Bihar’s agro-industry can give its per-capita income a push…

Bihar is mostly a service oriented economy; however the state has a vast agricultural holding. Nevertheless, manufacturing has worked positively since 2005, Bihar still has the lowest GDP per capita income in INDIA. The new government under Nitish Kumar has made several key social and economic reforms which resulted in improvement in the economy of the state. According to the Indian government’s Central Statistics Organization, between 2005 and 2009 Bihar’s GDP increased 11.03% which made Bihar the second fastest growing state after Gujarat. Bihar, now, is among the most feasible places for investment in INDIA. It has several important sources of minerals like iron-ore, coal and bauxite.

Bihar has a fertile soil and a large number of agricultural commodities – sugarcane, jute, paddy, wheat, lentils., etc., etc., are produced which serve as raw materials for industry. Bihar is the largest producer of vegetables and second largest producer of fruits in the country. It is a big grower of bhindi, cabbage, brinjal, cauliflower, and fruits like litchi, mango, banana and guava, Bihar produces 71% of all litchi production in INDIA, however, despite government’s support investment in irrigation and other facilities are far from sufficient. Many small and large businesses exist in rice-mills, sugar-mills, oil-refineries, mining and extraction, textiles, steel cement, fertilizers, and engineering and automobile products. Bihar is one of the biggest producers of vegetables and fruits in INDIA and there is a gap in investment in food-processing, and private sector initiatives are welcomed in processing and packaging for quality. To encourage investment in tea industry the government provides subsidy for setting up processing units.

Sugar industry is the largest agro-based industry in Bihar which generates a lot of employment in the sector. According to estimates, around 5 lakh farmers and their dependents are employed in the cultivation of sugarcane and around a half a lakh skilled and unskilled people, including trained and qualified technologists are employed in the sugar-industry.  There are a lot of investment opportunities in the sugar and allied industries in Bihar, in capacity expansion of the existing units, green field sugar mills, ethanol manufacturing, alcohol manufacturing, power generation, paper manufacturing, confectionary items manufacturing, engineering units and others. The sugar industry has developed in Bihar with the government’s effort to revive the industry. The industry is also helped by the weather conditions in the state which is good for producing good quality sugarcane and creates a lot of employment in the rural areas. Out of total 28 sugar mills in Bihar only 9 are working. The sugar mills are situated in Champaran, Chorma, Dulipati, Gopal ganj, Samastipur, Sitamarhi, and Supaul… The sugar industry can be divided into organized and unorganized sectors. Sugar factories fall under the organized sector and the unorganized sector comprise traditional sweeteners (gur and khandsari) which are a part of rural-industry. They are generally consumed by the village population in large quantities. To facilitate the sugar industry in Bihar the state government has proposed to privatize mills that are not running for many years. Moreover, the state government has approved 15 new sugar mills with an investment of around Rs. 3, 770 crore. The major agro based industries of Bihar are of rice, sugar, edible oil. The edible oil mills are located at Bauxer, and Lakhisarai at Munger district.  at Araria, Banmankhi in Purnia District. The rice mills are located at Bauxer Karbisganch in Purnia district, Araria. Sugar mills are located at Banmankhi in Purnia District, Bauxer, Madora in Saran District, Samastipur and Bihata in Patna District. 

The respective per-capita income of Bihar to the national average is same at the beginning of 12th Plan Period compared to the respective per-capita income of Bihar to INDIA when the Planning was commenced in 1951. The per-capita income of Bihar is 15, 268 which is 40.1% of the national average.  In the past few years Bihar has been able to reverse the trend and this is also because of double digit GSDP growth and low GDP growth at the national level. Till 2005 the per-capita income of Bihar was 30% of the national average which later increased to 40% in the year 2012. The speed with which Bihar’s per-capita income is increasing, it will take, atleast, 30 years to catch-up the national average. According to experts to speed-up the recovery in per-capita income Bihar must give thrust to the agriculture sector. Besides increasing the per-capita income, the agriculture sector would increase the demand for other products which is likely to push economic growth and GSDP. Industrialization should be promoted generally and agro-based industries more specifically. Experts believe that high population growth rate is also responsible for low per-capita income.  Sustained development of the agricultural sector is crucial for increase in farmers’ income because only industries can add-value to the agricultural products…