Bihar Special: Economy of Bihar

Present Composition of economy of Bihar

• Primary Sector - 23%
• Secondary Sector - 17%
• Service sector - 60%
• GDP - ₹32 lakh crore (USD 99 billion)
• GDP per capita - ₹ 26,801 (USD 420)
• Bihar has lowest GDP per capita but has pockets of higher per capita income like the capital Patna.
• In June 2009 World Bank report, Patna was ranked as the second best city to start a business in India after Delhi.
• According to Central Statistical Organization, between 2004-05 and 2008-09 Bihar was the 2^nd fastest (11%) growing state after Gujarat.

Post-independence economy of Bihar

• Until mid-1950s, 25% of India’s sugar output, 50% of horticulture and 30% of rice and wheat was from Bihar
• Dalmianagar was a large agro-industrial town
• In the 1950s Bihar had the reputation of being one of the best administered state with annual growth rate of 4% much higher than national average of 3.3%.
• Between 1950-80 attempts were made to industrialize the northern Bihar
  • Oil Refinery at Barauni
  • Motor Scooter plant at Fatuha
  • Power Plant at Muzaffarpur
• However till 2000, major thrust was given to industrialize the southern Bihar which became the prime reason for lack of industrialization of present bifurcated Bihar.
• The north remained the agricultural heart of the undivided Bihar.
• Jharkhand region provided for 60% of the output of Bihar.
• Important cities that developed in undivided Bihar are - Bokaro, Jamshedpur, Dhanbad and Ranchi.
• In 2006, New Industrial Policy was launched along with many other policy initiatives to promote industrialization in Bihar
• During the 2008 global financial crisis also, automobile sales in Bihar grew by 45%. Negligible impact of the crisis on Bihar was due to
  • Small industrial base
  • Employment generally in public sector or self
  • Small amount of loan coverage
• Indian railways has announced to set up manufacturing plant for electric locomotives in Madhepura.
• Diesel Locomotives will be manufactured at Marora.
• Food Production in Bihar
  • 71% of India’s Litchi production.
  • 10% of India’s Maize production
  • 85% of India’s Makhana production
  • 13% of Mango production
  • 14% of Honey production
• Sudha Cooperative
  • It was founded by I.A.S. officer Ram Chandra Sinha
  • It also sells its products to other states like Uttar Pradesh, West Bengal, Jharkhand and Delhi.
• Husk Power Systems
  • It is a company that provides power to rural areas by converting husk into electricity.
  • It was founded by Gyanesh Pandey, Manoj Sinha and Ratnesh Yadav.
  • It was established in the village Tamkuha in West Champaran district in 2007
• Although agriculture is the backbone of Bihar, HYV seeds have not been adequately utilized here.
• Because of high density of population and illiteracy, unemployment is very high in Bihar. Migration is a regular phenomenon here. It has the highest out migration after UP.
• Land ownership rights are highly skewed. 97% of the farmers are marginal and small.
• Hertz Biotech
  • It is a MNC which opened a unit in Imamganj of Gaya district
  • It is a pharmaceutical company which manufactures tables, capsules, injectables, ointments and food supplements.
• Kapilansh Dhatu Udhyog
  • It manufactures and exports high quality Cast Iron Earthing Electrodes.
  • It has been set up in Rajpur in Buxar district

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