Bihar: Economy current affairs

Bihar: Economy current affairs


The Gross State Domestic Product of Bihar for 2018-19 (at current prices) is estimated to be Rs 5,15,634 crore. This is 11% higher than the revised estimate for 2017-18. Note that the GSDP in 2017-18 is expected to be 26% lower than what was estimated at the budget stage.

Total expenditure

for 2018-19 is estimated to be Rs 1,76,990 crore, a 2.4% increase over the revised estimate of 2017-18. In 2017-18, the revised estimates indicate that expenditure is expected to be Rs 12,799 crore (8%) higher than the budget estimate.

Total receipts (excluding borrowings)

for 2018-19 are estimated to be Rs 1,60,735 crore, an increase of 19% as compared to the revised estimates of 2017-18. In 2017-18, total receipts (except borrowings) fell short of the budgeted estimate by Rs 4,048 crore.

Revenue surplus for the next financial year is targeted at Rs 21,312 crore, or 4.13% of the state Gross Domestic Product (GSDP). Fiscal deficit is targeted at Rs 11,204 crore (2.17% of GSDP).


Rs 32,126 crore has been allocated towards education. Of this, Rs 14,039 crore has been allocated towards the Sarva Shiksha Abhiyaan. Rs 2,171 crore has been allocated towards the Midday Meal Scheme. The World Bank’s project on Enhancing Teacher Effectiveness in Bihar will be implemented. Rs 116 crore has been allocated towards it.


An agriculture road map has been set for the state for the period 2017-2022. This road map will provide for the overall development of the sector, food and nutrition security, and improving farmer income. The total allocation towards this road map is Rs 1.54 lakh crore (for 2017-22).


A National Emergency Response System will be set up for citizens to provide them with essential services during difficult situations. Through this system assistance will be provided in the areas related to police, health, firefighting, and female harassment.

Budget Estimates for 2018-19 

The total expenditure

in 2018-19 is targeted at Rs 1,76,990 crore. This is 2.4% higher than the revised estimates of 2017-18. This expenditure is proposed to be met through receipts (other than borrowings) of Rs 1,60,735 crore and borrowings of Rs 20,520 crore. Total receipts for 2018-19 are expected to be Rs 1,81,255 crore, which is 17.6% higher than the revised estimate of 2017-18.

Expenditure in 2018-19

Capital expenditure

for 2018-19 is proposed to be Rs 40,250 crore, which is a decrease of 2.4% over the revised estimates of 2017-18. This includes expenditure which affects the assets and liabilities of the state, and leads to creation of assets (such as bridges and hospital), and repayment of loans, among others.

Revenue expenditure

Revenue expenditure for 2018-19 is proposed to be Rs 1,36,740 crore, which is an increase of 3.9% over revised estimates of 2017-18. This expenditure includes payment of salaries, maintenance, etc.

In 2018-19, Bihar is expected to spend Rs 18,089 crore on servicing its debt (i.e., Rs 7,326 crore on repaying loans, and Rs 10,763 crore on interest payments). This is 25.7% higher than the revised estimates of 2017-18.

Receipts in 2018-19

The total revenue receipts for 2018-19 are estimated to be Rs 1,58,051 crore, an increase of 18.7% over the revised estimates of 2017-18. Of this, Rs 35,448 (22.4% of the revenue receipts) crore will be raised by the state through its own resources, and Rs 1,22,603 crore (77.6% of the revenue receipts) will be devolved by the centre in the form of grants and the state’s share in taxes.

Non Tax Revenue

Bihar has estimated to generate Rs 4,446 crore through non-tax sources in 2018-19. Of this, Rs 1,600 crore will be received from non-ferrous mining and metallurgical industries.

Tax Revenue

  • Total own tax revenue of Bihar is estimated to be Rs 31,002 crore in 2018-19. The tax to GSDP ratio is targeted at 6% in 2018-19, which is marginally lower than the revised estimate of 6.9% in 2017-18. This implies that growth in collection of taxes will marginally reduce as compared to the growth in the economy.
  • State GST is expected to be the largest component of Bihar’s tax revenue. It is expected to contribute Rs 15,000 crore.
  • Sales tax is expected to be the second largest component of tax revenue for the state. It is expected to generate Rs 7,890 crore.
  • The Bihar government expects to generate Rs 4,700 crore from stamp and registration fees. This is 2.2% higher than the revised estimates of 2017-18.
  • Tax on vehicles will contribute to about 7% of the tax revenue, which amounts to Rs 2,000 crore.
  • The remaining amount will be generated by the state through land revenue, and taxes and duties on electricity.



Deficits, Debts and FRBM Targets for 2018-19

Revenue deficit

It is the excess of revenue expenditure over revenue receipts. A revenue deficit implies that the government needs to borrow in order to finance its expenses which do not create capital assets.

The budget estimates a revenue surplus of Rs 21,312 crore (or 4.13% of GSDP) in 2018-19. This implies that revenue receipts are expected to be higher than the revenue expenditure, resulting in a surplus. The 14th Finance Commission had recommended that states should eliminate revenue deficits. The estimates in the Bihar Budget 2018-19 suggest that the state is expected to meet this target of eliminating revenue deficit.

Fiscal deficit

It is the excess of total expenditure over total receipts. This gap is filled by borrowings by the government, and leads to an increase in total liabilities. In 2018-19, fiscal deficit is estimated to be Rs 11,204 crore, which is 2.17% of the GSDP. The estimate is within the 3% limit prescribed by the 14th Finance Commission. However, as per the revised estimates of 2017-18, the fiscal deficit is expected to be Rs 34,958 crore (7.5% of the GSDP). As per the 14th Finance Commission, the fiscal deficit limit may be relaxed to a maximum of 3.5%, if states are able to contain their debt and interest payments to certain specified levels.

Bihar is national topper in FY17 growth, with 10.3 %

Bihar clocked a growth rate of 10.3 per cent in 2016-2017 as against 7.5 per cent in the corresponding fiscal a year ago, riding largely on the back of the services sector.

State finances

  • The revenue surplus of Bihar has increased from Rs 4820 crore in 2011-12 to Rs 12,507 crore in 2015-16, the highest so far, exceeding the budgetary expectations of Rs 14,649 crore. This has allowed the state government to increase its capital spending by more than Rs 5800 crore during the year. This has also allowed the state government to limit its Gross Fiscal Deficit to only 2.9 percent of the new estimate of GSDP (2011-12 series), well within the FRBMA limits. If one uses the old estimate of GSDP (2004-05 series), then the ratio is even lower at 2.4 percent.
  • Of the total capital outlay of Rs 23,966 crore in 2015-16, as much as Rs 17,609 crore (73 percent) was spent on economic services, Rs 2740 crore (11 percent) on social services and rest of Rs 3617 crore (15 percent) on general services.

Agriculture and allied services

  • Bihar’s water resources are abundant, as it receives an average of 995 mm. of rainfall each year. The annual rainfall is reasonably adequate for the state’s agricultural operations. However, only worrisome feature is the year-to-year variation in rainfall which tends to create flood or draught-like situations in the state. During the period 2001 to 2015, the annual rainfall has varied from being 678 mm. in 2010 to 1506 mm. in 2007.
  • The proportion of total land put to agricultural use is high in Bihar, compared to other states of India. In 2009-10, net area sown was 57.0 percent and it has increased marginally to 57.7 percent in 2012-13. In 2013-14, it has again decreased to 56.1 percent. During this period, there has been an increase in gross sown area between 2009-10 (7295.81 thousand hectares) and 2013-14 (7580.14 thousand hectares). The cropping intensity has increased marginally from 1.37 in 2009-10 to 1.44 in 2013-14.
  • The total cereals production of Bihar is estimated at 140.9 lakh tonnes for its population of around 10 crores. Presently, Bihar produces rice (68.0 lakh tonnes), wheat (47.4 lakh tonnes), maize (25.2 lakh tonnes), pulses (4.2 lakh tonnes), oilseeds (1.3 lakh tonnes), fibre crops (16.3 lakh tonnes) and sugarcane (119.1 lakh tonnes).


  • In 2015-16, the total production of vegetables was 142.84 lakh tonnes. The total vegetable production in 2015-16, comprised potato (63.46 lakh tonnes), onion (12.47 lakh tonnes), tomato (10.01 lakh tonnes), cauliflower (10.04 lakh tonnes), cabbage (7.20 lakh tonnes), brinjal (11.38 lakh tonnes) bottlegourd (6.32 lakh tonnes) and radish (2.47 lakh tonnes). The levels of production of seven major fruits in Bihar in 2015-16 were — mango (1465 thousand tonnes), guava (370 thousand tonnes), litchi (198 thousand tonnes), banana (1535 thousand tonnes), pineapple (116 thousand tonnes), papaya (53 thousand tonnes) and amla (14 thousand tonnes). The gangatic alluvial soil of the state is most suitable for the cultivation of a variety of fruits and vegetables.


Industrial and manufacturing sector

  • The growth of an economy is largely dependent on the growth of its enterprises sector which includes both secondary (industrial) and tertiary (services) activities. This is because, with increase in income, the demand for non-agricultural goods and services keeps on growing. The overall Bihar economy has grown at 7.6 percent, the secondary sector has grown at 8.4 percent and the tertiary sector has recorded an even higher growth rate of 10.4 percent.
  • The mineral resources in Bihar are extremely limited, thus the importance of agro-based industries are relatively more in Bihar. The agro-based industries in Bihar are dominated by cereal-based industries (rice, wheat and maize). The number of food processing industries in Bihar in 2015-16 was 399, of which 266 (66.7 percent) were operational. By August, 2016, there were a few additions, resulting in 407 units, of which 278 (68.3 percent) were operational. No less than two-thirds of the agro-based industries in Bihar are engaged in processing of cereals. The total employment under the Food Processing Industry is 48.4 thousand.
  • The industrial sector in Bihar, as elsewhere in India, is very heterogeneous with industrial units ranging from tiny/small to large. There were 17.07 lakh economic enterprises in the state in 2013, after recording an increase of 39.4 percent over the number in 2005 (12.25 lakh). This increase of about 40 percent over a period of 8 years implies an annual growth of 4-5 percent, which may be considered as at least a modest growth rate. It is heartening to note that this growth in the number of economic enterprises is higher in the rural areas (43.7 percent) than in the urban areas (30.3 percent)
  • There were 19.5 thousand milk cooperative societies in 2015-16, compared to 18.4 thousand societies a year ago. It implies an annual growth of 6.0 percent. The total milk procurement per day in 2015-16 was 1740 thousand kgs. and this amount has recorded a steady growth of 13.5 percent in the last five years. As regards milk procurement per functional dairy, it was 124.5 kilo litres in 2015-16.
  • The state government has prepared a new policy document ‘Industrial Investment Promotion Policy’ in 2016. This policy aims to achieve an annual growth rate of 15 percent for the industrial sector, so that its contribution to the GSDP can gradually reach to about 25 percent. To achieve this goal, the main strategy of this policy is to focus on — (a) development of support infrastructure, (b) prioritising core sectors with emphasis on advanced technology, (c) skill development, (d) modified structured package of assistance, and (e) balanced regional development.

Infrastructure development

Development of the infrastructure sector has been a priority area for the state government and it has enhanced public investment in roads and bridges. The investment in the road sector has increased three fold from Rs 2696 in 2007-08 to Rs 7696 in 2016-17, indicating an annual growth rate of more than 10 percent. In 2015-16, the expenditure on roads constituted 16.4 percent of the expenditure of the state government on economic sectors, 7.7 percent of development expenditure, and 1.5 percent of the GSDP of the state.

National highways: For inter-state road transportation, the National Highways is an extremely important mode. A total of 40 NHs, measuring 4621 kms were there in Bihar till September, 2016, as compared to 35 NHs (4321 kms) in 2014. A major share (72.4 percent) of the NHs is of double and multiple lane roads.

State highways: The State Highways (SH) connect the different districts in the state through roads. The total length of the SH in Bihar till September 2016 was 4253 kms. Around 67.8 percent of SH was double-lane roads, 13.5 percent intermediate lane roads, and 18.2 percent single lane roads. The multiple-lane roads constituted only 0.6 percent of the SH.

District roads: Major District Roads (MDR), mainly connect the villages to the urban centres. There was 11,054 kms of MDR in the state as on September, 2016, with a major portion (54 percent) of it being single-lane roads. Out of the total length of MDR, 5121 kms have been converted into intermediate or double lane roads.

Rural roads: The rural roads connect villages to one-another and to the nearest road of higher category (MDR, SH and NH). Till September 2016, rural road network of 60,503 kms have been constructed with an expenditure of Rs 31,589 crore in Bihar. ‘Ghar tak Pakki GaliNaliyaan’ has been included under seven commitments (Saat Nischaya) of the state government.

Airways in bihar

Airways play a vital role in facilitating the growth of business and economy. In Bihar, the number of aircraft movements has almost doubled from 9547 in 2010-11 to 18,744 in 2015-16. Similarly, the number of passengers has also nearly doubled from 8.39 lakh in 2010-11 to 15.99 lakh during 2015-16. The freight also increased from 3.28 thousand tonnes (2004-05) to 4.41 thousand tonnes (2015-16).

Energy sector of bihar

There has been significant improvement in power availability in Bihar from 1712 MW in 2011-12 to 3769 MW in 2016-17, registering a growth about 120 percent in six years. The peak deficit in power has been around 30 percent for several years till 2012-13; by 2015- 16, this deficit was reduced to around 16 percent. Due to increased availability of power from an average of 6-8 hours to 14-16 hours in rural areas and from 10-12 hours to 20-22 hours in urban areas, the per capita consumption in the state has risen from 145 kwh in 2012-13 to 258 kwh in 2015-16, implying a growth of about 78 percent in three years.

In order to meet the increased demand for power, the state government has already planned for additional capacity of 5589 MW from different sources — own generating stations, renewable energy sources, central generating stations, and long/ medium term Power Purchase Agreements (PPA) through competitive bidding. Out of this planned addition, about 171 MW shall be from non-conventional energy sources and 5418 MW from conventional sources. As such, the total available capacity for Bihar by 2018–19 is expected to be 8925 MW, of which 8220 MW will be conventional and the remaining 705 MW non-conventional.

Poverty and rural bihar

Between 2004-05 and 2011-12, the poverty ratio in Bihar was reduced by 20.7 percentage points, from 54.4 percent in 2004-05 to 33.7 in 2011-12. It is heartening to note that this reduction in poverty level in Bihar was more than the reduction at all-India level (15.3 percentage points). Further, one may also note that the reduction in the poverty ratio in rural areas of Bihar (21.6 percentage point) was higher than in the urban areas (12.5 percentage points).

JEEVIKA is an initiative of the state government to reduce poverty. It has organised 70.98 lakh households into 5.57 lakh Self-Help Groups (SHGs) till October, 2016. It has also formed 32,431 Village Organisations (VO) and 365 Cluster Level Federations. The project emphasises on providing financial support to the SHGs by opening of saving bank account in different banks and ensuring their credit linkage. Till October 2016, 3.03 lakh SHGs have been linked with banks, and they were able to obtain a total loan of Rs. 2113 crore.

The Panchayat system has been the backbone of rural economy. The Fifth State Finance Commission (2015-16 to 2019-20) has made its recommendations for the financial base of the PRIs. Under this recommendations, 2.75 percent of the actual total expenditure of the state and 8.50 percent of the State’s Own Tax Revenue during the preceding financial year will be transferred each year to the PRIs. The distribution of the total transferred amount among the three tiers will be — Gram Panchayats (70 percent), Panchayat Samities (10 percent) and Zila Parishad (20 percent). Under this devolution scheme, a sum of Rs. 1081.16 crore has been sanctioned in 2016-17 as the first instalment.

Banking and finance in bihar

Till March 2016, of the total of 6661 branches of commercial banks in Bihar, 55 percent were located in rural areas, compared to 60 percent in 2011. In comparison with a record of 638 branches opened during 2013-14, the year 2015-16 saw only 364 new branches, with only 44 branches (12 percent) opened in rural areas, 224 branches (62 percent) in semiurban areas, and 96 branches (26 percent) in urban areas. Bihar accounted for only 4.8 percent of all the bank branches in the country in June 2016, though its share in country’s population was about 8.6 percent.

Human development index in bihar

  • The state government has enhanced its development expenditure during the last five years and is utilizing 35 percent of its total expenditure on social services. Because of limited resources of the state government, the Per Capita Development Expenditure (PCDE) in Bihar has been low compared to the national average. However, during the last five years, the PCDE of Bihar has grown at 16.4 percent, nearly the same rate (17.1 percent) at which it has grown at all-India level.
  • The functioning of the public health institutions is improving steadily due to several initiatives taken by the state government. The average number of patients visiting government hospitals per month was 9317 in 2011, which has increased to 10,232 in 2016, implying an increase of 10 percent. This increase is primarily due to better infrastructure facilities, larger manpower, and proper monitoring of the health institutions.
  • Institutionalised delivery is an effective way to combat maternal morbidity and mortality. The institutional deliveries in Bihar have increased rapidly in the recent years. The number of institutional deliveries grew at an annual rate of 3.4 percent, even though there was a moderate drop in the number of institutional deliveries from 16.47 lakh in 2013-14 to 15.34 lakh in 2015-16. It is obvious that the significant decrease in Infant Mortality Rate (IMR) in Bihar in recent years is an outcome of the wider practice of institutional delivery.
  • Presently, 544 ICDS projects are operational in Bihar, covering all development blocks in 38 districts. The budget provisions for ICDS has steadily increased from Rs. 1255.9 crore in 2011-12 to Rs. 1409.7 crore in 2015-16, implying an annual growth rate of 7.3 percent . The fund utilisation has been generally high, in some years exceeding 100 percent.
  • The state has made remarkable progress in literacy in the last decade. The literacy rate in Bihar increased from 47.0 percent in 2001 to 61.8 percent in 2011, implying an increase of 14.8 percentage point during the decade. This decadal increase is not only the highest among all the decades since 1961, it is also the highest among all the states in India for the decade 2001-2011. The total enrolment at elementary level has been steadily increasing over the five years at an annual rate of 3.9 percent. The total enrolment in primary level was 161.35 lakhs in 2014-15, increasing from 149.34 lakhs in 2010-11. Similarly, at upper primary level, the total enrolment at this level in 2014-15 was 67.91 lakhs, indicating an annual growth rate of 9.6 percent. As a whole, the total enrolment, taking primary and upper primary together, rose to 229.26 lakhs in 2014-15 from 198.14 lakhs in 2010-11, implying an annual growth rate of 3.9 percent. The enrloment for SC and ST students during this period has grown at an even higher rate of 5.2 percent and 16.6 percent respectively.

Revenue account of bihar

As pointed out already, in 2015-16 budgets estimates, Bihar’s revenue surplus was projected to increase to Rs 14,649 crore, more than double the amount of Rs 5847 crore registered in the previous year; but, it actually increased to Rs 12,507 crore. The revenue receipts increased by Rs 17,706 crore, of which Rs 16,659 crore (94 percent) came from increases in tax revenues alone. The central grants increased by only Rs 420 crore and non-tax revenues by Rs 628 crore. Within the broad head of tax revenue, own tax revenue of the state government increased by only Rs 4699 crore (28 percent of increase) and most of the increase (72 percent) came from increase in the state’s share of central taxes by Rs 11,960 crore. These increases were much higher compared to the previous year, when the increases in state’s own revenue was Rs. 789 crore and increase in its share of central taxes was Rs 2134 crore. Further, in 2015-16, contribution of the state’s own revenues to the growth of overall revenues was much higher, compared to the previous year, restoring the trend that was broken in the last year. The growth rate of the own revenues of the state government, tax plus non-tax, improved substantially to 22 percent during 2015-16, from 18 percent in the year before. The own revenue of the state government constituted 29 percent of its total revenue receipts, compared to 28 percent in the previous year. The share of central taxes accounted for 51 percent of the total revenue receipts in 2015-16 (47 percent in 2014-15) and central grants constituted the remaining 20 percent of the total revenues (24 percent in 2014-15).

The revenue expenditure in 2015-16 increased by Rs 11,046 crore over that in 2014-15, of which social services accounted for Rs 4230 crore (38 percent), economic services for Rs 5251 crore (48 percent), and the general services for Rs. 4564 crore (14 percent). The corresponding figures in the previous year stood at 53 percent, 4 percent and 43 percent respectively. The most remarkable was the significant increase in economic services during 2015-16, which reflects the state government’s determination to maintain the standards of economic assets created within the state. As regards their respective shares in the total revenue expenditure, social services claimed 43 percent, economic services 24 percent and general services 33 percent. Of the increase in general services by Rs 1564 crore during 2015-16, interest payment alone accounted for an additional expenditure of Rs 969 crore, compared to an increase of Rs 670 crore in 2014-15. Pension payments accounted for another Rs 505 crore. Thus, these two heads together claimed 94 percent of the total increase in general services during 2015-16. The pension liability of the state government has increased rapidly over the years, from only Rs 7808 crore in 2011-12 to Rs 11,850 crore in 2015-16, increasing annually at about 11 percent. The salary payments to the state government employees also accounted for increases in revenue expenditure by Rs 317 crore in 2015-16, compared to an increase of Rs 570 crore in 2014-15. During 2015-16, salary payments amounted to Rs 14,924 crore.

Outstanding Public Debt

The state government had an outstanding public debt of Rs. 50,990 crore in 2011-12, equaling 20.6 percent of its GSDP. In 2015-16, the outstanding debt increased to Rs. 88,829 crore, and the Debt: GSDP ratio increased to 21.5 percent, well below the limit of 25 percent, specified by the Fourteenth Finance Commission. The ratio of interest payment to revenue receipts was at 9.3 percent in 2011-12, which got reduced to 8.5 percent in 2015-16, again well below the upper limit of 10 percent, recommended by the Fourteenth Finance Commission. Thus, both conditions having been satisfied in addition to Bihar being a revenue surplus state for years together, the state government is eligible for an additional half percent fiscal deficit over and above its FRBMA target of 3 percent during the current fiscal; the budget estimates in fact indicates the fiscal deficit as 3.4 percent of new estimate of GSDP (2011-12 series). This also clearly indicates that the debt problem is well under the control of the state government.

Fiscal Performance of state

Ratio of Revenue Surplus to GFD : This ratio indicates the extent to which revenue surplus contributes to GFD. Ideally, the revenue account should leave a surplus for the creation of capital assets. As noted already, there were substantial surpluses in the revenue account of state government for the last three years, enabling it to increase its capital expenditure continuously. The revenue surplus of Bihar constituted 88 percent of GFD in 2015-16, a steep rise from 52 percent in 2014-15. Thanks to the recommendations of the Twelfth Finance Commission, most major states in the country today are revenue surplus states. During the last three years, among 17 major states, other than Bihar, 5 other states (Jharkhand, Odisha, Madhya Pradesh, Gujarat and Karnataka) have consistently maintained reasonable surpluses in their revenue accounts. The remaining states have failed to generate revenue surplus continuously.

Ratio of Capital Outlay to GFD : As an obvious consequence of the improvements in its revenue accounts, Bihar has had a high capital outlay during the last three years. In 2014- 15, the capital outlay was nearly 1.6 times its GFD; this increased to 1.8 times in 2015-16. In 2016-17, the ratio is expected to increase further to 1.9. Among the major states, those which could register a similar high level of capital outlay are — Jharkhand, Odisha, Uttar Pradesh, Madhya Pradesh, Karnataka, Gujarat and Chhattisgarh.

Ratio of Non-Development Revenue Expenditure to Aggregate Disbursements: The nondevelopment expenditure, incurred mainly for administrative or general services, should preferably be a small part of the total expenditure. In Bihar, non-developmental revenue expenditure constituted only 31 percent of the total expenditure in 2015-16. In 2015-16, in five states, this ratio was more than 30 percent — Uttar Pradesh, Punjab, Kerala, Tamil Nadu and Himachal Pradesh. On the other hand, the ratio was below 20 percent in only Chhattisgarh.

Ratio of Non-Development Revenue Expenditure to Revenue Receipts : This ratio indicates the extent to which the state government’s revenue receipts could not be utilized for developmental purposes. In Bihar, the non-developmental revenue expenditure consumed 33 percent of total revenue receipts in 2014-15 and, in 2015-16, this ratio was brought down to 29 percent. In 2016-17 also, this ratio is projected to remain almost the same. While West Bengal, Punjab and Tamil Nadu had this ratio at higher than 40 percent, Kerala consistently had a very high ratio around 60 percent. The ratio was less than 30 percent for Jharkhand, Odisha, Rajasthan, Andhra Pradesh and Chhattisgarh in 2015-16.

Expenditure on Social Services

The state government’s concern for social development is amply reflected in the increased allocation for this sector from Rs. 19,536 crore in 2011-12 to Rs. 38,684 crore in 2015-16. In the budget estimates of 2016-17, social services expenditure is projected to increase further by Rs. 12,387 crore (32 percent). The share of capital outlay in social services sector, with some fluctuations in between, increased from 4 percent in 2011-12 to 7 percent in 2015-16, and it has been projected to rise further to 8 percent in the budget of 2016-17.


Drinking Water Supply and Sanitation

One of the major causes of poor health conditions in Bihar is the absence of basic amenities like safe drinking water and sanitation. As per census 2011, only 4.4 per cent of households in the state have access to tap water connection, of which only 3.1 percent households use tap water from treated sources. As high as 89.6 percent households of the state depend on hand pump/tube well/bore well for drinking water. Regarding sanitation coverage, 76.9 percent of the state’s households do not have a latrine within their own premises, as per 2011 census. In urban areas, this figure is 31.1 percent, and in rural areas it is 82.4 percent. Consequently, 75.8 percent of the total households defecate in the open; the proportion are 81.4 percent in rural areas and 28.9 percent in urban areas.

Literacy Rate

The literacy rate in Bihar remains one of the lowest in the country, but the state has made remarkable progress in this field in the last decade. The literacy rate in Bihar increased from 47.0 percent in 2001 to 61.8 percent in 2011, implying an increase of 14.8 percentage point during the decade (Table 10.18). This decadal increase is not only the highest among all the decades since 1961, it is also the highest among all the states in India for the decade 2001-2011. It might be noted here that, for the country as a whole, the literacy rate in 2011 was 72.9 percent, compared to 64.8 percent in 2001, implying an increase 8.1 percentage point. Apart from recording the highest increase in literacy rates, Bihar has been able to considerably reduce the gender difference in its literacy rates. In 2001, the male and female literacy rates in Bihar were 60.3 percent and 33.6 percent respectively, implying a difference of 26.7 percentage point. In 2011, the genderwise literacy rates were 71.2 percent (male) and 51.5 percent (female), implying a reduced gender difference of 20.1 percentage point. This was possible because the decadal growth in female literacy rate in Bihar was as high as 17.9 percent, compared to 10.9 percent for the males. This appreciable performance of Bihar in promoting literacy can be ascribed to two factors. First, due to awareness of social justice, the demand for education is now very high among all sections of the society and the second, state government has considerably enhanced its expenditure on education.


The state government has undertaken several targeted schemes based on the report of the State Mahadalit Commission for the welfare of the most deprived amongst the scheduled castes. The Commission observed that, out of the 22 scheduled castes in Bihar, 21 are acutely deprived in terms of economic, social, cultural and political status. The population belonging to these castes have not benefited significantly from affirmative actions meant for the SC population. Thus, the idea of Bihar Mahadalit Vikas Mission is to fulfill the basic necessities of all Mahadalit communities The specific attempt of the state government for the welfare of Mahadalits include:

  • Under Darsharath Manjhi Kaushal VikasYojana, 2 lakh scheduled castes youth were enrolled for skill development training between 2013-14 to 2015-16.
  • The state government has decided to appoint Vikas Mitras at each Gram Panchayat and urban ward, dominated by Mahadalit community. This aims at an effective implementation of the various welfare schemes targeting the said community. A reservation of 50 percent is given to women in the selection of Vikas Mitras. Till date, 9555 Vikas Mitras have been appointed.
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