Bihar is apparently the flavour of the season. Many famous columnists have applauded the state's stupendous economic performance of 11 per cent annual growth rate between 2004 and 2009 - the highest among Indian states.
There have been equally quick rebuttals based on the state's well-known failings on social deprivation; some have even questioned the veracity of the official figures given the poor governance in Bihar.
Here is an attempt to demystify the story by looking closely at the official documents.
Using the Central Statistical Organisation's (CSO's) compilation, the average of annual growth rates of Bihar's gross state domestic product (GSDP) between 2004-05 and 2008-09 stands at 11 per cent.
However, the same, based on Bihar's Economic Survey 2008-09 (presented before the last Budget), is just 7.3 per cent - lower than the national average of 8.5 per cent.
The discrepancy between the two, both based on official data, should moderate the new-found enthusiasm for the state's growth story, paving the way for a sober and careful scrutiny of the official statistics.
Annual growth rates presented by the two series are broadly comparable during the first three years (see table), but diverge significantly in the following two years, causing all the confusion (and the celebration?). Why do they diverge?
Annual growth rates presented by the two series are broadly comparable during the first three years (see table), but diverge significantly in the following two years, causing all the confusion (and the celebration?). Why do they diverge?
CS0 vs BIHAR'S ECONOMIC SURVEY
GDP GROWTH RATES FOR THE LAST TWO YEARS ARE DRAMATICALLY DIFFERENT IN THE TWO DATASETS | ||
Growth in % per annum
|
CSO
|
BiharEconomic
Survey |
2004-05
|
12.17
|
11.31
|
2005-06
|
1.49
|
2.79
|
2006-07
|
22.00
|
20.27
|
2007-08
|
8.04
|
-0.07
|
2008-09
|
11.44
|
2.41
|
Average growth
|
11.03
|
7.34
|
They should not, in principle, since the same official agency (state statistical bureau) is responsible for preparing the estimates - the CSO merely compiles them for all the states in a comparable format.
As any careful user of official statistics would know, the GDP/GSDP estimates usually undergo at least three revisions - advanced estimates to quick estimates to provisional estimates to the final estimates.
This is true in most countries (barring perhaps China!). The magnitude and sign of the variation between the CSO and the Economic Survey estimates is so pronounced that it would be imprudent to tell a credible story based on such divergent numbers.
To put the record straight, Bihar did not remain stagnant over the medium term during the last decade. Between 1999-00 and 2008-09 (i.e., during the last term of Lalu Prasad/Rabri Devi and now under Nitish Kumar), GSDP grew at an average annual growth rate of 8.5 per cent (CSO series), or at 6.1 per cent (Economic Survey series), with two years of negative growth rate and wide yearly fluctuation.
Yet, its per capita income remained at the bottom of the ranking of Indian states in 2005-06 (the latest year for which complete data are available), with 30 per cent of the national average.
Bihar's story of 11 per cent growth during the last five years, as per the CSO's compilation, needs to be compared with Bihar Economic Survey's data that shows a more modest growth rate of 7.3 per cent; the variation between them is entirely on account of the differing growth rates in the two most recent years.
