Economy of Bihar

There was a division of Bihar in 2000, when the industrially advanced and mineral-rich part of the state was carved out as the separate state of Jharkhand. Since then, the main economic activity of Bihar has been agriculture.

Bihar is among the less developed states of India and has a low per capita income. The blame for this stems from many factors: a historical neglect from the center of Indian power (be it Calcutta during the British Empire or Delhi in the independent India), lack of vision of the political classes, absence of a sub-national identity which allowed the Central Government to get away with the neglect even in the post-independence era, and grossly inadequate investment in agriculture, infrastructure and education. Many people in Bihar and in the rest of India also believe that gross mis-rule, caste-based politics, and rampant corruption by politicians have been the cause of the poverty of the state and its people.

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.

Recently the dairy industry has picked up very well in Bihar. There also have been some attempts to industrialize the state: an oil refinery in Barauni, a scooter plant at Fatuha, a power plant at Muzaffarpur and some agriculture-based industries such as sugar and vegetable oil. However no sustained effort has been made in this direction, and there is little success in its industrialization.