Bihar Elections

The election results from Bihar clearly show that people have voted in favour of a political alliance which offers better hopes for the future than the other political parties which were just bent on criticising Nitish Kumar’s government. The coalition led by Nitish Kumar has won handsomely mainly because of its track record in providing good governance to the hard-working peasantry, which includes backward castes like the Koyarees and Kurmis, and also the middle class in cities like Patna.

A new type of economic analysis is needed to estimate financial and economic returns on proper governance. It should be noted that for the past two years the World Bank and other international banks have allocated a substantial share of their lending to India (at least 27%) for improving governance. The Bihar example will help international lenders in assessing the appropriateness of this policy as against providing the bulk of lending resources to investment lending or liberalisation policies promoting globalisation where the chances of financial and moral leakages are always high when governance is in a mess.