The state of Bihar is situated in the eastern part of India with the Himalayan nation of Nepal to its north and the states of West Bengal, Uttar Pradesh and Jharkhand flanking each of the other sides. Bihar is the land of origin of religions like Buddhism and Jainism. Patna, the present day state capital, traces its history to the erstwhile capital city of Patliputra of Emperor Ashoka.
The state has an area of 94,163 sq km and is home to about 8 per cent of India’s population. Its geography is varied – northern Bihar is mostly level tract and part of the Gangetic plains, while southern Bihar is wooded and hilly. The state has fertile soil, well-irrigated by rivers, as well as forest wealth. Present day Bihar is a result of the bifurcation of erstwhile Bihar and the creation of the state of Jharkhand in 2001, which also took away the majority of mineral rich areas as well heavy industrial units. Thus, not surprisingly, agriculture is a prominent component of the economy of Bihar, employing over 84 per cent of the state’s workforce.
Bihar has a mix of industries ranging from agro-based (food processing, silk and tea) to leather and non-metallic minerals, though dominated by the small scale sector. Food, beverages, tobacco and petroleum products account for more than 85 per cent of the total industrial income. The state contributes about 10 per cent of India’s common fruit and vegetable output, but less than 1 per cent of processed output.
The state is committed to create an investment climate conducive for private sector participation. With its Industrial Incentive Policy 2006, the state initiated power sector reforms, one-time settlement schemes, creation of food parks, revival of sick industrial units and other measures to attract investments. Thrust areas also include promotion of specific industries, in particular agro-based industries (food processing, jute, sugar and horticulture) since they are based on the state’s factor advantages, as well as other industries like IT and entertainment.
Another initiative alongside the Industrial Incentive Policy 2006 was the Single Window Clearance Act, 2006. It aims at speeding up the clearances required for implementation of industrial and other projects and ensures single point clearances to promoters for early commercial production of such projects. The initiative covers various nodal agencies and supervisory bodies with clearly defined roles and responsibilities.
In parallel, the state is working on enhancing industrial infrastructure as seen in projects such as Agro-Park, Air Cargo Complex and Inland Container Depot. The state has a well developed rail network, and is working on enhancing its roads as well as upcoming inland waterways network. Telecom (fixed line and mobile) is developing rapidly, while power – grossly under-invested till recently – is seeing a huge inflow of funds to address demand shortage. Bihar is below national averages on various health and social indicators (life expectancy, literacy etc), and gaps in its social infrastructure are also starting to be addressed – by filling vacancies in educational institutions, inviting private participation in higher and technical education as well as financial support programmes for healthcare.
Since the onset of the Industrial Policy regime and Single Window system, the State Investment Promotion Board has approved over 100 proposals worth over $8.6 billion. The proposals cover infrastructure sectors, the thrust industries as well as others like healthcare and hospitality. As of March 2007, projects worth $2.7 billion were under implementation.
Bihar at a Glance
Economic Overview of the State
Investments in Bihar
Key industries and players in Bihar
- The Gangetic plain of Bihar, the biodiversity of Bihar, backed by good climate & fertile soil.
- Direct access of country’s population having common boundaries with UP, Orissa, Jharkhand and West Bengal and international border with Nepal & NE states with chicken neck.
- The state has a strong agricultural base for setting up agro-based industries like agri & food processing units for sugar, jute, tea, etc.
- The state has virtual monopoly in production of Litchi, Makhana and Honey.
- Fairly motivated and hard working manpower.
- The state is capable of producing mushrooms of best quality and in abundant quantity.
- Traditional knowledge weavers are available in plenty.
- Very close to international silk route.
- Producer of tasar, eri and mulberry silk of good quality.
- Water resource is available in abundance