bihar economy survey 2011-2012

Overview of Economy
1. The economy of Bihar grew at an annual rate of 11.36 percent during the period 2004-05 to 2010-11. This growth process can be termed as 'revival of a stagnant economy'. The growth rate of the state economy in 2010-11 over 2009-10 was 14.8 percent. This was possible because there was substantial increase in public investment. However, there is still a stress on infrastructural development.

2. During the period 2004-05 to 2010-11, the sectors reporting a growth rate of more than 15 percent are — registered manufacturing (23.30 percent), construction (19.61 percent), communications (27.23 percent) and trade, hotels and restaurant (20.22 percent).
3. Bihar is a densely populated region, with no less than 1102 persons living per sq. km. As per the estimates of Tendulkar Committee, in 2004-05, 54.5 percent of the population lived below poverty line in Bihar. For rural and urban areas, the poverty levels were 55.7 percent and 43.7 percent respectively.
4. Agriculture would continue to play an integral part of the development process in the state as around 90 percent of the population still live in villages and continue to depend an agriculture as a prime source of their livelihood. In view of this, the state government is not only stressing for a second Green Revolution based on bio-technological improvement, but also putting forth a concept of 'Rainbow Revolution'. The growth rate of agriculture and animal husbandry during the last 5 years has been 3.20 percent, compared to 2.40 percent in previous 5 years.
5. There has been noticeable increase in the rate of growth of Bihar's economy, but this rate of growth shows wide fluctuations. One source of this wide fluctuations is most likely the vagaries of monsoon, which tend to cause upswing and downswing in the rate of growth of agriculture and the remaining sectors of state economy. There is, therefore, a need to stabilize the rate of growth of agriculture through introduction of modern techniques and spread of irrigation.
6. Bihar continues to be at the bottom of the ranking of states with respect to Per Capita Income. In 2006-07, the Per Capita Income in Bihar (Rs. 10,055) was 32.2 percent of the all-India average (Rs. 31,198); however, in 2009-10, this ratio increased to 34.7 percent (Rs.
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16,119 for Bihar and Rs. 46,492 for India). It is obvious that the present momentum of growth of Bihar economy has to be sustained for several years to close the gap between Bihar and the all-India average.
7. Bihar economy has undergone some structural changes over the years. About a decade earlier, the average share of different sectors in total GSDP stood at 36.4 percent (primary), 10.5 percent (secondary) and 53.1 percent (tertiary). Thereafter, the share of the primary sector has been declining, and it came down to 22.1 percent for the triennium ending 2010-11. Since secondary and tertiary sectors have recorded tremendous growth in the last decade, their shares of outputs are now much higher than those in the triennium ending 2002-03.
Governance
1. The state government has taken positive steps for increasing common man's faith in police. The police administration is constantly endeavoring to improve itself, so that common man in both urban and rural areas can live in peace and harmony. The Chief Minister is in constant touch with all the District Magistrates to ensure particularly two things — speedy implementation of developmental schemes and speedy improvement in overall law and order situation throughout the state. The 'speedy trial mechanism' has been effectively utilized to expedite convictions.
2. There has been remarkable improvement in the police administration in recent years through extensive training programmes and strengthening of its physical infrastructure. In order to strengthen the training facility for the police officers, the Bihar Police Academy has been established in the state, with adequate number of posts. The work has began on construction of a new campus of the Academy at Rajgir.
3. Since corruption takes a serious toll in the quality of governance, major steps were taken to contain corruption in the state. The 'Zero Tolerance' policy of the state government against corruption is being diligently implemented. To confiscate disproportionate assets earned by public servants through corrupt means, the state government has set up six specials courts under 'Bihar Special Courts Act and Rules' in 2010.
Disaster Management
1. Due to its topographic and climatic conditions, Bihar is vulnerable to extreme climatic conditions on a continuing basis, covering particularly floods and droughts. Bihar lies in
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high and moderate seismic zones and hence prone to earthquakes. Considering the frequency and magnitude of disasters, an independent Department of Disaster Management has been established.
Agriculture and Allied Sectors
1. The total rainfall in 2010 was much below the average. Similarly, in 2009, the rainfall from south-west monsoon was again less than the normal which led to draught like situation in many districts of Bihar. This has caused varying growth rate of output in agriculture.
2. The area under net sown area has shown a marginal decline. In 2006-07, net sown area was 60.5 percent of total geographical area, but it came down to 59.4 percent in 2008-09. However, the cropping intensity has shown a marginal increase from 1.36 in 2006-07 to 1.38 in 2008-09. The districts where irrigation facilities are at a minimal, the cropping intensity remained low. The cropping intensity is the lowest at 1.16 in Jamui and Patna. The highest cropping intensity was registered at 1.78 for Supaul.
3. The average productivity for the triennium 2007-10 of three important cereals are — 1353 kgs/hectare for rice, 2208 kgs/ha for wheat, and 2629 kgs/ha for maize. For wheat, the productivity rose by 8 percent over the two trienniums and for maize, the rise in productivity is even higher at 10 per cent. Of the two pulses groups, kharif pulses show an average productivity of 1061 kgs/hectares for the triennium 2007-10 and, for rabi pulses the average productivity level is 826 kg/ha for the same years. The percentage increase in productivity for kharif pulses is 18 percent over the two trienniums, whereas for rabi pulses, the increase in productivity is 3 percent.
4. In last kharif season, a farmer in Nalanda district had created a world record by achieving a productivity level of 22.4 tonnes per hectare for rice in his fields. In the kharif season of 2011-12, the estimated production of rice is 67.55 lakh tonnes, which is 9.85 lakh tones more than the previous highest of 57.71 lakh tonnes, achieved in 2008-09.
5. In terms of vegetable production, the state holds the topmost position in the country. The area under vegetable which was 8.24 lakh hectares in 2006-07 rose to 8.45 lakh hectares in 2009-10. Alongside production, the cropwise productivity is also increasing. The productivity of potato increased from 17,180 kgs/hect in 2008-09 to 18,410 kgs/hect in 2009-10. Similarly, the productivity of onion which was 19,270 kgs/hect in 2008-09 went upto 20,317 kgs / ha in 2009-10.
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6. The farmers of Bihar are also taking interest in floriculture in recent years. The commercial production of flowers is taking place in the state in view of its rising demand. The important flower crops of the state are rose, gladiolus, jasmine (bela), marigold and tuberose. In 2010-11, the production levels of important flower crops were – rose (86.52 tonnes), marigold (5120 tonnes), Jasmine (307.46 tonnes) and tuberose (522 tonnes). Patna, Muzaffarpur, Vaishali, Samastipur and Gaya are major flower producing districts in the state.
7. The major initiatives like Chief Ministers' Crash Seed Programme, 'seed village' programme (Beej Gram Yojana), provision of subsidy for the use of 'certified seed' by farmers, revival of hitherto dormant Bihar Rajya Beej Nigam (BRBN), strengthening of Bihar seed certification agency, multiplication of seeds by state farms have together immensely helped to raise agricultural productivity in Bihar. Recently, the technique of hybrid paddy cultivation has been disseminated under a new scheme of 'Mukhyamantri Tivra Beej Vistaar Karyakaram'. This has benefited the farmers in the paddy zone. The Seed Replacement Rate (SRR) for major crops like rice, wheat and maize have increased manifold during the last 5 years. More importantly, the SRR has touched the scientific recommendation of 33 percent for self-pollinated crops.
8. The total consumption of fertilizer which was 32.25 lakh tonnes in 2006-07 has increased to 39.08 lakh tonnes in 2009-10, registering an increase of 21.1 percent over three years. In 2010-11, the consumption rose to 40.36 lakh tonnes, again a 3.2 percent increase over 2009-10. This rising trend emphasises that the farmers are willing to adopt new technology in agriculture. The per hectare consumption went upto 183.4 kgs/hectares in 2010-11 from a level of 181.1 kgs/hectare in 2009-10.
9. The extension service in the state had earlier reached a very low level. These extension services are important for seed management, optimum use of chemical fertilizer, adaptability to newer cropping pattern, and other improvements in farming. The state government has taken several initiative in recent years to improve the extension services which will make farming more economically productive. It has taken pains to transfer knowledge of agricultural institutions to farmer's doorstep so that they can optimally use those knowledges.
10. The state government has constituted a cabinet committee on Agriculture with the Chief Minister as its Chairman. This is a landmark initiative. The cabinet comprises 18 departments. It has constituted 14 Expert Committees for preparation of a road map for 2022.
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11. There is also an effort by the state government to help the farmers to procure pump-sets and tillers through provision of subsidy. From a meager 540 power tillers in 2007-08, 5333 of them were provided to farmers in 2010-11. In 2010-11, 2056 pump-sets were distributed to farmers for enhancement of irrigation capacity.
12. Upto 2008-09, the achievement level of Kisan Credit Card (KCC) has been around 60 percent of the targets. However, since then, there has been improvement and the achievement level was as high as 89.30 percent in 2009-10. In 2010-11, the achievement level was 70.14 per cent. The facility of KCC needs to be widened further in coming years.
Enterprises Sector
1. The enterprises sector in Bihar is characterised by a relatively larger share of the unregistered units. In India, while the unregistered units account for about one-third of the total industrial income, in Bihar, its share is more than half. It is pertinent to note that the small industries in the state is dominated by tiny enterprises and artisan based industries and its share is very high among all the Medium, Small and Macro Enterprises (MSME) units.
2. Except for Food products/Beverages/Tobacco, the performance of all other groups under agro-based industries was unsatisfactory in 2008-09, compared to 2007-08. Similarly, all the industry groups under non-agro based category also registered a decline, primarily on account of poor post-recession recovery, accentuated by poor infrastructure in the state. However, the performance of the food products/ beverages/ tobacco industry was very satisfactory and it increased its share in all-India production.
3. Due to downturn in the economy in 2008, the overall industrial growth rate of Medium, Small and Micro Enterprises in 2008-09 worked out to only 2.80 percent; but showed an upward trend in 2009-10 and registered a growth rate of 10.40 percent.
4. There were in all 36 large scale units in the state, besides 6 such units under the central sector. A total of 1.89 lakh medium, small and micro registered units were set up in Bihar till December, 2011, indicating an overall increase of around 60 percent over the year 2000. The highest increase of about 62 percent was noticeable in tiny/micro sector, followed by artisan-based units (58 percent).
5. During the first 6 months of 2011-12, 1245 Medium, Small and Micro units have been registered, of which over 98 percent are micro/tiny units. Of the total units registered, 25
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percent were in Patna division, followed by Tirhut (17 percent), Magadh (13 percent), Munger (12 percent) and Purnea (12 percent). Of the total enterprises started, around 3 percent were owned by SC/ST, 10 percent by the minority community, and 87 percent by the remaining categories of general and backward classes.
6. As many as 873 units under Medium, Small and Micro Enterprises sector were provided assistance under the Prime Minister Employment Generation Programme (PMEGP) which forms only 3.25 percent of the all-India figure. Similarly, the margin money utilized and employment generation by these units formed 3.77 percent and 2.43 percent of the all-India total.
7. The food products, beverages, tobacco, etc. cover a range of products accounting for around 80 percent of total industrial income, and holds high promises in terms of net value added and employment. However, there still remains substantial unutilised potential of agro-based industries.
8. The major agricultural products of Bihar are cereals, pulses and oilseeds, along with varieties of fruits and vegetables. However, the farmers have been unable to harness the full benefits of these important agricultural products in the absence of processing industries which have also high potential for employment generation.
9. In 2010-11, the area under fruits was 296.42 thousand hectares with the total production of 3912 thousand tonnes. Mango is an important fruit, accounting for a half of the total acreage under fruits. However, its production accounts for only 34.12 percent of total fruit production. The vegetables cover around three times more area (845 thousand hectares) and four times more production (14,630 thousand tonnes) compared to fruits.
10. There are around 5000 rice mills in the state, including 36 new mills started last year. Only 5 percent of these mills may be considered as modern. They need to be modernized and their capacity should be increased. These rice mills are mostly concentrated in the erstwhile district or Shahabad (presently comprising of Rohtas, Buxar, Bhabhua, and Bhojpur), besides Purnea, Araria, East Champaran and West Champaran.
11. The number of sugar mills at present remains limited to 28 only, of which 18 are sick and closed. The remaining 10 working mills are in private sector. In crushing season of 2010-11,
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in 10 sugar mills, a total of 414.06 lakh quintals of sugarcane were crushed, to produce 38.97 lakh quintals of sugar.
12. Under the rehabilitation programme, a total of 6 sugar mills have been started, which consist of the mills at Lauria, Sugauli, Motipur, Bihta, Sakari and Rayyam.
13. Bihar grows annually over 4 million kgs. of tea. More than 25 thousand acres of land in Kishanganj and adjoining 3 districts are covered under tea plantation. There are 5 tea processing plants in Kishanganj with an output of more than 2300 tonnes of tea, whose quality is at par with Assam variety. The shortage of tea processing units forces the tea traders to ferry their produce to West Bengal. There is a scope for about 20 new tea processing units in Kishanganj.
14. There are a large number of handloom units in Bihar, of which 10,850 are under cooperative sector and 25,503 units are outside. Besides, there are 11,361 powerlooms in the state. There are in all 1090 primary weavers cooperative societies, of which 417 are functional. The number of weavers in the cooperative fold is 34,367 and around 98,000 are outside. There exists a vast potential of handloom/powerloom sector in the state.
15. The State Investment Promotion Board (SIPB), has approved a total of 603 project proposals till date. This involves a total investment of more than Rs. 248 thousand crore and employment of 1.85 lakh persons. Of the total proposals approved, 161 were approved in 2010-11 and 142 in the first 6 months of 2011-12.
16. The tourists flow shows an increase of more than 90 percent in 2008 over the previous year. The decrease in the flow in 2009 is probably attributable to the slowdown in the global economy. The domestic and foreign tourists arrival registered significant growth in 2010 and first six months of 2011. This compares favourably with growth at all-India level.
Infrastructure (Roads)
1. During the last 6 years, the state government took up the development of all kinds of roads on a priority basis. As a result, the year 2010-11 witnessed a sharp increase in road length over the previous year, both in terms of per lakh population and per 100 sq.km (119 percent). But even after this achievement, the availability of roads in Bihar is much less, compared to the national average.
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2. In Bihar, the total road length was 94.0 thousand kms in October 2010 which increased by 20 percent in a year to 112.7 thousand kms. Of the total road length constructed upto September, 2011, the length of National Highways (NH) did not witness any change and constituted only a little over 3 percent of its share. Though the length under State Highways (SH) has increased by 22 percent from 3989 kms in 2009-10 to 4857 kms. in 2011-12, the Major District Roads (MDR) registered a decline in its length by around 5 percent. This is on account of conversion of some lengths of MDRs into SHs.
3. The rural roads are constructed under various schemes like Mukhyamantri Gram Sadak Yojana, Apki Sarkar Apke Dwar, Minimum Needs Programme, RIDF (NABARD), Border Area Development Programme and Pradhan Mantri Gram Sadak Yojana. During 2006-07 to 2009-10, a total of 13.7 thousand kms. of rural roads have been constructed under those schemes.
4. Under State Plan, 36 major bridges were constructed in 2008-09 and 24 in 2009-10. In 2010-11, the work on 16 major bridges has been completed and another 16 major bridges are targeted to be completed in 2011-12. Besides, the construction works on 11 major bridges on different rivers are under progress. Under the Mukhya Mantri Setu Yojana, 910 schemes were completed during November, 2010 to October 2011. The Bridge Construction Corporation has completed 801 bridges at a cost of Rs. 2118.75 crore between 2007-08 and 2011-12.
5. The number of registered vehicles is on continuous increase and the registration of new vehicles recorded a phenomenal increase of around five fold, from around 80 thousand in 2005-06 to 3.87 lakh in 2010-11. All the categories of vehicles recorded substantial increase. During first nine months of 2011-12 too, the increase in all categories of vehicles has been quite appreciable.
Communication
1. In Telecommunications, Bihar too has shown robust growth in recent years. The total number of connections increased to 447.95 lakh in 2010-11, compared to 42.14 lakh in 2005-06. The landline connections, which declined considerably in 2006-07 over 2005-06, remained almost same thereafter. However, the WLL connections are showing a steady growth throughout the period.
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2. In Bihar circle, there were 9025 post offices as on March, 2011, around 95 percent of the post offices in the state were in rural areas as against the all-India average of 90 percent. Of the total post offices, more than 90 percent were extra-departmental branch post offices.
Urban Development
1. There are in all 139 urban institutions — Corporations (10), Municipal Councils (43) and Municipal Panchayats (86) in the state. Under the head of Urban Infrastructure and Governance, the schemes worth Rs. 758 crore have been sanctioned by the central government till date, of which the share of central government was Rs. 420.10 crore and that of state government Rs. 338.31 crore. Under Basic Services for Urban Poor (BSUP), the work in Patna and Bodh Gaya are going on at 4 sites, and the work on 368 housing units is in progress.
2. There are 1845 slums in the jurisdiction of 139 urban bodies and the state government is committed to develop all these slums under the State Slum Policy, 2011. With some international assistance, the state government has made plans for upgradation of these slums by providing basic amenities, including proper roads, community centres and drainage networks. The state government has finalised proposals to develop 56 slums in 28 towns.
Power Sector
1. Bihar has the lowest annual per capita consumption of electricity in the country at 122.11 KWH, against the national average of 778.71 KWH. There is an acute shortage of power not only for peak demand, but even the base demand in the state. The deficit at peak load has been increasing over the years, from 30.9 percent in 2007-08 to 44.5 percent in 2010-11. Similar to peak deficit, energy deficit in 2010-11 was also very high at 6099.18 MU (35.4 per cent). A number of projects have been approved by the state government to enhance the availability of power. Most of these power projects are under the Public-Private Partnership mode.
2. At present, there are only 2 thermal power stations in the state sector – Barauni Thermal Power Station (2x50 MW and 2x110 MW) and the Kanti Thermal Power Station (2x110 MW). Due to various technical reasons and financial crunch, the present generation capacity of these plants is 50-60 MW and 80-90 MW respectively. To restore their full generation
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capacity through restoration and modernisation (R&M), work is ongoing under the Rashtriya Sam Vikas Yojana (RSVY).
3. Upto January, 2012, a total of 17,363 villages and 1967 thousand BPL families have been connected to the grid under Rajiv Gandhi Grameen Vidyutikaran (RGGVY). Under this scheme, construction of 171 power sub-stations has also been approved. Of these, 90 have already been charged. A total of 2429 villages and 230.8 thousand BPL households were connected to the grid in 2011-12.
Water Resources
1. For assured irrigation, the total potential created was 24.82 lakh hectares in 2001-02, which increased to 28.86 lakh hectares in 2010-11. Against this potential, the total area irrigated was 16.56 lakh hectares in 2001-02, showing utilization efficiency to be 67 percent.
Social Sector (Expenditure)
1. The Per Capita Development Expenditure (PCDE) of Bihar has shown a steady upward trend during 2001-02 to 2010-11. Compared to PCDE of Rs. 930 in 2001-02, it became Rs. 3467 in 2010-11, implying an annual growth rate of 17.1 percent. During the same period, the PCDE of the country as a whole grew at a lower annual rate of 13.6 percent. The social sector spending in Bihar increased from 18.9 percent in 2001-02 to 31.9 percent in 2010-11.
Social Sector (Education)
1. The literacy rate in Bihar increased from 47.0 percent in 2001 to 63.8 percent in 2011, implying an increase of 16.8 percent during the decade. This decadal increase in literacy rate is the highest among all the states in India. Bihar has been able to considerably reduce its gender disparity in literacy rates. In 2001, the male and female literacy rates in Bihar were 60.3 percent and 33.6 percent respectively, showing a difference of 26.7 percent. In 2011, however, the genderwise literacy rates were 73.4 percent (male) and 53.3 percent (female), implying a reduced gender disparity of 20.1 percent.
2. During 2002-03 to 2009-10, total enrolment in elementary classes increased at an annual rate of 8.2 percent. Bihar has now reached a stage where enrolment in primary classes for the children in age-group 6-14 years is nearly universal. The enrolment in upper primary classes grew at an annual rate of 19.1 percent during the period 2002-03 to 2009-10. For SCs, the
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enrolment in primary education is growing as fast as that for general category population. For upper primary education, SCs enrolment is growing annually at 22.1 percent, which is higher than the rate for general population. A similar trend is also observed for children belonging to STs.
3. The enrolment of girls’ students is increasing at a faster rate than for the boys. For example, during 2002-03 to 2009-10, the enrolment of boys in primary schools grew at an annual rate of 6.4 percent, compared to a higher rate of 6.8 percent of girl students. For upper primary classes, the enrolment of boys grew at 17.9 percent, compared to a much higher rate of 23.7 percent for girl students.
4. For the primary stage, the dropout rate was as high as 61.6 percent in 2001-02, but it reduced to 42.5 percent in 2009-10. The total dropout rate at upper primary level was as high as 74.8 percent in 2001-02, which declined to 58.8 percent in 2009-10.
5. Presently, 15 universities are in existence in the state, of which 13 are traditional universities and 2 of them are open universities. There are 815 colleges which are distributed among 13 traditional universities. Out of these colleges, 451 are government colleges, and they constitute more than half of the total number of colleges in the state.
Social Sector (Demography)
1. According to provisional figures of 2011 census, the total population of Bihar stands at 103.8 million. With an increase in population of about 20.8 million in the last decade, Bihar is the third most populous state in India, after Uttar Pradesh and Maharashtra. Accounting for 8.58 percent of country's population, the state has the highest population density of 1102 persons per sq. km., which is much above the national average of 382 persons per sq. km.
2. The decadal growth rate of population in Bihar between 2001 and 2011 was 25.1 percent. The rural population formed 88.7 percent of total population, with urban population constituting only 11.3 percent. This makes Bihar the second least urbanised state in India, after Himachal Pradesh which recorded an urbanisation level of 10.1 percent. The sex ratio in Bihar has been lower than all India sex ratio, both in 2001 and 2011.
Social Sector (Health)
1. Inspite of being the poorest state in the terms of per capita income and having the least literacy rate, the IMR in Bihar is 48 per thousand live births in 2010, almost equal to national
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average of 47 per thousand live births. Between 2005 and 2010, the IMR in India has been reduced from 58 to 47. This pace of decline was even higher for Bihar, as the IMR for Bihar decreased from 61 in 2005 to 48 in 2010. Along with a drop in IMR, Bihar has also recorded a sharp drop in Maternal Mortality Rate (MMR) from 312 in 2007-09 to 261 in 2007-08.
2. The percentage of institutional delivery has also increased from 18.8 percent in 2002-04 to 48.3 percent in 2009. Between 2001-02 and 2006-07, the number of institutional deliveries increased only marginally, however, in 2007-08, there was a substantial increase of nearly 7 times in the number of institutional deliveries The improvement in immunisation was even higher at 49.0 percent in 2009 compared to a mere 20.7 percent in 2002-04.
3. The health department has also demonstrated improved efficiency, resulting in higher utilisation of funds received. This utilisation ratio was 31.1 percent in 2005-06 and had steadily increased to 89.8 percent in 2009-10. In 2010-11, even after a drop in utilisation ratio, it stood at 71.4 percent.
4. The budget provision for ICDS steadily increased from Rs. 242.0 crore in 2003-04 to Rs. 880.24 crore in 2010-11, implying an annual growth rate of 24.8 percent. The utilisation percentage of the total fund released has been more than 100 percent, owing to the state government's own contribution to the ICDS project to supplement the transfers from the Centre.
Social Sector (Water and Sanitation)
1. As regards the number of hand pumps constructed under National Rural Water Drinking Programme, there is a steady progress and 59.0 thousand hand pumps were constructed in 2010-11. As regards financial progress, the utilisation of funds was as high as 93.0 percent in 2010-11.
Welfare Programmes
1. During 2010-11, a total of 1.84 lakh persons were assisted through SHGs under Swarnajayanti Grameen Swarojgar Yojana, of which 1.21 lakh (65.6 percent) were women. A total of 1.77 lakh SHG members were trained in 2010-11, of which 64 percent were women. In 2010-11, 70 percent of physical targets under Indira Awas Yojana were achieved, as against 59 percent in 2009-10. Under Mahatma Gandhi Rural Employment Guarantee Scheme, a total of 130.44 lakh households were issued job cards till 2010-11, of which 46.8
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lakh (36 percent) were provided employment. Utilisation of funds improved over the years, as 83 percent of funds have been utilized in 2010-11, compared to 76 percent in 2009-10.
2. With an objective of enhancing warehousing capacity, 423 godowns are now being constructed by the state government at the block level for the Public Distribution System (PDS). The total capacity of these godowns will be 2.84 lakh tonnes. There are 41,912 PDS dealers in the state. For BPL households, the lifting percentage for wheat was less than 50 percent upto 2006-07, but it has increased substantially thereafter to reach 91.3 percentage points in 2009-10. In case of rice under BPL scheme, the lifting percentage also increased substantially from 58.3 person in 2009-10 to 95.6 percent in 2010-11.
3. The total allocation for SC/ST welfare increased from Rs 375.19 crore in 2010-11 to Rs 838.24 crore in 2011-12. Under Mahadalit Toilet Construction Yojana, till 2010-11, 1.24 lakh toilets have been constructed with an expenditure of Rs. 3.72 crore. Till 2010-11, 7.20 lakh students studying in government schools were benefitted through Mukhyamantri Mahadalit Poshak Yojana
4. Mukhya Mantri Nari Shakti Yojana (MNSY) was launched in 2007-08 with an objective of holistic empowerment of women in economic, social and cultural spheres. Till 2010-11, 1558 clusters, 90 village organizations and 63 federations were nurtured under MNSY. Out of a total of 33,246 Self-Help Groups (SHGs), 21,796 SHGS have been linked with saving account and 6394 with credit linkage involving an amount of Rs. 25.63 crore.
5. Scholarships to students from backward and extremely backward classes were introduced in October, 2010, and 4.44 lakh students have availed the benefit of this facility. In 2010-11, 2500 students from minority community have been selected under scholarship schemes for college students. In 2010-11, the total expenditure for labour welfare schemes was Rs. 4.62 crore and the budgeted amount for 2011-12 was Rs. 6.93 crore.The age-limit for old age pensioners has been reduced from 65 to 60 and the pension amount of those 80 years and above has been raised from Rs. 200 to 500 per month.
Banking and Allied Sectors
1. At the end of March 2011, of the total 4348 branches of commercial banks in Bihar, 56.2 percent were located in rural areas, 23.6 percent in semi-urban and 20.2 percent in urban areas. The total number of branches increased by about 4 percent during 2011. However,
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Bihar’s share in the total bank branches in the country practically remained around 5 percent over the past few years.
2. As on March, 2011, Bihar had 1537 Regional Rural Banks (RRB). Their total deposits increased substantially from Rs 7210 crore in 2007 to more than Rs. 13,735 crore in 2011. But the credit given by the RRBs increased by only about Rs. 2500 crore. Thus, while the rural economy of Bihar deposited an additional amount of Rs 6576 crore in 4 years to the RRBs, less than half (39 percent) of it flowed back to the rural economy in the form of credit.
3. In scheduled commercial banks, the total deposits in Bihar in 2010-11 increased by Rs. 17,700 crore over the previous year. This was a distinct improvement over 2009-10 when deposits had increased by only Rs 14,800 crore. Bihar’s share in the total deposits of scheduled commercial banks remained the same in these two years at 2.2 percent, but its share of credit has actually fallen marginally, from 0.9 percent to 0.8 percent.
4. Both in terms of per capita deposit and per capita credit, Bihar ranks the lowest among the major Indian states. The population served by a bank office in Bihar also remains the highest in the country. While the per capita deposit of Bihar has increased significantly in 2010-11 by Rs. 1668, compared to an increase of Rs. 1406 the year before, the increase in per capita credit was only one-third of this, i.e. by Rs 526 compared to an increase of only Rs 103 one year back.
5. The Credit-Deposit (CD) ratio of Bihar remains at 34 percent, far below the national average of 75 percent, and way behind the CD ratio of states like Tamil Nadu (114 per cent), Maharastra (81 percent), Rajasthan (90 percent), West Bengal (64 percent), Madhya Pradesh (60 percent) or Uttar Pradesh (44 percent).
6. As on September 2011, the aggregate deposit of all banks in Bihar was Rs. 1,22,934 crore, against a credit of Rs 43,003 crore, giving a CD ratio of 34.98 percent. This was far below the CD ratio of 40 percent in Bihar during the early liberalisation years of 1990s. The CD ratios across districts of Bihar show wide variation, from 21 percent in Siwan to 53 percent in Kishanganj.
7. As on March 2010, agriculture (33 percent), industry and manufacturing (11 percent), personal loans (28 percent) and trade (17 percent) together accounted for 89 percent of the
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total credit and the rest being loans to professionals and other services, finance and miscellaneous activities (11 percent).
8. The priority sector advances constituted 63 percent of the total advances in Bihar during 2010-11, of which agriculture accounted for nearly two-thirds. Advances made to the small scale industries were only 9 percent of the total loans disbursed. Overall achievement under the Annual Credit Plan was more than 69 percent, but it showed wide inter-sectoral variations. Under the Annual Credit Plan of banks in Bihar, the total credit flow in Bihar has gone up from Rs. 17,537 crore in 2009-10 to Rs 25,552 crore in 2010-11, registering 26 percent growth.
9. With 8463 Primary Agricultural Credit Societies (PACS), Bihar accounts for about 9 percent of all PACS in India. However, in terms of deposits and borrowings, Bihar is much behind the other states. As on March, 2010, their outstanding loans were only Rs 171 crore, against total borrowing of Rs 501 crore.
10. The numbers of Kisan Credit Cards (KCC) issued by Commercial Banks in Bihar during the period from 1999 through 2011 was very high. Overall, the achievement in the state has been around 71 percent of the target till March 2011.
11. Refinancing by NABARD has been continuously increasing and stood at Rs 1785 crore at the end of 2010-11. Most of the financial support has been provided by way of RIDF loans. The total disbursements made by NABARD under various tranches of the RIDF in Bihar till September 2011 was Rs 443 crore.
12. As on September 30, 2011, about 2.15 lakh SHGs were credit-linked to banks and the total credit flow to these SHGs was Rs. 1216 crore. SHG Bank Linkage has grown in Bihar by only 167 percent, compared to 64 percent for all India, during 2007 to 2011. Bihar has a share of only 4 percent of all the SHGs in India as on March, 2010. In Bihar, the penetration of microfinance is insignificant compared to the other states.
13. In March 2007, Bihar had a total of 8731 registered limited companies (1.17 percent of the country’s total). Of these, 86.5 percent were in the private sector and only 13.5 percent in the public sector. As of December 2010, the private sector accounted for 88.0 percent of the total number of limited companies operating in Bihar, the share of public sector being 12.0 percent.
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State Finances
1. The revenue surplus of Bihar Government increased from Rs. 2498 crore in 2006-07 to Rs. 6272 crore in 2011-12. The capital outlay has increased systematically from Rs. 5211 crore to Rs. 11,448 crore during the same period. The developmental expenditure on social and economic services increased from about Rs. 17.1 thousand crore to about Rs. 42.9 thousand crore during this period, while non-developmental expenditure increased moderately from about Rs. 10.0 thousand crore to Rs. 22.5 thousand crore.
2. The state government had an outstanding debt of Rs. 29.0 thousand crore in 2001-02, equalling 53 percent of its GSDP. By 2011-12, the outstanding debt has increased to Rs. 63.1 thousand crore, and the debt servicing payments to Rs. 8.8 thousand crore. However, the outstanding debt is now only 25 percent of the GSDP.
3. The state government still depends overwhelmingly on central funds for meeting its own expenditure needs, 66 percent of its total disbursements having been financed by central transfers during 2011-12. About 70 percent of the gross transfers to the state government come from its share of central taxes and the rest from the central grants and loans.
4. Bihar’s Gross Fiscal Deficit (GFD), at around Rs. 5273 crore in 2009-10, sharply declined to Rs. 3970 crore in the subsequent year, but it again increased to Rs. 6194 crore in 2011-12 as per the budget estimates. As a percentage GSDP, the GFD increased from 1.44 percent in 2007-08 to 3.01 percent in 2009-10. Thereafter, it was brought down to 1.86 percent in the next year; However, it again increased to 2.43 percent in the budget estimates of 2011-12. Capital outlay contributed most to GFD during the years 2005-06 through 2011-12, and more so during the recent years.
5. From 2006-07 to 2010-11, revenue receipts grew at a higher rate than revenue expenditure, resulting in revenue surpluses in all these years. The state government's own revenue, tax and non-tax combined, which used to meet barely a quarter of its revenue expenditure till 2005-06, now covers around 28 percent. The total revenue of the state government has more than doubled from Rs. 23,083 crore to Rs. 56,206 crore during 2006-07 to 2011-12 and the state government's own revenue, grew at a faster rate, from Rs. 4544 crore to Rs. 15,569 crore, during the period.
6. About 80 percent of the total expenditure of the state government has been non-plan expenditure till 2005-06, after which the share of plan expenditure increased steadily and has
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now reached to 42 percent in 2011-12. Around 15 percent of the non-plan expenditure was solely on account of interest payment on outstanding loans. The total plan expenditure increased by over Rs. 22.6 thousand crore between 2005-06 and 2011-12, while the total non-plan expenditure increased by about Rs. 20.2 thousand crore during the period.
7. The tax revenue collected by the state government has increased substantially from Rs. 17.3 thousand crore in 2006-07 to Rs. 39.5 thousand crore in the budget estimates of 2011-12, while its non-tax revenue increased from Rs. 511 crore to Rs. 2986 crore during the period. The increase in non-tax revenues was primarily due to debt relief provided by the central government.
8. Sales tax, stamp and registration fees, excise duty of the state, taxes on goods and passengers and taxes on vehicles together made up as much as 98 percent of its total tax receipts. Of these, sales tax alone comprises 52 percent of the total tax receipts, followed by taxes on Goods and Passengers (15 percent).
9. Out of the total expenditure of Rs. 50,706 crore made by the state government during 2010-11, 35 percent has been its consumption expenditure including expenditure on salary wages and administration. Next, 16 percent of the total expenditure were utilised for creation of capital assets; 40 percent was transferred to other sectors of the economy by way of grants, subsidies and payments for interest and pension etc; 2 percent as grants for capital formation; another 2 percent for making financial investments and giving loans and advances to the rest of the economy; and finally, 4 percent towards reducing the existing financial liabilities of the state government.
10. The focus of plan expenditure in Bihar has remained on social and economic services during both the recent years. Among economic services, the focus has been on agriculture, rural development, special area programmes, irrigation and flood control, energy and transport. The overall pattern of plan expenditure is in line with the national objectives of the plans.