The Hindu Business Line : Getting Bihar on the path to progress

WHERE there is no bread, there is no law; where there is no law, there is no bread. The idea that a society's moral well-being depends on its economic well-being and vice versa is well settled. Unravelling this chicken and egg conundrum in the context of Bihar is the biggest challenge that the new Government headed by Mr Nitish Kumar faces in the wake of its resolve to make a difference.

The problems facing this State are well known and documented. Rank poverty, widespread unemployment, crippling caste and class conflict, low industrial base, failing agriculture, weak socio-economic infrastructure and, above all, an all-pervasive feeling of `powerlessness' or `voiceless-ness'.

It is quite clear that effective and sustained turnabout cannot be achieved merely by policies that spur economic growth. The agenda would have to be more broad-based, including something more than the amelioration of poverty in the narrow sense, that is, low income and wealth. At a conceptual level, the Government must address three basic issues:

Promoting opportunity: Expanding economic opportunity for the poor, by stimulating overall growth and building up their assets (such as land and education) and increasing the returns on these assets, through a combination of market and non-market actions.

Facilitating empowerment: Making State institutions more accountable and responsive to the needs of the poor, strengthening their participation in the political processes and local decision-making, and removing the social barriers that result from distinctions of caste, region, gender, religion and social status.

Enhancing security: Reducing vulnerability to social discrimination, ill health, economic shocks, crop failure, policy-induced dislocations, natural disasters and violence, as well as helping the poor cope with adverse shocks when they occur. A big part of this is ensuring that effective safety nets are in place to mitigate the impact of personal and natural calamities.

The solutions are as well known as the problems. On the economic front, the Government will have to remove bottlenecks to private enterprise, create an enabling climate for fresh investment in industry and directly address stagnant agricultural productivity.

Further, the Government would have to focus not only on increasing the quantum of development spending (that is, outlays) but closely monitor delivery of programmes (outcomes). There is enormous potential for doing this through the deployment of information and communication technology. The basic approach would have to be to improve the outreach (in terms of awareness) of these programmes among the masses so that they become interested in monitoring the outcomes. This can be done at low cost through these technologies. On the political front, the challenge would be to contain conflict and resolve it quickly.

The dearth of ideas is definitely not a problem that the Nitish Kumar Government would face. The challenge would lie in prioritising them in a sensible and realistic manner and not spreading the canvas too wide. A new idea means little — except risk — without follow-up and follow-through. So nothing can substitute concrete action. It is implementation that would pose the biggest challenge. Nothing less than a "paradigm shift" is needed. In fact, the Government must use the dictum of Lord Keynes to get the message clear: "Words ought to be a little wild, for they are the assaults of thought on the unthinking."

In terms of sequence, the first priority of the State should be to restore law and order and the common man's faith in the criminal justice system. And for that the police force should be strengthened and modernised. It has to be a professional, well-equipped and motivated force. It should be de-politicised and its focus must be to serve the common man. Unfortunately, at present, the average Bihar policeman is demoralised.

Next is to set up a value-based administration. Civil services have to be toned up and reward for performance and punishment for non-performance have to be made visible. In the past, civil services have been subverted. It should be stressed that the Weberian virtues of anonymity, objectivity, hierarchy of formal structure, and so on, inform all its actions.

It should also be sensitised to the power of competition, markets and transparency. In a market economy, there is a limited, but crucial, role for the government; working in the changing scenario of expanding interfaces that entail the roles of NGOs and other formations, hitherto beyond the realms of the Government's functioning. After all, one can hardly undermine the fact that in the ultimate analysis it is the common men around whom the entire system is woven and, hence, the bureaucracy has to remain responsive to the needs of the vast millions of poor in Bihar. The bureaucracy has to be aware about what works on ground. The spirit is there, only the spark is needed.

The common man must be empowered through education and information. The entrepreneurial spirit of the people should be ignited to bring more jobs and investment, as that is the only way to reduce poverty.

Economic growth is essential to reducing poverty and unemployment. Fifty years ago, W. Arthur Lewis, one of the most prominent development economist, wrote: "The advantage of economic growth is not that wealth increases happiness, but that it increases the range of human choice... The case for economic growth is that it gives man greater control over his environment, and thereby increases his freedom."

The idea of economic growth as a force for human freedom has gained renewed force. Prof. Amartya Sen, in his book Development As Freedom called for a more expansive conception of "development" to incorporate not only economic development, in the conventional sense of a raising standard of living brought about by the modernisation of economic activity, but also the expansion of human freedom. Because economic development, in itself, is not sufficient to bring forth human freedoms in all settings, Prof. Sen's call for explicit attention to those freedoms, and for conscious efforts directed toward establishing and sustaining them, is apt. Economic development fosters the freedoms that are integral to a broader conception of "development". The present Government should encompass this broader concept of development.

In The Politics, Aristotle wrote: "Where democracies have no middle class and the poor are greatly superior in number, trouble ensures and they are speedily ruined."

One of the main points of distinction between Bihar and its neighbour, West Bengal, is that the latter has a huge middle-class. By contrast, this base is narrow in Bihar. Over time, it must try to enhance this moderating segment of society. To the extent possible, this can be achieved by unleashing market forces for economic growth. But care has to be taken not to go overboard and render this process `exclusive'.

Knowledge is the key to prosperity in today's technology-driven world, and Bihar simply cannot afford to undermine science and technology and higher education. The leading universities of the State have to be re-vitalised and de-politicised to create a modern professional class. Science and technology has to be the institutional cornerstone for new society.

Land reform, infrastructure development, water management and irrigation, basic education, healthcare services, rural finance, agriculture research and extension, and management of natural resources are some of the areas which need urgent attention of the Government to promote rural growth and augment the rural voice.

The mindset and work-culture also have to change. There is no substitute for hard work. Succeeding in today's economic milieu requires the ability to communicate and collaborate across the globe. Coming up with innovative ideas, products and services means getting people across different spheres and different categories to work together, "More and more value is created through networks and team work".

Finally, communication, coordination and teamwork are essential for success. The leadership should have a dream and the vision to inspire.

For take off, Bihar has to break the vicious circle of poverty and illiteracy, and for that institutional and policy intervention should help. Nothing less than a "paradigm shift" is needed.

(The author is a member of the Indian Revenue Services. The views are personal. )