Why is Bihar poor?

Poverty in Bihar is related to the management, and transformation, of its production systems. The
deep social stratification meant that the production systems (read, vast tracts of highly productive
lands) were traditionally controlled by a few, typically belonging to the higher castes. Members of
other castes survived on the diversified opportunities provided by an agrarian economy that
supplied bumper harvests, but was also unstable, thanks to the seasonal floods and changes of
river courses.

Before Independence, layers of entrenched zamindars demanded usurious taxes from the peasants
– ensuring their deep poverty – while the expropriated amounts were used to maintain the hold of
the zamindars on the land and satisfy their whims. The exploits of the Darbhanga Maharaja had
reached folklore proportions.

After Independence, the process of industrial development was spurred by the central government
(which focused on the mineral rich areas to the south that is presently Jharkhand), while the state
governments dealt with land and irrigation. The meagre resources of the state government were
invested in embankments of the rivers – nearly 3000 km of embankments were built till 1990,
attempting to stabilise the production systems. In fact, temporary stabilisation did take place
during the ‘60s and the ‘70s when the promise of a booming agriculture actually sucked in labour
from different vocations, (arguably) leading to rapid loss of diverse traditional skills.

According to the assessment of the Second Irrigation Commission of Bihar in 1994, the flood-
prone area had increased to 6.88 million hectares in 1993 from 2.5 million hectares in 1952. If the
Ganga Stem is excluded, 3.75 million hectares of North Bihar, which is nearly 83 percent of the
total drainage area of different tributaries of the Ganga in the state from the north, is now flood-
prone. Clearly, embankments failed to ensure steady growth of agriculture.

Agriculture had become an even more ‘high gain – high risk’ phenomenon, since the frequency of
flooding had reduced and its intensity had increased. Uncertain productivity, and unclear
ownership of land, ensured that rents collected from share-cropping were invested elsewhere –
transport buses, or even higher education. Reducing productivity was, therefore, harming the
tiller/ share-cropper more than the landlord (who spread his risk through large landholdings and
diversified investments). In fact, the process of impoverishment of the tiller reduced his capacities
to claim his rights on the asset that he worked on, which helped the landlord to focus elsewhere
while retaining control over land.

At the community level, peasants were thus dealing with economic exclusion from landed assets,
social discrimination on the basis of caste (which identified him with his occupation), and
political marginalisation through non-representation. At the individual level, they were dealing
with an overwhelming dependence on labour (an asset that is prone to excessive risks), loss of
other assets (houses were often washed away during the floods), and loss of any other opportunity
to invest. Moreover, in the past few decades, they were coping with an altered scenario where the
floods were more devastating, governance was weak and they themselves were more impoverished
and marginalised. Where survival is the only issue, confidence and self-esteem invariably take a
backseat.

Governance in the state of Bihar shifted gears during the ‘80s, when the democratic processes
finally shattered the entrenched social stratification in the political arena and representatives of
the backward castes came to power. The new dispensation worked to dismantle the existing
systems and structures that were perceived to be in favour of the forward castes, particularly the
bureaucracy (and even the judiciary to some extent). Provision of assets (chiefly land, but also
some houses) to the hitherto dispossessed backward and scheduled castes was attempted but soon
became ad hoc and unsustainable due to the lack of credible and efficient systems of delivery.
Somehow, it didn’t seem to matter.

Empowerment, rather than development, was the official credo. It was time for the backward and
scheduled castes to assert their rights, protest against social discrimination and aspire for a share
of the political power. Creating opportunities for industrial and urban growth was perceived to be
ceding control of the new production systems to the same upper castes that have just been
dislodged from political power. In effect, governance and infrastructure, the drivers of growth and
development, were precisely the two areas that were allowed to decay during this period.

The process of empowerment of the backward communities, thus, was happening at a time when
the markets were rapidly shrinking and economic opportunities were eroding. Agriculture – the
mainstay of the masses – was becoming less remunerative, while any attempt towards
mechanisation and external linkage was thwarted by lack of infrastructure. The decay of
infrastructure was hastened by the floods in north Bihar, while lack of governance was abetted by
an upsurge of naxals in many parts (Naxalism had emerged during the early ‘70s as a backlash on
partisan governance). The limited empowerment of a section of the backward communities has,
therefore, come at a cost – shrinking of opportunities for all sections of society.

Viewed in the context of a rapid economic growth in the country, the development gap in Bihar is
truly astounding. The per capita income in the state is Rs 1,010 per month (compared to the
richest state Maharashtra with Rs 4,853 per month) – almost only a fifth. What is even more
disconcerting is the fact that while the country has consistently grown at 6-8 per cent for over a
decade now, Bihar has recorded a much slower rate, even negative in some years. Bihar is also
the only state in the country with a rising fertility rate and declining health for mothers and
children.

Migration, therefore, is a foregone conclusion for all sections of society. Bihar provides the rest of
the country with inexpensive labour – be it the agriculture fields of Punjab or Assam, the
construction zones of the National Capital Region or the rickshaw-pullers and coolies in Kolkata.
Those who can afford, send their children to Delhi and other cities for education and employment.
Some people have estimated that there are at least a million students studying outside Bihar and
spending about Rs 2,400 crores each year (over US$ 500 million). Even if the estimates seem
inflated, it is a pointer to the fact that increasingly, education is being seen as a passport to
migration with dignity but, more importantly, is a major drain on any capital formation in the
state. The chief aspirations are to enter government service for its perceived powers and income
stability. In case it does not materialise, education enables survival in a distant city through some
other forms of employment. Enterprise is seldom seen.

While it is very unlikely that Bihar will regress into the earlier power equations, the task of
development is gargantuan given the low base of human development, absence of an enabling
environment in the form of a credible and effective governance and basic infrastructure.