Bihar is witnessing a major economic shift as migrant workers send increasing amounts of money from abroad, creating a pattern that experts say resembles the long standing remittance driven model seen in Kerala. The trend is gaining strength as more workers move beyond the Gulf region to new destinations across the world.
Political economist Devesh Kapur, co author of A Sixth of Humanity Independent India’s Development Odyssey, highlighted these changes during an interview with two senior editors from a common news platform. He explained that migrant workers from Bihar are spreading to countries such as Africa, Greece and Korea, adding to the state’s growing remittance inflows.
“We are seeing elements of the Kerala story emerging in Bihar and Bengal, but especially Bihar, which is migration out of the country,” Kapur said when asked whether northern states can match the growth levels of some southern states. He added that Kerala now accounts for only a small share of migration to the Gulf while half of such migration comes from Uttar Pradesh and Bihar. Workers from Bihar are now engaged in projects like setting up electric transmission lines in Africa. Although the total number of workers is still small for a state of over one hundred million people, Kapur said that the higher earnings and remittances they bring back mirror the foundations of Kerala’s earlier growth model.
He noted that Kerala did not see much industrialisation and had limited progress in IT services and agriculture, yet it sustained growth through remittances. Similar signs are now visible in Uttar Pradesh and Bihar. He added that the long term impact will depend on how large the migration becomes and how the returning money is used within the state.
The discussion comes amid ongoing debates among policy experts about the widening differences between northern and southern states. Some economists have warned that uneven development could lead to social tensions. States like Tamil Nadu, Kerala and Andhra Pradesh have higher per capita incomes compared with states like Uttar Pradesh and Bihar.
Former Chief Economic Advisor Arvind Subramanian said that some states did not fully use the political and economic autonomy available after 1991. He said that the success of better performing states must inspire others. He noted that Uttar Pradesh is already showing signs of change through infrastructure expansion and steps to improve its power distribution sector. He also pointed out that the liquor policy in Uttar Pradesh has become one of the most effective in terms of revenue generation.
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