How Bihar Performs

socialprogress.in [email protected]

HOWBIHARPERFORMS

AmitKapoor,InstituteforCompetitiveness,India

2

WHAT IS COMPETITIVENESS ?

Source:MichaelE.PorterandInstituteforStrategyandCompetitiveness

COMPETITION AMONG STATES

• The purpose of a sound economic policy is to increase the overall

prosperity in the state and for that the states should focus on increasing

their competitiveness.

• Improvements and productivity and technological advancement are the

guiding principles in this regard.

• Competitiveness requires a fundamental rethinking of usage of your

existing resources.

• For government has to fundamentally rethink its role, it should try to foster a

spirit of entrepreneurship in the private sector.

• The criteria for judging the merits and demerits of an economic policy

should be by outcomes and not political philosophy.

• The prosperity of India will depend largely on the states and not just the

(Center) Delhi.

Context for Firm Strategy and

Rivalry

Related and Supporting Industries

Demand Conditions

• Local rules and incentives that encourage investment and productivity e.g.

- salaries,- incentives for capital investments, - intellectual property protection• Vigorous local competition i.e., - Openness to foreign and local

competition; - Sophistication of company operations

Local availability of suppliers and supporting industriesPresence of clusters instead of isolated firms

Sophisticated and demanding local customers and needs e.g.,- Strict quality, safety, and environmental standards– Consumer protection laws – Government procurement ofadvanced technology– Early demand for products andServices.

Access to high quality business inputsi.e.,- Natural endowments,- Human resources, - Capital availability,- Physical infrastructure,- Administrative infrastructure,- Information infrastructure, - Scientific and technological infrastructure

Factor Conditions

• Many things matter for competitiveness• Successful economic development is a process of improving the business environment to enable increasingly

sophisticated ways of competing

The Diamond

Source: Institute for Strategy and Competitiveness, HBS and Institute for Competitiveness, India

COUNTRYEQUIVALENTS

Source:EIU2011,InstituteforCompetitivenessAnalysis

BAHAMAS CUBA

INDUSTRIESINBIHAR

Sugarcane

Textiles/ Sericulture

Agro based Industries

Manufacturing

Petrochemical

Tourist center

DEMOGRAPHICPROFILEINBIHARPo

pulatio

ninNum

bers

Source:InstituteforCompetitivenessAnalysis

1056

7000

1069

5000 1192

9000

1149

4000

9919

000

7379

000

6054

000

5618

000

5270

000

4718

000

3943

000

3143

000

2381

000

1810

000

1397

000

9280

00

4770

00

0

2000000

4000000

6000000

8000000

10000000

12000000

14000000

0-4years

5-9years

10-14years

15-19years

20-24years

25-29years

30-34years

35-39years

40-44years

45-49years

50-54years

55-59year

60-64years

65-69years

70-74years

75-79years

80+years

NEARTERMSTATEPROSPERITYPERFORMANCE

Jammu&Kashmir

HimachalPradesh

Punjab

Haryana

UttarPradesh

Rajasthan

Delhi

Uttarakhand

Bihar

Orissa

WestBengal

Assam

Meghalaya

Tripura

Mizoram

Manipur

Nagaland

ArunachalPradeshSikkim

Jharkhand

Gujarat

Maharashtra

Goa

MadhyaPradesh

Chhattisgarh

AndhraPradesh

Karnataka

Kerala

TamilNadu

3

4

5

6

7

8

9

0 20000 40000 60000 80000 100000 120000 140000

GrossDomesticProductperCapita

GrossD

omestic

Produ

ctperCap

itare

algrowthra

te

HighlyProductiveandProsperityRisingversusIndia

HighbutdecliningversusIndia

LowbutrisingversusIndia

LowanddecliningversusIndia

PROSPERITYANDCOMPETITIVENESS


AndhraPradesh

ArunachalPradesh

Assam

Bihar

Chattisgarh

Delhi

Goa

Gujarat

Haryana

HimachalPradesh

JammuandKashmir Jharkhand

Karnataka

Kerala

MadhyaPradesh

Maharashtra

Manipur

MeghalayaMizoram

Nagaland

Orissa

Punjab

Rajasthan

Sikkim

TamilNadu

Tripura

UttarPradesh

UttarakhandWestBengal

y=2486.4x- 105523R²=0.51721

0

10000

20000

30000

40000

50000

60000

70000

80000

90000

45 50 55 60 65 70

Percap

itaStateDom

esticprodu

ctatcon

stan

tpric

e

MicroeconomicCompetitivenessScores

AGRICULTURALGSDPPERCAPITAANDCOMPETITIVENESS


AndhraPradesh

ArunachalPradeshAssam

Bihar

Chattisgarh

Delhi

GoaGujarat

Haryana

HimachalPradesh

JammuandKashmir

Jharkhand

Karnataka

Kerala

MadhyaPradesh

Maharashtra

ManipurMeghalaya

Mizoram

Nagaland

Orissa

Punjab

RajasthanSikkim

TamilNadu

Tripura

UttarPradeshUttarakhand

WestBengal

y=199.83x- 2794.9R²=0.06055

0.00

5000.00

10000.00

15000.00

20000.00

25000.00

45 50 55 60 65

Agric

ulturalGS

DPperca

pitainRup

ees/An

num

MicroeconomicCompetitivenessScore


WHY SOCIAL PROGRESS INDEX?

• Besides economic progress, measuring social progress is equally important for a nation toget a true reflection of its performance.

• Till date, predominant focus has been given to measuring economic development throughGDP per capita. It has been assumed that social progress will follow.

• But this is not always the case. There are regions that perform well on economic front butlag behind in improving quality of lives of their citizens.

• Therefore, there is a need to measure social progress directly.

11

Nation’s Performance

Economic Progress

Social Progress

INDIA ON THE GLOBAL SOCIAL PROGRESS INDEX 2016

Key Insights

§ Social Progress Imperative ranks countries on the basis of social and environmental progress.

§ India moved up to 98th rank in 2016 index.

§ The key findings of the index about India include:

üOn an absolute basis, India performs well on affordability of housing, political rights and gender parity in basic education.

üThere is room for improvement when the country is analysed on performance is tolerance and inclusion, pollution and health.

ü On a relative basis, India’s scores are well within the range of expected scores.

üIt outperforms its economic peers corruption and political rights.


COMPONENTS – SOCIAL PROGRESS INDEX

13

SocialProgressIndex

BasicHumanNeeds FoundationsofWellbeing Opportunity

NutritionandBasicMedicalCare

WaterandSanitation

Shelter

AccesstoBasicKnowledge

AccesstoInformation&Communication

Health&Wellness

PersonalRights

PersonalFreedom&Choice

Inclusion

Doesacountryprovideforitspeople’smostessentialneeds?

Arethebuildingblocksinplaceforindividualsandcommunitiestoenhanceandsustain

wellbeing?Isthereopportunityforallindividualsto

reachtheirfullpotential?

Dimension

Com

ponents

PersonalSafety EnvironmentalQuality AccesstoAdvancedEducation


SOCIAL PROGRESS PERFORMANCE: OVERALL

14


0102030405060708090

SocialProgressInd

ex

Basic

Hum

anNeeds

Nutrition&BasicM

edical

Care

Water&Sanita

tion

Shelter

Person

alSafety

Foun

datio

nsofw

ellbeing

Accessto

Kno

wledge

Accessto

Inform

ation&

Commun

ication

Health&W

ellness

Environm

entalQ

uality

Opp

ortunity

Person

alRights

Person

alFreed

om&Cho

ice

Inclusion

Accessto

Advanced

Education


SOCIAL PROGRESS INDEX – OVERALL SCORES

15

* Peer Groups are decided on the basis of per capita income of 2013-14 at the current prices.

SocialProgressIndex

PeerGroups* States Scores

VeryHighIncomeStates(Morethan103820)

Goa 63.8Delhi 57.8Sikkim 59.0Haryana 58.2Maharashtra 59.1TamilNadu 68.0Gujarat 56.9

HighIncomeStates(Between77529and

103820)

Kerala 64.7Uttarakhand 63.7Punjab 61.7HimachalPradesh 63.6ArunachalPradesh 51.2Karnataka 62.5AndhraPradesh 58.1Nagaland 51.1

MiddleIncomeStates(Between58547andless

than77529)

Mizoram 57.9WestBengal 55.1Tripura 52.9Rajasthan 50.9Meghalaya 46.8Jammu&Kashmir 50.0Chhattisgarh 53.3

LowIncomeStates(Lessthan58547)

Odisha 50.7MadhyaPradesh 52.9Jharkhand 47.2Assam 43.0Manipur 55.7UttarPradesh 48.2Bihar 43.6


SOCIAL PROGRESS INDEX- DIMENSION LEVEL SCORES

16

States BasicHumanNeeds Foundationsofwellbeing OpportunityAndhraPradesh 64.4 47.6 62.3ArunachalPradesh 53.6 58.3 41.8Assam 47.0 52.0 30.1Bihar 48.4 45.9 36.3Chhattisgarh 56.9 51.7 51.2Delhi 60.5 69.0 43.8Goa 77.7 63.0 50.6Gujarat 68.8 51.3 50.5Haryana 63.7 52.5 58.4HimachalPradesh 60.5 61.2 69.1Jammu 51.7 48.9 49.4Jharkhand 51.4 52.6 37.7Karnataka 63.0 58.2 66.5Kerala 65.3 63.4 65.5MadhyaPradesh 55.6 48.3 54.7Maharashtra 67.7 57.5 52.1Manipur 68.3 55.0 43.9Meghalaya 46.4 59.3 34.8Mizoram 65.1 59.0 49.7Nagaland 62.8 49.3 41.1Odisha 49.7 48.1 54.4Punjab 63.7 58.6 62.9Rajasthan 52.1 44.7 55.8Sikkim 65.8 57.3 53.9TamilNadu 74.6 60.4 69.1Tripura 56.9 52.8 48.9UttarPradesh 47.0 46.3 51.4Uttarakhand 63.9 62.6 64.7WestBengal 60.0 55.6 49.9

The overall scores of Biharare better in Basic HumanNeeds than the other twodimensions. Implying thatwhen it comes to providingits citizens with basic needsof survival such as water,health facilities Bihar isperforming relatively better.


States

Nutrition&BasicMedicalCare Water&Sanitation Shelter PersonalSafety

AccesstoKnowledge


Health&Wellness

EnvironmentalQuality PersonalRights

PersonalFreedom&Choice Inclusion

AccesstoAdvancedEducation

AndhraPradesh 41.8 72.7 69.5 73.8 31.0 41.4 54.2 63.9 81.5 80.7 54.3 32.7ArunachalPradesh 39.7 64.5 56.8 53.4 62.1 23.6 72.9 74.4 65.7 59.1 19.7 22.7Assam 20.5 82.8 33.1 51.6 58.0 7.7 70.1 72.1 58.0 17.6 34.5 10.2Bihar 22.3 74.7 30.1 66.7 39.9 8.9 65.8 69.1 45.2 58.2 33.6 8.2Chhattisgarh 13.9 89.6 59.2 64.7 73.2 29.0 47.7 57.1 77.4 65.8 44.1 17.6Delhi 50.1 77.3 78.3 36.3 78.1 79.9 60.5 57.7 25.8 82.2 38.5 29.0Goa 66.8 88.1 84.7 71.3 88.2 44.4 52.9 66.5 58.1 54.1 37.1 53.2Gujarat 29.4 90.8 73.3 81.7 38.8 48.0 58.7 59.8 62.8 79.1 27.8 32.5Haryana 34.9 88.2 71.2 60.3 40.5 44.1 69.7 55.6 70.9 77.8 37.4 47.5HimachalPradesh 38.6 44.3 85.1 74.1 65.5 54.9 74.5 49.9 69.5 87.2 50.8 68.9Jammu 38.8 45.6 54.1 68.1 24.3 31.8 70.5 68.8 68.5 78.9 23.7 26.6Jharkhand 14.1 81.5 48.8 61.1 47.8 26.8 70.5 65.4 52.0 53.4 37.1 8.3Karnataka 42.3 70.9 66.4 72.3 67.3 47.9 55.1 62.5 67.8 71.2 64.5 62.3Kerala 62.9 51.9 74.0 72.3 80.9 58.9 60.2 53.7 72.5 83.6 56.7 49.2MadhyaPradesh 16.6 81.7 58.1 66.0 38.1 33.4 64.8 57.0 66.8 74.2 39.4 38.2Maharashtra 49.3 85.9 62.4 73.1 59.1 49.8 57.7 63.5 41.4 78.8 43.1 45.0Manipur 80.7 61.1 64.3 67.2 62.0 25.4 64.2 68.6 44.0 70.5 22.2 38.8Meghalaya 35.4 28.3 61.0 61.0 79.8 20.9 73.7 62.7 42.5 64.9 13.4 18.3Mizoram 52.3 69.5 74.2 64.3 87.6 28.8 64.9 54.6 81.5 81.9 14.1 21.4Nagaland 59.9 56.3 61.6 73.6 50.5 22.1 62.5 61.9 67.6 64.5 9.3 22.9Odisha 21.3 72.8 43.5 61.2 48.7 14.1 66.0 63.4 57.0 66.4 44.1 50.0Punjab 42.8 82.0 60.0 69.9 49.7 59.7 64.5 60.5 82.9 83.2 47.3 38.3Rajasthan 16.4 68.2 57.4 66.5 16.1 31.2 73.0 58.5 75.7 54.7 40.1 52.7Sikkim 60.2 45.8 76.0 81.4 72.4 36.4 60.8 59.7 83.2 66.1 33.6 32.6TamilNadu 58.4 92.2 73.3 74.5 72.1 57.9 50.7 60.7 92.2 77.0 58.8 48.6Tripura 53.5 56.8 54.6 62.6 62.9 25.3 66.8 56.2 52.1 79.7 47.3 16.6UttarPradesh 7.8 92.4 15.7 72.1 36.5 21.4 68.9 58.3 51.8 63.5 62.0 28.4Uttarakhand 32.1 70.3 78.3 74.9 64.0 52.6 72.2 61.6 80.6 82.6 48.1 47.6WestBengal 47.5 70.7 46.9 74.7 59.9 24.5 65.8 72.2 51.5 74.0 56.0 18.1

SOCIAL PROGRESS INDEX : COMPONENT LEVEL SCORES


SOCIAL PROGRESS PERFORMANCE: BIHAR

18


0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

100.0

SocialProgressInd

ex

Basic

Hum

anNeeds

Nutrition&BasicM

edicalCare

Water&Sanita

tion

Shelter

Person

alSafety

Foun

datio

nsofw

ellbeing

Accessto

Kno

wledge

Accessto

Inform

ation&Com

mun

ication

Health&W

ellness

Environm

entalQ

uality

Opp

ortunity

Person

alRights

Person

alFreed

om&Cho

ice

Inclusion

Accessto

AdvancedEd

ucation

BIHARPeer Group: Low Income

Social Progress Index score: 43.6

BASIC HUMAN NEEDS 48.4 FOUNDATIONS OF WELLBEING 45.9 OPPORTUNITY 36.3

Nutrition and Basic Medical Care 22.3 Access to Basic Knowledge 39.9 Personal Rights 45.2

Infant Mortality Rate 43 Net enrolment ratio (primary) 93.8 Access to Judiciary 32.5

Maternal Mortality Rate 22.8 Gross enrolment ratio (secondary) 69.1 Property Rights 14.2

Prevalence of Anaemia 63.5 Drop out rates 2.1 Child Labour 0.0

Children under the age of 5 years who are underweight 43.9 Literacy Rate 66

Girls to Boys Enrolment 0.8

Water and Sanitation 74.7 Access to Information and Communications 8.9 Personal Freedom & Choice 58.2

Rural Sanitation Coverage 23.6 Internet subscribers 17.7 Human Trafficking 0.4

Fully covered habitations 58.8 Television access 14.50 Corruption 0.3

Rural access to improved source of water 97.6 Phone subscribers 69.3 Early Marriages 39.1

Typhoid Cases 2.6 Newspaper circulations 0.1 Contraception 24.1

Diarrheal Cases 5.3

Shelter 30.1 Health and Wellness 65.8 Inclusion 33.6

Housing Shortages 6.3 Suicides due to Illness 0.0 Insurance 8.6

Share of HH in pucca houses 36.1 Obesity Rate 12.2 Financial Inclusion 30.2

Access to electricity 16.4 Life Expectancy at 60 17.2 Sex Ratio 935

Power Deficit -0.40 HIV Prevalence 0.3 Women in PRIs 51.6

Leprosy Prevalence 1.1 Percentage of SC Enrolment 13.5

Personal Safety 66.7 Environmental Quality 69.1 Access to Advanced Education 8.2

Rate of murder Crimes 3.1 Change in forest cover 6.5 Gross Enrolment Ratio (Higher Education) 12.9

Rate of violent crimes 34.7 Renewable energy 0.1 Female Graduates 1.8

Crimes against women 2.1 Water withdrawals 44.00 Number of ITI 8.4

Deaths due to road accident 49.2 Acute respiratory infection 14.3 Number of UGC Colleges 0.001

Land degradation 36.1Municipal Solid waste treatment 25.2

OVERALL PERFORMANCE : BIHAR


SOCIAL PROGRESS AND ECONOMIC DEVELOPMENT

21

Key Findings: •There exists a positive and strong relationship between GDP per capita and Social Progress Index. For instance, Bihar with a GDP per capita of 31,199 scores 43.6 on Social Progress Index. On the other hand, Goa with a GDP per capita of 224138 has a social progress score of 63.8.

•The relationship between social progress and GDP (economic development) is not linear. At lower levels of income, a small change in GDP leads to large advancements in social progress scores. However, as income levels rise, the rate of change slows.

•Third, despite the correlation among GDP per capita and social progress index, considerable amount of variability in social progress is observed among states with comparable levels of GDP per capita. Economic development alone is not sufficient to explain social progress outcomes.

SOCIAL PROGRESS INDEX AND GDP: COMPONENT LEVEL RELATIONSHIP Quick Wins

§ ThisincludescomponentsthatshowrapidimprovementswithGDPpercapita.Buttherelationshipisleveledoffatmoderateincomelevels.

§ ShelterandAccesstoInformation&Communicationshowdrasticimprovementsatrelativelylowerlevelsofincome.

§ Thisgroupofcomponentsshouldbecentraltotheagendafordevelopmentinthecountryaseconomicdevelopmentwillleadtoimprovementsintheseaspectsofsocialdevelopment.


SOCIAL PROGRESS INDEX AND GDP: COMPONENT LEVEL RELATIONSHIP Steady Improvers

§ ThosecomponentsthatshowimprovementswithGDPpercapitathatdoesnotlevelsoffuntilaveryhighincomelevelareclubbedundersteadyimprovers.

§ NutritionandBasicMedicalCarealsoshowsstrongcorrelationwithpercapitaGDPbuttheimprovementsarenotasrapidasinthecaseofQuickWins.Thestatesneedtomakesystematicinvestmentsovertimeinhealthfacilitiestoenhancethewellbeing.

Nutrition&BasicMedicalCare

socialprogress.in [email protected] 24

Mild correlation exists between social progress and state competitiveness.

SOCIAL PROGRESS AND STATE COMPETITIVENESS

Size of the bubble represents population of the state.

Source:Michael.E.Porter,http://www.hbs.edu/faculty/Publication%20Files/20130321%20--%20AllWorld%20and%20TEF%20CSV%20Presentation%20---%20FINAL%20FINAL_04158e95--88e5--48ab--8582--4e5a2142492c.pdfInstituteforStrategyandCompetitiveness(ISC)

InboundLogistics

(e.g. Incoming Material Storage, Data Collection,

Service, Customer Access)

OutboundLogistics

(e.g. Order Processing,

Warehousing, Report Preparation)

After-Sales Service

(e.g. Installation, Customer Support,

Complaint Resolution, Repair)

Ma

rg

i

n

Primary Activities

Firm Infrastructure(e.g. Financing, Planning, Investor Relations)

Procurement(e.g. Components, Machinery, Advertising, Services)`

Human Resource Management(e.g. Recruiting, Training, Compensation System)

Value

What buyers are willing to pay

• Relationship with universities (-)• Ethical Research Practices (-)• Product Safety (+/-)• Conservation of Raw Materials (-)• Recycling (+/-)

• Financial Reporting Practices (+/-)• Governance Practices (+/-)• Transparency(-)• Use of Lobbying (-)

• Education and Job Training (+/-)• Safe Working Conditions (-)• Diversity and Discrimination (+/-)• Healthcare and Other Benefits (+/-)• Compensation Policies (-)

• Procurement Practices (e.g., Bribery, child labour,) (+/-)

• Use of Particular Inputs (+)• Utilization of Natural

Resources (+/-)

• Transportation impacts (e.g., emissions, congestions) (+/-)

• Emissionsandwaste(-)• Biodiversityandecologicalimpacts(-)

Energyandwateruse(+/-)• Workersafetyandlaborrelations(+/-)• HazardousMaterials(+/-)

• Packaging use and Disposal (+/-)

• Marketing and advertising (e.g., truthful advertising) (+/-)

• Pricing Practices (+/-)• Consumer Information (+/-)• Privacy (+)

• Disposal of Obsolete Products (+/-)

• Handling of Consumables (-)

• Consumer Privacy (+/-)

SupportActivities Technology Development

(e.g. Product Design, Testing, Process Design, Material Research, Market Research)

This is where most patent producing multinationals focus

Operations

(e.g. Assembly, Component

Fabrication, Branch Operations)

Marketing& Sales

(e.g. Sales Force, Promotion,

Advertising, Proposal Writing, Web site)

This is where most Indian Generic Manufacturers focus

ValuechainofagenericplayerandImpactonSociety

26

DOES LACK OF TRUST UNDERMINE COMPETITIVENESS?


ROLE OF PRIVATE SECTOR IN ECONOMIC DEVELOPMENT

Increasingly Business Models are emerging which are solving societal needs at the same time making money

for the Organisation. Examples include HUL Shakti Amma and

Aravind Eye care Vaatsalya Hospitals

Vision Spring

Social Objectives

Economic Objectives

CREATING A STATE ECONOMIC STRATEGY

State Value Proposition

Achieving and Maintaining parity with peers

Developing Unique Strengths

What are the main strengths, positive attributes, location advantage etc of the particular state in question.

• How can the state leverage on its unique capabilities and create new ones?

• Which businesses/ clusters can be made stronger?

• What are the key weaknesses which need to be taken care of while forming maintaining parity with peers?

State economic strategy requires setting clear priorities and measuring against predefined criteria.