ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Booming Bihar: Fact or Fiction?

In recent weeks, much has been made of a "booming" Bihar. But a look at disaggregated data shows that the growth has been based almost entirely on the public works programme, which boosted state output in construction during the boom in that sector from 2004-05 to 2006-07. Despite this, value added in construction seems overestimated, given the infirmities in estimation methods. Further, there has been no measurable multiplier effect of this infrastructural investment on the rest of the Bihar economy.

COMMENTARY
Booming Bihar: Fact or Fiction? R Nagaraj, Andaleeb Rahman (Figure 2, p 11). During this period, the trend growth rates of primary, secondary and tertiary sectors were 0.7%, 12.9% and 6.9% per year respectively. In other words, there was practically no growth in the

In recent weeks, much has been made of a “booming” Bihar. But a look at disaggregated data shows that the growth has been based almost entirely on the public works programme, which boosted state output in construction during the boom in that sector from 2004-05 to 2006-07. Despite this, value added in construction seems overestimated, given the infirmities in estimation methods. Further, there has been no measurable multiplier effect of this infrastructural investment on the rest of the Bihar economy.

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