Current development model not delivering for Bihar: Report

Business Standard

1. Key Arguments Presented in the Report

1. Bihar’s current development model is inadequate
   The report argues that despite overall economic growth, structural bottlenecks in agriculture, manufacturing, and job creation have prevented the state from reaping sustained development dividends.
2. Agriculture remains the dominant employer but low-productivity
   Around 34% of Bihar’s workforce is employed in agriculture, but the sector contributes only 18% to GSDP, reflecting deep productivity challenges.
3. Manufacturing and industrialisation lag behind the national average
   The report notes severe stagnation in agro-processing, lack of food processing clusters, and weak private sector investment, which limit employment generation.
4. Per capita income remains among the lowest in India
   Bihar ranks second from bottom in Net State Domestic Product per capita, highlighting persistent poverty.
5. Infrastructural and logistic challenges impede growth
   Issues such as poor irrigation, lack of market access, vulnerable supply chains, and underdeveloped agro-infrastructure are highlighted.
6. Comparisons with better-performing BIMARU states
   Madhya Pradesh and Rajasthan, earlier clubbed with Bihar, have surged through stronger reforms, procurement revivals, power sector improvements, and industrial diversification.

2. Author’s Stance

The author takes a diagnostic and cautionary stance, arguing that Bihar’s developmental trajectory is not structurally sound, and relies excessively on consumption-led growth instead of production-linked growth. The tone suggests an urgent need for policy correction rather than merely recording trends.

The stance leans towards empirical, data-driven critique, not political advocacy.

3. Potential Biases

1. Over-reliance on agricultural underperformance while less emphasis is given to Bihar’s improvements in social indicators like literacy, fertility rate decline, and governance digitalisation, which might paint an overly pessimistic picture.
2. Comparative bias emerges as Madhya Pradesh’s reforms are showcased as a benchmark without equal assessment of Bihar’s socio-political constraints (like land fragmentation, flood vulnerability, migration patterns).
3. Limited acknowledgment of structural historical deprivation, which may unfairly measure Bihar against states that inherited better resource endowments.

Overall, the article is data-heavy but may underreport Bihar’s incremental gains, presenting a somewhat one-sided view of current challenges.

4. Pros and Cons of the Arguments

Pros

• Clear identification of structural barriers (agriculture productivity, irrigation gaps, industrial stagnation).
• Uses credible datasets such as NSDP, workforce share, sector-wise GSDP data.
• Highlights lessons from other states, giving a comparative policy framework.
• Focuses on sustainable rural transformation, which aligns with long-term development goals.

Cons

• Underestimates the constraints imposed by flood-prone geography, frequent disasters, and historical land fragmentation.
• Does not sufficiently discuss recent improvements like road infrastructure upgrades, digital governance expansion, women’s SHGs, and public procurement improvements.
• Focuses narrowly on economic metrics and neglects human development gains which Bihar has achieved at scale.

5. Policy Implications (UPSC-ready)

Reforms Required in Agriculture

• Shift from subsistence farming to crop diversification.
• Investment in irrigation networks, cold chains, agro-processing parks, and organised procurement.
• Promotion of farmer producer organisations (FPOs) to overcome fragmentation.

Industrial and Service Sector Strategy

• Creating special economic clusters, particularly in food processing, textiles, leather and local crafts.
• Improving ease of doing business, logistics, and freight connectivity.

Fiscal and Governance Reforms

• Strengthening local governance, decentralised planning, and participatory rural development.
• Enhancing the state’s capacity to attract private investment.

Social Sector Investments

• Aggressive pushes in schooling quality, vocational training, skilling, and women-led employment.
• Integrating health and nutrition with economic development to create a productive workforce.

6. Real-World Impact

• If structural reforms continue without deep change, Bihar risks persistent intergenerational poverty.
• The state may fall further behind in India's competitive federal landscape.
• Failure to create non-farm employment may accelerate distress migration, adding pressure on destination states.
• Weak agro-processing limits Bihar's ability to leverage its rich agricultural base into higher incomes and export potential.

7. Alignment with UPSC GS Papers

• GS Paper 1 (Indian Society & Regional Development): Migration patterns, rural-urban divide, historical disadvantages.
• GS Paper 2 (Governance & Social Justice): State capabilities, public service delivery, role of institutions.
• GS Paper 3 (Economy, Agriculture, Food Processing): Structural transformation, agricultural productivity, industrialisation.
• GS Paper 3 (Environment): Flood-prone geography and vulnerability affecting development.
• GS Paper 4 (Ethics): Equity, justice, and governance challenges in backward regions.

8. Balanced Summary

The report rightly highlights that Bihar’s development model is not structurally aligned with productive growth, particularly due to low agricultural productivity, weak industrialisation, and inadequate infrastructure. These interlinked factors have prevented Bihar from leveraging its demographic potential and rich agrarian base.

However, the analysis should also recognise Bihar’s significant progress in education access, health improvements, governance reforms, and enhanced public infrastructure. The developmental lag is not merely the outcome of policy choices but deeply tied to geographical constraints and historical deprivation.

A balanced way forward requires a dual strategy—structural reforms in agriculture and industry, combined with sustained social sector investment and disaster-resilient planning.

9. Future Perspectives

• Bihar must adopt a cluster-based agricultural transformation model.
• Focus on manufacturing niches suited to its demographics—food processing, textiles, handicrafts, and labour-intensive sectors.
• Strengthen public-private partnerships in irrigation, warehousing, and logistics.
• Adopt a resilience-oriented model due to recurring floods and climate stress.
• Develop a long-term State Industrial Policy aligned with national economic corridors.
• Encourage skill-based education and vocationalisation aligned with migration patterns and labour demand in other states and abroad.