Daijiworld Media Network - Patna

Patna, Nov 8: Noted economist and author Ruchir Sharma has said that Bihar appears to be “stuck in a welfare trap,” with its growth stagnating over the past decade. Speaking to NDTV’s Editor-in-Chief Rahul Kanwal ahead of the 2025 state elections, Sharma said that despite years of promise, Bihar remains India’s poorest state.

“The kind of poverty I’ve seen on this trip is quite heartbreaking. After the optimism I felt for Bihar in my previous visits, this one has been dispiriting. The kind of transformation we expected hasn’t materialised,” said Sharma, who heads the international business of Rockefeller Capital Management.

Sharma pointed out that between 2005 and 2015, Bihar made significant strides under Chief Minister Nitish Kumar, with marked improvements in infrastructure, roads, law and order, and electrification. “Compared to 2005, everything is dramatically better,” he said. However, he added that the state has struggled to sustain growth beyond that phase.

“After 2015, Bihar’s evolution should have focused on creating new industries and jobs. That’s where the state is stalling and struggling to find its next growth model,” Sharma observed.

He noted that Bihar’s per capita income, which once showed signs of closing the gap with the national average, has again fallen behind. “Between 2005 and 2015, the gap between Bihar and the rest of India narrowed. But now, Bihar’s per capita income of about Rs 70,000 a year is less than 30% of India’s average of Rs 2 lakh,” he said.

According to Sharma, Bihar’s landlocked geography and dependence on agriculture have made it difficult for industries such as real estate and construction to gain traction. He also pointed to lingering perceptions about the state’s law and order as a deterrent to investors.

“My big fear is that Bihar seems stuck in a welfare trap. Even in this election, nearly 3% of GDP has been announced in pre-poll welfare schemes,” Sharma said. “When China was at a similar stage of development, it invested everything in infrastructure and nothing in welfare. India cannot keep going down this path.”

He added that while Prime Minister Narendra Modi’s government tried to shift focus from welfare to infrastructure, state-level welfare spending has risen sharply after the 2024 general elections.

“One of the biggest swing factors in the 2025 Bihar elections is the NDA’s women-centric Rs 10,000 Jeevika Scheme. But now, Tejashwi Yadav is countering it with a Rs 30,000 promise. It’s becoming a vicious loop,” Sharma warned.