Bihar Disclosures

>> Under BJP-JDU Bihar gets floods even during very low rainfall years.

>> Area under cultivation declined 12% food production by 27% but population increased 20%.

>> BJP-JDU wanted 4x700 MW Nuclear Power at Rajauli Preferred Substandard & Obsolete NPICL Reactors

>> NPAs of SCARDB as percentage to Loans Outstanding increased from 68.6% in 2006 to  89.69% in 2007.

>> Bihar was revenue surplus for five years to the extent of Rs.13,000 crores but failed to improve power sector, control floods and invest in Industry.

Thanks to Raj Pandey of newly founded BPD party's comments equating Nitish to Chankya which to me is most stupid observation in present times when world's knowledge is accessible sitting at home that too from an IITian.

Autocratic style of JDU-BJP ruled Bihar had practically no capability to run a large mismanaged state Bihar.

My friend D.K. Mishra always maintained flow in 10 kilometer wide Kosi River was just 1,40,000 cusecs against designed capacity of 9,50,000 cusecs yet corrupt Nitish Government ensure worst floods in Bihar. But even more shocking revelation is that rainfall too was a third of previous year. In 2007 South West rains in Supaul located in the heart of Kosi River was 1239mm but in 2008 rainfall was only 443mm but Bihar still had the Catastrophic floods during virtually draught conditions. P-98/379

http://finance.bih.nic.in/Documents/ESR-2008-09-EN.pdf

But even more devastating is the fact that seasonal Rainfalls at Supaul during four years of Rabri Devi government were 1448, 1117, 1647 and 1791 – the last one was most devastating and thereafter in Nitish Kumar's time rainfall was moderate 1089. 889 and 1450 and current years figure shall be around 740mm against average of 1330.

Budget allocation was increased from around Rs.2000 crores during Rabri Devi times by Vindictive or Bias Sinha-Nitish Nexus was raised to Rs.14,000 crores to Rs. 16,000 crores, had Nitish- Modi government carried out maintenance works at even Rabri level of "Corruption" Bihar would have been insulated from floods.

In tables on page 101-2 of the document you can see the area under cultivation of principle crops has decreased by over 20% in 8 years but area and food production has decreased by 27%. In fact area under cultivation has decreased 12%.

(Area in `000 ha/Production in `000 tonne)

11. Among the three principal sources of credit, the commercial banks are most important, which account for about 65 percent of the total credit disbursement; the shares of regional rural banks and central cooperative banks are about 25 and 10 percent respectively. Since the commercial banks are the most important source of credit, it is a matter of concern that the achievement rates for these banks have also shown a declining trend. In 2007-08, the achievement rate for the three types of banks were — 81.47 percent (commercial banks), 75.80 percent (regional rural banks) and 57.42 percent (central commercial banks). The

cooperative banks presently account for only 10 percent of the agricultural credit in Bihar. One of the main reason for such limited reach of cooperative banks is that such banks are absent in no less than 16 districts of Bihar.

In table 2.14 P-114/379 you can during Rabri era credit to farmers disbursed were 82.01% and 86.76%  that declined to 80.59%, 80.19%, 76.96% to 28.80% of the target though last figure is for six month but cover Khariff season that produces 60% of food.

Table 2.15 : Distribution of Cooperative Credit in Bihar

But table 2.15 on next page you will be horrified though Bihar has adequate funds but disbursement of credit to farmers was most ERATIC – it must be remembered cropping season is uniform through out but credit disbursal was most erratic – example in Sitamarhi achievement was 17.0%, 92.9% and 1.1% of the targets for three years.

Table 1.9 : Districtwise Consumption of Petroleum Products (2007-08)

Sale of petroleum products is not even 1% of India. It will shock people to discover in Bihar sale of Kerosene (.662 MT) used for lighting and cooking is more than combined sales of Diesel (.156 MT), Petrol (.103 MT) and LPG (..266 MT). P- 50/379

Table 1. 10 : Districtwise Small Saving in Post offices and Publics Provident Fund

Nitish Kumar targeted Rs.2000 crores as small savings and public provident fund in 2007-08 but achievement was Rs. 815 crore.. This is per capita saving of Rs. 86 or not even $2 in a year. Champaran district where Mahatma Gandhi camped for some time is just Rs.31 per capita.

[As further indicators of regional disparity, two more tables present the districtwise data on —consumption of petroleum products (Table 1.9) and small savings in post-office and public provident funds (Table 1.10). Taking into account petroleum consumption only, one notices that Patna accounts for 19.1 percent of total petroleum consumption in Bihar. Other districts whose share in petroleum consumption is substantially higher than their share in population are — Rohtas, Bhagalpur, Begusarai, Vaishali, Darbhanga, Saran and Gopalganj. The districts with very low consumption of petroleum are — Jehanabad, Arwal, Nawada, Sheikhpura, Jamui, Lakhisarai, Khagaria and Sheohar. As regards the small savings in post-office and public provident fund, the per capita savings in 2008-09 was the highest in Nalanda (Rs. 216), followed by Patna (Rs. 169), Chhapra (Rs. 168), Aurangabad (Rs. 103), Darbhanga (Rs. 102), Nawada (Rs. 101) and Gopalganj (Rs. 100). The four districts with the lowest per capita saving in 2008-09 are — Sitamarhi (Rs. 31), Araria (Rs. 23) and Khagaria (Rs. 17).]

3.1 Structure of Industries

The vivisection of the state brought about major changes in the overall structure of industries in the present Bihar. There are practically no mineral based industries left in Bihar and the agro-based industries including textiles, leather, wood and paper accounted for nearly 43 percent of the gross value added. The share of gross value added of petroleum and atomic fuel, was around 48

percent (Appendix I).. That the performance level of agro-based industries in the state is not satisfactory is clear from the fact that such industries in Bihar constituted a very nominal share of only 0.48 percent in the total production of agro-based industries at the all-India level. In absolute terms, Bihar's production value in 2004-05 was only Rs. 1,922 crore, as against India's Rs. 4,03,572 crore (Table 3.1)

Table 3.10 : Physical and Financial Achievement of Udyog Mitra (2004-05 to 2007-08)

The reorganisation of Udyog Mitra is on the anvil through obtaining the services of professional experts on contract basis. A committee has been formed to remove the obstacles that the new units face after the approval of the State Investment Promotion Board (SIPB). The committee will, from time to time, assess various stages of works and pursue with different departments to remove the problems. The total outlay for the entire Eleventh Plan period for Udyog Mitra is Rs. 2.50 crore.

Going through tables I found registered industries in Bihar contribute just 1.3% to state GDP and that too largely due to Brauni Refinery or some Railway Projects. Udyog Mitra of Bihar disburses around Rs.50 lakh ($0.1 m) to up to 957 applicants.

The annual per capita consumption of electricity in Bihar is only 76 units, as against a national average of 612 units in 2005 (Table 4.12). The National Electricity Policy aims to increase the average annual per capita consumption to 1,000 units by 2012. This is sought to be achieved by increasing generation to remove peak electricity shortfalls, as well as implementation of the Rajiv

Gandhi Grameen Vidyutikaran Yojana (RGGVY). Under RGGVY, the aim is to electrify all villages by 2009 with the help of central government grants.

There is severe power shortage in the state and only 41 percent of its villages and 10 percent of the households are electrified. The peak availability is about 950 MW, causing a peak shortfall of 550 MW, which results in widespread shortage in supply to all categories of consumers. As mentioned above, Bihar has only 592 MW of installed capacity, of which 540 MW is thermal and the

remaining 47 MW is hydel and 5 MW is renewable energy. However, generation from its own thermal power stations is negligible, and most of the power requirement is met by purchases from the central generating plants.

CHAPTER V - SOCIAL SECTORS

It must be noted that in the period since 1999, while India's per capita GDP has increased very fast, its international ranking in HDI has slipped from 115 in 1999 (Human Development Report 2001) to 128 in 2005 (Human Development Report 2007/2008). Thus, the quality of human life in the country as a whole compared to the rest of the world has not improved in the period of accelerated economic growth. The annual growth rate of Bihar's per capita income has been 3.77

percent in the last ten years. In Bihar, the twin challenges of economic growth and human development are further accentuated by its high poverty ratios and low per capita income.

Table 5.27 : NREGS – Physical and Financial Overview - 2007-08   

The programme has generated about 841 lakh persondays of employment for 38,63,370 households in 2007-08. Of this, 27.3 percent of workdays were for women.

Appendix II Districtwise Status of Regular & Contractual Doctors

Sanctioned posts of doctors in Bihar are 4643 but only 2712 doctors are serving and 1931 posts are vacant and respective figures for contracted doctors are 2369, 1392 and 977.

Appendix III Districtwise Details of Grade- 'A' Nurse

Sanctioned posts of nurses in Bihar are 812 but only 464 doctors are serving and 359 posts are vacant and respective figures for contracted doctors are 3810, 1005 and 2805.

6.2 Deposits, Credits and Credit-Deposit Ratio

Table 6.6 shows the deposits and credits of scheduled commercial banks in Bihar vis-� -vis other states and their shares in the total deposits and credits in the country. From this table, it is seen that while there has been significant growth in total deposits in Bihar in 2007-08 over the previous year by Rs 11,681 crore, the credit expanded by only Rs 3,712 crore. But Bihar's share in the total

credit of scheduled commercial banks has remained practically the same at 0.9 percent over the years. The per capita deposits and credits of scheduled commercial banks in these states are shown among the major Indian states. While the per capita deposit of Bihar has increased significantly in 2007-08, the increase in per capita credit has not been appreciable. The banks need to take more pro-active measures in increasing the credit flow by opening more branches in the unbanked areas. It has been noted earlier that the expansion of bank branches in Bihar in 2007-08 has been marginal. in Table 6.7. We note that in terms of both per capita deposit and credit, Bihar ranks the lowest among the major Indian states.

6.10 State Cooperative Banks

Table 6.23 shows the working results of State Cooperative Banks in the major Indian states. The recovery percentage in Bihar is very low and, there has been a phenomenal increase in the volume of Non-Performing Assets (NPAs) in Bihar during the last financial year. The NPAs have increased from Rs 164 crore to Rs 267 crore between 2006 and 2007 and the recovery percentage has declined from 51.35 to 36.05 percent during the same period. All these have caused substantial drop in the performance of the cooperative banks in Bihar.

6.11 State Cooperative Agricultural and Rural Development Banks (SCARDB)

Table 6.24 shows the working results of State Cooperative Agriculture and Rural Development Banks (SCARDB) in the major states in India. Here also, the recovery percentage in Bihar is a very low at 16.0 percent, compared with the all India average of 43.9 percent; but even this marked a significant improvement over 2006-07, when the recovery percentage was only 1.87 percent. There was also a similar increase in the volume of Non-Performing Assets (NPAs).

NPAs as percentage to Loans Outstanding increased from 68.6% in 2006 to  89.69% in 2007.

CHAPTER VII PUBLIC FINANCE

Table 7.1 : Receipts and Expenditure of the Bihar Government

While Tax Revenue increased from Rs10518 crores in 2003-04 to Rs.12465 crores, Rs.13983 crores, Rs. 17325 crores, Rs. 21852 crores, Rs. 24353 in 2007-08, Grants in aid and contribution increased from Rs.1618 crores, Rs. 2832 3333 crores, Rs. 5247 crores, Rs. 5832 crores, Rs. 8776 in 2007-08.

7.2 Overall Financial Position

Table 7.1 and the accompanying chart unravel the story of Bihar's gradual financial turnaround. Till 2003-04, the state government had a deficit in its revenue account, but in 2004-05, for the first time Bihar had a revenue surplus that was more than Rs 1000 crore. This surplus has been increasing continuously, from Rs 82 crore in 2005-06 to Rs 4647 crore in 2007-08. In the budget estimates of 2008-09 also, the state government projected to keep it at almost the same level. This has been made possible not by squeezing the expenditure necessary for maintaining the pace of development, but by increasing the revenue (especially since 2005-06), efficient debt management, and containing the interest payments. During the last 6 years, interest payment has always been well below Rs 4000 crore on an outstanding total liabilities of around Rs 47,649 crore as on March 2009. This has allowed the state government to increase its capital outlay threefold.

Table 7.13 : Transfer of Resources from Centre to Bihar

Net Transfer of Resources increased from Rs. 7656 crores in 2003-04 to Rs. 10885  crores, Rs. 13268 crores, Rs. 18229 crores, Rs. 23107 crores, Rs. 27460 in 2007-08.

Ravinder Singh

March15, 2009