Economic governance of a state like Bihar suffers from multidimensional infirmities, emanating from a mix of factors such as underdevelopment of its economy, its long feudal legacy, an inherently fragile and vulnerable polity, a federal structure with financial powers heavily loaded in favour of the Union government, an extremely poor endowment of economic and social overheads which together hinder and arrest the pace and politics of development. It is an inauspicious combination of historical factors as well as failure of the social - political - bureaucratic set up to give a clear direction to the processes of development. Nowhere probably the result of these failures over the past decades have been so apparent as in Bihar, a state which ranks the lowest in the country in almost all the socio-economic parameters.
Centre for Economic Policy and Public Finance was set up in 2008 in collaboration with the Government of Bihar to undertake analysis of present economic trends as well as feed into long term analytical tasks which tend to get neglected under the burden of routine work in the government. The proximity of the Centre to the government together with administrative and organisational autonomy facilitates objectivity and academic freedom in the Centre which are essential for such an institution to deliver. At the same time the Centre is accumulating expertise and evolving into an intellectual and academic repository which can act as a useful knowledge resource for both actors and agents of change in state and society.
With the Centre having emerged as a leading repository for research on economic policy and public finance in Bihar with an emphasis on political economy, the goal is to gradually broaden its coverage to include the other states in India to evolve as a centre of specialisation on public finance at the state level on the basis of continuing research and education and exchange and sharing of ideas with similar institutions. The long term objective of the Centre is to emerge as a national centre of academic repute on research on political economy of public finances.