The Indian express carried the article today. May be of interest.
Rajesh K. Jha

BIHAR AS ETERNAL SUBSIDISER OF NATIONAL ELITE
SHAIBAL GUPTA
Indian Express, January 29,2005

That byword for a 'sunset' state, the provider of jokes. But in the
absence of a market, state-centred political participation is
employment.

Bihar is possibly the only state in the country where bipolar politics
has not taken root, inspite of one and half decades of Laloo Prasad's
rule. Contrary to the general impression, election for the Bihar
Assembly will thus not be the test of incumbency factor alone; it will
also be a test for the politics of 'sunrise' or 'sunset', the former
being concerned with the 'market' and the latter with the 'state'.
The politics of sunrise specially operates in the developed regions
like Maharastra, Tamil Nadu, Karnataka, Gujarat and Andhra Pradesh
where incentive structure had evolved through a less iniquitous land
tenurial system. The public investment in the pre-British period was
concentrated in the Ryotwari areas, comprising those states, for
expanding the land revenue base. In the Permanently Settled
(zamindari) areas, generally in the states of the eastern India,
fixity of the revenue between the intermediaries and the state, acted
as a disincentive for public investment. In any case, the
intermediaries there appropriated the surplus created by the tenants,
thus forestalling creation of incentive structure and rural
entrepreneurs.
Even in the post-Independence period, a new benchmark of incentive
structure could not be created. Freight equalisation had favourable
consequences for South and Western India, unlike in the eastern India.
This freight policy, announced in 1948, in fact subsidised the
industrialisation of India with the coal, iron ore and cement from
mineral- rich states. Over the years, not only did their own markets
develop but, with their superior industrial base, they were able to
substantially capture consumer markets outside their home state. In
the process, they integrated their economy fully with the national and
partly with international industry. Therefore, the social agenda
revolved round the promotion and the development of the incentive and
the market structure. Consequently, political competitions centred
around implementation of development programmes and any
under-performing leader got replaced.
Thus politics became stiched up with the commensurate economic
concerns, though it may have manifested itself through liberal or
subnational or even right wing agendas. When the reform agenda was
initiated in the country, the states with a developed market structure
were structurally more prepared to take up the alternative development
path. For those political elites, national and state concerns
converged instead of taking a centrifugal spin. Even when state
governments were voted out for pursuing the reform, the applecart of
that agenda was not essentially affected. In contrast, the
underdeveloped states were not prepared to escape the 'state' centric
trajectory, in the absence of a level playing field. Politics in
under-developed states, revolved not around 'growth' of the market and
the economy, but around participation in the state structure,
manifesting in positive discrimination in different tiers of civil
service for the socially marginalised. Since the mammoth edifice of
the state is becoming increasingly unsustainable in view of the
massive crisis of public finance, the national elite considers such
politics of social justice as 'sunset' politics.
For the national elite, the state has outlived its historic utility
and creativity. Any politics which is not wedded to the market
promotion is outside the pale of productive discourse. However, sunset
politics has survived in nearly all the underdeveloped states. This
underdevelopment, not the result of quality of regional leadership but
essentially a burden of history, is almost certain to continue, until
and unless tenurial related inequity is completely banished, releasing
social forces that are productive as well.
In the Ryotwari states where the incidence of inequality is less,
there has in contrast eveloped a bond of accommodation between the
developed and the underdeveloped groups. This has resulted in
power-sharing among diverse social groups which in turn has ensured
liberal, pluralistic and accommodative approach to governance. Whereas
market is increasingly replacing the state as the key development
agency in the national and international discourse, its resonance is
not being heard even in areas which are just outside the urban or the
metropolitan enclaves. The share of Bihar in the national market is
only 4.8 percent even though it has 8.3 percent of the national
population; the grammar of political discourse here is thus very
different. Society here is acrimonious, not consensual. A million
mutinies are always taking place around social and economic equity.
With the increasing withdrawal of the state, this agenda is being
further extended to the private sector. Politics here is completely
innocent about the increasing paradigm shift in the national and
international economy.
The mandate of the Planning Commission to bridge the spatial diversity
cannot be operational, because the market expects 'survival of the
fittest'. Ironically, the biggest ideological dismantler of the state
is heading the biggest planning agency which is supposed to promote
the cause of the state and remove regional economic divides. India may
witness the ominous possibility of 'cessation of the successful'
states unburdened by history. For those states, history is factored
into their favour.
For example, establishment of Indian Institute of Science by the Tatas
in '20s and broad banding of telephone system in Karnataka in '80s has
ensured that Bangalore leads the software revolution in India. While
the macro economy leap frogged in India, there followed increasing
public finance crisis. Since the 80s, to keep electoral pace or
populism, the Congress Party started embracing right wing politics.
Later on, the authentic right wing parties stole its thunder and led
to its ultimate marginalisation. However, inspite of political
differences, there is complete unanimity over the question of
development in these states.
How can states like Bihar, without the muscle of the market or the
mineral or the high valued human resources, matter for the national
elite? How do they view the forthcoming assembly election here? As
long as the parliamentary democracy exists in India, states like Bihar
cannot be dispensed with totally. It will continue to provide
electoral subsidy in the central government formation, in the way
freight equalisation subsidised India's industrialisation, without
Bihar benefiting on either count. Not only was Bihar historically
ignored, it was punished from time to time. When a new social segment
rose to the helm of political power in Bihar through existing
democratic institutions, it was so unimaginable that it was considered
almost a blasphemy. Bihar was unceremoniously bifurcated, without
being given any financial package. The retarded and the spastic
political elite and the (un)intelligentsia of the state did not
realise the implication of the division. The 2000 Assembly Election
gave a de facto seal to the division spelling near financial doom.
Even after acceding to the whim of the national elite, Bihar was
discriminated equally by NDA as well as by UPA on this count.
Unfortunately, these concerns do not get reflected in the manifestoes
or in the discourses of the different political parties that are
jockeying for political power in the state.
In recent period, especially since the parliamentary election of 2004,
the ruling elite in Bihar is trying to incorporate or being
incorporated by the same social forces with whom it had fought a
relentless battle in the last one and half decade. In case it happens,
what will be its implication in the 'social justice' constituency, is
to be seen in the assembly election. For the Congress, marginalisation
of the social justice constituency is the main agenda in Bihar. From
the way it allowed the UPA constituency to fall apart in the Bihar
Assembly Election, it is indicated that it cannot hope for any revival
of its fortune in the tri- or quadrupolar politics of today. It can
thrive only on bipolar politics, even if it entails bringing NDA back
to power in Bihar. Otherwise, it cannot be a party of reckoning in the
next parliamentary election of 2009.
Given a choice, BJP will also not like to pursue a different strategy.
One may remember here that in the last parliamentary election, Advani
exhorted the voters in Haryana to vote for Congress rather for INLD, a
regional ruling party. Unlike Maharastra, the Bihar election is not
important for the Congress because of its limited market and meagre
internal resource base. In the market dynamics, it is not a sunrise
state. Because of its small market, Bihar may go out of the cognitive
world of the national elites. However, this is the only state in the
country where various streams of politics still survive in an
authentic manner. In Bihar, bipolar politics of the same ideological
persuasion has not predominated. Here different ideological concerns
are robust and kicking. Will the Congress and the BJP together will be
able to ensure the end of 'sunset' politics in Bihar, in this
election? That would determine the survival or extinction of sunset
politics in the rest of the country.

The writer is an economist and member secretary Asian Development
Research Institute (ADRI), Patna