State Profile

Bihar, located in eastern India, is transforming its industrial landscape. Historically known for its culture and agriculture, the state is now fostering agro-based industries. Ethanol, textile manufacturing, food processing, dairy, and horticulture are booming now. Bihar offers attractive investment opportunities with a young workforce, ample resources, low operational costs, a streamlined system, export potential, transparent governance, and perennial rivers driving future growth.

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Demographics Indicators

State Capital Patna
Geographical Area (Sq. km) 94,163
Administrative Districts (No.) 38
Population density (per sq km) 1,106
Total Population (million) (as per 2011 census) 104.1
Literacy rate (%) 61.8%
Gross Cropped Area (Lakh Gross Cropped Area (Lakh 74.06

Bihar's Economy

The Bihar economy registered a sharp recovery in 2021-22, with its Gross State Domestic Product (GSDP) growing at 10.98%. This growth rate was the third highest among all the states in the country. The Indian economy grew by 8.68 percent in 2021-22. The sectoral growth rates in Bihar at constant price during 2021-22 were primary (9.6 percent), secondary (3.8 percent), and tertiary (13.3 percent).

Tertiary and secondary sectors were key growth drivers and within the secondary sector, it was EGWUS (Electricity, Gas, Water Supply and Other Utility Services), which was growing at a high rate of 14.5 percent from 2017-18 to 2021- 22. In the tertiary sector, the fastest-growing sectors were: - Air Transport (10.5 percent), Storage (21.3 percent), Financial Services (12.6 percent) and Public Administration (9.3 percent) from 2017-18 to 2021-22. This growth pattern has led to structural changes in the economy.

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At present, the share of the primary sector in the Gross State Value Added (GSVA) of Bihar is only 21.2 percent, compared to secondary (18.1 percent) and tertiary (60.7 percent). Bihar has a strong MSME base as well. The state bagged the second prize in the 'National MSME Award 2022' to states and UTs for outstanding contributions to the promotion and development of the MSME.

Within the secondary sector, it was EGWUS (Electricity, Gas, Water Supply and Other Utility Services), which was growing at a high rate of 14.5 percent from 2017-18 to 2021-22. In the tertiary sector, the fastest growing sectors were - Air Transport (10.5 percent), Storage (21.3 percent), Financial Services (12.6 percent) and Public Administration (9.3 percent) from 2017-18 to 2021-22.

GSDP of Bihar at constant (2011-12) prices is the highest (11.0 percent) in 2021-22, among the eight EAG states of India

2017-18 2018-19 2019-20 2020-21 2021-22 CAGR (2017-18 to 2021-20)
Bihar 7.9 10.9 4.4 -3.2 11.0 4.6
Chhattisgarh 3.0 8.0 5.1 -1.8 NA 3.8
Jharkhand 9.0 8.9 1.1 -5.5 8.2 1.9
Odisha 7.0 7.1 2.9 -4.2 10.2 2.9
Rajasthan 5.2 2.4 5.7 -2.9 11.0 3.4
Uttar Pradesh 4.4 3.9 3.9 -5.5 4.2 1.0
Uttarakhand 7.9 2.8 0.6 -4.4 6.1 3.1
India 6.8 6.5 3.7 -6.6 8.7 2.0

As on September 2023, Under the Bihar Industrial Investment Promotion Policy 2016, the State government has approved the 2695 proposals for investment worth approx. Rs 68 thousand Cr in the last six years. To encourage the establishment of production units, the State government has released a sum of Rs 1592 Cr. as grants under the Bihar Industrial Investment Promotion Policy 2016 during the last six years.

NATIONAL MSME AWARDS 2022

Strong MSME Base

Bihar has a strong MSME base. The state bagged the second prize in the 'National MSME Award 2022' to states/UTs for outstanding contributions to the promotion and development of the MSME. The growth of these MSMEs is not just limited to numbers but the Department of Industries is also ensuring qualitative and sustainable growth. The state of Bihar continues to promote awareness about ZED certification among MSMEs and entrepreneurs in an effort to transform the region into an economic engine for global manufacturing and to ensure that the goods have "zero effect" on the environment.

ZED CERTIFICATION

The efforts have culminated in an encouraging outcome in ZED. The state has outperformed and ranked first across the country with 3782 ZED certificates. The industrial unit gets accreditation based on 20 different quality and environmental criteria. These include waste control, increasing the capacity of production, maintaining machine standards, and employee safety. ZED comes in three different certification levels based on how many of the parameters are fulfilled.

Bihar has the highest number of ZED (Zero Defect Zero Effect) certified micro, small and medium enterprises (MSMEs) in India. The state has 3,782 ZED-certified units.

These units are certified at different levels:

  • 3,744 units are certified at the bronze level
  • 21 units are certified at the silver level
  • 17 units are certified at the gold level

Now, the aim of the Department of Industries is to provide them with financial help for technical upgrades, free consulting support and subsidies on railway freight. The ZED certified MSMEs also gain access to different schemes and national and international trade fairs.

The Government of Bihar is also performing exceptionally well in supporting MSMEs through various schemes such as PMEGP (Prime Minister's Employment Generation Programme) and PMFME (PM Formalisation of Micro Food Processing Enterprises). 121.21% of the physical target achieved, as well as a total of 4458 projects worth INR 121.20 crore, received disbursement from various banks against the physical target of 3678 crore (having a financial target of INR 105.67 crore). A total of 37391 applications were forwarded to banks, out of which 8715 were sanctioned by the banks and 6407 units claimed the margin money. One of the best performances in the country.

Similarly, under the PMFME (PM Formalisation of Micro Food Processing Enterprises) scheme, Bihar is also the best-performing state in the country. Bihar sent the highest number of applications to the bank, which shows commitment and honesty from the Department of Industries to boost the growth of MSMEs and encourage entrepreneurship.

Startup Ecosystem in Bihar

To promote the innovation ecosystem and unlock the enormous entrepreneurial potential of the state, the government of Bihar has notified the "Bihar Start-up Policy" and since then has progressed fast on the track of development, with unrelenting efforts being made towards strengthening infrastructure and promoting industrial growth. Startups and innovation play a key role in this development. They focus on next-gen solutions for present-day challenges.

Key Highlights

  • 502 Startups registered under Bihar Startup Policy
  • A total of INR 25 crore has been Sanctioned as seed funding to startups
  • Corpus of Rs. 500 crores set up by BSFT for startup and entrepreneurship development
  • Single web portal (https://startup.bihar.gov.in/) for registrations, knowledge, networking, Market access
  • Co-working space 'B-Hub' with advance amenities: 39041 sq. ft. Co-working space B-HUB With seating Capacity of 578 people
  • Collaboration with the incubator centres of Premier academic institutes 23 Incubation centres were created in premier institutes like IIT-Patna, CIMP, IIM-Bodhgaya, etc
  • Funding avenues being created through Investors' Meet, Demo Day, Bank Meet-ups Screening of applications for seed fund disbursement just takes 45 Days
  • Purchase preference to Startups by Government and PSUS
  • Setting up 'Startup Cells' in every district
  • National-level Startup festivals, bootcamps and hackathon
  • Creation of funds with leading financial institutes
  • IPR Facilitation Centres for startups
  • Panel of experts, mentors and facilitators for providing services to startups
  • PGDM course on innovation, entrepreneurship, and venture creation in association with CIMP.

CHIEF MINISTER ENTREPRENEURSHIP SCHEME

The Department of Industries has adopted a market-led/linked sustainable, inclusive, scalable, and replicable cluster development method where initial unit setup and investment are to be done by the Anchor Unit (Principal Firm). Further, major investments, including common facility centres and training support, would be taken care of by the state government. The Chief Minister SC/ST/EBC/Yuva/Women Entrepreneurship Scheme is an opportunity for investors to set up their unit in Bihar as an anchor unit. Under this scheme, financial assistance of INR 10 lacs (INR 5 lacs as a grant/subsidy and INR 5 lacs as an interest free loan) is being provided to the aspiring entrepreneurs of the state.

Till August 2023, just within 2 years of this scheme's launch, a total of 26405 entrepreneurs have received funding of INR 1704.82 crore from the Department of Industries under the scheme.

Don't miss this chance to be part of Bihar's growth story.
Register now and join us at Bihar Business Connect 2023.

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