Bihar’s economy has a low single digit contribution to India’s GDP and election results have more political impact than economic impact. However, the State is expected to grow at double digit levels, outpacing India’s growth as it implements a development agenda.
The elected CM, Nitish Kumar, is inclined towards development and that will actually benefit the country as a whole. Hence, election results will have a more positive than negative impact on India’s economy, though a relatively small positive effect.
Bihar is located in the eastern part of India. The state is surrounded by Nepal in the north, West Bengal in the east, Uttar Pradesh in the west and Jharkhand in the south. The state enjoys a unique location specific advantage because of its proximity to the vast markets of eastern and northern India, access to ports such as Kolkata and Haldia and to raw material sources and mineral reserves from the neighbouring states.
The Gross State Domestic Product (GSDP) for Bihar for the year 2014-15 is reported at Rs.4022.83 billion (Current Prices) contributing 3.28% to the GDP of the Indian economy. The economy of the state is projected to grow at around 13.4% during the 12th Five-Year Plan. Bihar’s per capita GSDP increased from USD 195.8 in 2004-05 to USD 596.4 in 2014-15.
The per capita income of Bihar as reported in the year 2012-13 is Rs.28,774. The Rank in terms of the GDP contribution to the Indian economy stands at 14 among 33 States and Union Territories.
The Human Development Index (HDI) is a composite statistic of life expectancy, education, and per capita income indicators which for Bihar is calculated to be 0.367 with zero being the worst and 1 being the best in measure.
Bihar is one of the strongest agricultural states. The percentage of population employed in agricultural production in Bihar is around 80 per cent, which is much higher than the national average. It is the largest producer of vegetables and the second largest producer of fruits in India. Food processing, dairy, sugar, manufacturing and healthcare are some of the fast growing industries in the state.
The state enjoys a unique location specific advantage because of its proximity to the vast markets of eastern and northern India, access to ports such as Kolkata and Haldia and to raw material sources and mineral reserves from the neighbouring states. The state has a large base of cost effective industrial labour, making it an ideal destination for a wide range of industries.