Nestled in eastern India, Bihar, traditionally known for its rich culture and agriculture, is undergoing a remarkable transformation in its industrial landscape. The state has strategically shifted its focus towards agro-based industries, witnessing significant growth in sectors such as ethanol, textile manufacturing, food processing, dairy, and horticulture. Bihar now stands as a lucrative investment destination, boasting a young workforce, abundant resources, cost-effective operations, a streamlined system, export potential and the driving force of perennial rivers propelling future growth.
In the fiscal year 2021-22, Bihar’s economy experienced a robust recovery, with its Gross State Domestic Product (GSDP) surging by an impressive 10.98%. This growth rate, the third highest among all Indian states, outpaced the national economic growth of 8.68%. Sector-wise, Bihar exhibited notable growth rates in the primary (9.6%), secondary (3.8%), and tertiary (13.3%) sectors at constant prices.
The tertiary and secondary sectors emerged as pivotal growth drivers, with Electricity, Gas, Water Supply, and Other Utility Services (EGWUS) within the secondary sector showcasing exceptional growth at 14.5%. Noteworthy sectors in the tertiary domain include Air Transport (10.5%), Storage (21.3%), Financial Services (12.6%), and Public Administration (9.3%) during the same period, contributing to significant structural changes in the state’s economy.
Dynamic MSME Landscape
The state’s vibrant MSME sector earned accolades, securing the second prize in the ‘National MSME Award 2022’ for its outstanding contributions to MSME promotion and development. The Department of Industries in Bihar is actively supporting MSMEs through various schemes, including the Prime Minister’s Employment Generation Programme (PMEGP) and PM Formalisation of Micro Food Processing Enterprises (PMFME). Bihar achieved an outstanding 121.21% of the physical target under PMEGP, with 4458 projects receiving disbursement worth INR 121.20 crore – a remarkable feat in the country.
Investment summit
The recent Invest Bihar Summit, held in December 2023, proved to be a watershed moment, showcasing the state’s transformed landscape and attracting a staggering ₹50,530 crore in proposed investments across diverse sectors. The summit witnessed the inking of MoUs with a staggering 278 companies, with the lion’s share – ₹31,394 crore – dedicated to general manufacturing. This influx of capital promises to breathe new life into Bihar’s industrial scene, creating a vibrant ecosystem for diverse manufacturing activities. From established players like Bharat Petroleum’s ₹7,386 crore investment to rising stars like Patel Agri Industries’ ₹5,230 crore commitment, the summit painted a picture of a burgeoning manufacturing hub. These investments span various sectors, promising substantial job creation within the state.
In addition to the MoUs, the Adani Group, a prominent player in the corporate landscape, expressed its commitment to invest an additional ₹8,700 crore across diverse sectors, including cement manufacturing, logistics, and agro-industry. This move follows the Adani Group’s earlier investment of ₹850 crores, contributing significantly to Bihar’s economic growth.
Another sector basking in the investment sunshine is food processing. With 124 investors pledging ₹14,564 crore, Bihar is poised to become a major player in this crucial industry. This focus on food processing aligns perfectly with the state’s agricultural strengths, promising to create a valuable link between farmers and consumers.
Industries Minister Sameer Kumar Mahaseth outlined three crucial needs for Bihar’s accelerated development. These include effective water management collaboration with Nepal to mitigate flood-related challenges, securing special category status for expedited industrial development, and inclusion in SEZs to boost overall economic progress.
Sandeep Poundrik, Additional Chief Secretary of the Industries Department, highlighted the state’s conducive environment for industries. With readily available market access, raw materials, infrastructure, workforce, and government support, Bihar positions itself as an attractive investment destination. Poundrik expressed optimism about future summits, emphasising the state’s commitment to welcoming new investors.
The Invest Bihar Summit also marked the launch of the Bihar Logistics Poliwcy 2023, aimed at providing world-class infrastructure facilities for industrial and social growth. This policy emphasizes the importance of logistics in enhancing the state’s economic competitiveness.
Global participation and sector-wise investments
Representatives from 16 countries, including the US, Taiwan, Japan, and Germany, attended the summit, signifying Bihar’s growing global appeal. While manufacturing steals the spotlight, the summit’s impact extends far beyond. Investments in services, IT & ITeS, textile & leather, and other sectors paint a holistic picture of economic diversification. This multi-pronged approach ensures that Bihar’s growth is not lopsided, paving the way for a more robust and sustainable economy.
Government support, ecosystem and entrepreneurial drive
To foster an innovation ecosystem and unlock entrepreneurial potential, the government of Bihar has implemented the “Bihar Start-up Policy.” The state is making significant strides in infrastructure development and industrial growth, with a keen focus on startups that provide next-gen solutions for contemporary challenges.
Bihar’s commitment to quality and sustainability is exemplified by its focus on Zero Defect Zero Effect (ZED) certification. The state has outperformed others, securing the highest number of ZED-certified micro, small, and medium enterprises (MSMEs) in India – a remarkable 3,782 units. This certification, based on stringent quality and environmental criteria, ensures responsible waste management, production capacity enhancement, machine standards adherence, and employee safety.
Catalysts for entrepreneurship
The Chief Minister SC/ST/EBC/Yuva/Women Entrepreneurship Scheme stands as a testament to Bihar’s commitment to entrepreneurship. Under this scheme, aspiring entrepreneurs receive financial assistance of INR 10 lakhs, comprising a grant/subsidy of INR 5 lakhs and an interest-free loan of INR 5 lakhs. In just two years since its launch, the scheme has empowered 26,405 entrepreneurs with funding amounting to INR 1704.82 crore, showcasing the government’s dedication to nurturing business growth in the state.
Bihar’s accelerated trajectory
As the state continues to attract investments and foster innovation, it positions itself as a dynamic player in India’s industrial landscape. The convergence of policies, schemes, and entrepreneurial enthusiasm paints a promising picture for Bihar’s future as an economic powerhouse.
While challenges lie ahead, the seeds of a transformed Bihar have been sown. The impact of Invest Bihar Summit is not merely measured in crores or MoUs, but in the lives it will touch, the dreams it will ignite, and the legacy it will leave behind. This is a story not just of factories and jobs, but of empowerment, progress, and a collective leap towards a brighter tomorrow. Bihar’s manufacturing sector stands poised at the precipice of a transformative era, one that promises not just economic growth but societal upliftment.
