Economy of Bihar

See also: Bihar Economic Survey

The economy of Bihar is one of the fastest growing in India. In the 2025–2026 financial year, the GDP of Bihar is estimated to grow by 22%. The industry in Bihar is largely service-based, though agriculture and industry also contribute substantially. At previous prices not adjusted for inflation, the state's GDP was estimated at ₹1,309,155 crore (US$140 billion) for 2024–25. After forming a new state government in 2025, the cabinet of Nitish government has proposed a new initiative, called the "New Age Economy", which aims to promote economic development in the state of Bihar.

Economy of Bihar

Great Buddha statue in Bodh Gaya, Gaya
Currency	Indian Rupee (INR, ₹)
Fiscal year	1 April – 31 March
Statistics
Population	13,000,0000 (2025)
GDP	₹13 trillion (US$140 billion) (nominal; 2026 est.) ₹60.08 trillion (US$630 billion) (PPP; 2026 est.)
GDP rank	14th
GDP growth	15% (2025-26)
GDP per capita	₹105,200 (US$1,100) (nominal; 2026-27 est.) ₹510,750 (US$5,300)(PPP; 2026-27 est.)
GDP per capita rank	35th
GDP by sector	Agriculture 19.9% Industry 21.5% Services 58.6% (2023–24)
Inflation (CPI)	4.35% (August 2025)
Population below national poverty line	15.73% in poverty (2024–25)
Human Development Index	0.617 medium (2023) (36th)
Labour force by occupation	Agriculture 54.2% Industry 23.6% Services 22.2% (2015)
Unemployment	3.9% (Sep 2022)
Public finance
Government debt	37.04% of GSDP ₹406,476.12 crore (US$42 billion) (2025–26 est.)
Budget balance	₹32,718.30 crore (US$3.4 billion) 2.98% of GSDP (2025–26 est.)
Revenue	₹2.61 lakh crore (US$27 billion) (2025–26 est.)
Spending	₹2.94 lakh crore (US$31 billion) (2025–26 est.)
Economic aid	7.9% (2017–18)
All values, unless otherwise stated, are in US dollars.

Bihar accounts for 71 percent of India's annual litchi production.

As of 2021, the service sector accounts for 58.6% of the state's economy, with industry contributing 21.5%, and agriculture 19.9%. During the 2002–2007 period, the average growth rate of manufacturing in the state was 0.38%, significantly lower than the national average of 7.8%. In the 2021-22 financial year, Bihar's manufacturing sector grew by 3.9% and has shown continued improvement in recent years. Bihar has the lowest GDP per capita in India, but there are pockets of higher per capita income, such as the southern half of the state and its capital city, Patna.

The GSDP (Gross State Domestic Product) for 2024–25 is estimated at ₹9,91,997 crore (approximately US$116 billion) at current prices, recording a growth of 13.1%, while for 2025–26 it is projected to be ₹10.97 lakh crore. In actual terms, as of 2025–26, Bihar's state GDP is ranked 11 out of 28 states in India. Corruption is an important hurdle for the government to overcome, according to Transparency International India, which the government has also acknowledged. Since November 2005, the government, led by Nitish Kumar, has implemented some economic and social reforms. Such reforms have yielded positive improvements in the state's economy and in the economy of Patna. For example, in June 2009, the World Bank reported that Patna was the second best city in India to start a business, after Delhi. Between 1999 and 2008, state GDP grew by 5.1% a year on average, which was below the Indian average of 7.3%. However, in January 2010, the Indian government's Central Statistics Organisation (CSO) reported that in the five years between 2004–2005 and 2008–09, Bihar's GDP grew by 11.03%, which made Bihar the second fastest growing economy in India during those 5 years, just behind Gujarat's growth of 11.05%. Another survey conducted by the CSO and the National Sample Survey Organisation, under MOSPI, said that Bihar saw a 14.80% growth in factory output in 2007–08, which was slightly less than the overall Indian rate of 15.24%.

History

Mauryan

The Magadha economy, under the Mauryan Royal Government, depended mainly on agriculture, and the state owned large tracts of farmland for cultivation. The state's other income came from taxes levied on agriculture, land, trade, and products such as handicrafts. Mauryan agriculture had two types of landholdings. One of these types was the Rashtra type, a direct descendant of the holdings of the former tribal oligarchies that had been subjugated in pre-Mauryan times. The Rashtra landholdings were independent of the state machinery in their internal functioning and administration. Their only obligation was the regular payment of the Rashtra taxes to the state. The second major type of landholdings was the Sita landholdings. These were formed by clearing forests with the help of the tribespeople whose tribal way of life had been systematically annihilated by the Mauryan statecraft. Rice, Wheat, Coarse grains, Sesame, Pepper, Saffron, Pulses, Linseed, mustard, vegetables and fruits of various kinds and sugarcane were grown on the cleared land. The state owned large farms, which were cultivated by enslaved people and farm laborers. Water reservoirs and dams were built during this period, and they were measured and distributed. The chief industries were mining, metallurgy, jewellery, pot making, and textile work. The state often regulated trade. The state specially protected artisans and craftsmen, and any offences against them were severely punished. Guilds were powerful institutions during this period, conferring economic, political, and judicial power on artisans. The chief of the guild was called the Jesthaka. A few guilds issued their own coins. These guilds also made donations to learned Brahmans and to the destitute. The Mauryan empire supplied western countries with indigo and other medicinal substances, like cotton and silk. Trade was carried out in both land and sea. Godowns (eastern word for warehouses) were built, and special provisions were made to protect the trade routes. The state controlled the weights and measures.

Sher Shah Reforms

In the 1540s, Sher Shah, the ruler of Bihar and northern India, introduced measures, including laws to ensure that peasants were not cheated and that all were treated equally, irrespective of religion or class. The empire stretched from Bengal in the east to the Indus in the west. Sher Shah divided his empire into 47 sarkars (provinces or districts), which were further subdivided into parganas for ease of administration. The reforms were an indication of the economic sophistication of the Bihar region during Sher Shah Suri's rule.

Colonial

During the colonial period, the rural and urban economies of Bihar underwent gradual changes and faced challenges to their sustainability. The villages here were never just an agriculture-based model but a holistic, integrated system that gave all their people a respectable job and sufficient income. These small-scale industries were directly processing agricultural output, helping villages become self-sufficient, and providing products, food, and services to cities as well. The famous cities of Bihar, such as Magadh (Gaya), Patliputra, Sitamarhi, Purnea, Bhagalpur, Chhapra, and Arrah acted as prime places for the development of the state economy.

With the advent of external traders and successive invasions, along with internal weaknesses, the village economy began to deteriorate. The cheaply available British finished products, such as clothing, caused the rural economy to deteriorate.

Post-Independence

1947 – 1979

The sugar and vegetable oil industries were important sectors of undivided Bihar. Until the mid-1950s, a significant share of India's sugar output was from Bihar; also a major of horticulture products were produced here. Rice and wheat were around 29%, and Bihar was truly an agricultural powerhouse in the days after independence. Dalmianagar was a large agri-industrial town. There have been attempts to industrialize the northern half of the state between 1950 and 1980: an oil refinery in Barauni, Barauni Fertiliser Plant, Barauni Thermal Power Station, a motor scooter plant at Fatuha, a power plant at Muzaffarpur and Bharat Wagon and Engineering at Muzaffarpur and Mokama. There are many factors behind Bihar's economic decline. Many in Bihar blame the freight equalisation scheme, poor political vision, and under-investments in the key sectors of agriculture, infrastructure, and education. Others view cultural and political factors as reasons behind economic decline, especially in the 1980s and 1990s.

Between 1947 and 2000, the government supported industrialisation in the southern half of the state rather than in the northern half. This government is often blamed for the lack of industrialisation in northern Bihar. The undivided Bihar government developed important industrial cities like Bokaro, Jamshedpur, Dhanbad, and Ranchi in the south. The north remained the agricultural heart of the undivided state. The two regions complemented each other.

1980 – 1989

Indian government data from 1980 to 1990 (see Economic Indicators below) also show that the GSDP of the undivided Bihar grew by 72% during this period, despite the state's socio-economic problems. The data also show that the state's GSDP grew by 49% between 1980 and 1985, indicating that the economy was among the fastest-growing in the country during the early 1980s. In 1980, undivided Bihar had a population of 70 million. In the 1980s, the five-year plan called for $4 billion in investment in Bihar. By 1987, the $4 billion translated into a $12 investment per person. Economists claimed that a huge budget deficit is spurring inflation, eroding the standard of living of the poorest sections of Bihar's population. In agriculture, the largest sector, the government failed to invest in agricultural production and instead opted to import food grains from other parts of India. This decision helped facilitate problems faced by agricultural workers in the late 1980s and paved the way for the victory of Lalu Prasad Yadav in 1989.

Manufacturing of food products in Bihar

	1991–1992	1991–1992	1991–1992	1991–1992	1991–1992	1993–1994	1993–1994	1993–1994	1993–1994	1993–1994
	FVPI	Dairy products	Grain milling	Bakery	Veg. oils	FVPI	Dairy products	Grain milling	Bakery	Veg. oils
No. of factories	3	11	159	31	36	5	19	176	33	31
Value of output(Rs. 100,000)	31	2905	12667	2187	1315	365	6798	210119	981	767
Net value (Rs 100,000)	−15	151	1070	408	71	29	1231	1162	177	257
Net income (Rs 100,000)	−75	106	683	290	49	−19	1069	713	137	237
NI/NVA		70	64	71	69		87	62	77	53

Growth of Factory units in Bihar and India, 1997–98

Year	Bihar (Units)	India (Units)	Bihar's Share (%)
1991–1992	1371	112,286	3.26
1992–1993	3885	19,494	3.25
1993–1994	N.A.	N.A.	N.A.
1994–1995	3600	121,010	2.92
1995–1996	3617	134,571	2.68
1996–1997	3317	134,556	2.50
1997–1998	3297	135,551	2.43

1990–2005

Caste and Criminalisation

The Rashtriya Janata Dal leader, Lalu Prasad Yadav's party, supported social justice, ensuring that politics was dominated by Mandal politics and caste rather than development during this period. Also, the criminalisation of politics during this time created a business-unfriendly climate and contributed to the economic collapse. The biggest crisis business faced was with organised kidnapping, which was linked to the ruling RJD. The resulting crisis led to a flight of capital, middle class professionals, and business leaders to other parts of India. The flight of business and capital increased unemployment, leading to the mass migration of Bihari farmers and unemployed youth to more developed states in India.

Extent of corruption in Indian states, as measured in a 2005 study by Transparency International India. (Darker regions are more corrupt)

Non-RJD Factors

Bihar's share of revenue from the Central pool declined by Rs. 5,000 crore as the centre's revenue collection fell. This, coupled with the government's failure to have its plan allocation released because it could not contribute the required matching non-plan grant, aggravated the financial crisis. The 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, had a strong impact on development in the north, mainly through a loss of revenue. Divided Bihar produces 60% of the output of the undivided Bihar.

Economic Indicators under the RJD

In the non-agricultural sector, Bihar's growth rate was 6.62%, compared with 6.61% for India as a whole during the 1980s. During the 1990s, when the growth rate in Bihar was 3.19%, while for India it rose to 7.25%. This change was reflected in the per capita income as well. Per capita income in Bihar grew by 2.45% during the 1980s, compared with 3.32% in India as a whole. In the 1990s, per capita income grew by 0.12% in Bihar, as against 4.08% in India. The growth rate in agriculture was 2.21% during the 1980s, against India's 3.38%. During the 1990s, it was 2.35% in Bihar, while at the all-India level it stood at 3.14%. The economic indicators (see below) show that there was a serious recession between 1990 and 1995, which resulted in an employment-development-crime crisis between 1995 and 2004.

Current

Nitish Kumar reign

After Nitish Kumar came to power, he prioritized creating investment opportunities for large industrial houses like Reliance. Improvements in law and order, with a more proactive bureaucracy, led to a gradual improvement in the state's economy. NDTV dubbed this as the "Quiet Transformation". In January 2009, Nitish Kumar was awarded the CNN IBN Indian Politician of the Year award for helping put Bihar on the sustainable development and growth track. Again in January 2009, the ASSOCHAM Investment Meter stated that the private sector invested over Rs 304 crore in Bihar during the third quarter of 2008.

Policies

Secretariat Building, Patna

After November 2005, the government of Bihar has introduced several laws, which it hopes will provide a positive contribution to the future development of the state's industries.

2006

• Bihar Single Window Clearance Act
• Bihar Infrastructure Development Enabling Act
• New Industrial Policy
• Price Preference Policy
• New Policy Initiatives for Entertainment, Tea Processing, and Sugar Sectors
• Policy for establishing higher Technical Institutions in the Private Sector
• Simplification of VAT

2007

• VAT reimbursement @80% of the deposited amount for a period of 10 years with a ceiling of 300% of the capital investment. Provisions for incentives, even in zero-VAT cases.
• Reimbursement of 50% of the amount spent on plant & machinery for captive power generation.
• 25% of the VAT reimbursement for the existing units.
• Exemption from electricity duty for new units. Exemption from Stamp Duty and registration fee on land transfer. Incentive granted on land/shed in Industrial Area/ Industrial Park, etc.
• Incentive granted on land/shed in Industrial Area/ Industrial Park, etc.
• Corpus fund creation for sick & closed units.
• Exemption from annual minimum guarantee/ monthly minimum guarantee. CST was reduced to only 1% for small & medium industries.
• Bihar was the first state to have its Ethanol policy led by Minister of Industries Shahnawaz Hussain Sayed in 2020, bringing investment to the tune of 35,000 crore in the ethanol sector.
• Bihar Textile Policy is also under formulation, as announced by Minister of Industries Shahnawaz Hussain Sayed.

2015

In 2015, the Bihar Government, led by Chief Minister Nitish Kumar, came up with the Saat Nischay Yojana Archived 21 January 2023 at the Wayback Machine. This scheme envisions goals needed for Bihar's development. Under the Saat Nischay Yojana, there are seven resolves. The Saat Nischay Yojana is launched in two parts:

• Saat Nischay Yojana Part 1
• Saat Nischay Yojana Part 2. Saat Nischay Part 2 was released five years after Part 1. Seven new resolutions were conceived in part 2 of the scheme.

Improvements and investments

Roads construction and investment

The government is working on the expressway from the Purvanchal border through Bihar to Jharkhand, and has also expanded the highway from Hajipur to Muzaffarpur from two-lane to four-lane. The central-government-funded northeast corridor expressway will run through the northern part of the state. The state now spends Rs 2,222.08 crore on roads (2007–2008), compared with Rs 51.2 crore between 2003 and 2004. In September 2008, a $420 million (USD) loan from the Asian Development Bank (ADB) was provided to the government to improve nine state highways. The loan would be used to convert nine state highways into double-lane roads, covering a total stretch of 820 kilometres (510 mi). The government aims to convert these roads into double-lane traffic corridors in accordance with international standards, and has invited bids for their conversion under international bidding procedures. The ADB had also given its consent for the development of a 1,500-kilometre (930 mi) stretch of state highways into two-lane roads as per international standards under Bihar State Highways Project (BSHP). BSHP will be executed in two phases. The nine roads have been included in the first phase. World Bank Indian director Onno Ruhl has said that the Bank would double its assistance to Bihar from the current $500 million in the next couple of years. Recently, Bihar announced that it is going to develop its first 4-lane expressway from Amas (Gaya) to the Darbhhanga airport. The second major expressway will be from Raxual to Kolkata via Patna. The third expressway is set to be 6 lanes wide, stretching from Buxar to Bhagalpur. Expressways will be connected with the already-existing Purvanchal expressways. Another proposed expressway is from Gorakhpur to Darjeeling, a major portion of which will pass through Northern Bihar. Patna Ring Road, which is 4–6 lanes wide, is also upcoming in Bihar. Many more important national highways have been converted into 4-lane highways or are currently under construction. Notable examples of these include:

Highways

From	To	Lane amount
Patna	Gaya	4
Buxar	Patna	4
Sasaram	Arrah	4
Gaya	Rajgir	4
Patna	Bihar Sharif	4
Mokama	Bhagalpur	4
Begusarai	Muzaffarpur	2
Chapra	Hajipur	4

Even many major bridges over River Ganga are under construction. After the completion of these bridges, north-to-south Bihar will have 36 lanes of connectivity.

A total list of Bihar bridges can be found here.

Mobile phone growth

Bihar also has the largest growing mobile phone market in India. Bihar recorded the largest increase in annual telecom subscribers, with growth of 88.2% in fiscal 2007–2008, compared with 51.1% in 2006–2007. The total number of mobile phones in Bihar increased from 5,773,370 in 2006–07 to 10,869,459 in 2007–2008.

Jobs

5 percent of people are in jobs, and only 1.57 percent are in government jobs.

In the economic report of the caste census, the number of people and their percentages are given by dividing the jobs into three categories. A total of 4.92 percent of the population is employed, of whom 1.57 percent are in government jobs. 2.14 percent of the total population has private jobs in the unorganized sector. Private jobs in the organized sector, with benefits such as EPF insurance, are held by 1.22 percent of the population.

Industrial development and Power Sector

For industrial development, the NDA government has cleared a total of 135 proposals worth Rs 71,289.64 crore, submitted by major entrepreneurs to set up medium and large industries. The proposals are related to sugar mills, ethanol, engineering and medical colleges, and power production in the state. A sum of Rs 602.54 crore had already been spent on various activities pertaining to the cleared projects, which are likely to create job opportunities for over 114,000 people. The proposals include opening 23 new sugar mills and expanding seven existing ones, as well as ethanol production in two sugar mills and five sugarcane juice production plants. The projects regarding five power plants, 12 food-processing units, and 15 steel-processing and cement plants have also been cleared by the state.

Older industrial projects are also witnessing expansion and modernization. The Oil refinery at Barauni's expansion is underway, increasing production from the present 6 MMT p. a. to 9 MMT p. a. A Polymer Park is also under construction at the Barauni Refinery. The closed HFC fertilizer factory at Barauni is also being reopened with an investment of thousands of crores and is expected to produce urea by 2024. The Pepsi Company has invested 500 crore to set up its bottling plant in Barauni.

Power generation in Bihar has also surged, reaching 7700 MW in 2021. NTPC Barh 660*5 MW, NTPC Nabinagar- 3300 MW, NTPC Barauni-470 MW, NTPC – Railway Aurangabad 660*3 MW, NTPC Buxar – 1400 MW are major power projects in Bihar going under construction and expansion.

To boost investment in the construction of the New Airport at Darbhanga in Bihar under the Udan scheme of the Central government, thereby making it the most successful airport under this scheme, and to provide connectivity to all major cities of India, including Delhi, Mumbai, Bangalore, Kolkata, Pune, Ahmedabad, Jaipur, etc. The expansion of flight connectivity to Mumbai, Bangalore, and other Indian cities from Gaya airport has been scheduled and is underway. The land acquisition process for Purnea Airport in Bihar's most backward regions is underway. A civil enclave with an annual capacity of 2.5 million passengers is under construction at Bihta in Patna District to ease the burden on Patna Airport. The expansion of the Terminal at Patna airport to accommodate 8 million passengers annually is under construction. Patna Airport is the 14th busiest airport in India.

Tax collection improvements

There has been an improvement in tax collection by the state government. Tax collection growth in the first half stood at 265%. Patna witnessed a 43.09% growth in personal income tax collections, reaching Rs 559 crore.

Impact of the MGNREGA

The implementation of the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) has also led to a dramatic fall in the number of migrant workers in India's Punjab state.

State GDP from 2004 to 2007

Under the President's rule (February to November 2005) and the current NDA government (Nov 2005 to date), the state's GSDP has grown at an average rate of 12% per annum. And from 2004 to 2007, the state's GSDP had grown by 22%. The growth rate has led to visits by Indian business leaders to Patna, with commitments to invest in the state's fast-growing economy. (see Economic Indicators below)

2008–2009 Credit crisis

Despite the global credit crisis, automobile sales and the real estate sector continued to grow in Bihar. Auto sales grew by 45% to 1,33,000 in the last 11 months of 2008, against 92,147 sold in 2007. Due to the global credit crunch, many Indian states have reported a decline of 20–25 percent in the automobile sales. Deputy Bihar Chief Minister Sushil Kumar Modi said" "The rise in sales figures of vehicles in the state at the rate of 45 percent shows that the recession has not affected the sector at all in the state". November 2008 reported 19,729 vehicle sales across categories, compared with 15,326 in the same period of the prior year. The revenue collection department in Bihar has recorded a 28.02 percent increase in revenue collection through November 2008. The department collected Rs 192.01 crore in 2008, up from Rs 149.99 crore in 2007. Also, the real-estate sector earned Rs 37 crore in revenue from flat registrations in October and November 2008 alone. Altogether, 3,139 flats were registered, indicating good cash flow. The global recession has hit the real estate sector hard in other parts of India, prompting builders to slash rates and offer attractive packages to boost sales. The small industrial base, brought on by political mismanagement in the 1990s, the small-scale nature of the loans sector, and that employment is generally with public sector, or semi-government-owned businesses, are all key factors in Bihar avoiding the recession. The service sector, the other major employer, is less mature than in other Indian states and serves a large market. Modi added that real estate prices had risen tremendously since the middle-class population had come to dominate the state. Another factor was that a large number of development projects had been launched in Bihar since the NDA government came to power in 2005, attracting many construction companies, builders, and suppliers. In 2008 alone, the state government invested Rs 13,500 crore (135 billion Rupees) in development projects.

Post-COVID era: The beginning of industries

When the COVID-19 pandemic spread across the country, it led to lockdowns and industry shutdowns in places like Maharashtra, Karnataka, West Bengal, etc., where most people from Bihar work. After the pandemic spread, several industries closed down. This made people return to their homeland. This was a turning point in Bihar. Where those skilled workers came to Bihar and began their own manufacturing businesses, starting with the first in Champaran and later in many other parts of the state.

Kosi Floods

Standing crops worth Rs 800 crore were destroyed in the five northern districts of Saharsa, Supaul, Madhepura, Araria, and Purnia. Three lakh hectares of cropland were submerged under floodwater. Up to 3,500 people have been reported as missing

2008 Bihar floods.

Public − Private Partnership

Indian Railways Contract

Indian Railways announced contracts to manufacture electric locomotives in Bihar. The electric locomotives will be manufactured at a factory in Madhepura and the diesel ones at Marora. Five multinational companies have been shortlisted for two separate contracts, jointly worth an estimated $8 billion (Rs 37,600 crore), to manufacture and supply locomotives for the Indian Railways. In the past, Indian Railways manufactured locomotives at the Chittaranjan Locomotive Works in West Bengal or at state-owned Bharat Heavy Electricals Ltd, and diesel locomotives at the Diesel Locomotive Works in Varanasi. These factories now have developed capacity issues. Germany's Siemens AG, Bombardier Transportation India Ltd, a unit of Canada's Bombardier Inc., and France's Alstom SA are attempting to secure an order to build and supply at least 660 electric locomotives for the railways. General Electric Co. (GE) and Electro-Motive Diesel Inc. (EMD) will compete for the second contract to build and supply 1,000 diesel locomotives for the national transporter.

Economic indicators

GSDP at current prices 2000–2007

From India Brand Equity Foundation (Feb 2020 Data)

Year	GSDP (₹, in crore)	Percentage Change
1999–2000	₹50,200	12.7%
2000–2001	₹57,279	14.10%
2001–2002	₹57,804	0.92%
2002–2003	₹65,117	12.65%
2003–2004	₹66,961	2.83%
2004–2005	₹73,791	10.20%
2005–2006	₹79,682	7.98%
2006–2007	₹94,251	18.28%
2007–2008	₹1,13,680	15.24%
2008–2009	₹1,42,504	11.31%
2009–2010	₹1,63,555	17.6%
2010–2011	₹2,03,555	10.5%
2011–2012	₹2,47,144	15.04%
2012–2013	₹2,82,368	14.17%
2013–2014	₹3,17,101	12.41%
2014–2015	₹3,42,951	8.2%
2015–2016	₹3,71,602	7.58%
2016–2017	₹4,21,051	15.45%
2017–2018	₹4,68,746	14.6%
2018–2019	₹5,27,976	5.70%
2019–2020	₹5,81,855	11.05%
2020–2021	₹5,67,814	7.40%
2021–2022	₹6,47,394	14.01%
2022–2023	₹7,46,417	15.29%
2023–2024	₹8,54,429	14.47%
2024–2025	₹9,76,514	13.5%
2025–2026	₹10,97,644	12.33%

(Not including Jharkhand)

Net State Domestic Product (NSDP) at factor cost at current prices

From Reserve Bank of India Handbook of Statistics on Indian Economy 2011–12 (Rs. crore)

Year	NSDP	Percentage Change
Base Year : 1999–2000
1999–2000	₹46,071
2000–2001	₹52,519	14.0%
2001–2002	₹52,323	0.4%
2002–2003	₹59,302	13.3%
2003–2004	₹59,701	0.7%
2004–2005	₹66,041	10.6%
Base Year : 2004–05
2005–2006	₹75,311	14.0%
2006–2007	₹94,111	25.0%
2007–2008	₹1,08,096	14.9%
2008–2009	₹1,39,061	28.6%
2009–2010	₹1,63,555	17.6%
2010–2011	₹2,01,264	23.1%
Base Year : 2011-12
2011–2012	₹2,47,144	20.8%
20012–2013	₹2,56,851	3.93%
2013–2014	₹2,69,650	4.98%
2014–2015	₹2,79,482	3.65%
2015–2016	₹2,96,488	6.08%
2016–2017	₹3,18,797	7.52%
2017–2018	₹3,44,028	7.91%
2018–2019	₹3,81,383	10.86%
2019–2020	₹3,98,329	4.44%
2020–2021	₹3,68,970	7.37%
2021–2022	₹3,87,256	4.96%
2022–2023	₹4,25,384	9.85%
2023–2024	₹4,64,540	9.20%

Macro-economic trend, This is a chart of trend of gross state domestic product of Bihar at market prices by Ministry of Statistics and Programme Implementation

Income Distribution; north-south divide

In terms of income, the districts of Patna, Magadh and Begusarai in Bihar were the three best-off districts out of a total of 38 districts in the state, recording the highest per capita gross district domestic product of Rs 31,441, Rs 10,087 and Rs 9,312, respectively in 2004–05. The North Bihar districts are severely affected by floods every year, resulting in loss of human capital and livelihood for thousands of people. In financial year 2021–22 the top three districts in terms of income was Patna, Begusarai, and Munger district with per capita income of Rs.1,31,100, Rs.51,400 and Rs.44,300 with state average of Rs.50,555.

Poverty, income, and urbanization

The state has a per capita income of $610 a year against India's average of $2,200, and 30.6% of the state's population lives below the poverty line against India's average of 22.15%. However, Bihar's GSDP grew by 18% over the period 2006–2007, a higher growth rate than in the previous 10 years.

Barauni in Begusarai and Hajipur remain major industrial towns in the state, linked to the capital city through the Ganges bridge and good road infrastructure. The level of urbanisation (10.5%) is below the national average (27.78%). Urban poverty in Bihar (32.91%) is above the national average of 23.62%. Also using per capita water supply as a surrogate variable, Bihar (61 litres per day) is below the national average (142 litres per day).

Urbanisation:- Number of towns in Bihar has increased from "130 in 2001" to "199 in 2011" and "207 in 2017".

Total Urbanised Districts = 38 Total Urbanisation %age = 11.3% Compared to Urbanisation %age of India at 31.2%

There are 45,103 villages in Bihar with 853 police stations and 43 police districts.

Capital City, Patna, along with the districts of Gaya and East Champaran district, remained among the most prosperous districts (Top 3). Whereas the districts of Sheohar, Sheikhpura district & Arwal remained the least prosperous (Bottom 3). In financial year 2019–20 Patna was having highest per capita income in Bihar followed by Begusarai district and Munger district.

Economy of Patna

Software Technology Park of India, Patna

Patliputra was the largest city and headquarters of Patna district, Patna division, and Bihar state. It lies on the main line of the Eastern Central Railway and is well connected by road. It is estimated that the city has a population of 1.8 million people, and the district has a population of 5.6 million.

Patna district alone contributes more than 27% of the state's $120 billion GDP. The GDP of Patna is around $30 Billion.

Patna in the 17th Century: A Flourishing Centre of International Trade - Background

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During the 17th century, Patna (then part of the Mughal Empire) emerged as one of the most significant urban and commercial hubs in eastern India. Strategically located on the banks of the Ganges River, it became a major link in the vast trade network connecting the Indian subcontinent with Central Asia, Southeast Asia, and Europe.

In 1620, the British East India Company established a factory (trading post) in Patna primarily for the purchase and storage of calico (a variety of cotton textile) and fine silk, two commodities in high demand in Europe. As the trading opportunities expanded, saltpetre (potassium nitrate, essential for making gunpowder) soon became one of the most coveted products exported from Patna. This valuable commodity played a critical role in global geopolitics and warfare during the period, drawing the attention of European powers.

Recognising Patna's immense economic potential, other European countries quickly followed suit. The French, Dutch, Danes, and Portuguese all set up their own factories, warehouses (godowns), and trading agencies in the city, leading to intense competition among them. The bustling trade transformed Patna into a cosmopolitan centre, with diverse languages, cultures, and commercial practices interacting daily.

European travelers and chroniclers of the time, such as Peter Mundy, a British merchant and explorer, visited Patna in 1632 and described it as "the greatest mart of the eastern region." His observations underline the city's importance not only as a local trade centre but also as a vital node in the global commercial network. Goods from Tibet, Nepal, Bengal, Gujarat, and even the Coromandel coast passed through Patna, either on their way to inland destinations or overseas markets.

Apart from textiles and saltpetre, Patna also traded in spices, opium, indigo, sugar, grain, and ivory, making it one of the wealthiest cities in the region. The city also hosted a thriving artisan community that produced fine crafts and traditional goods, catering to both domestic and international markets.

Under the Mughal rule, particularly during the reigns of Emperor Jahangir and Shah Jahan, Patna enjoyed a relatively stable political environment that fostered trade. Local nawabs and zamindars cooperated with foreign merchants, sometimes offering protection and favourable terms in exchange for taxes or gifts.

By the late 17th century, Patna had firmly established itself as a vibrant centre of global commerce, attracting merchants, adventurers, and diplomats from across Asia and Europe. Its flourishing economy and strategic importance made it a prized possession in the eyes of colonial powers, foreshadowing the increasing European involvement in the region in the centuries to come.

Manufacturing, export, import

The city is known to manufacture pulses, shoes, scooters, masur, chasra, electrical goods, and cotton yarn. The city exports these manufactured products as well as vegetables, purval, and milk. Patna is a major importer of cotton, iron, foodgrains, rice, wheat, wool, and dalhan. Rice accounts for more than one third of the gross area sown. Other important foodgrains grown are maize, pulses, and wheat. Non-food crops consist mostly of oilseeds, and cash crops such as vegetables and watermelons are also grown in the Diara belt.

Canals

Patna is one of the few districts in the state with a network of irrigation canals. Attention has been paid to the provision of irrigational facilities. Besides the various irrigation projects executed in the districts, tube wells under the Patna-Barh-Ekangasarai-Bihta Emergency River Pump and Technical Co-operation Administration Schemes were also installed.

Fishing

The city is one of the best fishing grounds in India. The spawn of rehu, cattla, and hilsa is collected from the river Ganges, which is in demand in other parts of Bihar and West Bengal. The fishing season begins in October, with peak months in December, January, and February, when a variety of fish are available at the fish market. There are a large number of rivers & streams, ponds, and low-lying fields in the district where water accumulates during the rainy season, and these have considerable potential for fisheries development. The Fisheries Development Schemes of the district are managed by the district Fisheries office located in Patna under the administrative control of the Director of Fisheries, Government of Bihar.

Per capita income

Even though Bihar has the lowest per capita income in the country at Rs 50,745, compared with the national average of Rs 1,35,000 in 2020. Patna recorded a per capita of Rs 1,12,280 in 2017–18 . The per capita income of Begusarai district was Rs 45,540 and munger with Rs 37,000 were second and third in per capita income districts of Bihar.

Average per capita income, 2019

City	trend		Per capita income
Patna			Rs 2.02L
Bengaluru			Rs 6.21L
Kolkata			Rs 2.04L
Hyderabad			Rs 6.58L
Greater Mumbai			Rs 6.43L
Gurugram			Rs 7.41L
Noida			Rs 6.13L
All India			Rs 1.72L
Average Per Capita Income in various Indian Cities

Per capita income in Bihar

Development

The NDA government has secured financing and support for major projects to improve the city's entertainment sector. It was expected that in 2009, new multiplexes, malls, parks, and restaurants will all open in the city. China and the U.S. are currently engaged in business operations in Patna. The government is investing 300 Crores on two projects: one to replicate the Delhi Haat in Patna, and the other to create a Buddha Park.

World Bank Report

In June 2009, the World Bank ranked Patna as the best city in India for starting a business, out of 17. The World Bank also ranked Patna 2nd for contract enforcement, 9th for dealing with construction permits, 15th for paying taxes and registering property, 10th for trading across borders, and 15th for closing a business. Overall, the city was placed 14th.

Civic amenities

Basic civic amenities in the city have improved as of 2025. Garbage is being dumped in dedicated dumping grounds across the city. In terms of drinking water, almost 95 percent of the total five lakh estimated households have a legal water connection. The city pumps reduce its water wastage from 110 to just 20 million litres of untreated sewerage into the River Ganges. The poor condition of the sewerage system, which in some areas has already been improved, is very far from the drinking water pipeline, thereby improving the quality of drinking water.

Patna Metro is an under-construction project with almost 80% of the work completed, with 60% of the investment from JICA, Japan, and the remaining 20% from the state and the Central government, respectively. The total cost of the project is 13,500 crores and is expected to start by 2024. An electric bus is another civic amenity introduced in Patna. A chain of scores of flyovers has been constructed in Patna, and many more are under construction.

Ganga Path – Marine Drive, 21 km, is also complete in Patna, with the 1st and 2nd phases completed from Digha to Deedearganj. AIIMS – Digha elevated corridor and Atal Path are major roadways in Patna for seamless traffic flow.

The Greater Patna and Patna Smart City projects are also in the implementation stage.

Agriculture

Main article: Agriculture of Bihar

Bihar has significant production of mangoes, guavas, litchis, pineapples, brinjals, cauliflowers, bhindis, and cabbages in India. Despite the state's leading role in food production, investment in irrigation and other agriculture facilities has been inadequate in the past.

Bihar accounts for 71 per cent of India's annual litchi production

Farm workers in Bihar

• 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—the highest among the eastern states.
• Fishery production levels are 0.27 million lakh MT
• All the above data is from the Bihar Government and can be found here
• Bihar's mason-laborers are doing this work the most.

If we look at this, it proves that Bihar is not a farmer-based state, but a state of mechanics and labourers. The population of farmers in the state is 7.7 percent. That is, about one crore 70 thousand 827 people are associated with farming, while two crore 18 lakh 65 thousand 634 people work as mechanics and laborers. This is 16.73 percent of the total population.

National Economic Corridor

IMC, Gaya

For the development of an Integrated Manufacturing Cluster (IMC) in Bihar, the State Government has identified land parcels of nearly 1670 acres in the Dobhi block, under the Sherghati subdivision at the District Gaya. The proposed IMC Gaya project site spans 13 revenue villages (Mouzas). Land acquisition for the project is in process. The proposed IMC Gaya project site is located near NH 22 (Dobhi-Chatra road), which connects Gaya with Chatra district in Jharkhand. It is located approximately 7 km from NH 19 (Golden Quadrilateral), which connects Kolkata with Delhi, and approximately 40 km from the proposed New Paharpur station of the Eastern Dedicated Freight Corridor. Gaya International Airport is located approximately 25 km away.

For the preparation of master planning & detailed engineering for IMC Gaya, NICDC has appointed a master planning consultant. Master planning is in the advanced stage.

Sectors

Sugar

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 benefited from the state's climate, which is highly suitable for growing high-grade sugarcane. The main benefit of the industry is that it employs many people, especially in rural areas. Further, it provides facilities for transport and communication and helps develop rural areas by mobilizing rural resources. The total number of sugar mills in the Bihar sugar industry is 28, of 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 sugar mills of the Bihar Sugar Industry are located in 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 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 the Bihar Sugar Industry was 4.21 lakh tons in 2002–2003, and 2.77 lakh tons in 2003–2004. Again, in 2004–2005, the figure was 2.77 lakh tons. The state government, to boost Bihar's sugar industry, has decided to privatize state-run sugar mills that have not operated 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 the Bihar Sugar Industry.

Brewery sector

Bihar has emerged as a brewery hub with major domestic and foreign firms setting up production units in the state. Three major firms – United Breweries Group, Danish Brewery Company Carlsberg Group, and Cobra Beer – are in the process of setting up new units in Patna and Muzaffarpur in 2012. This sector however, received a major setback with the Statewide ban on Alcohol sale, consumption, and production in Bihar by Chief Minister Nitish Kumar in 2015.

Leather

The state has a very large cattle population. There are 50,000 footwear artisans in the state. The state has private-sector tanneries. More tanneries & footwear units are to be set up in the private sector.

Cements

As in other parts of India, the cement industry in Bihar has also flourished and grown significantly. There are now many cement plants across the state. ACC Cements has a plant in Patna. Also many other cement companies have invested in Bihar

Textile

The total number of weavers in Bihar is more than 90,000. Bhagalpur is known as the leading silk city. Gaya—another major weaving centre—around 8000. There are strong traditional handloom clusters in the districts of Bhagalpur, Gaya, Nalanda, Darbhanga, Madhubani, Siwan, and Patna. Infrastructure Leasing and Financial Services is preparing a Project Report for Textile Parks and also for Cluster Development Programs. However, most of the textile centers in the state are in decline, producing low-value goods. Now, Gaya is developing rapidly in the textile sector; approximately 10,000 looms are operational, and several new projects are set to launch soon. Shuttle-less and high-tech technology are also being widely adopted, and in Nalanda Rajgir, the textile sector is also developing.

Small-scale industries

The small-scale industries have contributed to Bihar's economic upsurge. SSI's total investment is Rs 88.75 crore. Small/artisan-based industries are generating 5.5 lakh person-days in the current fiscal till December.

Key organisations

Bihar Industrial Area Development Authority

Railway factory

• Diesel Locomotive Factory, Marhowrah
• Carriage Repair Workshop, Harnaut
• Electric Locomotive Factory, Madhepura
• Jamalpur Locomotive Workshop
• Rail Wheel Plant, Bela

Security and intelligence services

Main article: Security and Intelligence Services (India)

The SIS, an unlisted security company, has the largest workforce in the Asia-Pacific region and is projected to generate Rs 2,000 crore in revenue. The SIS has over 10,000 foreign nationals among its staff. The Patna registered company achieved this through the acquisition of Australian guard and mobile patrol services business of American conglomerate, United Technologies Corp (UTC). The deal closed in August 2008. It includes Chubb Security, which is Australia's largest and oldest security company. Chubb Security earned $400 million last year. The SIS is reportedly funding the acquisition through a mix of debt and internal accruals. The SIS, ranked among India's top three security services firms, has 30,000 employees in India, and it is expected to add up to 80,000 by 2012. Its 2,500-odd clients include Tatas, Birlas, Reliance, SBI, PNB, ICICI, Hyundai, American Express, Essar, Coca-Cola, Pepsi, Idea, and Wipro, to name a few. Chairman/ Managing Director Ravindra Kishore Sinha said, ""From pedestrian Patna setting to the panoramic skyline of Sydney, it has been a long and rewarding journey," he said, adding the SIS remains "rooted, registered and taxed in Bihar"

Sudha Co-operative

See also: Bihar State Milk Co-operative Federation

Sudha, a dairy co-operative, is one of the most successful government companies in India. An IAS officer from Bihar, Ram Chandra Sinha, founded the Co-operative. The co-operative's revenues from a range of milk and milk products have risen from $73.5m in 2001–2002 to $136m in 2007, and, in 2018, were reported at $279.6m. The co-operative had 6,000 outlets covering 84 towns in the state, and over 260,000 milk farmers were members in 2007–08. It now has 2,231 retailers and 25 plants (19 of which are dairy products) with a total Capacity of 3.1 million litres/day. Sudha also sells its products to other Indian states like Uttar Pradesh, West Bengal, Jharkhand and Delhi.

Husk Power Systems

Main article: Husk Power Systems

Husk Power Systems (HPS) is a Bihar-based start-up that provides power to thousands of rural Indians. HPS has created proprietary technology that cost-effectively converts rice husks into electricity. The organization uses this technology to produce, own, and operate 35–100 kW "mini power-plants" that deliver electricity as a pay-for-use service to villages of 2000–4000 inhabitants in the Indian "Rice Belt. In 2009, the company won an inaugural global business plan competition sponsored by venture capital firm Draper Fisher Jurvetson and Cisco Systems. The company will receive a $250,000 investment from DFJ and Cisco to help take the technology to the next level.

The company has since received two rounds of financing from the Shell Foundation. Two of the key founders of HPS are graduates of the top-ranked Darden School of Business (University of Virginia).

IOC Barauni

Main article: Barauni Refinery

IOC Barauni in the state of Bihar, India, was built in collaboration with the Soviet Union for Rs. 49.4 crores and went on stream in July 1964. The initial capacity of 2 million tonnes per year was expanded to 3 million tonnes per year by 1969. The present capacity of this refinery is 6.00 million tonnes per year. A Catalytic Reformer Unit (CRU) was also added to the refinery in 1997 for the production of unleaded motor spirit. Projects are also planned for meeting future fuel quality requirements.

The Union government plans to develop a petrochemical plant alongside the refinery.

East Central Railway, Hajipur

Hajipur is the only twin city of Patna, lies nearest to the capital, and shares most of its government offices, headquarters, and educational institutions with the capital city. Being another district headquarters, it is equal to the capital in terms of powers. It is one of the railway zones in the Indian railway system, i.e., East Central Railway zone; it comprises the following railway divisions: Samastipur, Danapur, Mugalsarai, Dhanbad & Sonepur.

LIC: East Central Zone

Zonal comprises the following LIC divisions: Muzaffarpur, Patna-1, Patna-2, Bhagalpur, Begusarai, Jamshedpur, Hazaribagh, Berhampur, Cuttack, Bhubaneshwar & Sambalpur.

National Thermal Power Corporation

The Eastern region headquarters of Indian power major NTPC is situated in Patna; the major power plants in this region are Kahalgaon, Talchar & Farakka. Upcoming power plants in the region are as follows: Barh (Patna), Nabinagar (Aurangabad).

Powergrid Corporation

The Eastern region, comprising Bihar and Jharkhand, has its regional headquarters at Shastri Nagar, Patna.