Gujarat Vs Bihar...

Development does not only mean economic-growth. It is associated with improvement in human-welfare within an economy. The most common definition of economic development is to grow, improve and progress… Moreover it also means reduction in poverty, inequality and unemployment within an economy. Development more generally means improvement in incomes of people living in poverty. Amartya Sen says development means freedom for a common-man; it means improvement in “freedom and capabilities” of the poor. Therefore, development means upgradation in the quality of life, development of social, economic and political freedom. There are many indicators a person may take into accounts while comparing growth and development of any two regions. Here, Gujarat and Bihar… Education, skills and training levels, levels of manufacturing, sanitation, electricity, housing, hygiene, hunger, people living in poverty, unemployment-rate, human-development-index, and many more… There are many important objectives of development. Some of them are to increase the availability and improve distribution of most basic life-supporting goods such as food, health, shelter, and protection, to raise standard of living, provide more jobs, good education, attention to human-values to generate individual and national self-esteem, and to increase social and economic choices.

The human-development-index (HDI), created by Amartya Sen and a Pakistani economist, concentrates on three things, life-expectancy, education and income. According to the index Maharashtra was at the first place, Gujarat at third and Bihar was the last in the row. Even though Bihar spends more on education than Gujarat, but the HDI shows education levels are better in Gujarat. Bihar illiteracy-rate is around 15% higher than Gujarat at 10%. Recently the Gujarat government announced measures to promote skill-development through Public-Private-Partnership (PPP) model which will promote industrial and economic development in the region.  Education and skills development contribute best to reduce poverty and earn higher income. If you are more educated and more skilled and productive you will get higher remuneration. Income works best to increase welfare of a common-man, s/he can better take-care himself and others too. You become independent and demand more… good for economic growth rates and for economic development too. Skills-development is an important area these days which affect the level of income. Skills improve you productivity, and more productivity means more income. The condition of skill development in Bihar is inferior to Gujarat and this is reflected in the per-capita income. Per-capita income is also an important indicator development. Gujarat’s per-capita income at Rs 90, 000 is much above the per-capita income of Bihar at Rs 23,000. Much below, less than a half...Low skills base of Bihar is among the most important contributor to poverty. Gujarat is also better in terms of poverty ratio. Gujarat’s poverty ratio stands at 16.6% while Bihar was at 33.5%. It means that the number people living below poverty line are lower in Gujarat as compared to Bihar. Sanitation condition in Gujarat is also better than Bihar. Out of the total population only 16 percent has electricity connections.  Industrial development, which is must for employment and income, in Bihar lags behind Gujarat. The share of manufacturing in Gujarat over 34 % is much above Bihar at 5%.

Modi’s model can be applied to states like Bihar if we use policies to hit Bihar’s local condition and resources. Bihar is completely different as far as low-per capita income, higher poverty levels and low manufacturing base is concerned. Bihar’s power shortage is mainly responsible for less manufacturing compared to Gujarat which is responsible for low employment levels and backwardness. Manufacturing is important for employment generation. The priority for Bihar in the long run is to increase employment opportunities and a higher per capita income for the growing population. Poverty in Bihar is a major issue and more acute in terms of numbers. Therefore to remove poverty we need more jobs for those do not have a job. Manufacturing may be capital or labor intensive depending on the level of technology but for a labor rich region a labor intensive technology is more appropriate to reduce unemployment. Therefore as far as technology is concerned we need to use more labor intensive technology in manufacturing. An important element of the Gujarat model is the emphasis on development of basic infrastructure, like power, roads and ports. Gujarat’s 24 hrs power to its villages has worked in favor of the state economy and helped in boosting manufacturing. Gujarat is an example of how infrastructure contributes to economic growth and development. Agriculture in Gujarat has also supported rapid growth and is a key factor in the development. Agriculture affects the overall economic performance of an economy. If Bihar has to improve its industrial base it is important that it press for agricultural development. Agricultural development is an imperative for manufacturing and industrial development because its keeps a tab on inflation and wage increases which can increase the competitiveness of the goods and services produced in the economy.