Economy of Bihar

There was a division of Bihar in 2000 when the industrially advanced and mineral rich southern half of the state was carved out to form the separate state of Jharkhand.Since then the main economic activity of Bihar has been agriculture. The new Bihar state produces about 60% of the output of the old Bihar state.

Bihar now mainly grows crops like paddy, wheat, lentils, sugarcane and jute. Fruits grown here include mangoes, bananas, jackfruit and litchis. The forests of Bihar yield valuable commercial products beside timber. While cane for weaving is found easily in swamps of West Champaran district the Bhagalpur region in the east produces tussar, a distinct quality of silk and high quality jute is produced in the Kosi region. These are transported to factories located near Kolkata for easy export of the finished material.

Bihar is among the least developed states of India and has a per capita income of $155 a year against India's average of $255. A total of 30.6% live below the poverty line against India's average of 22.15%. The blame for this stems from many factors: Freight equalisation scheme, lack of vision of the political classes, and inadequate investments in agriculture, infrastructure and education. Some people[citation needed] believe that mis-rule, caste-dominated politics and rampant corruption by politicians & bureaucrats have been the cause of the lack of development of the state. Saibal Gupta of Asian Development Research Institute has blamed the absence of a sub-national identity which has allowed the Central Government to get away with its neglect. Mohan Guruswamy of Centre of Policy Alternatives has done a detailed study of the continued neglect of Bihar by the central government and how it has resulted in its downslide.

The economy is mainly based on agricultural and trading activities. The vast swath of extremely fertile land makes it ideal for agriculture. Despite a number of rivers and good fertile soil, investment in irrigation and other agriculture facilities has been grossly inadequate. Agriculture is mainly dependent upon the vagaries of the nature.

Bihar has a number of major public sector projects like the Oil refinery of Indian Oil Corporation and Fertilizer manufacturing plant of Hindustan Fertilizer Corporation Ltd (HPCL) at Barauni, Pyrites, Phosphates and Chemicals Ltd (PPCL) at Amjhor; Cotton spinning mills at Siwan, Pandaul, Bhagalpur, Mokamah and Gaya; 13 sugar mills in private sector and 15 in public section located in South and North Bihar.

In addition distilleries at Gopalganj, West Champaran, Bhagalpur and Riga (Sitamarhi District); finish leather industry in West Champaran, Muzaffarpur and Barauni; Jute mills at Katihar and Samastipur; Medicine manufacturing unit at Hajipur; Food processing units and Vanaspati manufacturing units at Aurangabad and Patna; Kalyanpur Cement Ltd at Banjari are some of the notable industries in Bihar. Bihar has tremendous resources and their utilisation in the interest of its growing population has to be the supreme responsibility of both the state administration and the national planners.