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Growth and Public Finance in Bihar

Discussion Papers

No.331

by Chirashree Das Gupta
March 2012

ABSTRACT

This paper explores the causal links between the role of public finance and Bihar’s growth and development in the last decade; and argues that these links are tenuous. Bihar’s growth acceleration precedes the ‘policy reforms’ in public finance based on the ‘good governance’ agenda initiated since 2005-06. However, the constraints on sustaining efforts to close Bihar’s development gap with the rest of India stems from the nature of the growth process in its regional, sectoral and social dimensions and the contradictory means and ends of the ‘policy reforms’ in public finance. Together, this has not only prevented the economic growth to add to public coiffeurs of the state but also occluded the role of tax institutions.


Keywords: Good Governance, Growth, Bihar, Public Finance, Political Economy
JEL classification: O20, O40, P41, P43, R11, R58

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