Bihar: Economy, Governance and Current Schemes

The economy at a glance

Note: Check the latest Bihar Economic Survey (released before each state budget, usually in February) for figures. The trends below are stable.

• Growth: Bihar has often grown faster than the national average since about 2005. The base is small.
• Per-capita income: the lowest of the large states, roughly one-third of India's.
• Structure:
  • Services make up the largest share of GSDP (around 55–60%).
  • Agriculture is about a fifth of GSDP but employs about half the workers.
  • Manufacturing is weak, under 10% of GSDP.
• Poverty: NITI Aayog's MPI fell from about 52% (2015–16) to about 34% (2019–21), the largest fall in absolute numbers, but it is still the highest of any state.
• Migration: large out-migration of labour. Remittances sustain many rural households.
• Why Bihar stays poor:
  • the land and flood problem;
  • small farms (average under 0.4 ha);
  • weak urbanisation;
  • historical factors (Permanent Settlement, the freight equalisation policy);
  • low investment;
  • the loss of mineral areas in 2000.

Planning and sector policies

• Agriculture road maps:
  • first 2008–12; second 2012–17; third 2017–22; fourth 2023–28;
  • they have improved rice and wheat yields and pushed organic farming and makhana.
• Industry:
  • Bihar Industrial Investment Promotion Policy (2016, amended);
  • textile and leather policy (2022);
  • ethanol policy (2021), the first state ethanol policy in India.
  • The "Bihar Business Connect" investor summits have run since 2023.
  • Industrial areas are run by BIADA.
• Infrastructure:
  • new Ganga bridges, including the Aguwani Ghat–Sultanganj bridge, whose collapse drew scrutiny;
  • the Kacchi Dargah–Bidupur six-lane bridge;
  • the Patna Metro, with its first stretch in 2025;
  • Darbhanga airport (2020);
  • AIIMS Patna and the proposed AIIMS Darbhanga.
• Energy:
  • almost all households are now electrified (Saubhagya plus the state scheme);
  • prepaid smart meters;
  • solar parks such as Kajra (Lakhisarai), with battery storage.

State finances

• Revenue: Bihar depends heavily on Union transfers. Its share in central taxes under the 15th Finance Commission is about 10.06%, second only to UP.
• Own tax revenue is low; the loss of liquor excise after 2016 hurt it further.
• Debt is under the FRBM ceilings, and the state seeks special category status. The Union has not granted it and offers special packages instead.

Governance and social policy

• Panchayati Raj:
  • 50% reservation for women in panchayats (2006) and urban bodies (2007). Bihar was the first state to do this.
  • Reservation for EBCs in panchayats.
  • The Gram Kachahari is a village court for minor disputes.
• Women:
  • 35% reservation in state government jobs (2016);
  • Jeevika self-help groups, with over 1 crore members;
  • Mukhyamantri Balika Cycle Yojana (2006–07) and Poshak Yojana;
  • Kanya Utthan Yojana (cash from birth to graduation);
  • Mukhyamantri Mahila Rojgar Yojana (2025), which gives a first instalment of ₹10,000 to one woman per family to start a business.
• Prohibition: in force since April 2016. Debate centres on hooch deaths, the burden on courts and revenue loss.
• The caste survey (2023): Bihar's own survey (see Geography of Bihar).
  • In November 2023 the state raised reservation for SC, ST, BC and EBC to 65%, or 75% with EWS.
  • The Patna High Court struck this down in June 2024, and the appeal is pending in the Supreme Court.
  • The Union decided (2025) to count caste in the next Census.
• Saat Nischay:
  • I (2015): Har ghar nal ka jal, Ghar tak pakki gali-naliyan, Har ghar bijli, toilets, Bihar Student Credit Card, Kushal Yuva Karyakram, Swayam Sahayata Bhatta and women's job reservation.
  • II (2020): youth skills, women's entrepreneurship, irrigation for every field, a clean village and a prosperous village, better health, and Swachh Shahar Viksit Shahar.
• Jal-Jeevan-Hariyali (2019): reviving ponds, wells and ahars, tree planting and rooftop harvesting, as a climate response.
• Health: Mukhyamantri Chikitsa Sahayata Kosh; Ayushman Bharat with the state top-up.
• Education: BPSC TRE (teacher recruitment exams, 2023 onwards) hired more than 2 lakh teachers; there is also a domicile policy for teachers.

Polity basics of Bihar

• Legislature: Bihar has a bicameral legislature.
  • Vidhan Sabha: 243 seats.
  • Vidhan Parishad: 75 seats.
• Parliament: 40 Lok Sabha and 16 Rajya Sabha seats.
• High Court: the Patna High Court (1916).
• State symbols:
  • animal: gaur (bison);
  • bird: house sparrow;
  • tree: peepal;
  • flower: marigold (genda).
• Bihar Diwas: 22 March.

Exam tip: BPSC asks about state schemes by name and year. Keep a one-page table: scheme, year, department and target group. Update the economy numbers from the latest Bihar Economic Survey before the exam.