India's third most-populous state, Bihar, goes to the polls starting 21 October. Over the following month, among a population of 90 million, the electorate will vote over six phases to elect 243 members of the state assembly. It is no exaggeration to say that this electoral drama is the most important one in the political careers of two of the state's most prominent figures, Nitish Kumar and Lalu Prasad Yadav. This is the first time Nitish is facing an election as a sitting chief minister, and the first time since 1995 that Lalu is fighting an election as a candidate for that post.
The ruling National Democratic Alliance combine of Nitish Kumar's Janata Dal (United) and the Bharatiya Janata Party (BJP) are approaching this election on a plank of sushasan or good governance. But how do the actual economic figures measure up against this claim? According to the state's economic survey for 2008-09, Bihar's gross domestic product grew by more than 11.4 percent in 2008-09 – following similarly tall claims about the two previous years. Further, the survey says that the construction sector alone grew by 43.9 percent in 2008-09 and now contributes 13.4 percent of the state's GDP, compared with 4.2 percent in 2003-04; while INR 7 billion have been spent on road-building.
As being widely noted, though, there are accompanying concerns. First and foremost, there are discrepancies between the numbers given by the Bihar government and those furnished by the Central Statistical Organisation (CSO), New Delhi from 2004-05 onwards. For 2004-05, while the CSO mentions the growth rate as nearly 12.2 percent, Patna's economic survey puts it at around 11.3 percent. Similarly, for 2005-06 and 2006-07, the CSO rates are 1.5 percent and 22 percent respectively, while those of the state government are 2.8 percent and 20.3 percent. Even starker differences emerge for the years 2007-08 and 2008-09. The CSO offers 8.0 percent and 11.4 percent, while Patna suggests -0.1 percent and 2.4 percent. Given the wild discrepancies between these figures, the least that can be said is that one needs to exercise caution before trusting the Nitish government's claims about Bihar's growth.
Second, when Nitish came into office, in September 2005, Bihar's share of all-India bank deposits with the Reserve Bank of India was 2.2 percent, while its share of bank credit, an indicator of business growth, was 0.9 percent. Yet after four years of Nitish's rule, in September 2009, the state's share of all-India bank deposits was exactly the same. If indeed growth in Bihar over 2005-09 has been above the all-India average, as claimed by the combine of the JD (U) and BJP, then that has neither been fuelled by bank credit nor has the resulting development led to an increase in business investments and the state's share of bank deposits.