Country Session 6: India Bihar

The first half of the India Bihar session was chaired by Anjan Mukherji (NIPFP). The session opened with a presentation by Karthik Muralidharan (UCSD) who presented the findings of his joint research with Nishith Prakash (University of Connecticut) on the impact of Bihar’s flagship Cycling to School programme. He finds that the programme increased girls enrollment in secondary schools by 5 percentage points and had a greater impact for girls who lived further away from school. He highlights that the programme reduced gender gap by about 25 per cent and that it was at least as cost effective as other comparable programmes. Sushanta Mallick (Queen Mary University of London) stated that not only is Bihar’s credit deposit (CD) ratio significantly lower than the national average but also stagnant over the last few years. The stagnation in CD ratio is a clear indication of low level of financial intermediation which appears to be due to historical non-performing assets driving down the appetite of the financial intermediaries to give loans. He concluded that the positive link between finance and development is evident only in the context of agriculture and that measures such as the Kisan Credit Card and branch bank expansion at the district level tend to have a positive effect on per capita income in Bihar.

The second half was chaired by Robin Burgess (LSE and IGC) who gave a brief introduction for the policy round table on ‘Constraints to Industrial Development in Bihar’. T. Nandkumar (National Disaster Management Authority of India) said that the preconditions to industrial development are good governance and infrastructure. He highlighted that possible areas of investments are sugarcane, corn and power industry. R.K. Khandelwal (Government of Bihar) agreed with Mr Nandkumar regarding the constraints to industrialization. He highlighted that the present government has tackled some of these constraints through tax incentives, single window clearance among other initiatives. Shaibal Gupta (IGC and ADRI) said that the resurrection of Bihar is only a recent phenomenon and that Bihar was a non-functional state for a very long time. He pointed out that there is need to encourage local entrepreneurs, increase productivity of agriculture, update land records and carry out land reforms to push industrial development in Bihar. Maitreesh Ghatak (LSE and IGC) argued that Bihar cannot jump agriculture transformation since that is a precondition for industrial development, which in turn needs land reforms. Prabhat P. Ghosh (ADRI) said that Bihar should focus on small and micro industries as this is where Bihar’s comparative advantage lies.