Where Bihar’s Economy Stands, Pg16.

Key Highlights:

• Bihar’s unemployment rate (PLFS 2024) stood at 5.2%, lower than the national average (5.4%), but its labour force participation rate (LFPR) is only 48.8%, among the lowest in India.
• 3.16 crore residents have registered on the e-Shram portal, indicating job distress.
• Bihar’s Gross State Domestic Product (GSDP) grew faster than the national average between 2021–24, yet per capita income remains among the lowest in India.
• The services sector’s share in GSDP has shrunk from 61.2% (2019–20) to 54.8% (2024–25), while agriculture and construction dominate.
• Poverty persists — the monthly per capita consumption expenditure in 2022–23 was ₹1,724, the lowest in India’s rural areas.

Detailed Insights:

• Growth vs Welfare Paradox:
  • While Bihar’s GDP growth (8.7% average in 2021–24) outpaces India’s (7.8%), the gains are not translating into improved living standards due to weak private investment and limited job creation.
  • Most employment is informal or low-productivity, concentrated in agriculture and construction.
• Fiscal Stress:
  • The 2025–26 Budget allocates ₹1.12 lakh crore to salaries, pensions, and interest payments—leaving little fiscal space for development expenditure.
  • The fiscal deficit is projected at 4.7% of GSDP, higher than the permitted 4% ceiling.
• Welfare and Populism:
  • Schemes like Mukhyamantri Udyami Yojana (₹10 lakh subsidy for entrepreneurs) and Kushal Yuva Program aim to address joblessness but suffer from low implementation.
  • The Rangrajan poverty line data show that despite welfare expansion, Bihar’s poverty reduction has stagnated.
• Sectoral Shifts:
  • The industrial base remains narrow, with limited manufacturing clusters.
  • Agriculture employs over 60% of the workforce but contributes less than 20% to GSDP.
• Future Outlook:
  • The government plans to expand small-scale industries and improve rural infrastructure, but private investment and credit availability remain weak.

Scientific/Technical Concepts Involved:

• Gross State Domestic Product (GSDP): Measures the total economic output of a state within a fiscal year.
• Labour Force Participation Rate (LFPR): Percentage of working-age population either employed or actively seeking work.
• Fiscal Deficit: The gap between a government’s total expenditure and total revenue (excluding borrowings).
• Per Capita Income: Indicator of average income earned per person; crucial for measuring regional disparities.