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Why Bihar's Progress Is in the Hands of Its People?

I spent nearly two years living in Patna before relocating to Bangalore for a five-year stint. Afterwards, I found myself returning to Bangalore and again revisiting Patna to attend an event – the Bihar Innovation Challenge - 2023. During this period, I was frequently asked to compare Patna and Bangalore, and my response was never straightforward "Patna or Bangalore." I don't believe in binary judgments. For me, answers can't be simply 0 or 1; life is more nuanced. Consequently, my response has always been: I don't measure or evaluate things in binary terms, not even cities like Patna and Bangalore. You can read my answer at the end of this essay, for now, let’s start this essay.

Interestingly, I initially drafted this essay on April 28, 2022, but never published it. Now, as I see people discussing and taking serious steps towards Bihar's progress, it seems like the perfect time to share these thoughts.

My journey into contemplating this topic began after reading a thought-provoking essay titled "We Need a New Science of Progress." Born and raised in Dasaut, a small village in Bihar, I had little exposure to the concept of progress. However, as I ventured into different cities and states like Chennai, Bangalore, Delhi, Mumbai, and Kolkata for higher education and career opportunities, I started to question why Bihar was the way it was. Like many others, I initially aimed to secure a job, as society had whispered in my ear for decades. But fate had other plans for me.

The adage "The harder you work, the luckier you become" compelled me to start asking "why" about everything, apply parallel learning, study successful individuals and organizations, think from first principles, analyze the root causes of success, failure, and progress, and delve into the history of progress. These tools proved invaluable when evaluating my business ideas and preparing for challenging questions from private investors (VCs). In the process of building businesses, I uncovered the greatest secret of progress: the fundamentals of progress are consistent across all forms of life.

We have continually drawn inspiration from others to expand the boundaries of progress. Nearly everything we see around us today has been innovated upon, often by building upon humanity's top 50 innovations. Aside from a few groundbreaking inventions like fire, the wheel, and the printing press, we've generally discovered "how" by learning from someone or something. Behind every stride in progress, there lies the dedication and hard work of individuals. You can find many such stories on my blog.

Did you know that American scientist and educator William Barton Rogers published a manifesto in 1861 calling for a new kind of research institution? His vision seeded some of the world's best universities, including Harvard, MIT, Stanford, Caltech, Johns Hopkins, and the University of Chicago. Rogers initiated this reform by studying the successes of the German university model. At that time, Germany had a real chance of becoming the world's largest economy after the fall of the great empire - the UK.

Similarly, Dr. Vikram Sarabhai and Dr. Homi J. Bhabha laid the foundation for space exploration in India, motivated by the successes of the Russian and USA space programs. The Delhi Government has implemented education policies by studying the European education system.

In the startup world, terms like "First Mover" and "Last Mover" exist. It has been proven that even if you are not the first mover, you can succeed by studying the industry and developing a better process or system. In essence, everything boils down to a fundamental truth: everything we see around us is the result of the efforts and hard work of individuals. Progress is not inevitable; it requires deliberate collaborative efforts from a group of individuals. This means Bihar being the last mover can be treated as an advantage because we can learn from other’s mistakes and build a prosperous and sustainable society.

Whenever I look at Bihar's statistics, the numbers paint a challenging picture. With a population of 123 million residing in an area of 94,163 square kilometres (93.60 lakh hectares), Bihar has the lowest GSDP per capita among the 33 states in India, at $660 (INR 50,555). The distribution of GSDP by sector is as follows: Agriculture 24%, Industry 15%, and Services 61%. Bihar's GSDP growth has not consistently kept pace with its potential, and the decline in women's workforce participation from 17.2% to 2.8% over the past 20 years is a concerning trend. This means that approximately 46% of the population is not directly contributing to the GSDP. This decline in women's workforce participation is a national concern as well.

To be clear, it's not my intention to highlight these statistics to cast a negative light on Bihar. Instead, I believe that confronting these issues can accelerate Bihar's progress. While not everything can be attributed to the government and the policy system, it's also not fair to say that the government is doing nothing. However, government efforts alone are insufficient. The solution lies in making Bihar's progress individual responsibility while viewing the government as a supporting system. It's essential to understand that this is not a short-term endeavor; it must be a decade-long plan. The contributions we make today will yield results in 10 to 12 years. These contributions don't solely involve financial support but intellectual input, time, skills, knowledge, and more. If technologists, economists, storytellers, educators, architects, rural developers, and others spend a few hours each month brainstorming and sharing ideas, we can find solutions.

One of Bihar's growth challenges is its inconsistency. For instance, while we experienced 12% GSDP growth up to 2017-2018, this growth dropped to 5% in 2018-2019, then increased to 11% in 2019-2020, and decreased again to 2.5% in 2020-2021. Such fluctuations in growth rates demand attention and analysis.

Consider this example: Bihar's current GSDP per capita is INR 50,555, and if we aspire to match Tamil Nadu's current GSDP per capita of INR 2,43,198 within the next 10 years. This means Bihar's GSDP per capita needs to increase nearly fivefold (400%) of its current figure. To achieve this in a decade, we must grow our GSDP at a Compound Annual Growth Rate (CAGR) of 24%. To accomplish this ambitious goal, we need to focus on industries such as Agriculture, Industry, Tourism, Services etc.

It all starts with education. Bihar's education system should emphasize the "why" and "how" rather than just "what." Currently, it appears that 99% of Bihar's youth pursue education solely for the purpose of securing a job. Unfortunately, this is a narrow perspective that stems from the belief instilled from day one that education's sole purpose is job attainment. This mindset has deeply ingrained itself in the subconscious minds of the youth. To unlock Bihar's potential, we must educate the new generation to possess skills and competencies rather than rote knowledge intended for government exams. A comprehensive restructuring of the education system is necessary. Given the existing flaws in Bihar's education infrastructure, this transformation should be feasible. This revamped system will shape our future—the youths emerging from this educational environment will naturally drive Bihar's progress. They will require no external motivation to contribute significantly, whether it's creating advanced metaverse properties or revolutionizing Bihar's agriculture. Many individuals, like myself, will be inspired to write, debate, hustle, and attract billions of dollars in foreign investment to further Bihar's development.

Once we've laid the groundwork for the future, our focus must shift to the next ten years, aiming for a remarkable 24% Compound Annual Growth Rate (CAGR) to multiply our GSDP by fivefold.

First and foremost, we should delve into the root causes of the inconsistency in growth. By studying the drivers behind the high-growth years, such as 2017-2018, we can double down on those factors.

Secondly, we must harness our strengths. If agriculture is Bihar's forte, we should aim for explosive growth. Bihar stands as the second-largest producer of Maize, boasting an impressive yield of 4 million metric tons. However, there's a challenge: Maize is being sold by farmers at an average of INR 1750 per quintal. In terms of direct contributions to Bihar's GSDP, Maize production accounts for a mere 7000 Cr, approximately 1% of the current GSDP. Adopting a playbook often followed by successful startups, we can begin by focusing on our core strength, in this case, Maize production, and progressively extend our reach throughout the entire value chain.

Through this approach, we set a lofty goal: to make Maize contribute tenfold to Bihar's GSDP. This would require optimizing production, technological innovations, and building a robust supply chain infrastructure. We must also empower local farmers and communities to establish food processing units, thus leading to improved pricing. Investments in supply chain infrastructure and storage facilities are vital. Moreover, introducing technology that eliminates intermediaries and empowers farmers to grasp the end-to-end value chain is crucial. Remarkably, these changes can occur without significant government intervention, as many of the processes used by farmers are outdated and ripe for innovation.

We all understand how to make this possible, but it will necessitate capital. Thankfully, we have the National Investment and Infrastructure Fund (NIIF), India's first Sovereign Wealth Fund, with backing from entities such as CPP Investments Ontario, Teachers Pension Plan, US International DFC, Abu Dhabi Investment Authority, Multiples Somerset Indus, Eversource Capital, Asian Infrastructure Investment Bank, New Development Bank, ADB (Asian Development Bank), Australian Super, and Qatar Investment Authority, among others. These Limited Partners (LPs) are making substantial investments in developing countries and states, with an expected return on their investments in 10 to 15 years. However, we must develop a clear plan on how to a) utilize these funds and b) create wealth and value. This example illustrates that, with a well-defined playbook, we can drive significant progress in Bihar because all the capital and technologies are available at our fingertips.

Thirdly, we must bolster our technological infrastructure and aim for 100% internet penetration over the next decade. We should attract technology startups and high-quality talent while offering incentives and benefits to those establishing their businesses in Bihar. It is true that Bihar currently lacks some infrastructure and ecosystem support, but there are compelling advantages for startups operating in Patna, Bihar's capital. Patna's per Capita GDP matches India's, and startups located there can tap into customers from all 10 quintiles (Rural and Urban) within a 50 km radius which is impossible for startups building in Bangalore, Mumbai, and Delhi.

The next wave of startups should be geared towards serving the bottom 8 quintiles (Rural and Urban) - 1.2 billion consumers. By being based in Patna, startups gain access to a diverse range of customers. Bihar's population demographics mirror half of India's population, totalling 500 million potential consumers. Seamless connectivity can be an added advantage. Patna has the potential to become a hotspot for developing playbooks for the next billion users. This move is precisely why we transitioned from Bangalore to Patna to launch ZILA (my previous startup) in 2021. While the government may not fully grasp these nuances, we don't necessarily need government intervention. Instead, we must highlight the benefits and share success stories. A modest push from the government and public support can set in motion a robust flywheel propelling Bihar's progress.

The active initiatives taken by Bihar's Industry Department underscore the seriousness of increasing technology penetration and fostering an entrepreneurial mindset among Bihar's youth. Initiatives like Startup Bihar, offering co-working spaces at a much lower cost, seed funding, and industry connections, serve as valuable stepping stones in making Bihar an attractive destination for external entities to establish their offices. Here's a suggestion: for industries under state control, the Industry department can create startup corridors where startups in specific sectors can directly engage with relevant stakeholders. For instance, Bihar's healthcare infrastructure is one of the weakest in the country, and technology is the key to addressing this challenge. Any healthcare startup should have seamless access to engage with all stakeholders without unnecessary barriers. Such corridors would further attract startups from various cities and states.

Fourthly, tourism remains an untapped resource. While the government has allocated funds for Bihar's tourism sector in recent years, the success of these allocations largely depends on individuals like us. We must treat our guests with respect, maintain cleanliness in our cities, and exhibit rational behaviour. A positive guest experience can create a virtuous cycle, while a negative one can lead to a detrimental cycle. Goa, with its highest per capita GSDP, owes much of its prosperity to tourism. The state government has allocated substantial funds (417 Cr. Fy 23-24) to promote tourism, but the outcomes will be shaped by the people of Bihar.

Lastly, but crucially, we must strive to enhance women's workforce participation. Societal progress is severely hampered when we exclude women from the workforce, as this neglects a vast economic opportunity. Bihar currently holds the dubious distinction of having the lowest women's workforce participation in the world, standing at approximately 4%. This means that 46% of our population does not directly contribute to the economy. Across the world, we have seen success stories of improving women's workforce participation. Here, too, we need to act as individuals before expecting government intervention. We must shift our mindset from viewing women primarily as homemakers and allow 50% of our population to explore their potential and contribute to the economy. I remain optimistic that the government will also play its part in unlocking this potential.

In the end, it all boils down to our commitment and determination to bring progress to Bihar. This requires a small time commitment from all of us, the people of Bihar. This is our problem, and we must identify and implement the right solutions. We must be right from the start, as we cannot afford to be wrong, considering our state's population exceeds 125 million, equivalent to 25 times that of Singapore. Hence, the progress of Bihar begins with us—the people of Bihar.

Here is my answer to Patna or Bangalore: Both cities have their merits and demerits. Bangalore boasts clean roads, lush greenery, a thriving IT sector, higher living standards, and a higher Gross State Domestic Product (GSDP) per capita, but all of these are the result of the collective efforts of its residents, including its traffic challenges. Patna, on the other hand, offers a lower cost of living, access to diverse customer segments, and relatively less traffic congestion, but it also faces its share of challenges. Patna is neither inherently good nor bad when compared to other cities worldwide. There's no reason why Patna can't become a top quintile city with improved infrastructure, better living standards, and sustainability. Similarly, Bihar has the potential to achieve the highest GSDP per capita in India and globally...

Thanks for reading my essay, and if you think you have an interesting idea related to Bihar’s progress, let’s connect

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