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An economy waiting to take off: 5 sectors which can fuel the Bihar economic boom

Photo Credit: PTI

As Bihar prepares to head to the polls later this month, the state, like every other one in India, is facing a severe economic contraction made worse by a huge wave of reverse migration that has seen hundreds of thousands return to their native homes in search of safety and security. According to some reports, anywhere between 25 to 30 lakh migrant workers may have returned to Bihar, and as per CMIE data, the state’s unemployment rate rose as high as 46.6 per cent during April this year. 

Yet those statistics conceal the immense growth that the state has experienced over the last decade. In February this year, Bihar’s Deputy Chief Minister Sushil Kumar Modi announced that the state has experienced an average of 10 per cent growth over the last three years, markedly higher than that of the national average. 

Despite being a largely agrarian economy, the key drivers of growth have been air transport, trade and repair services, road transport and financial services. But the resource-rich state has several other sectors primed for greater investment. 

Food Processing

It is no secret that Bihar has a huge agricultural and animal production base providing an abundant supply of raw material capable of being processed for consumption. Yet, despite having these advantages, the level of food processing within the state remains disproportionately low. The scope for expansion is growing larger particularly within the context of rising incomes within the state, and changing lifestyles, both in the urban and rural areas. 

Leather

Bihar’s leather sector has huge potential for output growth, employment and export. As a foreign exchange earner, leather is one of India’s leading sectors. And Bihar benefits from having a huge raw material base (hides and skins), plenty of capable, cheap, skilled and semi-skilled labour, and a massive market for consumption. In recent years, the state government has redoubled its effort to develop the value-chain from raw material processing to the manufacturing of finished goods. 

Textiles

Textiles is one of the largest contributors to India’s GDP, and a vital employment generator for the country. And the state of Bihar is no exception. There is plenty of scope to develop textile units within the state along with other value-chain activities. 

The state is especially known for the production of silk. The district of Bhagalpur is a silk fabric manufacturing hub. The Tassar silk produced here fetches premium prices across the country. As of 2014-2015, the state was producing approximately 60 tonnes of silk yearly. 

Bihar is also home to over one lakh weavers who depend exclusively on garment and fabric manufacturing for their livelihoods. The strong weaver community within the state – most of whom are young – means that there is ample opportunity to develop the sector further. 

IT

The IT industry has been experiencing a boom, and its critical importance across nearly every kind of business means that it is only going to continue to expand. Growth in the IT sector spurs all-round economic growth be it via core industries like agriculture, education, healthcare, energy, tourism, textiles or telecommunication. But the sector is yet to gather pace in Bihar despite the presence of a large educated and youthful population. 

Healthcare

The COVID-19 outbreak has exposed the grave limitations of India’s healthcare infrastructure. Bihar in particular, has suffered from a chronic lack of investment and resources into its healthcare sector. The Centre’s introduction of the National Rural Health Mission (NRHM) 15 years ago managed to infuse some critical resources into the state’s healthcare system leading to improvements in primary healthcare delivery, and infant, child and maternal mortality but since then, there has been no concerted focus to continue to develop it. 

The government’s flagship programme, Ayushman Bharat – Pradhan Mantri Jan Arogya Yojana – has, in the view of some experts, failed to gain much traction within the state as well. As such, there remains an urgent need to identify where the weaknesses and deficiencies in the state’s healthcare system lie and respond to them quickly. A resilient healthcare system will have multiplier effects on the overall health of the state’s economy. 

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