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Shedding the BIMARU Tag ISSN (Online) - 2349-8846 Shedding the BIMARU Tag Madhya Pradesh, Bihar and Rajasthan GANESH KAWADIA, SHEENA SARA PHILIPS Vol. 49, Issue No. 31, 02 Aug, 2014 Ganesh Kawadia ([email protected]) and Sheena Sara Philips ([email protected]) are with the School of Economics, Devi Ahilya University, Indore. The states of Madhya Pradesh, Bihar and Rajasthan have been striving hard in the last decade to get rid of their BIMARU label. They have made impressive strides in the field of health and education, and their efforts to boost growth and mitigate poverty are worth noting. At a time when development models adopted by the states of Gujarat and Tamil Nadu are being hailed, it might be useful to analyse the remarkable progress made by the BIMARU [1] states of Madhya Pradesh (MP), Bihar and Rajasthan. These states, along with the state of Uttar Pradesh, were once held responsible for retarding India’s development. The acronym BIMARU was coined by demographer Ashish Bose to refer to the above mentioned laggard states because of their poor demographic indicators. But soon the acronym was used to refer to their economic backwardness. Odisha shortly joined this club given its poor gross state domestic product (GSDP) and social indicators. However, in the last decade, these states achieved remarkable growth rates and that too during a period when the overall Indian economy was coping with faltering growth, rising prices, weakening currency and burgeoning deficit. The laggard states that were once blamed for retarding the growth of the country are now actually pulling it up (Financial Express 2012). The deputy chairman of the Planning Commission Montek Singh Ahluwalia, specially referring to Bihar and MP, said that these states did not deserve the tag BIMARU anymore due to their impressive economic growth rate, which was far above the national average (Financial Express 2012). In this article, we will focus on MP, Bihar and Rajasthan – analysing how economic growth in these states has translated into broader development benefitting all. While the Bharatiya Janata Party (BJP) has been in power in MP since 2003, Rajasthan in the last decade has been ruled both by the Congress party and the BJP. Since 2005, Bihar is being run by a coalition government of the Janata Dal (United) and the BJP. Economic Performance ISSN (Online) - 2349-8846 The annual average growth rate of gross state domestic product (GSDP) from 2005-06 to 2011-12 in MP was 8.64% while for Bihar and Rajasthan it was 18.14% and 8.67% respectively (Databook for DCH 2014). The growth in all the three states was more than the national average, which was 8.46% during the same period. In 2004-05, the per capita income (PCI) of MP was Rs 15,442, of Bihar Rs 7,914 and of Rajasthan Rs 18,565. By 2011-12, this had risen to Rs 24,395 in MP, Rs 13,226 in Bihar and Rs 28,851 in Rajasthan, showing an average growth rate of 6.8%, 7.8% and 6.6% respectively (RBI Handbook of Statistics 2012-13). The contribution of services sector to the GSDP of these states was instrumental in this growth. Nevertheless, the agricultural sector still contributed more than 20% to the GSDP in MP and Bihar (Databook for DCH 2014). As illustrated in Table 1, the performance of the agricultural sector in Bihar was relatively better than that of MP and Rajasthan. But the comparatively better performance of agriculture and allied sectors put together in MP pointed towards the state’s emphasis on diversified activities. Bihar had an edge in the services sector with a 11.01% growth rate in the sector, whereas Rajasthan with 11.97% average annual growth rate in the industrial sector explained the greater role played by the secondary sector in the state’s economy. Table 1: Sectoral Annual Average Growth in Net State Domestic Product from 2005-06 to 2011-12 Sr No Particulars MP Bihar Rajasthan 1 Agriculture 6.81 9.17 6.93 2 Agriculture & Allied 6.21 5.35 6.11 3 Industry 9.46 11.92 11.97 4 Services 9.68 11.01 8.60 5 NSDP at constant prices 8.62 9.34 8.42 Source: RBI Handbook of Statistics on Indian Economy, 2012-13 The commendable economic performance of these states betters prospects for people, but if this growth does not percolate down, it will generate social unrest. Therefore, periods of high growth in poor regions can put significant pressure on the system. It can unleash powerful aspirations as well as frustrations. The question, therefore, is how to tap these emotions to benefit all. The challenge is to address this situation and devise new mechanisms and institutions to solve problems that are associated with rapid growth. Efforts to Reduce Poverty With a surge in economic growth, these states can afford to launch many welfare schemes for the poor. But it needs to be worked out how these schemes while granting entitlements to the poor could simultaneously empower them. Therefore, the socio-economic development of the poor becomes as important an objective as achieving economic growth. ISSN (Online) - 2349-8846 As per estimates based on Tendulkar committee methodology[2] for poverty estimation, poor people living below the poverty line in rural areas in 2011-12 when compared to 2004-05 came down from 48.6% to 31.65% in MP and from 34.4% to 14.71% in Rajasthan. Bihar managed a 20% reduction by bringing down the poverty level to 33.74% (India Rural Development Report 2012-13). The reduction of poverty levels in all these states was more or less the same during this period. The sharp decline in the poverty levels was mainly because of the public distribution system (PDS) through which state governments provided subsidised food. In 2004-05, hardly 1% of rural households reported PDS rice consumption in Bihar; the figure for Rajasthan was nil (Table 2). On the other hand, during the same period, 17.9% of rural households reported rice consumption in MP. In a period of 5 years from 2004-05 to 2009-10, MP registered a 5% increase in the household consumption of PDS rice, while figures for Rajasthan rose only by 0.2 %. However, for the same period, Bihar put up a commendable performance by registering a growth rate of 11.2% in rice consumption. As far as wheat consumption from PDS was concerned, MP not only outpaced Bihar and Rajasthan but also the all-India average in 2004-05 and 2009-10. As a matter of fact, it registered a sweeping 25.4% increase in wheat consumption in the five year period from 2004-05 to 2009-10, when Bihar and Rajasthan recorded an increase of 11% and 5.2% respectively. This helped to reduce the poverty levels in the state of MP. Table 2: Rice and Wheat Consumption from PDS by Rural Households (%) Sr No Particulars MP Bihar Rajasthan All-India Proportion of Rural households 1 reporting Rice Consumption in 17.9 1 0 24.4 2004-05 Proportion of Rural households reporting Rice Consumption in 23.0 12.2 0.2 39.2 2009-10 % Increase in Rice consumption 5.1 11.2 0.2 14.8 Proportion of Rural households 2 reporting Wheat Consumption in 20.3 1.7 12.7 11 2004-05 Proportion of Rural households reporting Wheat Consumption in 45.7 12.7 17.9 27.6 2009-10 % Increase in Wheat consumption 25.4 11 5.2 16.6 Source: Ministry of Rural Development: Key Data on Rural Development from IDFC India Rural Development Report 2012-13 ISSN (Online) - 2349-8846 The improvement in the PDS coverage in these states basically indicates reduction in leakages. The statistics in Table 2 suggest that MP, Bihar and Rajasthan vastly improved their PDS between 2004-05 and 2009-10, which basically implied better administration. The question now is whether this improvement in the consumption is matched by improvement in social indicators, which better reflect the level of development. It is therefore important to see the performance of these states in realising their social development targets. Though many studies have shown that despite a sharp reduction in poverty, measures of human development, such as the nutritional status, educational attainment and life expectancy, improve very slowly. Improvement in Literacy Levels The high growth also creates demand for skilled labour. Thus, education becomes a powerful tool for social mobility. Various centrally sponsored education schemes like the District Primary Education Programme (DPEP) and the Sarva Shiksha Abhiyan (SSA) have been successful in bringing the much needed improvement in literacy levels in these states. But as education is a part of the Concurrent List, it is imperative that state governments make serious efforts in this field. Be it female literacy, rural literacy or the overall literacy rate, the performance of MP has been phenomenal—70.63% of the state population is literate—almost at par with the national average (Table 3). Increased awareness among women through education has led to a decline in fertility and maternal mortality rates in MP. Implementation of schemes like Universal Education for all, Vikramaditya Nishulk Shiksha Yojana etc, has helped increase enrolment in schools. The state has emphasised heavily on female literacy programmes like Laadli Lakshmi Yojana, Gaon ki Beti Yojana, Pratibha Kiran Yojana, Free Cycle Distribution etc. Owing to the laudable efforts of the MP state government, the status of female literacy improved appreciably from 29.4% in 1991 to 60% in 2011 (Census 2011). In 2001 itself, MP had achieved 50% female literacy, which Bihar and Rajasthan could only achieve by 2011.
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