statesman news service
PATNA, 3 JUNE: A new study by the country&’s apex trade body, the Associated Chambers of Commerce and Industry of India (Assocham) has found Mr Nitish Kumar-ruled Bihar growing faster than Gujarat which is governed by his rival, Mr Narendra Modi. The report comes at a time when the name of Mr Modi is being debated as NDA&’s Prime Ministerial candidate.
The report, a copy of which was mailed to The Statesman, however, adds that although Bihar is growing at a better speed than Gujarat, yet the base numbers ~ whether relating to investment or per capital income ~ remains much lower than the western state. It also says Bihar is fast catching up among the developed states in terms of fresh investment in the crucial sectors like power, even though it has a huge disadvantage of the past baggage of laggard development.
“Bihar logged in a compounded average growth rate (CAGR) of 20 per cent in public investment between March 2003 and March 2013 while this was 14.1 per cent in the case of Gujarat. Likewise the CAGR of private investment in the same period was 104.5 per cent in Bihar as compared to 31.9 per cent in Gujarat,” a comprehensive study done by Assocham team of researchers said. The report was released yesterday.  As per the report, the outstanding investment in Gujarat at Rs 13,74,244 crore was four times more than Rs 3,11,527 crore in Bihar, thanks to the legacy of the western state being among the forward ones and Bihar being clubbed in the past among the so-called ‘Bimaru ***’ (sick) states. It says Bihar is moving fast in the catch-up even though its per capita income remains much lower than Gujarat.
“The established progressive states of Maharashtra, Gujarat, Haryana and Tamil Nadu have been joined by Uttarakhand, Bihar and Andhra Pradesh in the last several years. The notion was that in the post 1991 era, the rich states got richer while the poor states turned poorer. However, the rise of some erstwhile poor performing states to figure among growth leaders dilutes this notion,” says the report.
If the report is to be believed, it is public investment which is bringing the growth trajectory in the NDA-ruled Bihar where the BJP is a junior partner while in case of the BJP-ruled Gujarat, it&’s the private sector that takes the lead in making it among the most industrialised states in the country where a diversified set of industries such as textiles, petrochemicals and  pharmaceuticals have come up.
As per the report, the share of public investment in Bihar as on March 2013 was 50.3 per cent while it was 27 per cent in Gujarat. On the other hand, the share of private sector in Gujarat was way ahead at 72.3 per cent while it was 49.7 per cent in Bihar, though it is catching up fast in terms of growth but only on a low absolute base.
“Certainly in absolute numbers, Bihar is almost at a stage where Gujarat was about a decade ago,” says the report. For instance Gujarat&’s per capita investment in March 2003 was Rs 31,890 which has now gone up to Rs 227,586. On the other hand, the per capita investment in Bihar in March 2013 is Rs 30,011 from a measly Rs 3 074 ten years ago. As per the report, Bihar has caught up really fast in recent years as its CAGR per capita grew by 25.6 per cent in a decade as against 23.9 per cent in Gujarat. The report says while Gujarat is almost self-sufficient in electricity, Bihar is now hugely investing in that sector. Over 70 per cent of Bihar&’s total investment now goes to electricity. In terms of progress on implementation, the track record of Bihar is just a shade better than Gujarat, it concludes.
The economic experts, however, find the report far from the truth and not credible. “This is a misleading report which conceals more than it reveals,” remarked a leading economist and economics professor at the Patna University, Mr NK Chaudhary. According to him, the report does not talk about the status of rural farmers or agriculture, poverty or unemployment although around 89 percent people live in the rural areas. Stating that reality is far from what had been mentioned in the report, Mr Chaudhary said the growth rate in Bihar had actually declined to 9 per cent from earlier 13 per cent.