Friday, 6 July 2007

Agenda for Growth
by D N Mishra

Feb. 7, 2007

Achieving sustainable and long term economic growth through a eight step process.

0. God Governance: Institutionalization of efficient & effective governance through structural changes & induced autonomy in the various establishments. Re-establishing meritocracy and building the environment for excellence in administration.

I can make out from the emerging pattern & methods in the chief ministers initiative as this to be already the case. Anyway, prime responsibility for this lies in hand of state government.

1. Increase Urbanization: Working to the plan instead of stepping everywhere. State ought to decide how much people it wants to be dependent on rural economy and what % it would it like to move to urban growth centre. We will have to remember that our rural economy is a fine case of underemployment and also incidences of hidden unemployment are quite common. In my opinion state need to achieve 60-40 ratio by 2015 to optimize its developmental process. We need to conceptualize and develop six or seven mega cities of over 40 lac population in the state. We will have to ensure planned development of these cities; JNNURM should be taken optimum advantage of in this process.

However, in building these mega cities state will have to plan among other things as to what will drive the economy of the cities. Cities will have to be developed alongside the industrial clusters, befitting their competitive strength.

State will have to plan all these angles about mega cities, central government need to put them under JNNURM to support in developing the urban amenities.

2. Revive Rural Economy: Rural economy needs to be energized through cooperatives like COMFED in the other segments of “Potentially Rural Productivity” including in agro-processing, food processing, and animal husbandry and so on, with liberal dose of upstream corporate retailing linkages involving Bharti, Reliance, Tata & Birlas. State should take initiative to bring home contract farming, contract food processing / animal products processing and contract agro processing in association with these corporate groups.

3. Build Financial Infrastructure: As far the basic ingredients for economy goes state has advantage of land ( raw material) and labor (though skill enhancement is definitely needed) but lacks in Capital, Management & Entrepreneurs. It is not a hidden secret that Bihar lacks in home grown Capital Market & Financial Infrastructure. Market outside is plagued by many stereotypes about the state putting it at the disadvantage. Creation of homegrown financial market is a pre-requisite for development of the state. Ready access to capital market, awareness & understanding of capital market is very much adds in availing the capital so badly needed for industrial development.

Though an initiative has to be taken by state, but only the central government will have to take most of the actions here. Other places have just benefited from policy of central government, raj’s legacy and central largesse.

Some of the financial market Apex (Regulatory) Bodies, and also a few PSU’s, need to be headquartered in the state. May be state can ask Pension Fund Regulatory Authority to be located in State. Advent of the apex body itself will make it mandatory for all the governed entities to set up a shop in the state.

Building a culture of “Financial Excellence” is simply an imperative.

4. Institutions as Growth Drivers: Setting up of “Centre of Excellences” in Higher Education, Specialized Education Centers (as under various ministries at centre other than the ones under HRD) Technical Education, Research, and Vocational Institutes & Training Centers. This institution acts as the nucleus for “Economic Capability Building” and results in a definite competitive advantage in knowledge economy.

If we go by what has happened elsewhere, these “Center of Excellences” has been set up by central government only. State has got a short shrift in allocation of these assets. Regional Interest active at central level did never thought of building India. People at the helm of affairs were busy building there own native states. Bihar & UP lost out as they lulled themselves in the belief of being one India.

Though state can go ahead and create these institutions and it should be doing so, It should also fight for its right till the skewed situation in rectified in states favour. Under the garb of military principle of strategic depth, national asset can not be made repository of southern region. Bureaucrats & Ministers from heartland so get all those policies which militates against these states shelved, be it freight equalization, or the current policy of taking infrastructure development to the developed areas. Developed areas should sustain themselves through user charges & private investment. Public Investment should go to underdeveloped region.

State can not afford to loose out its elite through brain drain. Large Scale Migration warrants charges of criminal negligence of Eastern UP & Bihar. If central government does not proceed to rectify the situation, it should be prosecuted on this count.

5. Building Backbone Infrastructure: It is pity that state is being accorded the lowest priority under NHDP and also the GAIL Gas Grid has not been extended to the state even after a lapse of two decades, when it was brought to Jagdishpur in UP.

It is de-facto heartland of the nation still the infrastructure veins has always tried to bypassed the state completely excepting only where there is no alternative to passing through it because of geo-location advantage of being at the national cross road.

Inland Waterways, River Flow Control are other area asking for attention and have a great economic potential. Though center has initiated dredging of Palk Straight under controversial sethu-samundram project, it has not bothered to develop the national waterways across Gnga and its tributaries which can accrue immense benefit to the heartland.

Obviously, a major role in infrastructure development has to be played by centre. State will have to ensure that it gets it dues. Of course, in addition state will also have to play its own role in infrastructure development.

6. Seeding the Industrial Growth: Pattern & methods of Industrial Growth across country indicates the role played by Central PSU’s all over. Private sector has joined the bandwagon latter on. State PSUs have hardly ever been unable to provide this seeding effect anywhere. Seeding a Central PSU is also required to demonstrate suitability of location/infrastructure for an industry. Moreover many PSU’s has been able to create multiplier effect on the local economy. Since pvt sector is not going to be in any hurry to help the state out of this morass of underdevelopment central PSU need to step in to seed the industrialization in selected places in the state depending on the state governments plan.

7. Creating a Bandwagon Effect through Industrial Clusters: State and Central PSUs and the willing Private Sector Majors can come together to set up there units as part of an Industrial Cluster so as to create the “Critical Mass” for self propagation of industrialization of the cluster. This will happen because setting up of many other ancillaries, upstream and downstream businesses and industries will become viable once this critical mass is reached.

Setting up a wheel factory at one place, ordnance factory at another place and locomotive factory at a third place is not an ideal thing to do as such. In this we have lost out the advantage of creating the critical mass & subsequent bandwagon. Else it would have attracted toll manufactures, steel mills forging units and likes (depending on commonality of requirements) also in the vicinity.

State can think of dividing state in 8 Industrial Zones for its all round development.

Patna and around : Finance, Trade & Commerce, Entertainment & Media, Tourism, Healthcare, Consumer Durables, Consumer Non Durables, ICT etc.

Muzaffarpur and around: Agro & Food Processing and Allied Industry

Gaya and around: Tourism, Cement, Stone Slabs, Prefab Structure, Power Plants other Mineral Based Industry.

Barauni and around: PCPIR ( as planned by central government) (petroleum, chemical, petrochemical integrate complex including upstream & downstream industry),

Bhagalpur and around: Textile, Handloom & Handicraft, Gems & Jewelry, Furniture & Artifacts

Katihar & around: Jute, Leather and allied products, animal products, fisheries, poultry and so on.

Darbhanga & around: Higher Education, (Armed forces, Police, CPFs) Training & High End Research Labs specially in biotechnology, nanotechnology, communication technology and so on.

Munger & around: Electrical & Mechanical Hardware Industry, Heavy Industry and so on.

Excellent analysis

It brings the strategic advantages of the various regions of Bihar very well. - Thakur Vikas Sinha, Powai, Mumbai - Feb. 8, 2007

Wow! Great job Mishra Jee. You are a GURU.

There are several growth factors you have define here the way it should be. I liked the way you have created the industrial zones. That's the way to 'Go'.

Although Mr. Nitish/Mr Modi and their team might already have a good number of smart planners and administrators, still I hope they read your project plan on PD. - Naren Singh, India/USA - Feb. 8, 2007


The article written by Dr. Mishra jee is well written . He deserves appreciation for this.

In addition to all his points following are my suggestions region wise industry

A. Patna : IT and R&D Companies, Dairy Technology Patna can be the city of education and higher learning along with center for R&D. In Dairy Technology, Patna and Muzaffarpur are the best. Patna Dairy project and Muzaffarpur Dairy Project are the only industries in Bihar which has excellent track record in terms of profits.

B. Tirhut Region:

1. Vaishali Region/Muzaffarpur Region: Tourism and Manufacturing Industries /Development of Electronic city in Hajipur as it was shifted from Hajipur. The area from Patna to via Hajipur Muzaffarpur will be good for the investment in Education, Manufacturing industries and food processing. In fruits: Litchi, Banana, Mango export industries should be established for which both cities are famous.

2. Sitamarhi: Sitamarhi can be the best destination for tourism. This is the birth place of Hindu Goddess Sita. This district is also good in Sugar Industry (Riga Sugar Factory, near Sitamarhi is well known). In Litchi production, Sitamarhi is second best after Muzaffarpur.

C. Mithila Region:

1. Darbhanga: Good for tourism too (forts of Darbhanga Kingdom). This region can be developed as good place for floriculture and horticulture. Pan, Makhana and Machhali (fish) are three important things for the people in Mithila. Yes, Darbhanga can be city of education.

2. Madhubani: Famous for Mithila paintings in all over the world. It needs to be spread to all villages of Mithila and other districts of Bihar as one of the industries. Presently only few village women are working.

3. Samastipur: Famous for Khaini (Tambaku)

These are some of the suggestions for the government. - Bibhuti Bikramaditya, Daejeon, S. Korea - Feb. 8, 2007--------------------------------------------------------------------------------

Wow, kya article hai. Mishraji aap ko to Planning Commission mein hona chaahiye tha.

Seriously, if people who are doing planning for development had this kind of thought we would've done better for sure. We all know that Bihar as a State has lots of untapped potential but it's never been planned to tap those untapped potentials.

The specialized industrial zones is the way to go. This way we can leverage on the strength of each region in Bihar and make them self sufficient and powerful. When this happens I am sure it will stop the labor migration upto a greater extent. When (not if) that happens the other states who call us BIMARU will realize the importance of Bihari work force. - Samir Kumar Mishra, Brisbane, Australia - Feb. 8, 2007


What is most urgently required is to reduction of rural population and that can only be achieved by the process of urbanization. In comparison to Bihar’s population, meager number of rural population has migrated to different urban centers in Bihar and in other states. Lack of this process has led to violence in rural areas over the years due to continually decreasing agriculture land. Fall out at Singur and Nandigram in West Bengal (a center for rural economy engine), whatever the other reasons, is due to late admittance to urbanization process.

The real meaning of urbanization is to rich or marginal farmers settling down in cities. Their links to the land must be severed and they should become an integral part of urban communities.

As wisely suggested by D N Mishra, what we need now to identify strategic urban centers. This will allow entrepreneurial people with relatively good educational backgrounds to launch their own businesses or become high-caliber professionals in various sectors, where the growing population will be dependent upon its "hinterlands" to provide it with food and its product. This will certainly boost economy of our agricultural society. Eventually, there may emerge a large number of prosperous small towns in rural areas, which will demonstrate the progress of Bihar's urbanization process.

In today’s world, cities are the virtual face of development. A rational pattern exemplifying city construction of different sizes should be sought with the tag of special economic zone. If not SEZ, but a kind of SEZ is urgently needed in Bihar that too in a phased manner. - Dr. Sudhir Ranjan, USA - Feb. 8, 2007


Mr D N Mishra deserves kudos from all BIHARIS for giving an excellent and comprehensive plan for developing the state. However, it will very much depend on the government how fast they can act and what projects are taken on priority. It is necessary to take up at least some areas on fast track which can give some visible results quickly and the wheel of backwardness starts moving back. "The low lying fruits should be plucked first".

I would like to add that international standard roads connecting major cities of state and availability of power is of prime importance. Apart from this in at least two areas Bihar can make its place on world map. One is tourism - being the most important place for all Buddhist countries. Japan is already showing interest and investing money. Bihar should supplement it by providing other infrastructure - like safety of tourists, clean and good places to stay and have food. Tourists experience can be enhanced by providing additional amusements like developing banks of Ganges into good sightseeing place.

Setting up world class health facilities - especially for heart disease, neurology, cancer treatment and prevention, radiology upgrade, mental disorder and rehabilitation with facilities for stay of patients' family members in nearby places will prevent large number of people from going to far off places and spending a fortune. This will also attract people from nearby countries like Nepal, Bangladesh, Bhutan etc to come to Bihar for treatment. This may attract NRIs also to visit home state and get comparatively cheaper medical treatment as it has been reported to be happening in Gujarat. - Mithilesh Kumar, Delmar, NY, USA - Feb. 8, 2007


This is an excellent article on the growth of Bihar. A lot of congratulation to Mishraji for doing such extensive research and hard work. - Seema Jyotishi - Feb. 8, 2007


Really thoughtful and deep dug analysis by Mishraji. I could not comment much on the theoretical facts elaborated by Mishraji. He has really done a great work for ideal solutions for the modernization and economic strength.

But, the facts are far from reality. I know that my comments would be treated as negative attitude and would be forced to a back seat but bringing out the truth is as important as digging the theoretical facts.

1. Any development of Bihar should be seen in national perspective. After all, the short and long term plans of center are going to decide the fate of each and every part of India. I do not see Bihar developing its own economy going out of national policies.

2. The blind liberal economic policy adapted by the center has left nothing to be done by the government agencies. In every sector of life, the private companies have been invited to play their own games of money-spinning. I do not think that the MNCs coming in India are so generous that these would develop the non-profit fields like rural economy, backward states etc. After all, India still is 80% village and state of the villages would require huge non-refundable amount of money and resources which is out of capacity of an MNC or all MNCs.

3. The development plans are like child birth which cause lot of pain to the procurer. Whenever, anybody would think about any development plan, it would include replacing current policies, structures, trends, mentalities and attitudes with the new ones. I have doubt whether current political situation would permit anyone, whosoever may be, to start new plans. The latest example is the master plan for Delhi. After severe political pressures, the master plan has become miserable plan. The unplanned (mis)management of population, land and water has become so worse that it is out of reach of current law-makers, politicians, official and people too.

4. The theories would be thrown to air if an honest answer to the following question is tried to find:

What would happen (no. of chain events) if a hut comes in the middle of a large piece of land which has been acquired by the government for erecting a mega housing colony? The colony construction would bring employment to 1000 poor people, solve the space problem, develop the neighbourhood economy etc. The hut is to be removed!

Before answering, think about Narmada Baandh Pariyojna (Enron got bankrupted), Delhi Master Plan, Patna Master Plan, Reliance Project in UP, Singur and what not. Moreover, Bihar has more political potential than other states (everybody is a neta).

5. Have a look at the entrance of MNCs in retailing market. Big malls, good quality items, universal prices, clean crease staff, shining covers, big lights etc. The SABJIWAALA of our neighbourhood would go back to his village only to starve because we people are going to a big mall to purchase vegetables. That means (I know it would smell dirty), the MNCs are now planning to pick the last left 25 paise in the torn pockets of the sabjiwallahs and send it back to their own heaven.

If anyone can deny the above truths, I am sure Bihar and India would become the ideal place to live. - Ravish Kumar (A Worried Bihari), Hyderabad - Feb. 9, 2007


Everything is fine except THE TRIDEV:

Good road (as per dream project of the former Prime Minister Shri Atalji), Power (at least 12 hours non-stop power supply to every nook and corner of the state), and good health services (for every human beings and animals) at every government health centers of the State. Then, development comes and asks (kneeling down):

"Mere Aaqa! Hum hazir hain! Kaya hukum hai?" - Madani Mohiuddin Ahmad, KSU, Riyadh , KSA - Feb. 10, 2007

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