Bihar Economy

The state of Bihar is situated in the eastern part of India. The state has a lot of advantages for its location and nearness to the large markets of northern and eastern India. It has access to the Haldia and Kolkata ports and the neighbouring states’ raw materials and mineral sources. Bihar’s economy is considered one of India’s fastest-growing economies. This state is mostly service-based. Other than that there are agricultural and industrial sectors too. Likewise, let us see how the state has progressed in recent years as far as the state’s economy is considered. 

Brief Guide on the economic survey of Bihar

According to the Gross State Domestic Product (GSDP), the Bihar economy has increased at a compound annual growth rate of 13.27% from 2015 to 2016 and from 2019-to 2020. Robust growth in the net state domestic product per capita is found in the state. Bihar’s economy is largely based on its agriculture. Among the population of Bihar, 80% is employed in agricultural production, which is greater than the national average.

 Bihar ranks fourth in producing vegetables and eighth-largest fruit producer. The fast-growing industries of Bihar are dairy, sugar, food processing, manufacturing, healthcare, etc. Other sectors like tourism and education are also planned by the state to be included in the economic growth of Bihar. There is cost-effective industrial labour present in Bihar, making it the perfect place for a broad range of industries. DPI, or the Department for Promotion of Industry and Internal Trade, states that the FDI inflows in Bihar were US$ 50.62 million from October 2019 to March 2021. Merchandise exports from the USA in total was US$ 1661.13 million in the year 2020 and decreased to US$1160.72 million in 2021. 

With an average of 10% growth, the Bihar economy has registered higher growth than India’s total economic growth rate. The per capita GSDP was Rs. 47,541 at current prices and Rs. 33,629 at constant prices. During 2018-19 Bihar’s Economy registered double-digit growth. The drivers of economic growth of that time are air transport (36%), other services (20%), trade and repair services (17.6%), road transport (14.0%), and financial services (13.8%). 

Recent Developments

Transports and Construction of Roads

The road construction department decided that they would construct bypass roads across the state in about 120 urban locations in January 2021. The aim was to divide the heavy load of traffic congestion under the Saat Nischay Part-2 program. The road is to be measured at 708 kilometres with an estimated cost of Rs. 4154 crore. The Bihar economic survey 2020 shows that in the month of December 2020, the three-lane Koilwar Bridge, which measured about 1.5km long, was inaugurated by the Union Minister for Road Transport and Highways. By the year 2023, the Koshi Bridge of four lanes that will measure 7 km is likely to be constructed with an estimated cost of Rs. 1478 crore. 

SpiceJet announced on 17th December 2020 that thirty domestic flights would be launched, including six flights from the Darbhanga district of Bihar. 

The Union Minister of State for Ports, Waterways, and shipping has announced that they will construct a riverine or inland port on the river Gandak in the Saran district. 

Information technology and network connections

The Minister of Communications, Electronics, and Information Technology stated in October 2020 that 46000 villages of Bihar would have a connection through an optical fibre network within the next seven months, as shown in the Bihar economic survey 2020. 

According to the Bihar economic survey 2020, during the last five years, from 2016 to 2021, the Bihar economy grew at the highest rate of 2.3 per cent in the primary sector, 4.8 per cent in the secondary, and 8.5 per cent in the tertiary sector. 

Agriculture, fisheries, and livestock

In the last five years, allied sectors and agriculture grew by 2.1 per cent. The livestock and fisheries grew at 10 per cent and 7 per cent, respectively. 

Half of the Bihar economy depends on cultivation, and the population pressure has pushed cultivation to an extreme limit. Six per cent of the total area under cultivation is covered by sugarcane production in Bihar. In 2018-19, sugarcane production in the state stood at 182.85 lakh MT. In 2019-20, during the sugar season, 11 sugar mills were opened in the state. During 2019-20, sugar is estimated to cost 220.50 lakh MT. 

The total production of horticulture crops in 2019-20 was expected to be 20,676.37 thousand metric tonnes, and the area under production was 1175.98 thousand hectares. The economic survey of Bihar shows that in 2019-20, the total vegetables and fruits produced in the state were estimated at 16,327.53 thousand metric tonnes and 4256.21 thousand metric tonnes, respectively. 

Urbanisation

The state advanced toward urbanisation in the last ten years. The rate of urbanisation in 2011 was just 11.3 per cent, which gradually increased to 15.3 per cent at present. 

Bihar’s economy rose with 660-MV units of its thermal power plant in the state of Bihar, which was synchronised along with the grid given by NTPC Ltd., which would let the commercial electricity generation from it. 

The Bihar government announced in May 2021 that it aims to complete wheat procurement with the minimum support price (MSP).

Conclusion

The major achievement in the economic growth of Bihar is seen in the pandemic period of 2020-21 amidst all the restrictions and lockdown. It excelled in the economic growth of many other states. The per capita income of Bihar is a crucial indicator of the state’s development and has also registered a marginal rise in 2020-21 than 2019-21. It increased from Rs. 33,979 to Rs. 34,314. In the pandemic period, the state government responded to challenges by utilising the tax resources as much as possible. The reports say that with the sub-sectors, livestock, and fisheries that have grown at 10 per cent and 7 per cent, respectively, Bihar promises industrial development in the upcoming years.