From robber barons to sugar barons

SWAMINATHAN S ANKLESARIA AIYAR

[ SATURDAY, SEPTEMBER 03, 2005 11:08:11 PM ]

Bihar is among the poorest, most misgoverned states. More Plan funds or public sector projects are not re-medies. The st-ate was India's industrial heartland in the 1950s, boasting of the giant Tata complex at Jamshedpur and Dalmia-Jain complex at Rohtas. Bihar enjoyed massive public sector investment (Bokaro steel, Barauni refinery, Sindri and Barauni fertiliser plants, Heavy Engineering Corporation, Mining and Allied Machinery Corporation, coal mines).
Yet, it became mired in poverty and stagnation because of deplorable governance and weak institutions. No businessman invests in Bihar today because the investment climate is lousy. Public infrastructure does not work. Any successful businessman faces mafia extortion and kidnapping threats. The police cannot help, partly because the mafia are woven into the political fabric. There are criminals galore in the state legislature and cabinet.
Why do Bihari's elect mafia dons? Because the police-judicial system is useless, and offers no protection or redress. By contrast, the mafia system functions. Mafia bosses hold court and give verdicts that are obeyed instantly, since they are enforced with mafia guns. I was told during a visit to Bihar that even supposedly good politicians needed guns and militia for protection. Being law-abiding was not an option.
Life in Bihar is not rule-based: it depends on the whim of the powerful and moneyed, with caste-based armies prowling the land. Lalu Prasad did not create this misgovernance: it was created by countless upper-caste predecessors. Lalu's alternative was not good governance, but giving the spoils of misgovernance to Yadavs and Muslims. That formula has enabled him to win several elections.
He sneers that development does not win votes, caste does. Plan funds are routinely returned unspent to Delhi. Bureaucrats and teachers do not get paid, and so focus on ways to make money on the side. How can such a state be reformed? Additional Plan funds will not work. In theory, the Centre could impose a financial emergency, but this is unthinkable in an era of coalition governments dependent for survival on regional parties.
I see no easy way out. Harnessing rural communities for participatory development is a way forward, but the robber-barons of Bihar are uninterested. How, then, can we improve governance and institutions in a polity based on the spoils of misgovernance? One answer: make legitimate business politically and financially rewarding for the mafia than extortion.