Bihar: India's best performing state

Contrary to popular belief, Bihar (including Jharkhand) was the best performing state during 1980-2004, according to a a Reserve Bank sponsored study, while Tamil Nadu lagged behind in terms of TFPG, a parameter that measures productivity of the organised manufacturing sector.

Although Bihar did well in terms of TFPG (total factor productivity growth), it faltered on employment generation, the study on 'Productivity, Efficiency and Competitiveness of the Indian Manufacturing Sector', conducted by the Development Research Group (DRG), a research wing of the RBI said.

"The inter-state performance of TFPG of organised manufacturing sector indicates that Bihar (including Jharkhand) is the best performing state while Tamil Nadu is the worst performing state," it said.

Jharkhand was carved out of Bihar in November 2000. Referring the issue of employment generation, the report pointed out that good performance needed to be "juxtaposed with the fact that Bihar witnessed a negative growth rate of employment and Tamil Nadu witnessed a significant higher rate of employment."

The better performing states, according to the study, include Rajasthan and Andhra Pradesh. However, Gujarat and Punjab turned out to be bad performers.

The study, which covers 1981-2004, was conducted by Development Research Group (DRG), a research wing of the RBI, with a view to estimate productivity and efficiency of the manufacturing sector at industry and state levels. It has estimated efficiency of 449 companies.

The RBI-sponsored study also examined the path of efficiency and productivity in the context of economic reforms undertaken by the Indian manufacturing sector and provided a comparative view of the performance in organised and unorganised sectors.

On the industry-wise TFPG performance of organised manufacturing sector, the study said Food, Beverages and Tobacco (FBT) industry was the worst performer while Machinery and Transport Equipment (MTE) industry did better than others.