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Life has improved for Renu Kumar, who lives in the village of Dharampur Mushahar Toll, but she and her family are still extremely poor.Candace Feit

Step into Vijay and Renu Kumar's rough thatch sleeping shelter, to escape a light summer rain. Duck – the roof is so low that even Mr. Kumar, three inches shorter than his wife, has to crouch. Settle on the plank bed, with a scrap of old sari for cushion, because there are only six inches between bed and wall, not enough space to sit on the floor. Ms. Kumar will hastily tuck their cooking pots underneath the boards – their dirt hearth is in here too.

A curious goat will poke its nose in, and a cloud of flies will follow. The rain picks up, and it becomes clear that the branch roof has worn thin in several places.

How do the Kumars feel life is, these days, in Dharampur Mushahar Toll?

Mr. Kumar shrugs. "Not bad," he says in Hindi. "Not so bad."

He is making money, as much as $7 a day, selling the date liquor he brews to others in the village. The Kumars' three children are at school, and the state government has paid for their uniforms and books. The last time a child fell sick, a doctor at the local health centre gave them free medicine.

Last year the village was connected to the electrical grid – the Kumars haven't saved up enough for wiring yet, but their children study by lamplight in the evenings on the porch of the community centre.

And although they are Mushahar people, the lowest of the low in the Hindu caste system, no one has been beaten or harassed by an upper-caste neighbour in a year.

You, the visitor, may well have two reactions to this: You may share the Kumars' pleasure in how their life is transforming. And you may also think, "Good god, if this is the new good life, how can these people possibly have been living before?"

Bihar is a sun-bleached state of 90 million people in the east of India, and it has for decades been a byword for hopelessness. It has the lowest literacy rate, the highest child-mortality rate and the lowest life expectancy in India. It was ruled for decades by thuggish politicians who played caste politics to keep themselves in power while the state crumbled around them.

But under a new, reformist government, Bihar has become a synonym not for intractable despair, but for turnaround – and thus, for the ambitions of India as a whole. Bihar has posted economic growth above 11 per cent in each of the last five years, and suddenly it is every business titan's pick to be the next Bangalore. The national newspapers regularly splash good news from Bihar on their front pages.

Yet, in truth, very few business titans or newspaper editors actually come to Bihar. They don't meet the Kumars, in their much-improved, still-terrible village.

Half the children are without clothes; a third of them have the deep hacking coughs and crusted snot of chronic respiratory-tract infections. In the newly built early-learning centre, a gaggle of three-year-olds sits beneath one tattered poster of the English alphabet – not that there is anyone around who can read it. Few people have any food in their tiny houses; they buy what they can each day after working on the land of higher-caste villagers.

To travel in Bihar – in the rural areas or in the capital, Patna, where the streets are choked with garbage and the lights flicker out every couple of hours – is to see both how the place has changed, and how terribly far it has to go. And it is in this, more than anything else, that Bihar is emblematic of India – of its dark side of absolute poverty and exclusion, and how very difficult a task it is to change them.

A visionary workaholic brings in a one-man revolution

Change came to Bihar in late 2005, when a pot-bellied, teetotalling socialist engineer named Nitish Kumar was elected Chief Minister, with a vow to transform the place.

At first the rest of the country watched in bemused fascination as he locked up the gangsters who had long run the state, had thousands of kilometres of roads paved at breakneck speed and held weekly public meetings in his yard to hear people's grievances. It was a spectacle. No one expected it to last.

But not long ago Mr. Kumar (no relation to the Kumars in Dharampur) was re-elected in a landslide. He vowed to redouble his efforts.

The transformation of Bihar has two key ingredients. First, money: Mr. Kumar has cajoled ever-larger sums out of the central government in Delhi to finance his transformation efforts, a six-fold increase so far.

The second is leadership. He is a workaholic visionary – on this, even his critics agree – and he has demanded and obtained changes in Bihar that no one thought possible.

"People have faith that things can change – he has ended their fatalism," says Rajiva Sinha, who heads the Unicef team in Bihar.

Chief Minister Kumar inherited a wretched mess. When he took office five years ago, the main growth industry in the state was kidnapping, and citizens hastened to get behind locked doors by nightfall. The handful of roads that led out of the capital degenerated into dirt tracks after a few miles. The economy was based almost entirely on feudal agriculture. The state needed 800,000 teachers; it had 20,000.

Bihar had withered under 15 years of misrule by a theatrical thug named Lalu Prasad Yadav and his wife, Rabri. Mr. Yadav, who is from a low caste, built his popularity promising new power and self-respect for Dalits (or "untouchables") and for the state's sizable Muslim community. But he left the economy and infrastructure to benign neglect at best, and often to the control of corrupt cronies. Eventually even his own caste turned against him in disgust.

In Dharampur and across Bihar today, the name Nitish is on everyone's lips. The chief minister gets personal credit for each road paved (7,500 kilometres in his first four years), every child vaccinated (immunization rates doubled in that period) and every teacher hired (200,000 in his first two years).

"After Nitish Kumar became chief minister, things improved a lot – it's Nitish," says Renu Kumar.

And that's more accurate than you might suppose. "Nitish Kumar started as the leader of the government and he became the government," says N. K. Chaudhary, a professor of economics at Patna University. "You have extreme concentration of power."

The chief minister has a handful of highly capable senior bureaucrats around him; almost all planning and execution comes from them.

The formula: Security, roads, schools – and complaints

Mr. Kumar began his reforms with security, on the grounds that no other change would be possible as long as the state remained lawless. He created "super-courts" to go after the gangsters, and they convicted more criminals in his first year than had been brought to justice in the previous decade. He bulked up the police force with 8,000 new officers, and freed them from political control to do their work.

Far more quickly than anyone expected, the reign of the criminals collapsed; now, in the evenings, the city streets throng with shoppers and families out for ice cream.

Next the chief minister tackled roads and bridges. The vastly improved connectivity (travel time to most areas of the state has been cut in half) helps farmers and new industry, while the construction boom created plenty of jobs.

His third priority was the social sector. He targeted school enrolment with a variety of innovative ideas, such as giving girls bicycles if they complete Grade 10, and bringing tens of thousands of small private schools that had opened in forgotten villages into government control – and budgets.

Enrolment doubled; today there are 500,000 children out of school, still shockingly high, but down from 2.3 million five years ago. He poured money into programs for the Mushahars and other Dalit groups, determined to push them through the barriers of caste, which are fiercely enforced here.

He has used technology to shake up the public sector: Officials on state business must carry GPS-enabled phones, so that supervisors can monitor their movements. District offices must submit time-stamped cellphone pictures to confirm clinics are held, supplies are distributed, and staffers show up for work. He has spent heavily on rebuilding schools, but even more important, he has pushed to ensure that teachers actually show up.

He did the same with health – he hired nearly 2,000 new doctors, then made sure they actually turned up at outpost clinics. Semi-literate rural health workers were shown how to use their phones to make complaints if their kits of vaccinations and vitamins were siphoned off before reaching them.

The complaint culture, in fact, has been one of Mr. Kumar's great achievements. There are still plenty of absent teachers and short-changed medical kits – but now every citizen, in the most isolated village, knows what they're supposed to have and where to complain about it.

"We tell the mukhiya [the village-council head] and every public servant has to meet with him every month," says Vijay Kumar in Dharampur. "They have to have answers to his questions."

And if that doesn't get a response, they know how to take it up the chain. The Chief Minister "has created a groundswell of pressure on the system to deliver," says Unicef's Mr. Sinha. "That's what's going to make change."

Many mountains left to move

At the same time, there are critical areas where Mr. Kumar has made no headway. Bihar is cripplingly short of electric power – consumption is just 12 per cent of the national average – and that, says Shailesh Sinha, head of the Bihar Industries Association (and no relation to the Unicef officer), is the single greatest obstacle to economic growth.

The state produces almost no power, gets only a fraction of what it needs off the national distribution grid, and of what it does get, as much as 70 per cent is lost in transmission to faulty infrastructure and theft.

"I think it's because he's a socialist, and he doesn't believe in industrial development," sighs Mr. Sinha, whose family owns agroprocessing and cement businesses. Similarly, he says, Mr. Kumar has failed to court the "icons" of big business in India, such as the Tata Group or Infosys Ltd., and lure them to Bihar with concessions. "If we got even one, the others might follow," he says ruefully.

The other glaring omission from the chief minister's flurry of activity is land ownership. "A third of the people in this state are sharecroppers with no title to their land and they can't get access to credit, to subsidy or to relief," says Prof. Chaudhary. "So how are we supposed to get out of a feudal system? But the high-caste people, the landowners, the rich people – they don't want him to touch land reform, and he hasn't."

Employment is another sore spot. For years, Bihar's only export was people – skinny, desperate labourers who fanned out through the rest of the country to earn 80 cents for 12-hour days of hauling bricks in a basket on their heads, building the palaces of other people's dreams.

Anecdotal evidence suggests that migration out of the state has dropped dramatically, but the labourers who stay at home are mostly employed by government schemes.

Such small injections into a woefully anemic consumer culture are not enough, Prof. Chaudhary says, to create the hundreds of thousands of jobs that are needed. And without electricity or an easy way to purchase land, the big manufacturers won't be coming any time soon.

Much depends on what Mr. Kumar does next. Mr. Sinha at Unicef notes that, while the chief minister initially looked very good compared against his corrupt and ineffectual predecessor, at this point he is being compared against himself. "If he will be held responsible for the problem, will he be as quick to acknowledge it?"

The industrialist Mr. Sinha fears that the change is too bound up in the chief minister, and not institutionalized. "He's not a team man – he doesn't trust other people. There are only 24 hours in a day. How much work can he do?"

Not a great leap, but baby steps

But the focus on Mr. Kumar's leadership distracts from a larger point. The fact is that when a near-moribund economy grows by 11 per cent, its output is still nearly nothing.

The rise in Bihar's school enrolment is heartening, but the quality of education remains dire, and so literacy is barely rising, says Unicef's Mr. Sinha. The state has posted a near 900 per cent gain in the percentage of families with toilets in five years, which seems stunning, until you learn that 0.9 per cent had toilets in 2006, and so the figure is still less than 10 per cent of families today.

The real lesson from Bihar is perhaps not what good governance can do, but what it can't. Mr. Kumar, however good his intentions, cannot leapfrog his state into the 21st century. He can drag it to 1950, or 1970. But not to 2011. And there are pockets just like Bihar all over India where this is true.

The Kumars in Dharampur Mushahar Toll are happy enough. "I had a lot of difficulty to get education and a job," says Mr. Kumar. "My children are living a more comfortable way." He hopes that maybe one of his children can be a police constable, which was his dream. Ms. Kumar is satisfied to see her girls learning to read; maybe they will finish high school.

In this village, those are big dreams. But they're not the stuff of the middle-class superpower that India tells its citizens it will soon become.

Stephanie Nolen is The Globe and Mail's South Asia bureau chief.