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Economic Analysis on Bihar

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Submitted By pietra
Words 2325
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BY Group A

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History GSDP at Constant Prices Comparison of Bihar‟s GSDP with other states Composition of Various sectors Annual Growth Rate Comparison between 2004-07 and 2008-11 Summary



Bihar as a political entity, either as a kingdom, or as a state within the republic of India, has its own identity from the time written records were available. Noted historian, Romila Thapar, describes the history of ancient India as the history of ancient Bihar. Many achievements that India became renowned for, in education, governance, society, or religion, have their roots in Bihar. Significant achievements of Bihar in trade and economic engagement within the state and outside of the Indian sub-continent emerge from a past that appears to have left no living legacy in today‟s Bihar

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DURING 2005-2006: Growth rate of GSDP was minimum(.94%) Rabri devi departed out of CM house Bihar came under presidential rule In november,nda rule started with nitish kumar as CM This shift of govt. subdued or depressed the GDP


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DURING 2006-2007:
Drastic increase of GSDP from .94% to 18.13% Nitish kumar govt. came out with many social reforms: Bihar‟s single window clearance act Infrastructure development enabling act New industrial policy Price preference policy New policy initiatives for entertainment, tea processing, sugar sectors Introduction of NREGAs Simplification of VAT regime



DURING 2007-2008: GSDP fell down to 8.48%(around 10%fall )but was more than 2005-2006 VAT reimbursement @80% of the deposited amount for a period of 10 years with a ceiling of 300% of the capital investment. Provisions for incentive even in zero VAT cases. Reimbursement of 50% of the amount spent on plant & machinery for captive power generation. 25% of the VAT reimbursement for the existing units. Exemption from electricity duty for new units. Exemption from Stamp Duty and registration fee on land transfer. Incentive granted on land/shed in Industrial Area/ Industrial Park etc. Corpus fund creation for sick & closed units.







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DURING 2008-2009: GSDP again went high from 8.48% to 13.06% which was decent enough. Inspite of global credit crisis, automobile sales grew by 45% in the last months of 2008 and real estate sector also has grown. NDA govt. drawn many construction companies, builders and suppliers. In 2008 alone the state govt. invested Rs.13,500 crore on development projects. Shows Bihar had grown into a strong developing economy.






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DURING 2009-2010: GSDP went down to 8.56% showing a difference of around 5%. During the second half of 2008(august) one of the most disastrous floods (kosi floods) occurred in Bihar. Standing crops worth Rs.800 crore were destroyed Besides construction, communications and hotel and restaurants witnessed the highest growth Favorable environment for private companies, investors, entrepreneurs have been created Low growth of industrial sector than as it was expected

Top five states until 2010 in GSDP values 1.Maharashtra 2.Andhra Pradesh 3.Gujarat 4.Tamil nadu 5.Uttar Pradesh In 2005-2006 and 2007-08 Bihar stood in the top five states in GSDP growth. -due to reduction in migration levels -construction boom: real estate sector(Rs.18,000crore to Rs.24,000crore was spent)








Agriculture was the major contributing sector during this period with a share of 25.8%. Trade , hotels and restaurants formed the next major sector by contributing 21.2% in the GSDP. Total contribution of Primary , Secondary and tertiary sectors were 30.89% , 13.92% and 55.17% respectively.

GSDP

30.89%
55.17% primary

13.92%

secondary tertiary •

Agriculture formed the major part of the primary sector while construction and trade , hotels & restaurants formed major part of secondary & tertiary sectors respectively.

GSDP

28.7%
56.49% primary

14.80%

Secondary tertiary 



This year saw a decline in the percentage of agriculture to 23.61% from 25.8%.But, it still remained the major contributing sub-sector in Bihar‟s GSDP. The share of primary sector declined by 2% .This decline was compensated by an increase of 1% in both tertiary and secondary sectors.

GSDP

30.42%
54.87% primary

14.70%

secondary tertiary 





Agricultural sector‟s contribution increased from 23.61% to 26.28% .This increased the share of primary sector to 30.42%. Consecutively, there was a decrease in the contribution of secondary and tertiary sector. The tertiary sector witnessed a decrease of almost1.5% despite the increase in contribution of trade , hotels and restaurants to 22.36% from 20.59%.



Agricultural sector experienced a drastic change wrt. Public investment, use of inputs, extension activities and crop-milk-fish production. State govt. assigned priority to this sector by increasing the budget allocation for less than Rs.200 crores during the previous years to more than Rs.1000 crores during this year.

GSDP
Primary Secondary Tertiary

27%
57%

16%





Decrease in agricultural contribution: The contribution of agricultural sector again fell down to 23.01%.This was mainly due to floods in the state affecting 19 districts of the state. Increase in secondary sector : Nitish Kumar undertook many projects of construction of roads , schools and colleges which increased the contribution of construction sub-sector to 9.69% from 8.7%.



Also , the industrial sector progressed decently due to various schemes such as BSIDC , Udyog Mitra etc. Increase in Tertiary sector: The Nitish govt. was able to instill a sense of security amongst the population of Bihar. The standard of living improved slightly. This was reflected in the increase of trade hotels & restaurants sub-sector from 22.36% to 24.95%.

GSDP
Primary 26.22% Tertiary 57.93% Secondary 15.84%





Sharp Decline In The agricultural sector : The agricultural sector declined from 23.01% to 22.75%.The main reason for this decline was heavy floods in many regions of Bihar which destroyed large portion of standing crops. Emergence of trade , restaurants and Hotels as the major sub-sector: with policing and connectivity increasing dramatically, investment in trade and hotels has increased largely. it emerged as the major sector in 2008-09 with 30.43% share.

GSDP
Primary

22% Secondary tertiary 15%

63%





Rise in tertiary sector : Tertiary sector increased from 57.93% to 62.77% during 2008-09 to 2009-10. Bihar Govt. recruited 92000 teachers, 80,000 in primary schools and 12000 in secondary and sr. secondary schools after modifying the existing rules, which led to heavy employment generation.

GSDP primary 21% secondary tertiary 64%

15%

35 30 25 20 15 10 5 0 AGRICULTURE TRADE HOTELS AND RESTAURANTS

0.12

0.1

0.08

0.06 Series1

0.04

0.02

Primary sector low annual growth rate compared to other sectors with 2.88%.  Secondary has a decent growth of 9.08% .  Tertiary has the highest growth rate of 10.6%


0 primary secondary tertiary

0.16 0.14 0.12 0.1 0.08 0.06 0.04

0.02
0 -0.02 -0.04

Series1

Bihar didn‟t see much annual growth rate in primary sector.  Agriculture has growth rate of 3.4%  The reason is that Bihar is predominantly an agrobased economy and the contribution from forestry and logging sector decreased.  Industry sector boomed after NDA govt. entered.  Growth of 9.08% of secondary sector was mainly due to construction(13.5%) and electricity, gas& water supply sector(6.6%).


(Highest annual growth rate was in tertiary sector which is mainly due to trade, hotels and restaurants sector(15.1%) ,banking and insurance(13.8%) and communication 14.5%).  In addition railways(8.6%) and real estate (8.2%) have also contributed to overall increase of tertiary sector.


2004-05 to 2007-08


2007-08 to 2010-11
 Primary

Primary sector- contribution declined from 30.89% to 26.85% in the period 2004-08 mainly due to agricultural sector. Still agriculture was contributing the most.



Secondary sector-

contribution increased from 13.92% to 16.33%.This was mainly due to increase in industry.

contribution declined from 26.22% to 21.49% in 2008-2011.this was due to overpowering of other sectors together with natural calamities like floods and droughts.  Secondary sector-this period saw a decline of secondary sector from 15.42 %to 14.58%.

sector-

2004-05 to 2007-08


2007-08 to 2010-11


Tertiary sector-it grew

gradually from 55.17% to 56.8%. Main contribution is from trade, hotels and restaurant sector.



Agriculture-it remained

major contributing sector. Saw a rise in year 2005-06.it then declined further till 2007.Untill 2007 it remained largest sector(26.28%).

a growth of 6% from 57.93% to 63.91%.this is due to foreign investment and demands of people for high std of living.  Agriculture-in this period agriculture was the 2nd largest sector. It‟s share was 23.011% and declined to 18.68% by the end of 2011.This is mainly due to kosi floods of 2008 followed by drought in 2009-10.

Tertiary sector-it has seen

2004-05 to 2007-08


2007-08 to 2010-11




Industry- industry contributed 13.97% in 2004-05 and it‟s share increased up to 16.39% by the year 2008.This is mainly attributed to Govt. launching various programmes for industrial development like udyog mitra , BSIDC etc. Trade, hotels and restaurants-it was one of the fastest growing sectors which became the major contributing sector by 2008(24.95%).This is due to inc in living standad,law and order and public administration.

Industry-the contribution of industrial sector declined in 2008-2011 from 15.93% (2008) to 14.65%(2011).Other sectors increased at the cost of industrial sector.



Trade, hotels and restaurants-it is now the

major contributing sector. It‟s contribution inc from 26.84% to 32.44%.

In2005-06

Bihar was much below India in GDP growth rates. it contributed comparatively less in GDP of India. In 2006-07 India had a stable GDP growth while that of Bihar‟s increased steeply. Despite the decrease in GDP growth rates of India due to the global credit crisis Bihar showed inc in the GDP. Finally in the year 200910,India and Bihar reached almost same GDP growth rate.

% growth of GDP of Bihar and India

20.00 18.00 16.00 14.00 12.00

10.00 8.00
6.00 4.00 2.00 0.00 2005-20062006-20072007-2008 2008-09 2009-10

bihar india



“For decades the sprawling state of Bihar, flat and scorching

as a griddle, was something between a punch line and a cautionary tale, … Criminals could count on the police for protection, not prosecution. Highwaymen ruled the shredded roads and kidnapping was one of the state‟s most profitable businesses… Its government, led by politicians who used divisive identity politics to entrench their rule, was so corrupt that it required a newly coined phrase: the Jungle Raj.”
Polgreen (2010)





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Several policies existing over a large span of time led to systemic disadvantages and problems like wealth accumulation that have had notable negative consequences for Bihar‟ economic potential. Briefly, the list of policies that we cover includes: 1. The Zamindari System and the Permanent Settlement of

1793.






2. The step-motherly treatment meted out to Bihar by the Central Administration during the British Rule as well as during the Plan periods after Independence. 3. The Freight Equalization Policy of 1948. 4. The unwritten policy of non-performance during the 19902005 period or the „Designed Governance Failure‟.











Figure 1 captures, in a very raw sense, the pace of growth in per capita income has been the highest in the post 2005 period. In terms of sectoral growth it is also clear that the post 2005 period saw a quacking pace in each sector. While the construction sector maintained its high levels of growth, agriculture, industry and services, each grew faster in the post 2005 period. With almost 60% of NSDP coming from the services sector. In sheer levels, the most important services sector for Bihar is Trade, Hotels, and Restaurants that forms about 27.3% of NSDP by 2010.

16000

14000

12000

10000

8000

per capita GSDP at const prices

6000

4000

2000

0 2004-20052005-20062006-20072007-20082008-20092009-20102010-2011







Data from the National Family Health Surveys (NFHS) shows that while the total fertility rate for women in India went down from 2.68 children per woman in 1998-99 to 2.50 children per woman in 2005-06, for Bihar it went up from 3.7 to 4.0 children per woman. The fertility rate is still at 3.9 children per woman in Bihar and population projections suggest that Bihar will attain the replacement rate only by 2027 – one of the slowest states to achieve it. One of the implications of Bihar‟s population growth rate and fertility rate is that Bihar‟s workforce is and will remain one of the younger workforces in the future.



In spite of seriously undermined ability to provide services the Nitish Kumar government created a number of important changes, which led to the following:








 

Fiscal Reform and restructuring of public expenditures. Improvement of Law and Order and Crime Statistics. Construction of Roads and Bridges. Improved provision for power. Increase in education and health services. Migration and remittances.











The transition from a degrading economy to an expanding economy with a state government actively engaging in governance has been remarkable. However, Bihar remains a poor economy with key structural imbalances and is still well below the national average in terms of well-being, productivity and public investment. A key concern with the growth experienced so far has been its lack of inclusiveness. Data released by the Planning Commission shows that poverty ratios in Bihar remained stagnant over the period 2004-05 to 200910. The services sector has been leading growth in India since the early 1990s and this is the case for Bihar too, although the services sector started expanding in earnest only after the 2005 elections. „What next?‟

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...Why do Poverty Reduction Programmes tend not to work out as intended? Discuss in relation to either i) states or ii) civil society organisations (NGOs or social movements or both). Introduction Mass poverty is the single most important economic and social issue on our planet today (Downer, 1997). ‘Poverty’ is a multidimensional concept involving the inability of people to meet their economic, social and other standards of well-being (OECD, 2001). Over the years a number of institutional approaches have been used to ensure the eradication of poverty from the society (Sarker and Rahman, 2006). One of these efforts is through a poverty reduction strategy. According to Barder (2009) ‘Poverty reduction’ is often described as the promotion of economic growth that will permanently lift as many people as possible over the poverty line. This line is defined as ‘the income levels below which people are defined as poor’ (World Banks, 2004). However, making poverty reduction strategies work has proven a much bigger challenge regardless of the fact that many efforts have been made towards alleviating it. Downer (1997) argues that the provision of opportunity for people to meet their basic needs has become the greatest challenge to most countries. Why then do poverty reduction programmes tend not to work out as intended? Pellissery (2005) points out that in developing economies, public authorities who are responsible for designing and implementing anti-poverty interventions are not......

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9th Mile Meghalay

...| EDUCATION | 7 | PLACE OF BIRTH | 8 | MARITIAL STATUS | 9 | PERSONAL INCOME | 10 | YEAR OF ESTABLISHMENT | 11 | TYPE OF ENTERPRISE | 12 | CONCLUSION | 13 | TABLE NO. -1 SOURCES OF ASSITANCE From the above table it was found that on four occasion bank loan were taken for starting their business. And from the above data after analysis we can conclude that majority of the entrepreneur began their business from their own investment. TABLE NO. – 2 NATURE OF BUSINESS *Some students are not specifying the nature of shop properly The above table shows the type of business venture taken by the respective entrepreneur. We can see that most of the business venture chosen was Retail shop followed by trading and manufacturing job. TABLE NO. - 3 REASON FOR CHOSSING SPECIFIC JOBS AND THEIR MOTIVES/AIM BEHIND IT This table shows the reason for choosing their specific business venture. From the data we can see that everyone has their own personal reason for choosing their business line. TABLE NO. - 4 SOURCE OF INSPIRATION BEHIND THE ENTERPRISE The table shows the source of inspiration for entrepreneur to take up business ventures. From analysis we can see that unemployment is the highest followed by to support family and so on as given in the above table. TABLE NO. -5 AGE GROUP OF ENTREPRENEUR From analyzing the above given table we can say that most of the entrepreneur are in the age group of 40 – 50 yrs followed by age group of 20 – 30 yrs and 30 – 40 yrs. TABLE NO. –......

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