Industrial development of Bihar

Industrial development of Bihar

Bihar is one of the fastest growing states in India. The economy of Bihar is projected to grow at a compound annual growth rate (CAGR) of 13.4% during 2012-2017 i.e. the 12th Five-Year Plan. Bihar has witnessed strong growth in per capita net state domestic product (NSDP). At current prices, per capita NSDP of the state grew at a CAGR of 12.3 per cent during 2004-05 to 2015-16. Bihar is the largest producer of vegetables and the second-largest producer of fruits in India. Bihar has high agricultural production making it one of the strongest sectors of the state. About 80 per cent of the state’s population is employed in agriculture, which is much higher as compared to India’s average. The state has a large base of cost-effective industrial labour, making it an ideal destination for a wide range of industries.


The state enjoys a unique location specific advantage because of its proximity to the vast markets of eastern and northern India, access to ports such as Kolkata and Haldia and to raw material sources and mineral reserves from the neighbouring states. Major initiatives taken by the government to develop Bihar are:

  • The Government of Bihar has approved 224 food processing projects in FY 2015.
  • In 2015, the central government approved an FDI project worth US$ 396.03 million for manufacturing world class diesel and electric locomotive factories in Bihar.
  • Under Jawaharlal Nehru National Urban Renewal Mission (JNNURM), eight projects costing US$ 118.08 million have been sanctioned for urban centres such as Patna and Bodh Gaya. The key areas of development are solid-waste management system, water supply and sewage.
  • In the 2016-17 budget, capital outlay of US$ 863.26 million was proposed for the development of roads and bridges in the state.
  • The Bihar government is preparing a 20-year master plan for promotion and development of tourism in the state.
  • Construction work of 2,232 km national highways through the state funds, 2,104 km state highways under National Development Scheme and 251 km roads under the state plan was completed during 2015-16.

Recent Developments

  • The government has approved Rs 4,918 crore (US$ 720 million) highway projectfor widening of National Highways in Bihar and Jharkhand to augment the state’s infrastructure.
  • Bihar along with Uttar Pradesh, Odisha and Maharashtra has agreed to join Ujwal Discom Assurance Yojana (UDAY) which has been launched to improve financial and operational efficiencies of power distribution companies, as announced by Mr Piyush Goyal, Minister of State (Independent Charge) for Power, Coal and New & Renewable Energy
  • Indian Railways has issued a Letter of Award (LoA) to US-based General Electric (GE) for a Rs 14,656 crore (US$ 2.2 billion) diesel locomotive factory project at Marhowra, and to French transport major Alstom for Rs 20,000 crore (US$ 3 billion) electric locomotive project in Madhepura, both in the state of Bihar.
  • With 75.66 million mobile subscribers in May 2016, Bihar has reached the fourth-largest mobile subscriber base among all Indian states.



Bihar is mainly agricultural products producing state. The main large and small scale agro based industries are :

  • Rice Mills : Rice mills in Bauxer karbisganch in Purnia District, Araria etc.
  • Sugar Mills : Sugar mills located at Banmankhi in Purnia District, Bauxer, Madora in Saran District, Samastipur and Bihata in Patna District.
  • Edible Oil Mills : Edible oils from oil seeds are located at Araria, Banmankhi in Purnia District, Bauxer, Lakhisarai at Munger district.
  • SectorsIndustrial development of Bihar
  • Bihar has significant levels of production for the products of mango, guava, litchi, pineapple, brinjal, cauliflower, bhindi, and cabbage in India.Despite the states leading role in food production, investment in irrigation and other agriculture facilities has been inadequate in the past.
  • Maize accounts for 1.5 million MT(or 10% of country production)
  • Sugarcaine produces 13.00 million MT
  • Litchi production is 0.28 million MT(Bihar contributes 71% of national production)
  • Makhana levels are 0.003 million MT(Bihar contributes 85% of national production)
  • Mango is 1.4 million MT(13% of All India)
  • Vegetable production is 8.60 million MT (9% of All India)
  • Honey Production is 1300 MT (14% of All India)
  • Aromatic Rice 0.015 million MT
  • Milk Production (Present) :4.06 million MT. COMPFED has established 5023 cooperative societies with 2.54 lakh membership -highest among the eastern states.
  • Fishery production levels are 0.27 million lakh MT


The Indian Business Directory states that the Bihar Sugar Industry has flourished in the last couple of years due to the efforts taken by the state government to revive the industry. The Sugar Industry has been helped by the climate of the state, which is very suitable for the growth of high-grade sugarcane. The main benefit of the industry is that it provides employment to many people, especially in the rural areas. Further, it provides facilities of transport and communication, and also helps in the development of the rural areas by mobilizing the rural resources. The total number of sugar mills in Bihar Sugar Industry is 28 out which only 9 are operational. The total area under sugarcane production is 2.30 lakh hectares and the total production of sugarcane is around 129.95 lakh M.T. The location of the sugar mills of Bihar Sugar Industry are Samastipur, Gopalganj, Sitamarhi, West Champaran, Chorma, Dulipati, and Supaul.

  • The industry can be divided into 2 groups – the unorganized sector, which comprises traditional sweeteners manufacturers, and the organized sector, which consists of sugar factories. The producers of traditional sweeteners are considered to be a part of the rural industry and they manufacture khandsari and gur. These are consumed mainly by the rural people and are produced in substantial quantities. The total production of sugar in Bihar Sugar Industry was 4.21 lakh tons in 2002-2003 and in 2003-2004, the figure stood at 2.77 lakh tons. Again, in 2004-2005, the figure was 2.77 lakh tons. The state government, in order to boost the Sugar Industry in Bihar has decided to privatize the state-run sugar mills that have not worked for many years. The state government has also approved the proposal for the setting up of 15 new sugar mills in the state which will bring in an investment of Rs. 3,771 crore in Bihar Sugar Industry.


Total number of weavers in Bihar is more than 90,000. Bhagalpur is known as leading silk city. Gaya –another major weaving centre –around 8000. There is a strong traditional handloom clusters in the districts of Bhagalpur, Gaya, Nalanda, Darbhanga, Madhubani, Siwan, Patna. Infrastructure Leasing and Financial Services is preparing Project Report for Textile Parks and also for Cluster Development Programmes. However, most of textile centres in state on decline, producing low value goods. Now gaya is developing very fast in textile sector, approx 10000 looms are running and several new projects are coming soon. Shuttel less and hitech technology is also adopting very much, and in Nalanda Rajgir is also developing in Textile sector.



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