Bihar’s economy has turned around. Now, invest in people, institutions

Since I began writing on Bihar, my objective has been to invest optimism and hope into its development story. For long, the state has been regarded as a basket case in policy circles — a case of being stuck in a “low-level equilibrium trap”. Since Richard Nelson wrote about it in 1956, the East Asian Tigers and many South Indian states have escaped this trap. Bihar, however, appeared locked in a cycle of low productivity, low savings, low incomes, and a narrow margin between demography and per capita income. This diagnosis is now being replaced with that of a state quietly scripting one of contemporary India’s remarkable growth narratives. The state is today among the nation’s fastest-growing economies. Its nominal GSDP is projected to surge by 22 per cent in FY 2025-26 to nearly Rs 11 lakh crore. A region once viewed as agriculture- and aid-dependent is undergoing a decisive transition. Industry’s share has climbed to 26.6 per cent while ... Read More