Bihar’s growth accelerates to a record 14.48%

Numbers confirm Bihar’s structural shift away from agriculture, with sharp increase in share of services sector
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First Published: Tue, Jul 23 2013. 12 36 AM IST
A file photo of Bihar chief minister Nitish Kumar at a rally in New Delhi. Photo: Ramesh Pathania/Mint
A file photo of Bihar chief minister Nitish Kumar at a rally in New Delhi. Photo: Ramesh Pathania/Mint
New Delhi: Bihar has revised its economic growth for 2012-13 to 14.48%, five percentage points higher than what was initially forecast, according to two officials at the state’s directorate of statistics.
The new numbers confirm the state’s structural shift away from agriculture, with a sharp increase in the share of the tertiary or services sector.
The data is yet to be made public.
The state has had the distinction of having recorded the highest average growth rate among all states in the 11th Plan period, which ended in 2011-12. It grew by 15.69% in 2006-07, although this came on the back of a 0.17% expansion in 2005-06.
However, Bihar’s failure to reduce poverty levels in the state has taken away some of the sheen from this remarkable economic turnaround.
Experts said the data released by the Bihar’s directorate of economics and statistics should be interpreted carefully.
Vishnu Dayal Pandit, deputy director at the state’s statistics office, said the increase in comparable estimates was mainly due to construction and the tertiary sector.  
The revision may mean a further shift away from agriculture. Share of the primary sector or agriculture in Bihar’s predominantly rural economy diminished from 31% in 2006-07 to 23% in 2012-13, according to the advance estimates released in February.
The revision comes even as some experts have questioned whether Bihar’s remarkable growth has meant anything to its poor.
“Bihar’s growth story reflects that if you have heavily distorted regional economies, even small policy changes have large growth effects,” said Chetan Ghate, associate professor at the Indian Statistical Institute’s planning unit.
Releasing a new book on Bihar’s growth rebound on Sunday, experts including Nobel laureate Amartya Sen, said that while the state’s growth performance was remarkable, it needed to do more to reduce poverty.
The state had only managed to reduce the proportion of people below the poverty line from 54.4% in 2004-05 to 53.5% in 2009-10, according to the Planning Commission.
Media reports on 22 July that cited unnamed officials in the Planning Commission said that the state had witnessed a steep decline in poverty to 33.7% in 2011-12, although this is still more than ten percentage points above the national average poverty rate of 22%.
The news report was based on Planning Commission estimates that haven’t yet been made public.
Given that construction constituted about 10% of Bihar’s total product, the sharp revision could be a tentative indication that growth may be slightly more broadbased this year and driven by the services sector, Ghate said.
Other experts also said conclusions must be drawn carefully as the data is as yet only provisional.
“States bring out their growth numbers but we cross-validate them,” said Ashish Kumar, additional director general of the Central Statistical Office.
“We have not yet examined these estimates and typically, they are examined a year after the fiscal year ending after data from more sources is available.”
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First Published: Tue, Jul 23 2013. 12 36 AM IST
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