Status of Industries in Bihar | For BPSC

Saturday, September 5, 2020

Industrial Sector is the most important driving force for the development of an economy. Industrialisation results into increase in the number of employment, urbanization, revenue collection (due to value creation) and it also encourages other sectors. In Bihar the situation of industries is very bad whether it is Mineral based, agro based or other manufacturing industries. More than 70% of the population of Bihar is involved in agricultural sector. Which itself indicate the status industries in the state. Low level of industrial  development in the state  led to huge level of unemployment , migration and low urbanization. All these resulted into poverty, illiteracy, and hence, low level of socio-economic standard of living of the people in the state.
Industrial Pattern in Bihar

Contribution of Industries in the Economy of the State

According to the data of Economic Survey of Bihar (2022-23) in 2021-22 financial year, industries (Secondary Sector) contributed only 18.1% in the GSDP of the Bihar. While Service Sector (Tertiary Sector) contributes 60.7% and Agricultural Sector (Primary Sector) contributes 21.2%. Contrary to this in 2020-21, Agricultural Sector provides 47.4% employment, while Industries and Services Sector provide 25% and 27.6% employment respectively. Consequently contribution of Bihar in the Industrial output of India is extremely low at 0.5%.

Comparison to Other States

The contribution of Industrial sector in the Gross State's Value Added (GSVA) of Bihar is lowest among major states in India as well as overall average of the country. Bihar's Industrial sector contribution to it's GSDP is only 20% which is 11.2% lower than national average.

Table:- Comparison  of Industrial Sector Contribution in the GSVA  of Bihar and other States in 2021-22.

States Contribution of Industries (in %)
Bihar 18.1
Jharkhand 33.6
Chhatisgarh 40.0
Odisha 39.5
All India 28.2

Causes Weak Industrial Sector in Bihar

  • Lack of mineral resources which prevents the state from establishment of many industries which requires minerals.
  • Weak infrastructural support system such poor electricity supply, lesser & poor condition of State and National Highways, lack of large urban agglomeration etc.
  • Lack of financial resources to provide support system to budding entrepreneurs.
  • Rade Tapism and rampant corruption in Government departments which restricts new companies to be established in the state.
  • Extortion and money trail by politically powerful Bahubalis(criminals) in the state.
  • There are many bottlenecks in industrial policies of the state.

Positive Trends for Industrial Sector in Bihar 

To boost up industrial sector the Government of Bihar (GoB), brought well articulated, Industrial Investment Promotion Policy in 2016, which brought many institutional and strategic changes to industrial policies in the state which resulted into Annual growth rate of about 10.5% in Industrial sector in two successive years back to back i.e. 2017-18 and 2018-19. 

However, the trend of growth in industrial sector was started showing since 2006-07. Between 2006-07 and 2006-17 the Commulative Annual Growth Rate (CAGR) of industries in Bihar was remained much higher than the All India Average.