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The
stock of a Chief Minister in India is measured by the
number of visits by high profile dignitaries from the
Government of India to the respective province. By that
reckoning, Maharastra is possibly on the highest pedestal;
be it the event of unprecedented rain leading to accumulation
of knee deep water in Bombay or farmers' suicide in Vidharbha
because of draught or handing over living quarters to
the women beedi workers in Sholapur, the Prime Minister
of India, Dr. Manmohan Singh is in attendance on every
eventuality and occassion. Incidentally, each visit also
had separate financial package, for the given region in
the state. On that count, Nitish Kumar who completed his
nine months in office as the Chief Minister of Bihar on
August 24 is dismal. Even though currently a draught is
devastating Bihar, Prime Minister could not visit the
state. Far away in Hyderabad, he exhorted the former indentured
laboures from the state, who have become some what wealthy
in Mauritius, to invest in the land of their forefathers,
in the last NRI meet. Nitish Kumar in his nine months'
tenure could ensure the visit of President and Vice-President
of India. President Abdul Kalam has not only adopted Bihar,
he almost acts as a brand ambassador of the state. While
the Presidential forays is a matter of prestige and honour,
it further helps in creating ambiance of the state. But
in terms of tangible resource devolution, it has no significance.
However, Nitish Kumar literally accomplished a 'political
coup' by ensuring the visit of P. Chidambaram, the Union
Finance Minister for a half a day to Patna during his
present tenure. This was possibly Chidambaram's first
visit to any
of the Hindi Heartland states and thus not an ordinary
event. The visit was also important as he is not a run
of the mill union minister; he has not only the ability
to set the national economic agenda, but also the dexterity
to implement it which has far reaching implications for
economically peripheral states like Bihar. Thus the result
of his visit should not be measured in terms of financial
package announced for the state, but its symbolic significance.
Is economically resurgent India trying to locate Bihar
in its cognitive world and looking for a turn around in
near future? The very fact that two relatively young leaders,
Nitish Kumar and Chidambaram, broke ice between themselves,
symbolizing the union and the state governments, and both
have long innings to play in the national politics, the
meeting had deep significance. In the increasingly market
economy, the one to one personal rapport is more important
than formal institutional arrangements for determining
the economic contours.
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Basically,
Chidambram's visit should be examined along three parameters.
First, in univocal terms, he warned the commercial banks
to improve its performance and its internal governance.
If the target, set by Chidambaram, to devolve additional
Rs. 10,000 crore in the agricultural credit plan in the
state in the current financial year is achieved, it will
bridge significantly the mismatch between the savings
and the investment rate in the resource starved state
of Bihar. It is a dismal commentary on the performance
of the banks, that 37 blocks of the state are still outside
its pale, 800 branches are manned by only one officer
and 700 branches of the banks have not devolved credit
of single rupee in its respective area. It is indeed ironical
that the poor state of Bihar could generate a sizeable
deposit of Rs. 46,134 crore, but Rs. 31,326 crore of it
is transferred from the state to rest of India through
the machinery of banks. If Chidambaram is able to provide
the promised good performance of its own institutions,
as indicated by pulling up the shocks of the banking mandarins,
it will be great service to the benighted state of Bihar.
Secondly,
Chidambaram's chiding about poor quality of governance
in the state should not be ignored. He even sarcastically
mentioned that if resources have been devolved for roads
or bridges or school or hospital, at the end of the day,
these items should really get built. This statement implies
that resources in Bihar get siphoned off lock, stock and
barrel to private coffer, without tangible identifiable
result. In deference to what the media usually projects,
this impression is not a result of the last one and half
decades; the image of Bihar as the most corrupt state
(both in the rank of civil servants or politicians) continues
from the immediate post independent period. To nullify
this image of outright corruption, the fiction of Appleby
about Bihar's good governance was created in spite of
the fact that nowhere in Paula Appleby's Report there
is any mention of good governance in Bihar. The stick
of Appleby was used to beat all discordant voice which
questioned the quality of governance in Bihar. So unless
the systematic siphoning of resources is stopped, as Chidambaram
hoped, Bihar will not be able to create a new benchmark
in the matter of governance.
Finally, visit of Chidambaram to Bihar, will ensure that
he takes cognizance about historically disabling factors
that is inhibiting growth in some of the peripheral regions
of India. In case of Bihar, it had to face historical
disadvantage. As a first seat of British colonialism,
not only the indigenous artisans and traders were exterminated,
the tenurial system of 'permanent settlement' further
spelled doom for our state in the matter of generation
of surplus, appropriation of surplus and in turn investment
and per capita expenditure. The post independent development
strategies of India did not make efforts to reverse this
disadvantage of Bihar. The vivisection of the state in
November of 2000, between Bihar and Jharkhand, further
crippled our public financial and economic edifice. Since
independence, not only Bihar has lowest per-capita plan
expenditure, but even in the matter of non-plan expenditure,
it is still the lowest in the country. Chidambaram rightly
mentioned, in an interactive session with the developmental
specialist and agencies, that there is substantial jump
in the 12th Finance Commission award for Bihar. But even
after that, the per-capita allocation for the state is
lowest in the country, even though Finance Commissions
grants are expected to be 'equalization' grant. It is
not often realized that the quality of governance in a
given state, where the capacity for internal resource
generation is limited, the Finance Commission grant is
extremely important. The whole edifice of the state and
its civil service is lubricated through the non-plan grant
award of the Finance Commission. Even for meeting the
matching grant of the Planning Commission or servicing
the debt, the substantial quantum of Finance Commission
award is very necessary. Long before independence, way
back in 1930 in The Memorandum for the Indian Statutory
Commission on the Working of the Reforms by Bihar and
Orissa government indicated that, expenditure in administration,
education, health and police was the lowest in the country.
It identified the 'permanent-settlement' to be the main
cause of limited resource generation and in turn limited
administrative expenditure. The 'permanent-settlement'
also stood in the way of regular survey and settlement
operations, as in the 'Royatwari' areas, which forms the
'Sun rise' states of India. The historical absence of
governance at the lowest levels of the state, where social
arbitration is still being done by the feudal or by the
mafia. In areas with militant agrarian struggles, this
role is also played by the left radical organizations.
If the writ of the state in Bihar has to made all pervasive,
not only the non-plan expenditure has to be increased
in administration, but some parts of the state structure
also has to be dismantled. If fiscal management is followed
by debt reduction, as exhorted by Chidambaram, the proportion
of third and fourth grade employees, who do not contribute
to productive governance, should not only be reduced,
even in the matter of pay structure, it should be rationalized.
Incidentally, the annual per-capita expenditure on state
government employees is the highest in the country (Rs.
1.5 lakhs), whereas the national average is Rs. 82,000
only.
In the absence of such understanding about historical
disability, one will not be able to appreciate the reasons
for our debt accumulation over the years. If the cabinet
of I. K. Goral could write off the debt of Punjab, one
of the richest state of the country, why can't this favor
be extended to Bihar as well. In any case, without expanding
the market and strengthening the entrepreneurial base,
we cannot hope to devolve substantially resources through
market related rout. On the other hand, hardly any department
of the Bihar has any in-house capacity to prepare projects
which can withstand rigorous scrutiny by national and
international organizations, for funding. Our cognitive
world is still very limited. We still flatter ourselves
about our 'imagined' heritage of 'good governance' and
still involve their ideological progenies for streamlining
the future economic governance. Whereas we should take
Chidambaram's word with some amount of pinch of salt,
but his caution for quality of governance, if ignored,
will be at our own peril.
One
can only hope that, even if Prime Minister ignores Bihar,
it will at least be the destination of other luminaries
who could help in the re-branding of the state. In that
context, the visit of Chidambaram to Bihar has been one
of the glorious moments for Nitish Kumar in his nine months
saddle.
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