Bihar’s growth rate slides to 7.5% but fiscal health ‘remains robust’
The slide in the GSDP, as shown in the state’s economic survey 2016-17, is significant in that its growth was pegged at 14 % just a few years agoindia Updated: Feb 23, 2017 20:53 IST
After a sustained spell of high growth rate, Bihar has sho wn a slide with the state gross domestic product (GSDP) estimated at 7.6% for a five year period, from 2011-12 to 2015-16 at constant prices with 2011-12 as the base year.
This data finds place in economic survey for 2016-17, placed in the state assembly on Thursday.
The slide in growth rate is significant compared to the state’s high growth trajectory, in double digits, in past decade, from 2005-06 to 2014-15, once topping 14 % and stabilising around 11% till 2015-16.
State finance minister Abdul. Bari Siddiqui and principal secretary finance Ravi Mittal, however, did not agree that the state’s growth rate was on a slide, insisting there was a slight variation in figures due to growth estimates in all key sectors being calculated at constant prices, with base year changing from 2004-05 to 2011-12.
“Bihar is still on a high growth trajectory as 7.6% is higher than 6.8% medium term growth rate for national economy. At current prices, it would record double digits,” said Siddiqui, Mittal and Shaibal Gupta of ADRI, which prepared the survey report.
But the economic parameters do show some alarming trends. The share of primary sector, comprising agriculture and allied sectors, has fallen by 7% in last four years, with agricultural growth registering a negative ( -2.2 %) even though the secondary and tertiary sectors continue to rise.
Even in the tertiary sector, real estate and hospitality, which contributed substantially to Bihar’s growth story in past decade, has declined with growth rate pegged at 3.6% and 5.4%, respectively.
Per capita income at current prices, stood at Rs 36,964, with Patna , Munger and Begusarai being the top three districts, while Madhepura and Sheohar remained the poorest.
On the positive side, the survey report has outlined that the fiscal health of the state is robust with a revenue surplus of Rs 14,649 crore projected in 2016-17, facilitating the capping of the gross fiscal deficit at 2.94%, against the permissible 3% of GSDP, while internal resources have grown by 19% in five years (Rs 12,612 to Rs 25,449).
Public debt, however, remains a major challenge as the survey shows the outstanding debt increased to Rs 88,829 crore as against Rs 50,990 crore in 2011-12, with the debt:GSDP ratio increasing to 21%.
“But we are still within the permissible limit of 25% as provisioned by 14th finance commission,” said Siddiqui, allaying fears that the state was inching towards a debt trap due to rising loan liability, which stood at a hefty Rs 1.16 lakh crore.
The survey has outlined the state’s need to shore up internal resources, following the loss of excise revenue due to imposition of total prohibition in April 2016 and central assistance in terms of shares in central taxes being scaled down due to slowdown in economy, post demonetisation.
Senior BJP leader and former finance minister Sushil Kumar Modi called the GSDP growth figures being tagged for a four year period as a ‘jugglery of figures’ to hide the declining growth rate. “The survey has not shown what the growth rate of GSDP was in 2015-16, but given estimates of a four year period,” he said.
The survey report has also touched the growth scenario in sectors like road, transport, infrastructure, education and energy. In the power sector, the report says power availability grew significantly from 1,712 MW in 2011-12 to 3,769 MW in 206-17, a growth of 120%.
In rural electrification, substantial progress has been made,.with 23,757 villages out of 24,771 connected to grid..
The state has also recorded success in reducing the IMR (infant mortality rate), a development index, substantially, even as students enrolment in primary and upper primary schools together rose to 2.29 crore in 2014-15 from 1.98 crore in 2010-11.
First Published: Feb 23, 2017 20:53 IST