What do people who have money in Bihar do with it?
Lately, they have been putting it in demat accounts. Delhi, the third-largest state in terms of demat accounts, has logged a growth of just two per cent during the past year. In Patna, the rate of growth of demat acounts in one year alone was 10 per cent.Compare this to traditional top equity hubs like Bangalore (5 per cent), and Indore (7.5 per cent) and the process suggests that despite making allowances for a low base, the residents of Bihar are finding new investment avenues.
And, they’re making money. Accurate or not, Bihar’s Gross State Domestic Product (GSDP) grew by 11 per cent for 2009, a jubilant state government announced. By itself, this has little meaning. “Bihar has the lowest per capita income among Indian states,” says D K Joshi of Crisil. “Even if it continues to grow at this rate for the next 10 years, its per capita income will still be below the 2007-2008 national average. It is starting from a very weak base and has lot of catching up to do.”
But the state has suffered serial misfortune. Although there has been a transformation in the self-perceived role of the industries department (whose main job in the past used to be to advise on how to wind up sick units), Bihar has been a victim of the global commodities prices churn. In 2005, the state set great store by reopening some sick sugar mills and inviting investment for others. But the global volatility in sugar prices prevented these plans from taking off. Although the State Investment Promotion Board had cleared 245 investment proposals up to November 2009, only 22 projects have been commissioned.
Then there were the natural calamities – floods, drought and floods. The government has also been spending lavishly. Investment in infrastructure is now the most important focus area, with health and education. In 2009-10, capital outlays comprised 19 per cent of the expenses, compared to six per cent five years ago, with the biggest slice going to the construction of roads – allocations rising from Rs 595 crore in 2005-06 to Rs 3,555 crore today. And, this has translated into more construction, with the government constructing nearly 3,500 km of highways and major district roads in 2009-10, compared to 415 km in 2005-06.
Hope & worry
In terms of the quality of life of the people, this has meant better connectivity. Araria went to the polls yesterday. It is the town where famous Hindi literatteur Phanishwar Nath Renu was born. Those living here record proudly that the Hindi film, Teesri Kasam (Waheeda Rahman, Raj Kapur, based on Renu’s short story, Maare Gaye Gulfaam), was shot in the green fields here. But that was the extent of Araria’s contemporary brush with fame. Renu’s stories of poverty and longing in an area cut off from the rest of the world eight months in the year because of floods in the Kosi river, strike a chord with all Biharis. Largely because of this, families would not like to give girls in marriage to the people of Araria. Today, that has changed. Not only does Araria have its own website, it has brand new roads, a new broad guage rail linkage and, yes, weddings are taking place now.
But, there is much to be done. Corruption reigns. A social audit of the Mahatma Gandhi National Rural Employment Guarantees Programme by NGOs found leakages to the extent of 76 per cent in some parts of the poverty-stricken district. This pattern is mimicked in the entire state, they say.
The power sector continues to languish. Per capita power consumption remains the lowest in the country, at just over 100 units compared to the national average of 717 units. According to the state government’s Economic Survey for 2009-10, only 10.3 per cent of the households are electrified. And, even at this level, there is shortage of electricity.
It was a citizen of Renu’s Araria who summed up the situation in Bihar. On the Araria website, Md Salik Azam Palasi (who describes himself as a cricketer) posted the following: MY DIST IS VERY GOOD IN INDIA, BECAUSE THERE ARE LOTS OF LABORIOUS AND INTELLIGENT MEN LIVE HERE. BUT OUR LEADERS POSITION IS VERY BAD SO SOME PROBLEM CREATE EVERY DAY.