Real India conclave_Bihar

Bihar the Face of Emerging Markets in IndiaDr. Amit Kapoor

What is Competitiveness

What is Competitiveness?

• Competitiveness is the productivity with which a state utilizes its human, capital, and natural resources

• Productivity determines wages and the standard of living –Productivity growth determines sustainable economic growth

• Productivity depends on how a state competes, not what industries it competes in

• Innovation in products and processes is necessary to drive productivity growth

• Only productive businesses can create wealth and jobs States compete to offer the most productive environment for business

• The public and private sectors play different but interrelated roles in creating a productive economy

Geographic Influences on Competitiveness

Nation

Neighboring states

States

Metropolitan Areas

Rural Regions

• Influence and access federal policies and programs

• Integrate policies and infrastructure with neighbors

• Assist each metro area in developing its own strategy

• Connect rural regions with urban areas

Country Equivalents

Source: EIU 2011, Institute for Competitiveness Analysis

BAHAMAS

CUBA

Stages of the Economy

Factor-driven economies: Factor-driven economies focus on low-cost basic factor conditions, such as low-skilled labour, natural resources and geographic location. Factor-driven economies need to focus on input costs, macro, political and legal stability, efficient basic infrastructure and lowering the regulatory cost of doing business.

Investment-driven economies: Investment-driven economies would have the ability to produce standard products and services of high quality using efficient methods but at lower wages than advanced economies. Investment-driven economies need to focus on building efficiencies, enhancing local competition, market openness, incentives and rules for encouraging productivity.

Innovation-driven economies: Innovation driven economies would focus on innovative products and services at the global technology frontier. Innovation driven economies would need to focus on advanced skills, advanced infrastructure, incentives and rules encouraging innovation.

Stage 1

Stage 2

Stage 3

Quality of the Business EnvironmentContext 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 inputs i.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

4 Major Pillars

12 Sub Indices

350* Indicators

Hierarchy of Measurement of State Competitiveness Index 2012

Categorization of States

Innovation Driven Economies (Per capita GDP 900 to 1300 USD)

Transition Economies (Per capita GDP 800 to 900 USD)

Investment Driven Economies (Per capita GDP 500 to 800 USD)

Evolving / Changeover Economies (Per capita GDP 400 to 500 USD)

Factor Driven Economies(Per capita GDP < 400 USD)

City States (Per capita GDP>1300 USD)

CategorizationMicroeconomic Competitiveness Ranks

City States (Per capita Incomes >1300 USD)Delhi 1Goa 2Innovation Driven Economies (Per capita Incomes 900 to1300 USD)Haryana 1Maharashtra 2Gujarat 3Kerala 4Transition Economies (Per capita Incomes 800 to 900 USD) Punjab 1Tamil Nadu 2Himachal Pradesh 3Investment Driven Economies (Per capita Incomes 500 to 800 USD)Andhra Pradesh 1Karnataka 2Uttarakhand 3West Bengal 4Chhattisgarh 5Sikkim 6Mizoram 7Meghalaya 8Arunachal Pradesh 9Tripura 10Transition Economies (Per capita Incomes 400 to 500 USD) Rajasthan 1Jharkhand 2Orissa 3Jammu and Kashmir 4Factor Driven Economies(Per capita Incomes < 500 USD) Bihar 1Madhya Pradesh 2Assam 3Uttar Pradesh 4Manipur 5Nagaland 6

States in various Categories

Source: Institute for Competitiveness Analysis

2 4 6 8 10 12 140

20000

40000

60000

80000

100000

120000

140000

160000

34080.3

63060.8

71773.0666666667

92051.5333333333

26218.8

36278.3333333334

114067.2

49681.2

17889.4666666666

41144.7333333333

47553.8

31086.2

44200.6

3810340265.8

26240.425010.1666666667

43062.8

51221

28485.2

71493.8

80136.9333333333

144826.5

28376

49104

54068.855597.1333333334

66392.4

61237.6

Gro

ss D

omes

tic P

rodu

ct p

er C

apita

, 201

1

All

Indi

a Av

era

ge

57.2

8 In

dex

Poin

tsAll India GSDP /Capita rate (CAGR) of 9.53 %

All India Average of 52,852 Rupees/capita

Near Term State Prosperity Performance

High but declining versus India

Low and declining versus India

Highly Productive and Prosperity Rising versus India

Low but rising prosperity versus India

Gross Domestic Product per Capita CAGR rate, 2009-2011

Prosperity and Competitiveness


45 50 55 60 65 700

10000

20000

30000

40000

50000

60000

70000

80000

90000

34225

27114

19409

12464

26151

80932

87590

46116

51766

42728

23234 19807

34953

45694

18468

46285

19289

2795825902

18527

23846

40218

24212

32804

39256

26676

15693

3184230124

Microeconomic Competitiveness Scores

Per c

apita

Sta

te D

omes

tic p

rodu

ct a

t con

stan

t pric

e 20

11

Composition of Bihar’s Economy

Agriculture Forestry

and Fishing16%

Industry24%Services

60%

-5.00 0.00 5.00 10.00 15.00 20.00 25.000.00

1.00

2.00

3.00

4.00

5.00

6.00

36993.71

2193.24

2852.51

89.02

7694.80

1571.83

18721.31

49638.68

3398.07

3501.96

82.181541.88

5715.61 8620.35

10385.43

19547.57

Composition of Bihar’s Economy in Greater DepthBi

har /

Nati

onal

GSD

P sh

are

(Per

cent

) ,20

10

Average of (Bihar/ National sectoral )GSDP share is 2.97%

Average of Change in contribution of (Bihar/National sectoral), CAGR is 9.92%

Strong and Growing Position

Manufacturing and Competitiveness


45 50 55 60 650

5000

10000

15000

20000

25000

30000

35000

40000

45000

50000

5430.21255178303

686.735459214487

2891.29349358347

682.662952715686

9506.737014338738836.25449055063

46639.8853249593

19883.9813555643

13941.5802494905

6290.15241818638

2006.28215484706

8087.451248354979042.10623846243

4666.22935961271

2445.18829247234

13611.1736904137

1565.76465095818 2184.97369720562

641.60252144641745.924884181839

5306.7860277001

8746.31710953275

4066.47194302526

1584.64650719887

10283.5405523878

1102.44319833204

3144.66731131901

5805.66213345943

4150.88360810606

Microeconomic Competitiveness Score

Man

ufac

turin

g G

SDP

per c

apita

in R

upee

s /An

num

Services and Competitiveness


45 50 55 60 65 700

10000

20000

30000

40000

50000

60000

70000

80000

90000

23830.8442074848

13332.4625171746

14073.8369934766

8729.01043910014

13365.911261344

84579.139252807

57222.4321386466

24877.1747202735

39781.8745053775

22050.0714479239

13090.9656749756

9804.28865839448

26863.2689065711

37117.1820868721

11122.8531517093

41977.5430815634

10327.4699617943

17087.6699458987

25214.9639387457

19471.7811305824

16181.6684616943

29658.5227375818

14138.5717249405

22754.1084679419

28658.8304385174

18821.40322354

10972.020748532

21557.288083500822633.2650287761


Serv

ices

GSDP

per

capi

ta in

Rup

ees /

Annu

m

Healthcare

0 1000 2000 3000 4000 5000 60000

1

2

3

4

5

6

7

8

9

3.22476209183059

4.2497752049409 4.07016384846093

3.16180957823973

3.76292679502796

7.88418604651162

5.39624818850303

3.057507247662252.94266860226786

4.30062790146307

4.75368460941044.5225022572715

3.27948562138153

4.28036355646522

2.75674198833347

3.151603234188092.9310695135202

4.34925872099367

6.50969736251683

2.95342451145059

3.4494458878522

3.02288986339542

3.92198757833302

2.81985161953233

3.892492570801493.90296416215372

4.38576681756406

3.576661904176173.92398840519747

Total Government Expenditure on Medical, Health and Sanitation in Crores

All India Average 3.95%

All India

All India Average 1407.59 Crores

Perc

enta

ge o

f Tot

al g

over

nmen

t Exp

endi

ture

on

Med

ical

, Hea

lth

and

Sani

tatio

n

Government Hospitals versus Competitiveness


45 50 55 60 650

200

400

600

800

1000

1200

1400

1600

1800

359

161 153

1717

218

130

20

373

154142

92

500

919

386377

765

28 382048

1709

231

475

30

581

31

925

695

294


Num

ber o

f go

vern

men

t Hoi

spita

ls

Percentage of Villages Electrified

0

10

20

30

40

50

60

70

80

90

10098.24 98.14

100 100

85.31

67.1

100

95.52

52.8555.83

91.07

78.57

59.2957.23

80.6283.89

64.4

56.82

94.44

31.07

99.56

87.69

10096.35

95.37

100 98.7 100 100

All India Average of 83.78 %

Perc

enta

ge o

f Vill

ages

ele

ctrifi

ed

Teledensity

0 20000 40000 60000 80000 100000 120000 140000 1600000

50

100

150

200

250

70.27

42.531.2

50.07

5.94

208.9

52.74

76.12 77.5

104.86

8.416

24.2

33.2

57.763.8

42.542.5

42.542.5

22.1

97.9

62.3

17.4 15.7

42.549.9

15.521.8

Teledensity vs GSDP per Capita

All India Average 57.28 Index Points

All India Average of 52852 Rs/ Capita

All India Average of 66.17 %

Tele

dens

ity (

No

of c

onne

ction

s Pe

r 100

Peo

ple)

Per Capita GDP at current prices 2011

Debt to GDP ratio

AndhraArunachal

AssamBihar

ChattisgarhDelhiGoa

GujaratHaryana

HimachalJammu & Kashmir

JharkhandKarnataka

KeralaMadhya Pradesh

MaharashtraManipur

MeghalyaMizoramNagaland

OrissaPunjab

RajasthanSikkim

Tamil NaduTripura

Uttar PradeshUttaranchal

West Bengal

0 20 40 60 80 100 120

30.1115.9

2839.7

15.213.8

35.532.1

1955.7

70.133.6

24.334.334.4

25.177.4

37.3109.1

59.430.6

35.241.1

80.625.5

42.243.5

41.142.8

Debt to GDP Ratio of States

Prescribed limit according to WTO for developing

economies

Prescribed limit according to the growth and stability Pact of EU

Demographic Profile of BiharPo

pula

tion

in N

umbe

rs a

s pe

r Exp

ert g

roup

on

Popu

latio

n, 2

011

0-4 years

5-9 years

10-14 years

15-19 years

20-24 years

25-29 years

30-34 years

35-39 years

40-44 years

45-49 years

50-54 years

55-59 year

60-64 years

65-69 years

70-74 years

75-79 years

80+ years

0

2000000

4000000

6000000

8000000

10000000

12000000

_x0003_0-4

_x0003_5-9

_x0005_10-14

_x0005_15-19

_x0005_20-24

_x0005_25-29

_x0005_30-34

_x0005_35-39

_x0005_40-44

_x0005_45-49

_x0005_50-54

_x0005_55-59

_x0005_60-64

_x0005_65-69

_x0005_70-74

_x0005_75-79

_x0003_80+

80000 60000 40000 20000 0 20000 40000 60000 80000

60746

60092

61318

63479

62281

54078

46050

40596

36773

33218

28157

22391

16693

11991

8910

6075

4469

54133

53394

57259

58248

55757

47877

42855

40164

36691

31993

26038

20447

15712

12406

10034

7017

5163

Age Pyramid for India in 2011

MalesFemale

Population of males / females in Thousands in 2011

Demographics of India 2011

Source: Census of India, Institute for Competitiveness Analysis

_x0003_0-4

_x0003_5-9

_x0005_10-14

_x0005_15-19

_x0005_20-24

_x0005_25-29

_x0005_30-34

_x0005_35-39

_x0005_40-44

_x0005_45-49

_x0005_50-54

_x0005_55-59

_x0005_60-64

_x0005_65-69

_x0005_70-74

_x0005_75-79

_x0003_80+

80000 60000 40000 20000 0 20000 40000 60000 80000

55328

58396

59500

59529

59176

60113

61859

60313

51965

43702

37704

32968

28268

22185

15820

9937

8412

49256

51790

52734

52739

52410

55998

56739

54219

46466

41361

38267

34124

28651

21982

15819

10644

11465

Age Pyramid for India in 2026

Male Female

Projected Population of males / females in Thousands

Demographics of India 2026


Andhra Pradesh

Assam

Bihar

Chattisgarh

Delhi

Gujarat

Haryana

Himachal Pradesh

Jammu & Kashmir

Jharkhand

Karnataka

Kerala

Madhya Pradesh

Maharashtra

NE States Excluding Assam

Orissa

Punjab

Rajasthan

Tamil Nadu

Uttar Pradesh

Uttarakhand

West Bengal

80.0 60.0 40.0 20.0 0.0 20.0 40.0 60.0 80.0

45.05

51.97

49.71

57.45

39.96

48.40

51.12

46.91

50.27

55.35

45.97

45.23

60.18

48.85

44.57

48.47

46.62

60.51

43.07

66.11

56.39

44.58

42.49

45.14

47.67

48.40

34.81

43.16

41.24

42.87

43.11

47.13

43.46

45.96

48.37

42.72

42.23

43.43

41.77

46.67

43.78

55.02

47.88

42.35

Dependence Ratios 2011 Dependence ratio 2026

Dependence ratio 2011 Dependence ratio 2026

Overall Dependence Ratio of States


40 50 60 70 80 90 1000

2

4

6

8

10

12

14

16

7.98

7.29

5.7

13.63

11.92

8.67

6.31

8.32

9.71

6.14

4.33

7.91

6.86

7.88

3.87

6.8

5.2

6.57

4.64

5.28

10.03

7.187.796.71

6.34

4.785.51

7.71

6.03

Literacy rates in percentage terms

All India Average 7.14%

All IndiaAll India Average

77.12%

Literacy Rates versus GDPG

DP

grow

th ra

te (C

AGR

2006

-201

0)

Literacy rates versus Competitiveness


45 50 55 60 6560

65

70

75

80

85

90

95

100

67.6666.95

73.18

63.83

71.04

86.3487.4

73.91

76.64

83.78

68.7467.63

75.6

93.91

70.63

82.11

79.85

75.48

91.58

80.11

73.45

76.68

67.06

82.2

80.33

87.75

69.72

79.63

77.08


Liter

acy

Rate

s

Percentage of factories in operation versus total number of factories

0 5000 10000 15000 20000 250000

2

4

6

8

10

12

14

16

3.08285163776493

4.33168316831683

2.340374459913592.16078066914498

3.589450633152433.41382181515404

7.51811594202896

3.55555555555556

14.919113241462

7.14285714285714

2.94553233503373

6.81330472103004

1.51515151515152

13.680781758957713.5593220338983

14.6788990825688

13.7106918238994

2.76058342226966

3.93885949441503

0.920810313075506

3.28702134869536

6.15696887686062

8.3470550981634

4.54371410338226

8.7010455431508

6.98330590171644

Total number of factories

Perc

enta

ge o

f fac

tori

es n

ot in

ope

ratio

n

All India Average of 4.1% factories not in operation/state average

All India

All India Average of 6198 Factories/state

Industries in Bihar

Sugarcane

Textiles/ Sericulture

Agro based Industries

Manufacturing

Petrochemical

Tourist center

Major Cities in Bihar

State of Cluster Development : Bihar by Total Number of Enterprises

Mining

TextilesApparels and related industries

Publishing and

Printing

Glass and related

industries

Footwear

Lighting Electric

equipment

Minerals

Tobacco

Automotive

Oil and Gas

Medical equipment

Furniture

Other transportat

ion

Leather industries

Wood and Forest

Products

Rubber and Plastic

Industries

Television and allied electronic industries

Processed food

Chemicals

Pulp and Paper

Agricultural Products

Agricultural services

Other Service

Industries

Machinery and

Equipment

Metals

Domestic and electric Industries

Production

Top 7 types of Industries in Bihar

7-14 types of Industries in Bihar



State of Cluster Development : Bihar by Total Number of People Employed

Mining

TextilesApparels and related

industries

Publishing and

Printing

Glass and related

industries

Footwear

Lighting Electric

equipment

Minerals

Tobacco

Automotive

Oil and Gas

Medical equipment

Furniture

Other transportat

ion

Leather industries

Wood and Forest

Products

Rubber and Plastic

Industries

Television and allied electronic industries

Processed food

Chemicals

Pulp and Paper

Agricultural Products

Agricultural services

Other Service

Industries

Machinery and

Equipment

Metals

Domestic and electric Industries

Production

Top 7 ranked types of Industries in Bihar

7-14 ranked types of Industries in Bihar



Energy Usage Statistics

0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00%0

200

400

600

800

1000

1200

1400

1600

1800

643.819999999999

142.45122.36

48.94

611

968.449999999999

1608

1119.17

821.39779.97

330.7

502.33

661.58

355.71391.72

685.08

75.63

388.09

184.99

83.82

516.809999999999

1159.16

442.28 441.1

892.459999999999

113.99

239.75

548.49

318.18

Energy Deficit

Per C

apit

a En

ergy

Usa

ge (

Uni

ts)

Average Per capita energy usage is 564 units.

Average Energy Deficit is 9.8%

Poverty and Rural Development

0 5 10 15 20 25 30 35 40 45 500.00

200.00

400.00

600.00

800.00

1000.00

1200.00

1400.00

370.97

1169.31

382.37356.40

617.77

89.13

1301.60

453.82

622.19

520.64

276.10

433.16

318.81

174.06

594.16

495.05

427.89

1096.85

1295.23

586.74

442.24

67.71

582.92

1088.40

246.57

386.18

287.76

708.34

407.00

Poverty Ratio - Rural

Per C

apit

a Re

venu

e Ex

pend

itut

e on

Rur

al D

e-ve

lopm

ent

Average per capita rural expenditure is Rs 564

India’s poverty ratio rural is 28.3%

National Highway Infrastructure versus Competitiveness


45 50 55 60 65 700

1000

2000

3000

4000

5000

6000

7000

4472

392

2836

3642

2184

72269

3245

1512

12081245

1805

3843

1457

4670

4176

959810927

494

3704

1557

5585

62

4462

400

5874

1991

2524


Leng

th o

f Tot

al N

ation

al H

ighw

ays,

In K

m

Airport Infrastructure versus Competitiveness


45 50 55 60 650

1

2

3

4

5

6

7

8

9

4

0

3

11 11

7

1

3

2

1

4

3

4 4

1

1

2

1 1

3

2

0

3

1

2

2

8

Num

bers

of D

omes

tic A

irpor

ts


Teledensity versus Competitiveness


45 50 55 60 65 700

50

100

150

200

70.27

42.5

31.2

50.07

5.94

208.9

52.74

76.12 77.5

104.86

8.41 6

24.2

33.2

57.763.8

42.5 42.5 42.5

42.5

22.1

97.9

62.3

17.4 15.7

42.5

49.9

15.5

21.8


Tele

dens

ity ,

Phon

es p

er 1

00 p

eopl

e in

the

popu

latio

n

Andhra Prad

esh

Arunach

al Prad

eshAssa

mBihar

Chhattisga

rh Goa

Gujarat

Haryan

a

Himach

al Prad

esh

Jammu &

Kashmir

Jharkhan

d

Karnata

kaKera

la

Madhya

Pradesh

Mahara

shtra

Manipur

Meghala

ya

Mizoram

Nagala

nd

Odisha

Punjab

Rajasth

anSik

kim

Tamil N

adu

Tripura

Uttar Prad

esh

Uttarakh

and

West

Benga

l

16.85

0.21 4.94

13.98

4.15 0.289.64

3.53 1.24 1.55 4.8610.23

6.6010.92

19.06

0.40 0.42 0.16 0.337.87

4.279.34

0.10

14.17

0.66

25.76

1.59

15.72

21.02

0.266.37

18.94

5.62 0.32

12.18

4.72 1.48 2.026.18

13.18

7.72

14.97

23.83

0.51 0.54 0.22 0.40

9.66

5.41

12.58

0.13

18.49

0.84

32.92

2.00

20.07

Households in India (in Millions) 2001 and 2011

Andhra Prad

esh

Arunach

al Prad

eshAssa

mBihar

Chhattisga

rh Goa

Gujarat

Haryan

a

Himach

al Prad

esh

Jammu &

Kashmir

Jharkhan

d

Karnata

kaKera

la

Madhya

Pradesh

Mahara

shtra

Manipur

Meghala

ya

Mizoram

Nagala

nd

Odisha

Punjab

Rajasth

anSik

kim

Tamil N

adu

Tripura

Uttar Prad

esh

Uttarakh

and

West

Benga

l

67.254.7

24.9 10.3

53.1

93.680.4 82.9

94.880.7

24.3

78.6 70.2 70.0 77.560.0

42.7

69.6 63.6

26.9

91.9

54.7

77.8 78.2

41.831.9

60.3

37.5

92.2

65.7

37.1

16.4

75.3

96.990.4 90.5

96.885.1

45.8

90.6 94.467.1

83.9

68.460.9

84.2 81.6

43

96.6

67

92.5 93.4

68.4

36.8

87

54.5

Percentage of Households in India 2001 and 2011 having electricity

Percentage of Households having electricity in India 2001 Percentage of Households having electricity in India 2011

Households in India

Source: Census of India,2011 Institute for Competitiveness Analysis

Access to water

Jammu &

Kashmir

Himach

al Prad

esh

Punjab

Uttarakh

and

Haryan

a

Rajasth

an

Uttar Prad

esh Bihar

Sikkim

Arunach

al Prad

esh

Nagala

nd

Manipur

Mizoram

Tripura

Meghala

yaAssa

m

West

Benga

l

Jharkhan

d

Odisha

Chhattisga

rh

Madhya

Pradesh

Gujarat

Mahara

shtra

Andhra Prad

esh

Karnata

ka GoaKera

la

Tamil N

adu

0

10

20

30

40

50

60

70

80

90

100

63.9

89.5

51

68.2 68.8

40.6

27.3

4.4

85.3

65.5

47.2

38.6

58.7

33.2

39.3

10.5

25.4

12.9 13.8

20.723.4

69 67.969.9

66.1

85.4

29.3

79.8

6.5

2.9

0.5

1.1 3

10.8

4

4.3

0.6

5.7

25.7

7.5

4.7

27.4

25.4

18.9

636.5

19.511.4

20

7.114.4

6.49

11.1

62

5.1

11.4

3.6

24.7

2212

25.3 64.9

86.6

0

10.72.2

6.5

0.8

18.12.8

50.250.1

43.8

41.5

58.4

47.1

11.6

9.9

13.7

5.5

0.1

0.5

4.6

1.5

0.7

21.9

212.9

12.2

2.93

0

2.4

4.5

0.4

0.9

16.3

2.6

9.2

16.7

3.5

20

7.2 7.69.6

5.76.9

16

0.3 3.7 8.216.7

3.4 26.7

3.111.1

0.9 1.714.1

15.820.6

47.2

34.8

5.1

29.9

11.3

1.8 3.4 5.2 2.3 2 2.6 2.2 3.2 3.53.2

4.4 2.4

Tap water Well Handpump Tubewell Tank, Pond, Lake, River, Spring, Canal and any other source

Perc

enta

ge b

y so

urce

of h

ouse

hold

s

Source: Census of India,2011 Institute for Competitiveness Analysis

Date post:	09-May-2015
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