PRAGOTI

Just when the failed policy ensemble called ‘good governance’ had run through its course nationally both under the NDA and the UPA, Mr Nitish Kumar’s NDA government in Bihar breathed new life into it. Though similar patterns of growth were visible in Uttarakhand, Orissa, Jharkhand and Chhattisgarh in the same period, Bihar’s recent growth spurt is attributed to NDA’s sushasan, citing improvements in law and order and increased public expenditure. Fifty percent reservation for women in panchayats and an initial stepping up of development expenditure reinforced this faith. The article of faith in sushasan-led-growth in Bihar became entrenched among professional opinion-makers across political divides. Seven years into sushasan, there are gaping holes in this faith based lore.

Crime and Punishment
Cognizable crimes under the NDA increased to 3.8 percent per annum which was 1.8 percent between 1998 and 2004. Crimes against women and dalits showed an alarming increase since 2004. The annual trend growth in rape of dalits (15 percent); kidnapping of women (18 percent); arson against dalits (22 percent); and in atrocities recorded against dalits and adivasis (24 percent) indicates the change in the social base of crime victims after 2004. Under sushasan, the safety and security of the propertied and the affluent was secured at the cost of the oppressed and exploited in Bihar.

59 percent of MLAs in the 2010 Bihar Assembly have criminal charges pending against them compared to 35 percent in the previous assembly. 116 out of 141 MLAs with pending criminal charges belong to the NDA.

The same government which had earlier claimed the credit for fast-tracking the judgment against the perpetrators of the 1997 Lakshmanpur Bathe massacre, is presiding over a law and order regime that perpetrated the Forbesganj firing, and has enabled the acquittals of the accused in the 1996 Bathani Tola carnage case, the assassination of the key accused Ranvir Sena leader Barmeshwar Mukhiya immediately after acquittal; and the violence, sexual aggression and arson unleashed by the Mukhiya’s ‘supporters’.

Clearly, the NDA’s law and order interventions have facilitated the reassertion of the terrorizing power of Bihar’s traditional upper caste feudal patriarchy.
 

The Growth Story

Between 1993-94 and 2000-01, Bihar’s economic growth at 6.09 percent was higher than the national average of 5.75 percent. The ‘economic shock’ of bifurcation in 2000 brought this to a halt. Since then, Bihar saw a fluctuating pattern of growth, caught up again with the national average in 2004-05, and overtook it in the subsequent period.

Growth acceleration in Bihar preceded the NDA’s tenure. It started from 2002-03 and became pronounced between 2003-04 and 2005-06. The design of the first set of ‘reforms’ under sushasan started from January 2006. The highest period of economic growth was between 2005-06 and 2007-08. The period 2006-07 to 2008-09 – the three full years of NDA rule, shows a relative decline.

The growth patterns since 2000-01 is a continuum of 3-year cycles. The years 2002-03, 2004-05 and 2006-07 are periods of more than 10 percent growth in this cycle. Thus Bihar’s growth since 2002-03 is the resumption after bifurcation of a long fluctuating and volatile movement towards a higher growth continuum which started from 1994-95.

74 percent of GSDP growth since 1999-2000 is in agriculture and allied activities; construction; communication and; trade, hotel and restaurants. Agriculture accounted for 17 percent of GSDP growth between 1999-2000 and 2004-05. After 2004-05, this fell to 6 percent.
 

The acceleration in trade started at least six years before the NDA’s interventions. Trade was the single secular driver of growth in Bihar till it caught up with the 'communication boom' in 2004-05 and the subsequent spurt in construction with the rest of India.

Bihar’s growth since 1994-95 followed from the diversified patterns of accumulation through the agency of new entrants. Land struggles and the aspirations for social justice that emerged from caste oppression were decisive in changing the political economy of accumulation in Bihar since the 1990s and led to the economic diversification into trade after social empowerment of sections of the 'backward castes'. The recent politics of alliance reflects attempts to reconcile conflict through power sharing arrangements between the traditional upper-caste landed ruling classes and the emerging contending factions of the ‘backward’ upwardly mobile nouveau aspirants who combine a mix of agrarian and mercantile capital. So Bihar’s economic growth and the constituents of Mr Kumar’s government are both continuations of the political developments of the last two decades.

Labour productivity does not show any improvement in this long period of accelerated growth. Mr Kumar himself has consistently argued that even the revised estimates of the Tendulkar Committee grossly underestimate poverty in present-day Bihar. The distributive impact of Bihar’s growth is thus a moot question.

Public Finance

The share of development expenditure in the state government's total expenditure increased since 2005-06 to peak at 65 percent in 2007-08, but fell to 48 percent in 2008-09 and subsequently has fallen further to 2001-02 levels. Post-VAT, there has been a negative impact on elasticity in all but  three districts  of Bihar with significantly volatile tax collection patterns. Even after the ‘tax reforms’, not only did tax elasticity decline in all but three districts, but the tax-GSDP ratio remains stagnant around 5 percent. Due to the failure of tax mobilisation under NDA-style sushasan, Bihar’s vulnerability to onerous conditional devolution from the central government has been reinforced despite high growth.

The NDA’s acquiescence to fiscal fundamentalism in Bihar made expenditure compression the norm after the inherited revenue surplus from the previous government ran out. The basis of distinction between revenue and capital expenditure has been questioned by economists, as both are overlapping in their functional purpose. Nevertheless, the capital outlays in plan and non-plan budget are exclusively geared towards creation of new infrastructure and resources. In the non-plan budget, the disproportional priority on policing in the state has led to falling public investment in public work and almost insignificant allocations to major irrigation . In a state ravaged flood and majority of impoverished lives and livelihoods entirely dependent on monsoons, the low priority accorded to new investments in ‘major irrigation’ in the lasts even years reflects the inherent methodological lacunae of the ‘inclusive growth’ agenda. The trend of decline in public work also reflects the low priority given to developing arterial infrastructure which is much more relevant in the sustaining of livelihoods and improvement of living conditions than point-to-point large scale infrastructure projects which accentuate disparities.

The gaping holes in the sushasan armour reveal the lop-sided nature of the regional, sectoral and social outcomes under the NDA in Bihar. This is in keeping with the recent trend of led lopsided and highly volatile economic growth in its regional dimensions.

Both in terms of state-society relations and in terms of the nature of economic development, the NDA's 'sushasan'  is taking BIhar back to the turn of the century social quagmire from where it started after a decade of the neoliberal growth juggernaut's antiquated 'tandava'.