The progress made by Bihar in areas of construction, public services, and improved telecommunication have been the key drivers in this spurt of growth. But is it enough to keep the economy on a path of sustained double-digit economic growth?
Bihar has emerged as one of the fastest growing states in India in the last decade. While a lot of it can be attributed to the low base that the economy was being subject to, the relative sustainability of double-digit growth in Bihar’s economy between 2006-2014 is nonetheless impressive. The progress made by Bihar in areas of construction, public services, and improved telecommunication have been the key drivers in this spurt of growth, but we must question whether it is enough to keep the economy on a path of sustained double-digit economic growth.
First, even with such impressive growth credentials, Bihar continues to lag significantly behind the national figures when it comes to absolute income. Bihar currently has a per capita GDP slightly higher than INR 36,000, which is considerably below India’s per capita GDP of over INR 87,000. This leaves a very large gap for Bihar’s population to overcome. For instance, if India’s per capita GDP continues to increase at 10% for next two decades, Bihar will need its per capita growth to be around 15%, for it to reach the average Indian levels. This daunting task seems quite uphill, and Bihar’s growth strategy for next 20 years needs to be designed to fill up this gap.
Figure 1: Bihar has done well in terms of GDP growth, but still remains last in terms of national average