Flagship Research Quarterly of the Indian School of Business (ISB). Find out more

Sign up  |  Log in

Past Issue • Apr-Jun 2012

The Amazing Transformation of Bihar

What were the factors behind the dramatic transformation of Bihar from a state with a dismal record in education, health, and law and order to a model of growth and governance? Professor Rajesh Chakrabarti traces the story of Bihar’s astonishing turnaround. This article is based on his forthcoming book, tentatively titled, “The Bihar Breakthrough: How a Troubled State Turned the Corner.”

The latest Central Statistical Organisation (CSO) estimates portray India’s GDP growing at 6.88% in 2011-12, a bit less than the 8.39% clocked in the previous year. But this growth figure hides considerable interstate variation. In 2010-11, the growth rates in state GDP ranged from a low of less than 4% in Nagaland to a high of almost 15% in Bihar. The range is almost as wide this year – from a low of 3.65% in Arunachal to a high of 13.13%, once again in Bihar. States increasingly matter more in the Indian polity and growth stor y, and it is in this varied landscape that the story of Bihar’s turnaround from a basket case to a case of almost model growth deserves a close look.

In 2005 when the current government came to power, over two-fifths of Bihar’s total population, which was larger than Germany’s, was below the poverty line. Its literacy rates and student-teacher ratio were the worst in the country, with the latter exceeding 90:1 in primary schools. The state had worse than sub-Saharan levels of child mortality rates, with just over one in ten children being fully immunised in 2000. Of the 69 backward districts in India, identified on the basis of poverty ratios, hunger, infant mortality rate, immunisation, literacy rate and enrolment ratios, 26 belonged to Bihar. With a total of 38 districts, this number accounts for more than two- thirds of the state! Only 13% of Bihar’s households had an electricity connection, the lowest in the country. In 2000, teledensity remained below 1%. Bihar needed help. Ironically, it also had the lowest utilisation rate for centrally-funded programmes, forfeiting a full 20% of central plan assistance during 1997-2000.

It was also outright dangerous to be in Bihar during that time. The phrase “jungle law” was being used rampantly in the media to describe the state of affairs. Kidnapping for ransom had become an industry. Women avoided venturing out after dark even in its capital, Patna. Politically protected gangs brazenly roamed its streets in jeeps, with firearms in open view.

A little over six years on, all that seems like the phantasmagoria of a nightmare past. Patna is more like a normal Indian city now, complete with its traffic snarls and crowds. The newly built Eco Park is thronged by young couples as well as families, and spotting women there at nine in the evening hardly raises an eyebrow. When the first Domino’s Pizza outlet opened in Patna, it recorded the highest sales anywhere in the nation. The number of cars at the P&M Mall that opened in 2011 – Bihar’s first – are often twice as many as the 150 parking spaces available. The price of land in the Patliputra Industrial Area has shot up from R 6 lakhs per acre to R 2.5 crores.

What did Bihar do right? Several things, in fact. The Bihar transformation story is the result of many individual innovations enabled, incented and monitored by a leadership focused on performance. In the paragraphs that follow, we provide a quick sketch of the broad governance approach as well as a few of the key innovations that made this major change possible.

The Overarching Strategy

Having come to power on a slogan of good governance (Sushasan) in a state on the verge of complete administrative breakdown, the Nitish Kumar-led NDA government adopted the slogan of “Development with Justice.” Based on this broad vision, the government quickly chalked up a simple, four-fold, clearly measurable mission:

  • Every Indian plate must have one edible item from Bihar;
  • Bihar should at least produce 30 lakh liters of milk every year;
  • People should be able to travel from anywhere in Bihar to Patna in less than 6 hours; and
  • A Bihari should earn no less that R 300 per day.

This broad mission would guide the overall development approach of the government. It also demanded a “zero-tolerance” approach to lawlessness, communal violence and corruption. This was a prerequisite for any development to occur, and this would be the most visible part of governance as well.

The primary credit for the turnaround in Bihar has to go to innovative solutions that emerged from within the bureaucracy.

The System Delivers

In much of popular discourse, the Indian bureaucracy receives far more brick-bats than bouquets. But the primary credit for the turnaround in Bihar has to go to innovative solutions that emerged from within the bureaucracy – notwithstanding its usual problems of heterogeneity in officer performance, more than occasional partisanship and lack of initiative. In Bihar’s case, the political leadership’s role was to push the bureaucratic machinery to deliver the goods and at the same time create an atmosphere where bureaucrats could try out innovative approaches to solving major administrative problems. It was essentially “management by objectives” that did the job – a combination of freedom to experiment combined with ceaseless monitoring, in most cases directly from the CM’s office. Following are a few examples of key innovations that helped turn the state around.

Law and Order

This was Bihar’s Achilles’ heel and the first issue that had to be tackled for any other development to take place. Three major innovations – “speedy trials,” the contractual hiring of retired armed forces personnel to create the State Auxiliar y Police (SAP) and the tireless prosecution of criminal-politicians (bahubalis) from across the political spectrum – marked the turnaround here. The ideas behind at least the first two of these are attributable in large part to the current Bihar DGP, Abhayanand, who was an Additional Director General during the initial years of the new regime.

Law and order, like currency, works on public faith. Once the public and lawbreakers come to doubt it, the ranks of the latter swell and crime becomes uncontrollable. In 2005, this threat was looming dangerously over Bihar. The challenge was not just to lock up the miscreants but also project a visible image of effective law and order so as to tilt the risk- return balance of the potential lawbreaker in the right direction.

The “speedy trial” approach rightly identified post-arrest prosecution as the missing link, focused on improving police “court-craft” and concentrated on the relatively innocuous crime of violating the Arms Act (carr ying illegal weapons) to speed up criminal trials and get miscreants off the streets. A trickle of 29 Arms Act convictions in Januar y 2006 swelled to 1,068 in December with an annual total of 5,230 convictions as opposed to 1,609 under other Indian Penal Code (IPC) cases. The following years witnessed even more staggering conviction rates – 8,774 and 10,994 Arms Act convictions (against 1,154 and 1,018 under IPC). In the three years, the combined Arms Act convictions were just two shy of 25,000.

The SAP solved the problem of a severely understaffed police force with a constabulary vacancy number of almost 30,000. They emerged as a crack team skilled in encounters, including in the Naxal- dominated areas. The tireless prosecution of dreaded crime overlords (and usually legislators in the state or in Delhi) of the likes of Muhammad Shahabudin and Anand Mohan, cutting across caste and party lines, sent a clear message that the government was keen on establishing law and order in a non-partisan, non- casteist manner.

The average number of patients visiting Bihar’s health care facilities per month rose from below 50 to close to 5,200, institutional deliveries increased from about 45,000 a year (of Bihar’s roughly 27 lakh births) to 12.46 lakhs, and the immunisation rate among children rose to 67%, better than the national average.

Roads

Roads, the most visible sign of a state’s development, lay in shambles in Bihar in 2005. The length of roads built increased almost tenfold from 385 km in 2004-05 to 3,474 km in 2009-10, cutting travel times by more than 50% between most parts of the state. The Secretary Roads (currently Union Home Secretary) R K Singh pushed road building – an area frequently mired in corruption and scams – on a war footing. A few small changes made a big difference. Reducing the contractor registration rules from a 12-page document to two pages helped bring in new contractors to break the road contractor cartel that could hold the government to ransom. The simplification of the bidding document created incentives for contractors to finish projects early and helped speed up project completion. Creating a viable government arm dedicated to constructing roads and bridges helped keep the bargaining power of contractors in check. This was the existing Bihar Rajya Pul Nirman Nigam (BRPNN) that itself was turned around from a near-bankrupt organisation to profitability by Singh’s trusted deputy and eventual successor, Pratyaya Amrit.

Health

If roads were bad in Bihar, health services were next to non-existent in the pre-2005 scenario. Despite the existence of a network of primary health centres, ver y few centres were actually in operation. The doctors on the rolls there rarely bothered to show up at the facilities, preferring to focus on their private practices in district towns. Both demand and supply of health services in Bihar were unacceptably low. The government responded with the distribution of free medicines at primary health centres coupled with cash incentives to boost demand. Institutional child deliver y, for instance, carried an incentive of R 1,400. Similar incentives were offered for family planning and the prevention and treatment of kala azar, a parasitic disease.

On the supply side, monitoring of doctor attendance was critical. This was done through a public-private partnership with a call centre operated by a BPO company that monitored doctor attendance, with stiff penalties imposed for repeated no-shows. Diagnostic machinery which, when operated by government, tended to have unusually large downtimes in order to facilitate private providers, was now contracted out to private players. Given the massive shortage of medical personnel, a strategy was adopted to focus on block level hospitals that would run 24X7 even at the cost of village level services.

The net effect of these measures was remarkable. The average number of patients visiting Bihar’s health care facilities per month rose from below 50 to close to 5,200, institutional deliveries increased from about 45,000 a year (of Bihar’s roughly 27 lakh births) to 12.46 lakhs, and the immunisation rate among children rose to 67%, better than the national average.

Education

Just as with health, cash incentives played a big role in creating demand at the primary level in education. The now-famous “bicycle for girl students” scheme – not the first in India but perhaps the most successful – became instrumental in lifting the number of young girls continuing in school. Cash for uniforms also played a similar role. On the supply side, as in health, monitoring of teacher attendance and hiring of temporary teachers improved classroom instruction.

The effects of these education initiatives were equally dramatic, as demonstrated in the decrease in the number of out-of-school children by 85%, the drop-out rate to a sixth of what it was in 2005 and the teacher student ratio by 40%.

Industry

While industry is beginning to pick up and build on the successes of the other key sectors, the early adoption of a Single Window Clearance system and an industry-friendly Incentive Policy as well as the Infrastructure Development Enabling Act and Land Acquisition Policy helped raise proposed investments by more than 15 times in six short years, though this accounts for a minuscule 1.5% of the entire investment in India.

The Secret Behind the Turnaround

These are but a few examples of conscious, innovative public policy interventions that made a difference in Bihar. E-governance and administrative reforms have made significant strides in the state. Bihar has pioneered the Right to Public Service (RTPS) Act, subsequently adopted by the centre. An ambitious socio-economic transformation is being attempted, by welding a Bihari identity in place of caste affiliations.

Without taking away from the innovative contribution of individual bureaucrats and police officers, it is fair to ask what made it all fall in place.

How was it that virtually the same bureaucracy that had witnessed the decline of Bihar to the verge of collapse was now coming up with so many solutions? The credit doubtlessly goes to the political leadership that put its faith in senior bureaucrats and monitored them ceaselessly through fortnightly meetings to discuss specific issues, even to the point of earning the blame for unleashing afsarshahi (officer rule). The style that the Nitish Kumar administration adopted was doubtlessly one of centralised control (detractors would use the term “autocratic”) wherein the CM’s office directly monitored key bureaucrats as many ministers, while formally part of the drive, failed to keep abreast of the developments.

If there is one single key to the turnaround story, it has to be ceaseless and untiring monitoring of the key departments and bureaucrats by the CM’s office, and in turn, by the key officers of the functionaries in the field. It is important to note that much of the funding for the Bihar turnaround actually came from central sources, the PM Gram Sadak Yojana for roads, National Rural Health Mission for health and Sar va Siksha Abhiyaan for education. The main contribution of the political leadership was effective and innovative implementation. The battle was literally won one project, one school, one hospital at a time.

The challenge of pulling off this extraordinar y turnaround in the caste-ridden political landscape of Bihar within the constraints of a coalition government was no less creditable. Here the political stature of Nitish Kumar in Bihar, where he stood head and shoulders above any rivals, proved useful.

Does the Bihar miracle serve as a model for other states? To a large extent, the answer is yes, particularly for the backward states that share similar challenges. While the details may not apply unaltered everywhere, the broad approach of committed governance is relevant across the board. Most importantly, the Bihar experience has put to rest doubts about the feasibility of governance-oriented politics in India. If it could happen in Bihar, why not elsewhere?

1. Indicus Analytics

2. Indicus Analytics and Prabhat Khabar, 2010, Bihar Development Report 2010.

ABOUT THE AUTHORS

  • Rajesh-Chakrabarti

    Rajesh Chakrabarti

    Professor, Executive Vice Dean and Director of Executive MBA Programme, Jindal Global Business School, Jindal Global University.
Scroll To Top