Why and how Bihar is steadily moving backwards.
IN 1996-97, Bihar had a per capita Net State Domestic Product of Rs.3,835 against Punjab's figure of Rs.18,213. While in the early 1970s the per capita income in Punjab was three times that in Bihar, the degree of difference became almost five times by 1996-97. It is only natural that States that lagged behind in the earlier stages of their development owing to problems of infrastructure and social development would face severe limitations in the matter of attracting investments compared to States that may have had an early start. Punjab had an advantage in this sense, but not Bihar.
The effect of this is reflected more than in terms of economic development simply because such low growth rates would end up distorting the overall indicators at the national level. States that lagged behind in the past have not only failed to catch up with those that have achieved a fair measure of economic growth in the present context (of liberalisation) but also tended to land in severe crises caused by their own fiscal problems. The adverse impact of this is bound to be seen on the human development indicators. If human development indicators are to be considered as a measure of the State's achievement in the area of poverty reduction, the Bihar experience leaves a lot to be desired.
The percentage of the Below Poverty Line (BPL) population is the highest in Bihar among the States. In literacy, Bihar ranks the last among the States with just 47.53 per cent of the population having been literate in 2001. Rajasthan, where the literacy levels were lower than in Bihar in 1981, surpassed Bihar during the past two decades. Similarly, a survey done by the National Council for Applied Economic Research (NCAER) in 1994 found that just 10 per cent of the households in Bihar used electricity, while in Haryana and Punjab the figure was 80 per cent.
If these figures do not convey the real picture with regard to how the people live in most parts of Bihar, figures of death due to kala-azar should convey it. Out of the 1,200 deaths reported across the country between 1996 and 1998, exactly 95 per cent was in Bihar. The treatment for the often-fatal tropical fever that is characterised by acute anaemia and so on, does not involve super-speciality hospitals. A patient needs regular administration of a course of antibiotics along with some paracetamol. Preventing the incidence of kala-azar is not an expensive affair either. This is done by spraying insecticides in the disease-prone areas.
THIS is where issues of development and the commitment of the dispensation in the State to governance get reflected. While Bihar certainly suffers from the disadvantage caused by the fact that the State lagged behind in the past and hence is not sought after by investors in the present climate, it is also a fact that it happened to return unutilised as much as 67 per cent of the outlay during the Eighth Plan period. The worst affected in terms of sectors was the power sector. The impact of this fact on prospects for investment in the industrial sector is clear. The annual growth rate of State Domestic Product that stood at 4.66 per cent during the period between 1980-81 and 1990-91 fell to 2.69 per cent in the period between 1990-91 and 1997-98. While the annual growth rate (of State Domestic Product) in Bihar was higher than those of Tamil Nadu, Orissa, Madhya Pradesh and Kerala in the 1980s, these States surged ahead in the period between 1991 and 1998 while Bihar's growth rate turned negative and fell by nearly two percentage points. Bihar was the only State among the 14 major States where the annual growth rate declined during the 1990s.
While under-utilisation of Plan allocations is not confined to Bihar, the extent, in percentage terms, is a clear reflection of the appalling state of the civil administration in the State and the lack of political will towards governance. The record was no better during the Ninth Plan period. Bihar's per capita Plan expenditure remained the lowest in the country and even here the gap between actual expenditure and approved outlay has been wide in most sectors.
The figures for Plan outlay and expenditure in the social sector, for instance, are as follows: Against a Plan outlay of Rs.458 crores, the expenditure in1997-98 was just Rs.253 crores. This was when over half the State's population remained illiterate. The State failed to spend almost half the funds approved for the social sector when the health care system in the State remains appalling. Against the stipulated ratio of Primary Health Centres (PHCs) and the population of 1:30,000, the actual in Bihar in March 2000 was 1:1,69,898. In other words, every PHC in the State catered to three times its stipulated capacity. It is another matter that in several cases the PHCs exist only on paper. And in several areas the buildings are in a dilapidated condition. The level of insensitivity on the part of the ruling elite could be gauged from the fact that out of Rs.4.30 crores provided to the districts in September 1999 specifically to carry out civil works in the PHCs (that is, to repair dilapidated buildings), Rs.3.59 crores remained unutilised.
Audit and Accounts found that funds running to several lakhs of rupees were drawn from the treasury even in cases where the preliminary procedure for the works - such as calling for tenders or identifying the exact nature of the work - had not been initiated. This is not very different from the manner in which at least Rs.1,000 crores was siphoned off from district treasuries, in what is now known as the fodder scam. The officials involved in the present cases are the drawing and disbursement officers in the districts.
The effect of such maladministration in the health sector was found in the fact that 44 per cent of pregnant women in Rohtas district (one of the most backward in the State) were not administered tetanus toxoid injections during 1999-2000. Another critical indicator is the percentage of deliveries out of the total that takes place in hospitals and health centres. Katihar, another backward district, set the record in this: only 4 per cent of the deliveries during 1999-2000 took place in hospitals and health centres.
In the matter of childcare, 73.6 per cent of the children born between January 1995 and June 1997 were not vaccinated. During this period, some 28,000 doses of BCG vaccine and 22,000 doses of measles vaccine had to be dumped because they were stocked in various PHCs in Hazaribag district beyond the date of expiry. Against the 9,583 sanctioned posts of medical officers there were only 7,700 doctors. There was a shortage of at least 2,000 doctors as on March 31, 2000. And as for the quality of medicines that were procured, Audit and Accounts found at least 50 per cent of the stocks to be sub-standard and even potentially fatal for humans. In the absence of too many industrial establishments in the State from which sections within the political class and the civil administration can take money, the suppliers of drugs turn out to be sources of funds. Medicine packs bearing marks indicating that they are supplies to the Health Department are available for sale with chemists in Patna and elsewhere in Bihar.
This means to riches is not restricted to medicines as far as the political class is concerned. The experience with the Public Distribution System illustrates this. While the diversion of foodgrains meant for supply through the PDS to the open market is not restricted to Bihar, Bihar accounts for the largest quantity of foodgrains thus diverted. A study carried out by Tata Economic Consultancy Services found that as much as 64 per cent of the rice meant to be distributed through the PDS was being diverted in Bihar (against the national average of 31 per cent).
A further study on this by the Planning Commission identified several reasons for the high incidence of abuse of the PDS. A PDS dealership, even being a member of the vigilance committees meant to check PDS malpractices, is seen as a position of significant profit. Add to this the fact that the Civil Supplies Corporation is among the 29 State government corporations whose employees have not been paid their salaries for years on end.
While the level of health of such corporations is not different in many other States too, the Bihar government has been refusing to release funds even to pay salaries to employees. The end result is that in a State where at least 55 per cent of the households fall under the BPL category, the number of households that derive benefit from the PDS is negligible. The PDS reaches only 5 per cent of the households. And if people do not die due to hunger, it has to do with the socio-economic reality that prevails in the State than any abundance of grain.
For all this, Laloo Prasad Yadav and Chief Minister Rabri Devi place the blame on the Union government. The State, according to them, is being discriminated against. It is not all that convincing. Apart from the fact that the civil administration in the State has ceased to exist, the extent of funds that remain unutilised convey a story that points to the lack of any commitment to the task of governance on the part of the State government.
The Prime Minister's Grameen Sadak Yojana, launched in 2001, is a case in point. The Centre sanctioned Rs.149.90 crores and the entire amount was released as on March 2001 to lay rural roads to benefit 629 villages in the State. Of this, the State could spend only Rs.58 crores until March 2003. Out of the 299 works that were sanctioned in 2001, the State could complete only 15 during the two-year period. The reason, according to highly placed officials in the civil administration, is that the State government's Roads Department is short of qualified engineers, which also rendered impossible the process of calling tenders. The officials say that several civil contractors were unwilling to bid. The government could clear the works only in 108 instances. This is the consequence of a combination of factors including a lack of confidence among the contractors in the government, but most important, a fallout of the insensitive approach among the political leadership towards matters of governance.
THE story of the State Road Transport Corporation is even worse. Started in 1959 with a fleet strength of 6,000 buses, the BSRTC now has just 370 buses. Recruitment of staff stopped in 1987 and in the 13 years since 1991, the Corporation has purchased just 190 buses. Even this was done only after the Supreme Court ordered that the State government was bound by a memorandum of understanding with the BSRTC to set aside funds to increase the fleet strength and ensure that the employees were paid. They had stopped receiving their salary in 1994. After the court ordered the payment of at least 50 per cent of the wages, the government released Rs.157 crores in 1997-98 in order to finance a revival package for the Corporation. (This constituted the only instance where the actual expenditure exceeded the Annual Plan allocation.)
The number of buses in its fleet is certainly not a reflection of the transport needs in the State. Apart from the 20,000 buses in the private sector (most of which are owned by influential sections in the political establishment), a large part of the transport needs are taken care of by the railways too.
Bihar, hence, is going backward. It is not just stagnation. And with industrial development remaining a far cry and agricultural operations remaining in the feudal mode in most parts of the State, the only activity that thrives in the State is trade. The formation of the State of Jharkhand has taken out of Bihar the industrial centres of Jamshedpur and Bokaro and also the mineral-rich Dhanbad. Laloo Yadav is clamouring for a compensation package to counter the implications for the economy of their loss. More worrying for the politicians is the impact it has had on party funding sources. The fact that trade remains the only economic activity seems to have meanwhile reduced the scope for the extortion "industry'', taking the number of kidnapping and ransom killings to a new high.