Bihar’s economy has shown strong recovery to be ranked third among states in terms of growth post-Covid, with gross state domestic product (GSDP) growing at a rate of 10.98% in 2021-22 (at constant prices), while it was 8.68% at the national level, says the Bihar Economic Survey report 2022-23.
The report was tabled in the legislative assembly by state’s finance minister Vijay Kumar Choudhary on Monday, the first day of the budget session, which will end on April 5. The budget will be tabled on Tuesday.
This was the 17th report of the Bihar Economic Survey, a practice started by the Nitish Kumar government in 2006-07.
As per estimates, Bihar’s economy grew at 10.98% in 2021-22, which is a sharp recovery after the decline of 3.2% in 2020-21— a year affected by the Covid-19. The total expenditure of the state government was ₹1.93 lakh crore in 2021-22, of which ₹1.59 lakh crore (82.4%) was revenue expenditure. The capital expenditure increased by 29.4% over the previous year to reach ₹33,903 crore.
“The higher growth is a matter of pride for the state and reflects better fiscal management. Bihar is ranked third, only marginally behind Rajasthan and Andhra Pradesh, in terms of growth despite its huge limitations due to high population density, geographical handicaps, poverty and perennial scourge of flood and drought, besides lack of desired cooperation from the Centre,” the minister said.
Choudhary said the per capita income in the state increased during 2021-23 by ₹6,400 to reach ₹54,383 at current prices. At constant prices (2011-12), it was ₹34,465. Patna has the highest per capita income of ₹115,239, while Sheohar, Sitamarhi and Araria remain at the bottom with less than ₹21,000.
The GSDP of Bihar at constant price (2011-12) is estimated to be ₹428,065 crore for 2021-22, higher than ₹385,728 crore in 2020-21.
“The growth story of Bihar is visible in more ways than one. Today Bihar is ranked third in terms of road density in the country. In the social sector, health and education are two key fields touching the life of every citizen. In the last 16 years, there has been eight and 11 times increase in these two sectors. The story of social and economic empowerment of women in Bihar and the silent revolution through Jeevika drew appreciation also from Prime Minister Narendra Modi a couple of years ago,” he said.
However, the survey points to a decline in the share of primary sector in GSDP from 21.4% in 2020-21 to 21.2% in 2021-22 despite being propelled by livestock and fishing & aquaculture, which registered growth rates of 9.5% and 6.7 % respectively. The secondary sector also declined from 19.3% to 18.1% during the same period, while tertiary sector interestingly witnessed an increase from 59.3% to 60.7%.
The survey says that in 2021-22, the state government collected ₹38,839 crore in revenue from its own sources, while the gross transfer of financial resources from the Central government was ₹129,486 crore, including ₹91,353 crore as state’s share in the central taxes. The grants-in-aid from the Centre and the Centre’s loan to the state was ₹28,606 crore and ₹9,527 crore, respectively.
The report says that the agriculture and allied sector grew at a pace of around 5% during the last five years (2017-18 to 2021-22) and overall accounted for 20% in Gross State Value Added (GSVA) in 2020-21.
According to the survey, the primary deficit of the state government declined from 17,344 cr in 2020-21 to ₹11,729 crore in 2021-22. Similarly, the fiscal deficit declined from ₹29,828 crore to ₹25,551 crore in 2021-22 despite the challenges of pandemic.
The survey reports that the State continues to see flight of capital via the scheduled commercial banks, which has much lower CD ratio than the national average. It means that banks continue to accumulate deposits from the state but are reluctant to extend credit. Among the banks the SBI has very poor CD ratio of 36.1% which is much lower than the national average CD ratio of 71.2%.
On the fiscal side, the state has been successful in continuously keeping the deficit figures within the permissible limit.
The fiscal health is shown to be in good shape in the Economic Survey. The development in the investment by some industries in the state has also been highlighted, however it appears to be small progress over the years.