Is Bihar really a state of mind?

I define ‘poorest’ as countries with an annual per capita income of less than 1,000 dollars per year. Fifteen of these countries are in Africa, and the four poorest Asian nations are war-torn Syria, Yemen and Afghanistan, and the North Korean redoubt of Kim-il-Sung. The largest of these nations is Afghanistan, with a population of about 40 million.

Bihar is ravaged neither by war, nor by a third-generation dictator. It sits in the heart of the Gangetic plain, and till Jharkhand was separated out, had huge mineral resources. Yet, its per capita income of 640 dollars a year, is less than one-third of the average Indian, and less than one-tenth that of Goa, whose residents make over 7,000 dollars per capita a year, at par with Thailand.

The ten-fold gap between the two states in the same nation is extraordinary. In the US, for example, residents of New York state and Massachusetts have per capita incomes of 76,000 dollars, while Mississippi comes in at 35,000 dollars, a factor of only 2.2.

One would have thought that, over time, incomes in different Indian states would tend to equalise—labour would move to places where incomes are higher, and employers move to places where wages are lower. Life, of course, is much more complex than economic models, and internal movements of both labour and enterprise are motivated by a great deal more than wage levels.

The major constraint, of course, is that there are simply not enough permanent jobs in India. Bihar is a major source of migratory labour, but the migration tends to be circular in nature. Most employment, whether in agriculture or construction, is temporary and uncertain. Wage levels are not high enough to support city rents and living costs of an entire family, so the village home and land—if any—remain the anchor, and most households don’t make a permanent shift to areas of higher incomes.

Returning after 45 years to Palamau, now in Jharkhand, economist Sudipto Mundle noted “a complete transformation of the physical infrastructure” thanks to decades of government-led development. Whether in Jharkhand or Bihar, roads, electricity, and cell phones have connected our most remote villages to the world. Starvation has largely vanished, due to food made available by the Public Distribution System (PDS). The MNREGA scheme generates some income through public works programs, but despite all these measures, over 40 per cent of Bihar’s children are stunted, and over half its residents are poor by NITI Aayog’s multi-dimensional poverty index.

Public education, after a fashion, is available to most Indian villagers, and enrolment at the elementary level is almost universal. There has been enough written about the poor learning outcomes of Indian schools, but it is a moot point whether this really matters when even those with advanced degrees find no jobs.

Formal sector jobs in India are heavily clustered—think Delhi/NCR, Mumbai, Pune, Hyderabad, Bangalore and Tamil Nadu. Each of these clusters generates synergies, both in skills, and between enterprises which develop buyer-seller relationships that sustain business activity. North of Mumbai, and east of Delhi—the bulk of the Indo-Gangetic plain —we have yet to see the seeds of any such clusters which could add substantial value in either industry or the services sector.

The state of physical infrastructure in Bihar has been a major obstacle to the development of business in the state, but—as Sudipto suggests—this gap is gradually reducing.

Bihar has a poor reputation when it comes to law and order, and this doesn’t help with investment. This April, we learnt that it is possible to steal a 500-tonne bridge in the state, which led to a hilarious riff on a popular Hindi song:

‘Chura liya hai tumne jo pul ko / Nahar nahi churana sanam...’ (You have stolen the bridge, but do spare our canal)

Levity apart, in a nation as vast as India, it is quite easy for a state to fall off the map of potential places to invest and work in, and Bihar is deep in the shade. It is going to take an enormous amount of change to make this happen. I don’t have the faintest clue of how these changes will come about, of how equipped the state and national governments are to effect these changes, and, most importantly, of how the average Bihari regards her place in the Indian economy.

But this scribe intends to begin finding out. In the second week of December, the author plans to spend a little over a week traveling in Bihar, to get a sense of what keeps 120 million Indians so far behind the rest of the nation.

Being neither an economic researcher, nor a journalist, one doesn’t have hopes for any deep insights. Yet, at some visceral level of solidarity and fraternity, one feels positively offended that a quarter of the way into the 21st century, this Indian state as large as a nation generates incomes at the level of sub-Saharan Africa. And for reasons not fully explicable, one feels the need to try understanding why.