Unpacking the Bihar story

Written by Rajesh Chakrabarti | Updated: Oct 3 2013, 20:34pm hrs
Bihar Chief Minister Nitish Kumar has more than one reason to cheer the Raghuram Rajan committee reports ranking of states on composite development. Apart from being put close to the bottom of the ladder in the new index of underdevelopment, Bihar also scores near the top in performance, that is, the reduction of underdevelopment a most sensible parameter introduced in the report far ahead of Narendra Modis Gujarat. Fair enough. If one has to point out the biggest governance turnaround in the country in recent years, one almost certainly has to turn to Bihar under Nitish.

When Nitish came to power in 2005, over two-fifths of Bihars population was below the poverty line. Its literacy, student-teacher ratio, immunisation and electrification rates were among the worst in the country. Of the 69 most backward districts in India, 26 belonged to Bihar, more than two-thirds of the state. Bihar needed help, but it also had the lowest utilisation rate for Centrally funded programmes, forfeiting a full 20 per cent of Central plan assistance during 1997-2000.

It was outright dangerous to be in Bihar then. Kidnapping for ransom had become an industry. Women avoided venturing out after dark even in its capital, Patna. Politically protected gangs brazenly roamed its streets in Jeeps, with firearms in open view.

The new Bihar, to use the title of a recently released volume edited by Nicholas Stern and N.K. Singh, is different. The law and order situation has improved, with the incidence of dacoities and robberies reduced by half between 2004 and 2008, and incidents of kidnapping for ransom coming down from over 400 in 2004 to 66 in 2008. As a result of road-building activity, travel times in most parts of the state have fallen by more than 50 per cent. There has also been a remarkable increase in the average per month footfall in healthcare facilities, and the routine immunisation rate has caught up with the national average. Drop-out rates have also declined, with the rate in 2011 one-sixth of the 2005 level.

What led to these changes Innovative use of the arms act and speedy trials helped restore law and order; changes in contracting documents accelerated road development; and monitoring doctor attendance using call centres drove sectoral-level changes. But the overarching model was strengthening governance by enabling and driving the bureaucracy and police force to experiment and solve problems.

The central feature of the Nitish Kumar administration has been empowerment with monitoring. The top and middle levels of bureaucracy were empowered significantly, with virtually a free hand in how they solved administrative problems. They were assured support from the top for most innovations. From an era when expenditures above

Rs 25 lakh required cabinet approval, the regime shifted to ministers exercising discretion to sign up to Rs 10 crore.

But along with this increased empowerment and delegation came close monitoring. Never before in Bihar have senior bureaucrats and ministers reported to the CMs office as regularly as they did under the Nitish Kumar administration. There were monthly, at times fortnightly, review sessions of each department attended personally by Nitish and his secretaries checking on progress. It is management by objectives at its best.

Innovative use of technology in monitoring projects and e-governance undercut the powers of lower-level officers and middlemen. Rights-based legislation Bihar was one of the first states to enact a right to public service became a key pillar of the turnaround. The Bihar story is about relentless execution, not about finding a single brilliant idea to change the states fortune. The battle was won one conviction, one bridge, one school and one clinic at a time, not as the result of an intellectual eureka moment.

Some contest that this performance must be discounted given Bihars low base. That would be an error. There is a reason why some states are in bad shape, and sometimes absolute improvement is actually harder to accomplish starting from a dysfunctional situation. If the job was easy to do under the circumstances, it would probably have been done already.

The turnaround has worked up to an extent. If you think the average Bihari today is teary-eyed in gratitude to the administration, well, think again. The dominant complaint today, as always, is corruption. Leakages in government programmes are rampant, estimated to be over 70 per cent at times. While in rupee terms the size of the corruption pie in the state probably pales before what goes on in a single metro and is probably similar to most backward states, the visibility and widespread nature of corruption grates on the common man in Bihar. The average citizen has quickly adjusted his expectations to the new reality and is impatient with the remaining gaps.

The Stern-Singh volume rightly points out much of the progress has been driven by a construction boom, and virtually all of it on government funds. Power generation and land for industry remain the two major stumbling blocks to attracting investment. As Prachi Mishras chapter argues, Bihar is the youngest workforce in the country and hence has the most desperate need to skill its youth to avoid a demographic disaster.

All this raises questions about the sustainability and permanence of the Bihar economic turnaround, particularly since the dissolution of the ruling coalition. There is much to celebrate in the new Bihar, but the spectre of its past is yet to be completely slain. More Central funds almost a certainty now, given the Rajan committee report would surely help, but it would be an error to think of it as the long-run panacea for its many substantial problems.

The writer is executive director, Bharti Institute of Public Policy at ISB Mohali, and author of The Bihar Breakthrough: The Turnaround of a Beleaguered State