The dust is finally settling down. The Bihar assembly elections are over. The pundits are reluctantly getting down from their lofty perches, having spouted wisdom for unending hours in TV studios and on digital platforms. When you watch TV shows, there is a sneaky feeling that these pundits do not even know what they talk about. For instance, there is a lot of jargon, and analysis about the politics of migration, the female vote, the so-called health of the former chief minister, Nitish Kumar, shadow jungle raj, callisthenics of caste arithmetic, and chemistry of alliances.
But frankly, the assembly result is clear. It is a thumping majority for Nitish Kumar and the NDA. More than 200 seats for them, and a mere 35 for the Grand Alliance, led by Tejaswi Yadav, the son of Laloo Prasad Yadav. Given what happened, an important issue that needs to be highlighted and focused on is that India, at this moment, badly needs a new and proper functional ‘Look East’ policy. This is not the policy that the former prime minister, PV Narasimha Rao, applied to foreign policy, and he wanted India to have close links with Southeast Asia and Japan to improve trade, bilateral economic investments, and security ties.
When I say look east in the Bihar election context, I mean that the Indian policy-makers need to look at the eastern parts of the country. Until and unless there is at least a modicum of decent economic development in the eastern parts, there is no way for India to quickly transition from a low-income country to a medium-income one. The data is crystal clear. If we add Uttar Pradesh to the list of the eastern states, even though the western part is vastly prosperous compared to the rest of the state, and different.
But for argument’s sake, we add Uttar Pradesh to the list because its eastern region, a vast land mass with a vast population, definitely falls under the eastern periphery. Now these states, which include Uttar Pradesh, Bihar, Jharkhand, Chhattisgarh, West Bengal, and Odisha, comprise more than 45 per cent of the population, but their contribution to the GDP is less than 20 per cent. I am certain that till this fundamental population-GDP anomaly is removed, two things will never happen. The eastern part will never transition out of poverty, backwardness, and an absence of livelihoods to a lower-middle-income economy.
The second thing that will never happen is that, unlike China, South Korea, and some other nations, unless the eastern region develops intensely and aggressively, the country's economy will never grow at 10 per cent or more per annum. A double-digit growth is important for India to become a major economic superpower in a decade. So, the most significant challenge for the Indian policy-makers is to look east and understand how to develop this region. Believe me, the challenges are enormous.
Let me give you another data. Let us look at the figures for June 2025, a month that is random, and relates to before the arrival of GST 2.0. In this month, the GST collections in the eastern states mentioned before were Rs 30,000 crore, or possibly less than this. The overall collection for the country was more than Rs 2,00,000 crore. What does this mean? It implies that these eastern states contributed 12-13 per cent of the GST collections. Any student of economics is aware that GST reflects the depth and intensity of economic activity, transactions, business investments, and production.
Quite clearly, the eastern part lags far behind. One more set of data will come as an eye-opener. It shows why the eastern region must catch up. The GST collections in Bihar in June 2025 were just over Rs 3,000 crore. The population of Maharashtra is slightly higher than that of Bihar. Its GST collection in the same month was Rs 30,500 crore. Just imagine the difference. In one month, a state with a similar population has a collection that is 10 times higher than that of Bihar. This is the yawning gap we are looking at. Policy-makers need to address this urgently. The problem is that far from catching up in a relative term, states in eastern India are in a state of regression.
I mean regression in the relative term. Let us look at another data set. In 1960-61, the GDP of West Bengal amounted to about 12 per cent of the national GDP. By 2024-25, the figure was down to 5.5 per cent or so. This is what I mean by relative regression. It is not that investments have grown in other areas, consumption has grown, or GDP has grown. The fact remains that a state like West Bengal, which was once an industrial powerhouse, has regressed. There is no point in blaming the other states. In 2000, the per capita income of West Bengal was about 50 per cent higher than Odisha. Today, Odisha’s is about 20-25 per cent higher.
But this shows a tantalising promise. If a hopelessly poor state like Odisha can break out of a vicious cycle of poverty, and become a moderately low-income economy, transiting towards a low middle-income one, then the right mix of policies and incentives in other states can achieve the same results. The problem is whether those in New Delhi, or in the state capitals, can find the solutions. It needs to be a combination, and it is time that the policy-makers look beyond politics, elections, and rhetoric, and focus on this promise.
The fact is that the eastern region has potential. It has natural resources like minerals, as well as vast cultivable land that can yield food-related exports. However, it suffers from the resource curse. Politicians and the business community have exploited the region without paying anything to the state or society. In the past, and even in the present, the central regimes pay lip service to the region. Massive budget plans are announced, but few are translated into reality. Central ministers, who hail from the region, start new trains, announce new hospitals in the region, which are short-term, one-off measures. What is required is a sustained 5-10-year plan, or maybe more, to transform the economics of the eastern region. As Odisha has shown, and as West Bengal tries to strive, this can be done, and has been done. It is a matter of political will.
The author has worked for leading media houses, authored two books, and is now Executive Director, C Voter Foundation; views are personal