- 2 months ago
The Mahagathbandhan on Tuesday released its manifesto for the Bihhar assembly elections, titled 'Tejaswhi Pran' (Tejashwi's promise).
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00:00And let's make that a special focus. Away from the political din, the real issue remains job creation in a state like Bihar.
00:09Remember, 9% of India's population lives in Bihar. Job creation, is it Bihar's biggest challenge? Is it a mission impossible?
00:18How can a state like Bihar get more private investment?
00:22Will Bihar come out of the Bimaru trap, the so-called Bihar, Madhya Pradesh, Rajasthan, UP trap, as was called a few years ago, several years ago, that these were the states that were least developed in the country?
00:37Let's go straight then to our talking point.
00:42So is job creation mission impossible for Bihar?
00:46Joining me now, two very special guests, N.K. Singh, Chairman, 15th Finance Commission, someone who's been a distinguished civil servant, IS officer from Bihar, comes from one of the most well-known families of that state, also being joined by Dr. Prachi Mishra.
01:03She's professor at Ashoka University, economist and head of the ISAC Center for Public Policy there.
01:10Appreciate both of you joining us.
01:11I want to come to you, Mr. N.K. Singh, first, because you've written a recent column where you've suggested that Bihar is actually one of the turnaround stories of the country in terms of the fact that there is economic growth that's visible over the last two decades.
01:25But the truth of the matter, Mr. N.K. Singh, is when I look at the big numbers, whether it's unemployment, which remains in double digit, when I look at per capita income, which is a third of the national per capita income,
01:37when I look at manufacturing, which is well below national figures, Bihar is still trapped, many believe, in a Bhimaru trap. Do you agree or not?
01:47I do not agree at all. I do not agree for four reasons, as the government says so. And I'll say it very, very quickly. First and foremost, if you look at long-term trends,
02:01I find you will find that between the period up to 2005, between that period, the growth of population was high, the growth of nominal GDP was low, and per capita income was roughly growing at close to roughly 1% per annum.
02:22In sharp contrast to that, if you look at contemporary figures, excepting for regrettably 2017, when there was a dip in the per capita income,
02:36if you, for instance, take the most recent example of 2025, 2026, nominal GDP, nominal GDP is expected to go at 22%.
02:47This is significantly higher than the expectation of nominal GDP. I recognize this is all from a very low base. But if you look at the growth trends of Bihar in the last 10 years,
03:01you will find that the growth of nominal GDP is significantly higher than the national average.
03:08Second, to support all this, demography, which was close to around 3%, has significantly come down to 1.4%, some say, but certainly below 2%,
03:22which means per capita income is rising significantly higher than at any other point in time.
03:30You compound this with the fact that capital expenditure has increased very significantly.
03:36There's a huge burst of activity in terms of roads, airports, rail connectivity.
03:42Couple it with the fact that a very large percentage of Biharis who are working outside, nearly every second household is receiving 35,000 rupees by way of remittances.
03:57Last year alone, the number of Biharis who sought jobs, secure jobs outside India are quite high.
04:05I made some suggestions on how...
04:07I'll come to those in a moment.
04:11What you're saying is the glass is half full and not half empty.
04:15I will in a moment challenge some of what you've said, but I want to come to Dr. Mishra.
04:20Dr. Mishra, do you agree that Bihar is showing signs of growth?
04:24We've got Tejasvi Yadav today saying, for example, that jobs remain his big focus.
04:29He's going to provide one job per household.
04:32Now, that's 2.7 crore jobs.
04:35Whether that's achieved or not is a huge question.
04:38It will require, according to some estimates, 7 lakh crore addition in budget, which clearly Bihar doesn't have.
04:43But is there a sense that Bihar is actually able to come out of this unemployment poverty trap,
04:48or is it mired in a way in the Bimaru state that it is?
04:54Thank you, Rajdeep.
04:55Pleasure to be here and pleasure to be in discussion with Mr. N.K. Singh.
05:00Look, I think recent growth rates, as Mr. N.K. Singh has pointed out in his article today, have been impressive.
05:09So it's been 8% to 9%, and it has doubled over the last decade.
05:16I think what I would like to add is that, you know, are these growth rates enough?
05:23I think despite these high growth rates, the divergence across states, divergence of Bihar with other states of India,
05:31has actually increased over time because a number of states are growing even faster than Bihar.
05:37Therefore, I think despite high growth rates, these are not high enough to catch up in convergence.
05:44At least my calculations suggest that it would need 15 years for Bihar to catch up to Orisa,
05:50and, you know, much longer to catch up to even half of the all India average, assuming current growth rates.
05:55However, all this implies, and it's very consistent with the forward-looking perspective which Mr. N.K. Singh has offered,
06:04is really Bihar needs double-digit real growth rates.
06:09And perhaps 8%, 9%, 9% growth rates are not enough to achieve, you know,
06:15at least to get to half of India's per capita income when India becomes fixed in Bharat.
06:22So, let me stop here, but happy to take one.
06:25You know, the fact though is, and based on what you're saying,
06:29let me, as I said, challenge N.K. Singh on the belief that you've got a situation, N.K. Singh,
06:38where 7.2% of the state's population, 75 lakh migrants according to one figure,
06:44work outside Bihar, the Bihar CAST survey report for 22-23,
06:49according to which 2.65 crore people live outside Bihar as migrants.
06:53Now, these are people who clearly are not finding employable opportunities within Bihar.
06:58Yes, in agriculture in particular, there have been impressive growth rates,
07:01in service sector it's grown, but when I look at manufacturing, it is very, very depressing.
07:06Now, therefore, you're saying that Bihar is turning around.
07:11Many will say that there is also the glass half empty, which you're not recognizing at all.
07:17No, I do not share this.
07:20I agree with Prachi that these impressive growth rates, which we have recently achieved,
07:26need to be accelerated further.
07:28If, by the time India becomes a Viksit Bharat, if Bihar continues with the same nominal GDP growth
07:38of, let us say, 11% to 12% per annum consistently, which requires a slew of policies,
07:45none of which are really impossible to reach,
07:49we would have significantly narrowed the gap by 2047,
07:53according to the growth projections that I have, Bihar's per capita income would be two-thirds
08:00of current Karnataka's income, which is the highest in the number of states.
08:06Yes, I agree that this requires several five steps, which I have mentioned in my article.
08:12I'll very quickly, in two sentences, mention these.
08:15One, continue with the present initiative in terms of the capital outlays being significantly enhanced.
08:22Two, secure the migrant incomes which are coming through institutional mechanism
08:28where they do not only go into consumption, but continue to go a reasonable percentage
08:32into capital expenditure.
08:34Three, provide mechanisms by which private capital can be attracted,
08:38which have been somewhat shy so far in Bihar, attracting private capital.
08:42Four, capitalize on the improved connectivity of Bihar in being able to harness something
08:47which Bihar has a latent capability, namely the tourism, the services sector,
08:52by the way, Rajdeep, the story on the manufacturing sector,
08:57the next to negligible, is not borne out by facts.
09:00The current percentage of the manufacturing sector, no matter how low the nominal GDP is,
09:07currently is close to 20% of Bihar is from the manufacturing sector.
09:13The contribution of the agricultural sector has come down,
09:16and just like the rest of India, the contribution of the services sector has gone up very, very significantly.
09:22The most important, really, thing, one of the things which I have mentioned in my article
09:26is being able to harness private capital in a significant way,
09:32bring about a qualitative change in the education sector,
09:36for which there is a huge potential which exists.
09:39Therefore, Prachi, when you look at this election that's coming out,
09:45because the debate is once again, at least as far as the opposition is concerned,
09:51focusing on Palayan, Roko, Naukri, Do.
09:55And if you travel across Bihar, jobs is a major issue.
09:58This is a government also on its side, the Nitish Kumar government,
10:01just ahead of the elections, suddenly announced 10,000 rupees for more than 1.2 crore women
10:07for making them entrepreneurs or self-entrepreneurs.
10:11The question arises that, does Bihar need massive state support,
10:16government jobs, government handouts, welfare schemes?
10:20There is a private investment cycle that has really not picked up,
10:25and that is a problem not just Bihar, but several states in that part of the country face,
10:30including West Bengal, including parts of eastern UP, for example.
10:33There is that trap that several parts of the country find themselves in.
10:38Do you see Bihar emerging out of that trap where it's completely dependent on a My Baap Sarkar?
10:44So, Rajdeep, let me just take this opportunity to, you know,
10:49just present a teaser for a report on Bihar, exclusively focused on Bihar,
10:55which ISAC Center for Public Policy is working on.
10:57And what, you know, related to the whole jobs issue, you know,
11:02what we make a case for is strategic industrial policy.
11:07And here, I think, let me highlight one thing, which is agro-industrialization,
11:13which is a first candidate for strategic industrial policy in Bihar.
11:18And what we make a case for is that there's immense scope and potential for agro-industrialization.
11:26And let me give you some concrete examples.
11:29If you take the case of maize, you know, maize has been a big success story in Bihar.
11:34What we argue is that this can be further capitalized on through exploiting two things.
11:40One is the geographical and the input-output linkages.
11:44So, let me just give you some granular examples.
11:47I think maize is very concentrated in certain districts in Bihar, Araria, Supol.
11:51These are districts in northeast Bihar.
11:54But most maize leaves Bihar as raw grain without any value addition.
12:00So, developing maize-based industrial structure clusters in some of these districts,
12:05like Araria and surrounding districts,
12:07could create multiply effects for both manufacturing and services.
12:13So, agriculture now is not, you know, agriculture-agriculture.
12:17You know, if you actually exploit the potential of agriculture,
12:21it can have spillover effects for both manufacturing and services.
12:25I'm sure you know about, you know, makhana and lychee.
12:27These are also examples of sectors which would have spillovers for manufacturing
12:33in terms of production as well as exports and for services.
12:37So, I think Bihar has, you know, important choices to make on the development path going forward
12:43and also learn from other states.
12:45Even if you look at agriculture, you know, different states in India follow different paths.
12:50You know, Madhya Pradesh is totally crop-based.
12:52Tamil Nadu is more livestock.
12:54Orisa is more balanced.
12:55Bihar could have a more balanced growth path spread across, even within agriculture, spread across crops,
13:02you know, traditional like pulses, but also high value like lychee and makhana,
13:06in addition to that livestock and fisheries.
13:09And remember that, you know, Bihar has comparative advantage from structural endowments like water.
13:15And so, livestock and dairy really remain dramatically underutilized relative to the available resources and market potential.
13:24And, you know, tourism is another sector for strategic industrial policy.
13:28I think Mr. Singh already spoke about tourism and has written about it.
13:32I think, you know, tourism's economic contribution to Bihar GDP, but most important to employment,
13:39is very, very low and that can increase, you know, significantly, I think, by doing a couple of things.
13:47Number one, you know, breaking the extreme geographic concentration.
13:51You know, right now it's very concentrated in two or three districts.
13:54Second, you know, again, Mr. Singh spoke about it.
13:57You know, diaspora-driven, rural heritage, you know, heritage tourism is another area.
14:03I think Bihar's large global diaspora and returning immigrants represent an untaxed resource,
14:10especially for agriculture.
14:11And then there's the, you know, big Buddhist heritage that could be, you know, exploited.
14:17So just, I think there are important choices to be made at this point,
14:21given that a new government is going to be in place in terms of development choices for the Bihar economy.
14:30I just want to ask both of you this.
14:33I don't want to ask you who you think is better placed to take Bihar forward,
14:38because I guess you don't want to put your, you don't want to politically commit on that issue,
14:46whether it's the Mahagadbandhan or the NDA.
14:48But what I do want to ask, and this is a question that has often troubled me,
14:52is the sharp income inequalities.
14:54As you travel across Bihar, one thing that always strikes out is just the scale of inequalities,
15:01particularly in parts of central Bihar, where per capita incomes remain very low
15:07and much below the national average.
15:09Do you see that changing and casing a quick response and then Prachi will end it?
15:13Well, I certainly see one of the biggest equalizers of this income disparity.
15:21By the way, Rajdeep, this is not only true of Bihar.
15:25This will be true for other states.
15:28This will be true of India as a whole.
15:30But to specifically answer your question, the, not a panacea, but the only bigger is continuing
15:39with the nominal GDP growth rate of around 15 to 16 percent over a long period,
15:47where growth is really propelled forward, will have inevitable spillover effects,
15:52apart from encouragement of private capital, big investment in education, in health,
16:00which requires some changes and recalibration, and of course, the ability to attract gainful
16:06private investment in partnership.
16:08Tourism, by the way, I don't know, Rajdeep, if you have ever visited.
16:12I'm sure you have.
16:14You have visited Angkor Wat or not?
16:16I was taken aback.
16:17One city of Angkor Wat attracts a tourism based on the Ramayana theme, attracts tourism,
16:25which is mind-boggling, Bihar's legacy and history.
16:29And given the fact that with the central government outlay, having gone up significantly
16:34in terms of improved connectivity of air, railways, and roads, offers that if it is blended with,
16:41particularly, I say this, with the hospitality sector being supported by availability of land
16:48at affordable prices and the availability of the other regulatory framework in a manner
16:53where this opportunity can be harnessed and capitalized to Bihar's advantage.
16:59Prachi, a final word.
17:01How important is political stability to all of this?
17:04Bihar has gone in the past through turbulent times.
17:06Is political stability the key when investors are making choices?
17:12They will certainly look at states that offer freedom from fear, particularly law and order,
17:18as well as a politically stable environment.
17:20Am I correct?
17:23Rajdeep, let me quickly say that I agree with you, what you started with,
17:28in terms of how concentrated growth in Bihar is.
17:33So, if you, you know, if you look at, you know, if you look at Patna, you know,
17:41it has a per capita income of, you know, of the orders of magnitudes of one and a half lakh.
17:46Begu Sarai is around 50,000, 60,000 dollars, 50,000, 60,000 rupees.
17:50But if you exclude these two, the magnitudes are extremely low.
17:54You know, whether this can change and, you know, how important is political stability?
18:01I think it's, you know, of course, political stability is very important for economic policy.
18:08I think there's enough evidence for that.
18:11But I think, again, as I said, it has to be combined with a drive for, you know, double-digit real GDP growth.
18:19And that can be achieved through strategic industrial policy with focus on agro-industrialization, tourism,
18:27and perhaps also GCCs, which can, you know, help us achieve both the twin goals of GDP and also of employment.
18:35Let me stop here.
18:36Okay. Let me leave it there.
18:37It's interesting to listen to two voices away from all the political noise,
18:42which is why we thought we'd bring both of you here.
18:44We heard a lot of noise, partisan noises on both sides of the political divide.
18:50Whether job creation is mission impossible in Bihar, time will tell.
18:56But we look forward to getting Bihar back on track because a state with a 9% population of the country
19:04certainly needs to move ahead if at all India is to move ahead.
19:09You just have to look at how well Biharis do when they are outside Bihar,
19:12extremely hardworking and enterprising to know that it is there in the soil of the land to work hard and move ahead.
19:20N.K. Singh, Prachi Mishra, appreciate you joining me here on the news today.
19:28Thank you. Thank you, Rajdeep. Pleasure.
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