Achievements and Challenges in the Process of Economic Development of Bihar

Bihar is the twelfth biggest and the third most populous state in India, right behind the states of Uttar Pradesh and Maharashtra. It is widely considered to be the least developed states in terms of economy and sociology by most social scientists and economists. For instance, according to the 2011 Census, it was found that 89% of the state’s population lived in rural areas and that it has the second-lowest urbanization rate in India. According to the Annual Report of the Reserve Bank of India of 2013, it has whopping 33.

74% of Population Below the Poverty Line which ranks it amongst the poorest states of India. As visible in this essay, most of the statistics of Bihar only show the state in a bad light for which the reasons stated by the majority are obvious; such as alarmingly low industrialization, corruption, poor policies and action of the government and so forth. These reasons are highly debatable and against the conventional view, there is no such single/particular factor responsible for Bihar’s under-development but an outcome of a multitude of socio-economic and political problems rooted in its vast history and culture that include relatively low finance/grants received from the government during consecutive planning periods that have undermined Bihar’s capacity of investment in healthcare, infrastructure, and education which have thus resulted in its Low Human Development Index.

Demographics of Bihar:

  • Urbanization Rate: 11%
  • Sex Ratio: 919Females/1000 Males
  • Industrial Training Institutes:724
  • Medical Colleges:8
  • Agricultural Colleges: 3

Bihar is a majorly agriculture-based economy with nearly three-fourth of its population engaged in agriculture.

More than half of the state remains under cultivation which should naturally increase its economic condition in terms of agriculture. Unfortunately, this is not completely the case due to its increase in population pressure on its land which has thus pushed cultivation of land to its maximum possible extent. In terms of power resources, Bihar was a highly rich and abundant source of minerals until its rich mineral source of Chota Nagpur plateau became of a part of Jharkhand after its split into two independent states in the year 2000, thus resulting in another major blow to the state’s economy. In terms of education, Bihar has been relatively backward in comparison with other states in terms of its GER(Gross Enrollment Ratio), as a result of which the present Government of India(NDA) under the present financial leadership of Smt. Nirmala Sitharaman, in its budget, has aimed at increasing it to 30% for higher education in the next few years. At present. its GER is at a rate of 13%. Presently, the state’s greatest strength is agriculture with 79% of the population being engaged in it. Its proximity to Northern Indian states and the country of Nepal benefit the same.

In the last few years, the state is gradually starting to see some positive changes and improvements which is a huge transition and transformation for such a state which has always been on the dark side of the Indian economy. This transition has, in turn, helped in the overall improvement of the agricultural sector of the country, Some of the present achievements in terms of agriculture in Bihar include the state being given the title of the second-largest producer of cotton throughout the country, becoming the pioneer in the usage of rice husk in the generation of clean energy in order to bring out about rural electrification and increasing its total vegetable production to 14.3 million tonnes in 2017-18, making it the third-highest among all the Indian states. Other achievements include improvement in renewable energy and sectors such as textiles, leather, and tourism. For instance, it has more than 1,00,000 weavers and is home to Tasar Silk which is a type of silk exclusively available in the state as a result of which higher market prices/premium rates are charged for the same. With the increase in the number of power projects, the state has developed a capacity of producing more than 12.5GW of renewable energy. The above mentioned, thus are some of the examples of key sectorial improvements in the state.

On the other hand, Bihar is now the top state in the development of the Gross State Domestic Product in 2017-18, according to a Crisil survey.

It has shown 11.3% growth in the same year and has thus made a remarkable change in terms of its GSDP which was around 9.9% in the previous year. According to the 2019-20 Budget presented by the Finance Minister of Bihar, Sri Sushil Kumar Modi, some of the highlights and major plans laid down include, increase in the allocation of funds towards education, health, and agriculture sector which are some of the most important sectors of the economy which had been previously ignored for decades. A budget of >₹35000 crores towards education, ₹5540 crores towards healthcare and ₹1690 crores towards agriculture has been allocated by the Finance Minister based on various criteria. The total expenditure has been estimated to be around ₹200000 crores, the total receipts, around ₹179000 crores, and revenue surplus at ₹21500 crores.

Apart from this, for the development of the Human Development Index in Bihar, the state government on Seven Commitments/Saat Nischay in order to satisfy/meet its needs/agenda. These include:

  • Arthik Hal, Yuvaon Bal: Entrepreneurship opportunities for the Youth
  • Arakshith Rozgar Mahila Adhikar: Employment generation for women
  • Har Ghar Bijli Lagatar: Provision of Electricity to at least 5000000 houses in the state
  • Har Ghar Nal Ka Jal: Provision of water to all households in the state
  • Ghar tak Pakka Gali-Naliyan: To increase/speed up the building of existing infrastructure and build new rural infrastructure
  • Shauchalay Nirman Ghar ka Samman: End outdoor defecation by providing financial aid and funding the construction of indoor toilets in all households as well as building community toilets in various parts of the state
  • Awsar Badhe, Aage Padhe: Increase opportunities to students for higher education and availing loans and scholarship for the same chemes for the implementation and achievement of Seven Commitments/Saat Nischay:
  1. City Surveillance Scheme for Women’s Safety: Installation of cameras at various spaces throughout the state and deployment of officers at different posts in order to facilitate better administration
  2. Free Wi-Fi through Campus Wi-Fi Scheme: Provision of free Wi-Fi to around 300 colleges and universities in the state by installing solar panels worth ₹23 crore around the state to ensure constant functioning of Wi-Fi
  3. Patrakar Samman Yojana: Ensurement of the provision of pension for Journalists
  4. Kushal Yuva Programme Skill Training Scheme: Improvement of the state in terms of well educated and employed youth in the state
  5. Bihar Student Credit Card Scheme: Provision of education loan up to ₹400000 for students that have cleared 12th grade
  6. Mukhyamantri Swayam Sahayata Bhatta Yojna: Provide financial assistance to 12th pass youth in search of employment
  7. Housing Scheme for Fourth Grade Government Employees: Development of housing projects for government servants and employees and provide affordable housing with all basic facilities needed for residing

Regardless of all the above-mentioned policies, schemes and Yojanas, Bihar is still going through a lot of tragedies such as the recent deaths due to acute encephalitis syndrome due to its mismanagement in terms of the handling of the crisis because of corruption, lack of implementation and sheer ignorance of the government and other authorities in general. Incidents such as these completely overshadow any/every scheme/policy laid down by the government and thus show/portray the utter failure of governance in the state and highlight the government’s partiality and importance given only towards selective issues which it feels necessary for its self-benefit than for the benefit of its people. Another such incident is that of the severe heatwave that killed 90 people in the state which Sri Nitish Kumar’s government ignored by saying that it was an incident that occurred throughout the country and not just the state of Bihar. This again shows the lack of commitment of the government towards socio-economic issues.

Therefore, from the above-mentioned statistics and data, it can be concluded that the state of Bihar is still more of an underdeveloped state with the potential to at least become a developing state, which is being held back due to its poor governance and lack of implementation of under and overestimated plans. Therefore, to bring it towards development, there has to be a tremendous change in terms of governance both at the state level and central level(in terms of giving importance and allocation of funds), as well as other social programs such as exposure to the importance of education and changes in life such as the abolishment of various outdated customs and traditions which are pulling the state back; such as not allowing women to work even till date/ignorance of the girl child. These would in-turn, directly and indirectly, influence the improvement of the economy of the state of Bihar.


  1. (Understanding the poor economic performance of Bihar and Uttar Pradesh, India: a macro perspective)
  3. (Political Economy of Poverty in Bihar)
  4. (Information About Bihar: Agriculture, Industries, Economic Growth, Geography)
  6. (The Daily Fix: Bihar encephalitis deaths reflect a tragic failure of governance)
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