The Lost Story of Bihar's Industrialization


Today, this tweet came up to my knowledge, as I was walking through on the top trends on Twitter for a brief glance. What caught my eye was the image that was inserted in the tweet. Contrary to perceptions about Bihar being some agricultural rustic land, one saw some big plants having been named in the list. The tweet had an angry tone, and was asking that people are wanting to re-develop Bihar's industries so that the migrant labourers do not have to ever leave their state again. Ironically, while this topic rages on among the tweeters of Bihari origin, the topic seems to have hit a stonewall of silence, as if no one wants to talk about the story behind these pictures.

Migrants are not able to get work within Bihar has always been a major driver of the migrant exodus from the state. In 2015, when there were state elections, there was a detailed discussion after perhaps several decades in the news media about industrialization in Bihar. Perhaps it was a necessary question - more than a decade back Nitish Kumar had stormed to power with the promise of transforming Bihar. However, when one talks to the Biharis outside Bihar, one only hears from them about what I call the Patna mirage - the minute one steps beyond Patna, things are bleak as ever. What was ironic was that in places like Fatuha, a supposed industrial town that saw some industries working with government support, local people barely got any employment.

A classic example of the situation was a company called Lumbini Beverages. A plant for manufacturing soft drinks for Pepsi, the plant that had been operational since 1997 actually shut down in September 2019. Thousands of people, full time and contractual, lost jobs overnight, and they came on the streets. Ironically, the reason behind the closure was that Lumbini could not strike an agreement with Pepsi, and subsequently there were talks with Coca Cola, which also did not materialize. This news got buried under a host of Youtube videos that propagated the various mega projects that have announced investments in Bihar.

Now it has been a lazy argument that Jharkhand, once part of Bihar, was a big hub of industries, and somehow continues to remain so to an extent. However, it was never the case that other parts of Bihar did not have industries set up, which is where the picture raises a genuine question - what really happened?

A big factor of course would have been the fracturing of law and order in Bihar, courtesy Lalu Prasad. However, the story would have started much earlier - just like Bengal's industry decay can be traced back to 1977, one can certainly trace back a similar trajectory to the times of such leaders as Karpuri Thakur, who was continually sabotaged by his own partymen, particularly Lalu and Nitish, for 'failing to meet the people's aspirations'. Lalu too was a Nitish choice to sideline every other faction, and yet, despite being Minister for some time, he decided to part ways.

Of course, in general, the entire socialist ilk must bear responsibility for the fate of Bihar. In a write up for Uday India, long time Communist student leader and economist Mohan Guruswamy, who was friends with the slain Chandrashekhar Prasad, had detailed how everything, even economics, was seen as a casteist conspiracy, ably supported by the likes of Mohammad Shahabuddin and Sharad Yadav. To quote Guruswamy's words:

Lalu recalled some of the statistics in it and rattled off things from it like the credit/deposit ratios, the investment in irrigation and rural development, and the destructive freight equalisation policy. He had a somewhat different take on it though. He said it was an upper caste/class conspiracy to keep the people of UP and Bihar poor and backward. Sharad Yadav had no interest in such things. On the way back, Sharad Yadav told me that he had introduced me to the next CM of Bihar. VP Singh was curious to know what Sharad had to say. Among us Sharad Yadav, who had an infinite capacity for intrigue, was referred to as Mamashree, inspired by the portrayal of Shakuni in the then popular Mahabharata serial. I told him that Mamashree thought of Lalu as a future CM to take the place of the great Karpoori Thakur. VP Singh gave me a quizzical look, as if to say are you for real?

However, that is not the raison d'être alone. A significant period has passed since then, and many people perhaps are simply thankful for the fact that Bihar has not seen the crime wave that it became infamous for on that scale again for a long period of time. Even then, there are questions that remain, which never get answered. For instance, the 2019 Economic Survey poses some facts that make one wonder why there is not more industrialization in the state while questioning the policy adopted by the state in general:

  • Though Bihar contributed only 1.5% of the total industries in the country in 2015-16, the growth rate of such industries in the state was 10%, much higher than the national average of 4%.
  • Bihar has relatively lower productive capacity, which translates into low capital and labour returns. For instance, the average size of fixed capital per factory in Bihar was only Rs 3.39 crore compared to Rs 14.70 crore at national level in 2015-16.
  • Labour absorption capacity has also been very low in Bihar vis-à-vis other states. In 2015-16, the total employment in industries in Bihar was 1.19 lakh, mere 0.8% of the national average.
  • Similarly, the number of workers per factory was only 41 against 75 at all-India level. Interestingly, wages, salaries (including bonus) per person annually in factories in Bihar has not been particularly low. In Bihar, wages, salaries (including bonus) was Rs 1,19,305 per person annually in 2015-16, increasing from Rs 97,790 in the previous year.

With the varying questions in mind, I wish to find more answers to the problem. Hopefully, I will get guidance on the subject from those who know me and also find out more as I try to write (if I get the time on this subject)


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