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Economy of
Bihar
Bihar is among the least developed states of India and has a per
capita income of $148 a year against India's average of $538. A
total of 30.6% live below the poverty line against India's average
of 22.15%. The blame for this stems from many factors: Freight
equalisation scheme, lack of vision of the political classes, and
inadequate investments in agriculture, infrastructure and education.
Some people[citation needed] believe that mis-rule, caste-dominated
politics and rampant corruption by politicians & bureaucrats have
been the cause of the lack of development of the state. Saibal Gupta
of Asian Development Research Institute has blamed the absence of a
sub-national identity which has allowed the Central Government to
get away with its neglect. Now the state Government has come to
terms with the development of the state and top priority is being
given for creating investment opportunities for big industrial
houses. Mohan Guruswamy of Centre of Policy Alternatives has done a
detailed study of the continued neglect of Bihar by the central
government and how it has resulted in its downslide.
The economy is mainly based on agricultural and trading activities.
The vast swath of extremely fertile land makes it ideal for
agriculture. Despite a number of rivers and good fertile soil,
investment in irrigation and other agriculture facilities has been
grossly inadequate. Agriculture is mainly dependent upon the
vagaries of the nature.
Previously, there were a few half hearted attempts to industrialize
the state: an oil refinery in Barauni, a motor scooter plant at
Fatuha, and a power plant at Muzaffarpur. However, no sustained
effort had been made in this direction, and there was little success
in its industrialization. Historically, sugar and vegetable oil were
flourishing industries of Bihar. Until the mid fifties, 25% of
India's sugar output was from Bihar. Dalmianagar was a large agro -
industrial town. However, these were forced to shut down due to
faulty central policy which neutralized the strategic advantages of
Bihar.
Recently the dairy industry has picked up very well in Bihar. Sugar
industry is another one which has started to show up with 25 new
sugar factories committed in Bihar between 2006 and 2007. Since
2005, the state government has taken a major task of creating
business friendly environment for investment opportunities and
leverage the resources there for all big and small industrial
houses.
Bihar's gross state domestic product for 2004 is estimated at $19
billion[citation needed] in current prices. There was a 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. Since then, the main economic activity of Bihar has
been agriculture. The new Bihar state produces about 60% of the
output of the old Bihar state. |