The buccaneering in Bihar

It is easy to interpret the world; it is very difficult to change it. If the change has to come in a feudal society, the task is even more formidable. In Bihar, the extent of leakage in public spending was among the highest in India; indeed, buccaneering accumulation has become a way of life in the state. Let alone being stigmatised, those who indulged in these practices were held in awe. Over the years, accumulation through corruption gradually reached cancerous proportions. Only recently has it come to be viewed with revulsion. The powerful constituency it created, which forestalled development in the state, is now in retreat.

In pursuit of transparency, details of public functionaries' assets were put on state government websites. The local area development fund for legislators, a great source of corruption, has recently been abolished. Further, the bold initiative of enacting the Prevention of Corruption Act and Right to Service Act may decisively change the state's rent-seeking profile. The first law relates to the state government confiscating property disproportionate to an individual's income. The second relates to state functionaries providing services to citizens within a stipulated time, so that rent-seeking can be prevented. Earlier, rent seekers could accumulate with abandon, and even the most blatant cases got either inconsequential censure, or at best, a suspension order. Additionally, their illegal accumulation was not touched. These laws now promise to change that situation.

The leakages of public spending in Bihar had a peculiar character, not seen elsewhere in this country. Here, the funds for state programmes either relating to agriculture or animal husbandry or the social sector, would be siphoned off for private accumulation right at the input stage. Secondly, such private accumulation, even if of a buccaneering character, was not invested within the state, as was the case in Indonesia; instead, it would often be transferred outside, as was the case in the Philippines. With their limited knowledge of capital markets, domestic or international, the looted resources of the state were generally invested in real estate in metropolitan cities.

Unlike in the ryatwari and mahalbari tenurial systems in some parts of India before Independence, the social position of an individual in Bihar was measured not in terms of his place in the incentive structure, but in terms of his capacity to weaken the state structure through leakages. In the process, Bihar's society developed a preference for accumulation through input-related leakage. In the post-Independence period, most scams were input-related, like the cooperative, fodder or recruitment scams. Unfortunately, even though scamsters accumulated in plenty, this money did not go into industrial investment, and only promoted conspicuous consumption. For example, one initiator of the fodder scam in

Bihar allegedly chaartered a plane, filled with relations, attendants and minions, to fly to Australia for a surgery. Someone else was said to have accumulated so much wealth that he had to float a bank to legitimise his resources.

Developed states have reached that status by carving a productive accumulation path. It is not that corruption is absent; in terms of magnitude, scams are possibly larger. However, input-related scams are almost unthinkable, because they would take away the state from the grammar of incentive structure that is a pre-condition for a capitalist transformation. Instead of input scams, these states have witnessed post-production scams, characterised by turnover based profit-sharing arrangements, ensuring their growth.

After the present political dispensation took over in 2005, public investment leapfrogged. The social-sector outlay also increased manifold. Bihar's society and ramshackle state were, possibly, not prepared for such high amounts of capital inflow. At the same time, vigilant people in the state were also not prepared to allow public money to be frittered away.

Thus, while interpreting the world is an easy proposition, working out the nuts and bolts of change is difficult that too, at great personal risk. Unlike ordinary criminals, it is not easy to tame the white-collar lawbreakers who are part of the power structure. Figures like Jayaprakash Narayan and Anna Hazare have fulminated against corruption but Nitish Kumar has stolen their thunder by actually reining in rent-seeking in Bihar, and changing the state's profile.

The writer is member-secretary, Asian Development Research Institute (ADRI), Patna

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