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Bihar - Economy

As nine out of ten people on the average live in the villages, poverty is more visible in rural areas. With the bifurcation of the state in November 2000, the newly created Jharkhand state inherited the mineral rich and forest rich parts of the state and present Bihar was left with its largely agro-based economy. However, Bihar is a part of the Gangetic plains and hence has rich soil and possesses abundant water resources. Principal food crops are paddy, wheat, maize and pulses. Main cash crops are sugarcane, potato, tobacco, oilseeds, onion, chilies, jute and mesta.

During the first 5 years after separation of Jharkhand in 2000, the economy had grown at an annual rate of 4.42 percent at constant prices. The already stagnating economy of Bihar had become even more crippled after the bifurcation, thanks to the asymmetric distribution of resources between Jharkhand and present Bihar. However, the economy witnessed a turnaround due to policies pursued by the present state government and, as a result the economy grew at an annual rate of 11.36 percent during the period 2004-05 to 2010-11. This has been made possible by the fact that the investment pattern showed a massive upsurge. From a small average annual plan size of around ` 1200 crores during the 10th Plan (2002-2007), the annual plan size climbed to more than ` 15,000 crores during the 11th Plan period (2007-2012). The investment portfolio also changed and there was a massive stress on infrastructural development and social delivery system.

Bihar plays a very important role in Indian industry sector. After independence various large and heavy industries were set up in Bihar because of its tremendous natural resources and huge manpower base. In the core sector there are two integrated steel plants, namely Bokaro Steel Plant and Tata Iron and Steel. Apart from above two there are a number of secondary steel making units. The largest coal based sponge iron plant is located at Chandil. The largest rope making complex of Usha Martin Industries is also located at Ranchi. Ranchi is also famous for heavy engineering plant. Tata Engineering and Locomotive Company is located at Jamshedpur. India's largest diesel engine manufacturing plant located at Jamshedpur. There are fertilizer plant at Sindhri, Aluminium factory at Muri, copper complex at Ghatsils, Caustic Soda plant at Garhwa Road, oil refinery at Barauni, three fertilizer factories at Barauni, Cement plants at Banjari, Chaibasa, Jamshedpurand Mokama, wax factory, ceramic capacitors, smokeless coal, bulk drug and formulation, mineral processing at Hazipur, micronised mica papers at Koderma, Uranium complex at Jadugora, and zinc smeltor of Hindustan Zinc Limited.

The mineral base of this state is very rich. Particularly the Chotanagpur plateau is very mineral rich field. It has an extensive and high quality coal deposits. Iron ore and copper ore are also produced in Bihar. Bauxite, ore for aluminium is also found here. This state has a reserve of pyrites and mica. The other important mineral resources found in Bihar are - limestone, graphite, chromite, manganese, nickel, barytes, kyanite and sillimanite, bentonite etc.

Major thermal power stations are at Pataratu Thermal Power Station, Barauni Thermal Power Station, Muzaffarpur Thermal Power Station, and hydel power stations at Subarnarekha Hydel Power Project, Kosi Hydel Power Project, under the Bihar State Electricity Board and Kahalgaon Super Thermal Power Project under National Thermal Power Corporation(NTPC). Apart from these, Bihar receives its power share from Farakka Super Thermal Power Station and Talcher Super Thermal Power Station under NTPC, and Durgapur Thermal Power Station under DVC and Chukka Hydel Power Station under National Hydro-Electric Power Corporation.

Bihar is very well connected with railway network. Communication in the north Bihar through railway is slightly difficult as there is only one rail bridge on Mokamah. A few railway routes connecting important places like Muzaffarnagar- Samastipur- Barauni-Katihar and Muzaffarnagar-Chapra-Siwan have been converted into broad gauge. The important railway junctions are at Patna, Gaya, Muzaffarpur, Katihar, Samastipur etc. The river bridges one at Bhagalpur on river Ganga another one is at Rewaghat on Buri Gandak river is under construction.

In 2009-10, the Net State Domestic Product (NSDP) of Bihar was US$ 32.5 billion. The average NSDP growth rate between 2004-05 and 2009-10 was about 16.2 percent. Biharís per capita NSDP increased from US$ 172.6 in 2004-05 to US$ 340 in 2009-10. A robust secondary and tertiary sector has helped Bihar to increase its average per capita NSDP by around 14.5 percent between 2004-05 and 2009-10.

While Biharís per capita income at current prices remains relatively low, the impact of the strong growth process in the state is reflected when one compares it with the all-India average. In 2006-07, the Per Capita Income in Bihar (` 10,055) was 32.2 percent of the all-India average (` 31,198); but in 2009-10, this ratio had increased to 34.7 percent (` 16,119 for Bihar and ` 46,492 for India) compared to the all India average of 46492 in 2009-102. However, as is the case with most states in India, these figures mask regional disparities within the State.

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Page last modified: 24-10-2021 15:29:42 ZULU