Story Brunch
Understanding Poverty in Bihar
Bihar, a state located in the eastern part of India, has long been associated with poverty and underdevelopment. Despite its rich history and cultural significance, Bihar struggles with numerous socio-economic challenges. From the lack of industries to high crime rates, the state’s issues are multifaceted and deeply rooted. This article aims to shed light on the various dimensions of poverty in Bihar and the reasons behind its current state.
Multidimensional Poverty of Bihar
When we talk about poverty, it’s not just about the lack of money. Poverty can be seen from multiple dimensions – health, education, and living standards. Bihar faces challenges in all these areas. For instance, many children in Bihar are malnourished, and the state has one of the highest infant mortality rates in India. In terms of education, a significant portion of the population remains illiterate, leading to a cycle of poverty that’s hard to break.
Lack of Industries and Jobs
One of the primary reasons for Bihar’s underdevelopment is the lack of industries. The state doesn’t have a robust industrial base, which means fewer job opportunities for its residents. Without industries, the state’s economy remains primarily agrarian, making it vulnerable to the vagaries of nature like floods and droughts.
Absence of Private Sector and Limited Government Jobs
The private sector, which is a significant source of employment in many states, is almost non-existent in Bihar. This absence means that the onus of providing jobs falls on the government. However, the number of government jobs available is limited, leading to high unemployment rates.
Lowest GDP in India
Bihar’s Gross Domestic Product (GDP) is the lowest among all Indian states. A low GDP indicates a lack of economic activity and prosperity. Without significant industries and businesses, the state’s revenue remains limited, affecting its ability to invest in development projects.
High Crime Rates and Unemployment
The lack of job opportunities has led to high unemployment rates, which in turn has resulted in increased crime rates. Many unemployed youth resort to unlawful activities as a means of livelihood, further deteriorating the state’s law and order situation.
High Outward Migration and Influx of Bangladeshi and Rohingya Refugees
Due to limited opportunities in Bihar, many residents migrate to other states in search of better prospects. This outward migration means a loss of human capital for Bihar. Additionally, the state also sees an influx of refugees from neighboring countries, adding to its population burden.
Lack of Urban Development and Infrastructure
Bihar lacks well-developed towns and cities. The infrastructure, including roads, bridges, and public transport, is not up to the mark. This lack of infrastructure hampers the state’s growth and development.
Historical Background to Poverty in Bihar: The Role of the Zamindari System
The roots of Bihar’s economic challenges can be traced back to the historical decisions and policies implemented during the British colonial era. One such policy that had a profound impact on Bihar’s socio-economic landscape was the introduction of the Zamindari Settlement Act in 1793. This system, while seemingly innocuous at first, set the stage for the economic decline of the state.
The Zamindari Settlement Act and Its Implications
Introduced by the British, the Zamindari System was a revenue collection mechanism. Under this system, large tracts of land were handed over to zamindars or landlords. These zamindars were tasked with collecting revenue from the peasants and farmers working on the land. In return for their services, the zamindars were allowed to keep a portion of the revenue, while the rest was to be handed over to the British administration.
However, the primary flaw in this system was that the zamindars were not incentivized to increase agricultural production or improve the land’s productivity. Their primary concern was to collect as much revenue as possible. This led to a situation where the zamindars would impose exorbitant taxes on the peasants, often far beyond what they could afford.
Deteriorating Conditions Over Time
With the zamindars focused solely on revenue collection, there was no investment in improving agricultural practices or infrastructure. For instance, in regions where rice was the primary crop, the zamindars could have introduced better irrigation methods or newer rice varieties to boost production. However, such initiatives were rare.
Over time, the high revenue demands without a corresponding increase in production led to severe hardships for the peasants. Unable to meet the high taxes, many peasants found themselves in debt. As an example, a farmer who once owned his land might have had to mortgage or even sell it to pay off the debts incurred due to high taxation. This led to a cycle where the rich zamindars became richer, while the peasants became landless laborers, further deepening the economic divide.
Furthermore, the land, which was once fertile and productive, began to deteriorate due to overuse and lack of proper agricultural practices. Soil erosion, declining fertility, and other issues became common, leading to reduced crop yields. The repercussions of this system are still felt today, as Bihar grapples with the challenges of poverty and underdevelopment.
Freight Equalization Policy and Its Impact on Bihar
Post-independence, India embarked on a journey to establish itself as a self-reliant nation, with a focus on industrialization. The Nehru government introduced several policies to achieve this goal. One such policy, which had unintended consequences for states like Bihar, was the Freight Equalization Policy.
Understanding the Freight Equalization Policy
Introduced in 1952, the Freight Equalization Policy aimed to create a unified national market for minerals and industrial raw materials. The primary objective was to ensure that industries had equal access to raw materials, irrespective of their location. Under this policy, the transportation cost of minerals like coal and steel would be the same, whether the industry was located near the source of the raw material or far away. The government would bear the differential transportation cost, thereby equalizing the freight charges.
How It Affected Bihar
Bihar (including present-day Jharkhand) was rich in mineral resources, especially coal and iron ore. Naturally, it would have been more cost-effective for industries to set up their operations near these raw material sources. However, with the introduction of the Freight Equalization Policy, this locational advantage was nullified.
For example, let’s consider a steel manufacturing company. Without the policy, it would have been economically beneficial for the company to set up its plant in Bihar, close to the iron ore mines, to save on transportation costs. However, with the Freight Equalization Policy in place, the company could set up its plant in a state far from Bihar and still get iron ore at the same transportation cost as if it were in Bihar. This disincentivized industries from establishing themselves in mineral-rich states like Bihar.
Consequences for Bihar
The policy had several repercussions for Bihar:
Loss of Potential Investment: Bihar lost out on potential industrial investments, as companies chose to set up their operations in other states, which might have offered better infrastructural or other incentives.
Economic Stagnation: While other states progressed with new industries and employment opportunities, Bihar’s economic growth was stunted due to the lack of industrial development.
Dependency on Agriculture: With industries not setting up base in Bihar, the state continued to rely heavily on agriculture, making its economy vulnerable to climatic changes and market fluctuations.
Migration for Employment: The lack of job opportunities in Bihar led to a significant outward migration, as people moved to other states in search of employment.
The Freight Equalization Policy, though well-intentioned, had adverse effects on Bihar’s economic landscape. By neutralizing the state’s natural advantage of mineral resources, the policy inadvertently contributed to its industrial stagnation and subsequent economic challenges.
The Era of ‘Jungle Raj’ in Bihar: A Period of Tremendous Decline
The 1990s was a transformative decade for India. As the nation embraced liberalization, privatization, and globalization reforms, many states began to flourish, reaping the benefits of these economic changes. However, while states like Karnataka, Maharashtra, and Gujarat were surging ahead, Bihar found itself grappling with a myriad of challenges. This period, often referred to as the ‘Jungle Raj’, was marked by lawlessness, misgovernance, and economic stagnation, especially during the tenure of Lalu Yadav.
Misgovernance and Maladministration
Under Lalu Yadav’s leadership, Bihar witnessed rampant misgovernance and maladministration. The state machinery seemed to be in disarray, with corruption becoming endemic. This environment was not conducive for businesses. Many industries, unable to operate efficiently in such a chaotic environment, chose to shut down or move to other states. The closure of these industries not only led to job losses but also deprived the state of crucial revenue.
Migration of Talent
The deteriorating situation in Bihar led to a significant brain drain. Many of the state’s brightest minds, skilled workers, and professionals chose to migrate to other parts of the country in search of better opportunities and a stable environment. This exodus meant that Bihar was losing its human capital, further hampering its growth prospects.
Law and Order Concerns
The state’s law and order situation was in shambles. Frequent caste wars, communal tensions, and massacres became the norm. For the common citizen, concerns about safety and security overshadowed everything else. In such an environment, productivity took a backseat. Businesses were hesitant to invest, and existing industries often faced disruptions.
Decline of Educational Institutions
Education is the backbone of any progressive society. However, during this period, Bihar’s educational institutions faced a severe decline. Lack of funding, mismanagement, and the prevailing lawlessness meant that these institutions could not function at their optimal capacity. This decline further affected the state’s human resource potential, as the youth were deprived of quality education.
Financial Strains on the Government
The state’s treasury was nearly empty. This financial crunch had severe implications. Government employees, including teachers, doctors, and civil servants, often faced delays in receiving their salaries. Such delays demotivated the workforce and affected the delivery of essential services to the public.
Contrast with Other States
While Bihar was embroiled in these challenges, other states were capitalizing on the economic reforms introduced in the 1990s. They were attracting investments, setting up new industries, and creating employment opportunities. This contrast further widened the development gap between Bihar and other progressive states.
Women’s Safety
Women’s safety reached an all-time low during this period. Cases of harassment, assault, and other forms of violence against women were rampant. This not only affected the morale of half the state’s population but also deterred many families from allowing their daughters to pursue education or work.
The ‘Jungle Raj’ era in Bihar is a stark reminder of how political instability, misgovernance, and lawlessness can derail a state’s progress. While the rest of India was moving forward, Bihar was caught in a web of challenges. It took years for the state to recover from the setbacks of this period, emphasizing the importance of good governance and stability for development.
Click on the link below to read detailed article on Jungle Raj in Bihar-
Let’s delve into some other crucial aspects that have further compounded Bihar’s challenges.
The Absence of Coastal Areas
Coastal regions offer a plethora of economic advantages. States like Gujarat, Maharashtra, and Tamil Nadu have leveraged their coastlines to boost trade, tourism, and industry. Coastal areas facilitate:
Trade and Ports: Coastal states can establish ports, which become hubs for international trade, bringing in revenue and fostering industries around these areas.
Tourism: Beaches and coastal regions are significant tourist attractions, generating income and employment.
Fishing Industry: A thriving fishing industry can be established, providing livelihoods to many.
Bihar, being landlocked, misses out on these economic opportunities, placing it at a disadvantage compared to coastal states.
Division and Deprivation: The Creation of Jharkhand
In 2000, Bihar underwent a significant territorial change with the carving out of Jharkhand. This division meant that Bihar lost a significant portion of its mineral-rich regions. Jharkhand, now a separate state, houses vast reserves of coal, iron ore, and other minerals. The loss of these resources was a blow to Bihar’s potential industrial growth and revenue generation.
The Burden of High Population Density
Bihar’s high population density puts immense pressure on its infrastructure. Roads, public transport, healthcare, and educational facilities constantly face the challenge of catering to an ever-growing population. Even as the state tries to expand its infrastructure, the sheer population load makes it seem perpetually insufficient.
The intensive subsistence agriculture, driven by the need to feed a large population, leaves little room for cash crops or plantation farming. This type of agriculture focuses on producing enough to sustain the farmer’s family, with little left for trade or profit.
Furthermore, the high population also strains resources for cattle. With limited fodder available, the dairy sector, which could have been a significant source of income, faces challenges.
Environmental Concerns and Their Economic Impact
Pollution in Bihar’s rivers and ponds has had a detrimental effect on the fisheries sector. Clean water bodies are essential for a thriving fish industry. However, with increasing pollution, the potential income from fisheries, which could have supplemented farmers’ earnings, is compromised.
The Persistent Brain Drain
Over the years, many of Bihar’s brightest minds have migrated to other states or countries in search of better opportunities. This brain drain means that Bihar loses potential entrepreneurs, innovators, and skilled professionals. The absence of such individuals has a cascading effect, as the state misses out on potential tech startups, businesses, and innovations that could drive economic growth.
In Conclusion
Bihar’s economic narrative is a complex interplay of historical decisions, geographical limitations, and contemporary challenges. Addressing these issues requires a multi-faceted approach, focusing on both leveraging the state’s strengths and mitigating its weaknesses.
FAQs related to Bihar Poverty
- What are the main reasons behind Bihar’s persistent poverty?
- How does the historical Zamindari System contribute to Bihar’s current economic challenges?
- What was the Freight Equalization Policy and how did it impact Bihar’s economy?
- Can you explain the effects of the ‘Jungle Raj’ era on Bihar’s development?
- Why does Bihar’s landlocked geography affect its economic development?
- How did the creation of Jharkhand impact Bihar’s economy?
- What challenges does Bihar face due to its high population density?
- In what ways has environmental pollution impacted Bihar’s economy?
- How does the brain drain phenomenon affect Bihar’s economic progress?
