Bihar unaffected by Global Recession

Bihar unaffected by global recession

Manoj Chaurasia 
PATNA, Dec. 21: The global economic meltdown might have had its adverse impact on many of the world's richest countries, but in Bihar, considered to be one of the poorest states in India, it is business as usual here. While automobile sales have shot up by 45 per cent, the real estate sector has been booming in the last few months as the world began feeling the heat of the economic recession.
According to an official report, a total of 1.33 lakh new vehicles were sold in the last 11 months in Bihar against the sale of 92,147 in the corresponding period of 2007, which is 40,853 more than those sold last year. In November alone, altogether 19,729 vehicles in different categories were sold ~ 4,403 more than those sold in the same period last year. Officials said the automobile sector registered a growth of about 45 per cent in sales this year. Notably, Bihar has recorded growth in this sector at a time when its sales have dipped by 20 to 25 per cent in many states.
No less rosy seems to be the picture of the real estate sector in the state, which figures among the most backward states of the country. As per a report received from the state registration department, Bihar earned Rs 37 crore in revenue from flat registrations in the last two months. Altogether 3,139 flats were registered which indicates there is good cash flow in Bihar. The real estate sector has been badly hit by the global recession in the country, which have compelled the builders to slash rates and offer attractive packages to push through their sales.
One main reason why the economic recession has not impacted Bihar, economic experts explain, is that here the source of income is not based on industry. There is no stock market here, bank loans have gone to very few and the state has second-tier cities. Rather, the state mainly has a salaried class who works with the government, semi-government offices or companies.
"Bihar has no industry, no stock market. So, there is no question of staff retrenchment here or slashing salaries. Instead, several companies have opened branch offices here where it has deputed officials who are getting a hefty salary on time. This is why the global recession has not impacted Bihar, but one cannot say for sure that this will continue in the future," explained Bihar's deputy chief minister, Mr Sushil Kumar Modi, who also holds the finance portfolio. He added that Bihar had mainly the second-class cities and the rate of real estate properties had increased tremendously since it was the middle-class population who dominated the state.
"Further, there are few cash crops in Bihar and the main crops of the people here are rice and wheat, which don't require much investment. Hence, few people have approached banks for loans," Mr Modi, who is a senior BJP leader told The Statesman. Moreover, a huge number of development projects had been launched in Bihar since the NDA government came to power, which had drawn many construction companies, builders and suppliers, he said. This year, Mr Modi said, the state government was investing Rs 13,500 crore on development projects

--