Bihar starts to slide downhill

Bihar managed to attract investment proposals worth Rs 20,000 crore in 2012-13. The next financial year saw a dramatic fall in fresh proposals to Rs 2,900 crore. It is now reduced to a trickle at Rs 657 crore in the first four months of 2014-15.

The state, once touted as among India's most promising emerging growth centres that had bettered other states in terms of growth in recent years, has fallen off the investor's radar once again.

"The changing political dynamics has ensured that whichever party wins elections, the state will suffer, at least in the short term," said a Patna-based political activist. He did not wish to be named as he is associated with the ruling coalition in the state.

The new ruling coalition consists of disparate parties like Nitish Kumar's Janata Dal (United), Lalu Prasad's Rashtriya Janata Dal and the Congress. Nitish Kumar and Lalu Prasad shared the dais for the first time after two decades to campaign for the coalition in the just concluded elections for 10 assembly seats. The new political group is up against a resurgent Bharatiya Janata Party that swept the Lok Sabha elections in May.

The new political discourse in the run-up to the August 21 bypolls is reminiscent of the state's politics of the 1990s that had scared investors away and considerably slowed down economic activity. Issues like building roads and bridges, ensuring electricity to all households, creating jobs, providing an enabling ecosystem for new investment and innovation in governance have given way to tried and tested themes of social justice and communal-secular divide.

While Lalu Prasad is back to his old "Mandal Vs Kamandal" (commonly referred to as the politics of other backward classes versus the politics of temple) rhetoric, Nitish Kumar's focus during the campaign was the BJP. The BJP, on the other hand, has harped on the return of the jungle raj, an euphemism for a period in Bihar's politics dominated by Lalu Prasad.

"Society has changed, politics has changed. But politicians are going back to the themes of the 1990s. It is not a good news for Bihar and aspirational Biharis," observed Ajay Kumar, a Patna-based journalist.

The changing political discourse is both a cause and consequence of deteriorating law and order in the state. According to the state government's records, the number of criminal offences rose from 1,47,633 in 2011 to 1,84,961 in 2013, a growth of nearly 25 per cent in two years.

Monthly numbers in 2014 also suggest crime is rising at a fast clip. Robberies and kidnappings are rising at even faster rates. Chief Minister Ram Jeetan Manjhi, in a recent interview to Business Standard, offered the following justification: "The Number of criminal cases may have gone up in the state, but that does not mean the number of incidents have gone up. As I have said on several occasions, actually the number of complaints has increased. It shows the level of transparency we have put in place. We have given strict instructions to police officials to file reports even about the smallest incident."

Political observers are also worried about the rising clashes involving members of different communities. Despite the chief minister's assurances that "there is complete communal harmony in the state" and "some incidents have happened due to antisocial elements," there is no denying communal harmony in the state has been disturbed.

Bihar now stares at undoing whatever little it had achieved in the recent past. "It was quite apparent during the early days of Nitish Kumar's second term as chief minister that there is a limit to what can public investment do. To take growth to a different level, the state needs liberal central assistance and a steady flow of private investment. The latter can happen only when there is the enabling infrastructure," Kumar said.

With the focus shifting away from building roads and bridges, there is a danger of even the trickle of investment drying up.