Thursday, August 28, 2014

Bihar, Microfinance, Entrepreneurship, Teachers

English: Bihar Districts
English: Bihar Districts (Photo credit: Wikipedia)
Nitish did very well as Chief Minister. But he had his weaknesses. He exhibited a singular focus on law and order, and on roads and bridges. That alone gave the state impressive growth rates. But he could do more for entrepreneurs - especially those in the lower income brackets - and for teachers.

Instead of being jealous of corporate houses giving Modi money, Nitish should compete to woo them. It is not a zero sum game. Helping big entrepreneurs create wealth and jobs is not anti-poor.

Access to credit is "infrastructure" to entrepreneurs. And Bihar could opt to take the lead on microfinance. Say you start with a $100 million fund. The idea would be that the fund need not make profits. As long as it does not diminish in size is all that matters. The idea would be to entitle every poor person in the state to an annual $100 loan. As long as you keep making your monthly payments, you keep getting your loan. If you mess up your credit history, the loans stop. The fund should factor in writing off 5% of the loans. And it should charge a low interest rate, something like 5 per cent. Because the idea is not to make profits. The idea is to help the poor build businesses without diminishing the size of the fund. Use of mobile phones (think M-pesa in Kenya) would go a long way to doing it right.

Training and hiring teachers is as, if not more, important than building roads and bridges. There also Nitish fell a little short.

Thursday, August 21, 2014

Nitish, Bihar, And Development

English: Nitish Kumar
English: Nitish Kumar (Photo credit: Wikipedia)
Right now the two alliances are running neck and neck. That means it will be a close fight next year in Bihar, but it is advantage BJP. Right now Sushil Modi is running ahead. In Bihar it might be 50-50. But in Uttar Pradesh it will be a total sweep by the BJP also at the state level.

Bihar is one place that could give Modi something akin to an opposition. And Modi in Gujrat was known as a man who brooks no opposition. His China model is not only economic, it is also political. He does not like the idea of having much of an opposition. And so he is going to do all he can to put Bihar into Sushil Modi's lap. Sushil Modi is not a bad candidate. He was deputy to Nitish in Bihar's spectacular success story. So he can legitimately take some credit.

If Narendra Modi could sweep Bihar as merely a prime ministerial candidate, imagine what he could do as a performing PM.

Nitish has a tall task before him that has been made tougher by Lalu's mandal-kamandal talk. You can not beat Narendra Modi with that. The way to beat Narendra Modi is with development talk. Laloo was spectacular as Railway Minister, Nitish was the top performing Chief Minister in the country. It is not like they don't have it. But they are not talking development. That is problematic. Right now Nitish is all set to lose the elections next year.

Maybe the real story here is that his break up with the BJP was a bad move. Nitish was the first person to call Narendra Modi a future PM. That was back in 2003, I think. Looks like somewhere along the way he switched his position but has refused to play the role.

He could talk all development all the time and give Narendra Modi a run for the money. But he is not doing it. Puzzles me.