Ironically, this economic growth has happened without any worthwhile contribution from the manufacturing sector. The state's economy is growing because of a boom in agriculture and services sectors. "It's government-induced growth," admits Bihar Industries Association (BIA) president S P Sinha. According to former BIA president K P S Keshri, private investments in the manufacturing sector have been as little as Rs 1,500 crore during the last four years.

Many attribute the growth to the fact that the flow of Central funds to states has increased manifold in recent years. In the case of Bihar, it went up from Rs 37,341 crore during the five-year period 2000-2005 to Rs 55,459 crore during the next three years. But equally importantly, the funds are now getting better utilized than during the Lalu-Rabri regime when large chunks remained unspent. Also, adds Gupta, the state made concerted efforts to mobilise internal resources with its own revenue collection going up from Rs 2,919 crore in 2003-04 to Rs 5,256 crore in 2008-09.

The flip side is that much of this growth does not get reflected in social indicators which remain abysmal. But, as Gupta says, it would be unrealistic for anyone to "expect the moon" at this stage. "Right now the fundamentals are getting corrected and therefore you can find mostly infrastructural indicators of growth; one will have to wait for social indicators to become visible," he says.

While contractors and realtors stand to gain, more than half the state's 8.2 crore people -- 1.25 crore families -- still live below the poverty line. For these families to prosper, Bihar desperately needs huge investments and more growth. The State Investment Promotion Board, formed by the Nitish government, has received proposals worth Rs 96,000 crore. But most of them, especially the major ones, remain on paper as Central rules prove a stumbling block. For instance, thermal power plants cannot come up in Bihar because the Centre has so far refused to provide coal linkages to ensure regular supplies to any such new plant.

Also, Bihar has a lot of catching up to do with the rest of India. "There cannot be any comparison between Gujarat and Bihar, both of which reportedly grew by over 11%; since our base is low, even a small investment results in impressive growth in percentage," Gupta points out. State officials admit that crucial sectors like health are still sick with meagre resources in comparison to other states.