Eastern mysticism to Eastern materialism

FM Nirmala Sitharaman has, in the interim budget, prioritised eastern India as a driver for economic growth. The region deserves special policy intervention. Per-capita income in the four states - Bihar, Jharkhand, Odisha and West Bengal - are lower than the national average by 15-60%. The growth rate of per-capita income in Bihar is less than half that of Karnataka, India's fastest-growing state.

Odisha, the fastest-growing state in eastern India, is the only one growing significantly faster than the national average. These states house over a fifth of India's population and constitute the tail in human development rankings. If India hopes to repeat the previous decade's feat of doubling per-capita income, it will have to devote special attention to the region.

Sitharaman's announcement would indicate GoI is preparing to bridge the physical and social infrastructure deficit in this part of the country.


The region is strategically located for India to act as a bridge for trade between Asia and Europe. These states have to be better integrated logistically to keep production and transport costs low for India to emerge as a manufacturing export hub. Of course, eastern India is not a homogenous area.

Policy will have to be tailored to specific states. Resource-rich Odisha and Jharkhand offer themselves to a manufacturing push. West Bengal has advantages in services. Bihar would benefit by stabilising its population growth faster and through higher social sector spending.

Reforms in welfare delivery and stepped-up capex offer GoI increased leverage to accelerate development of eastern India. Its growth record, however, acts as a serious impediment to weaning the region off its political compulsions to prioritise redistribution.

New Delhi's emphasis on growth has more than its share of sceptics here. The demonstration effect would be more powerful if the Centre could facilitate a winner in this bloc. Factors that led to the deindustrialisation of the region need to be addressed, alongside higher resource devolution.