Bihar: An Overview

Bihar, the ancient land of Buddha, has witnessed golden period of Indian history. The state with
its capital at Patna is situated on the bank of the river Ganga. The state as it is today has been
shaped from its partition from the province of Bengal and most recently after the separation of
the tribal southern region now called Jharkhand. The new environment driven by state policies,
increased foreign investment has brought about a huge change in the state environment which
had led to creation of more investment opportunities in the state of Bihar.
BIHAR FACT FILE
Area: 94,163.00 sq. kms
Population: 10,38,04,637 (All India Census 2011)
Capital: Patna
Literacy Rate: 63.82 per cent (73.39 per cent male literacy and 53.33 per cent female
literacy)
Religion: Hinduism, Islam, Christianity, Jainism, Buddhism
Languages: Bihari (Angika, Bajjika, Bhojpuri, Magahi, and Maithili), English, Hindi
Temperature: Summer season - 35-40 Celsius; Winter season 5-10 Celsius
Rainfall: Av. 120 cms
Major Industries: Agro-based, Tobacco, Power, Oil, Engineering, IT
Source: Government of Bihar

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Major Highlights of the State

As per the Indian government's Central Statistics Organisation, January 2010, between
the five-year period 200405 and 200809, Bihar's GDP grew by 11.03 per cent, which
has made Bihar as the second fastest growing economy in India.
As per the survey conducted by the Central Statistical Organisation (CSO) and National
Sample

Survey

Organisation,

under

Ministry

of

Statistics

and

Programme

Implementation (MOSPI), Bihar tracked a 14.80 per cent growth in factory output in
2007-08.
Bihar is the leading state in the production of fruits and vegetables in India and is the
largest producer of vegetables and second largest producer of fruits in the country.
The state also witnessed the largest growing mobile phone market in India and has
registered the maximum increase in annual telecom subscribers, marking a growth of
88.2 per cent in the fiscal 2007-08 as compared to the 51.1 per cent in 2006-07,
according to a government sourced research study.

Key Industries
The natural resources and policy incentives support the growth of the agro-based sector, which
accounts for around 50 per cent of large and medium scale industries in the state of Bihar.
There are 263 large and medium industries, a majority of which is located in Patna. The
unorganised sector accounts for around 65 per cent of the manufacturing output of the state;
unregistered units account for the balance.
Agriculture, Energy, IT, Health, Tourism, Transport, Education, are some of the potential sectors
in the state of Bihar that have been identified as major investment options.

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During the last 4 years, State Investment Promotion Board (SIPB) has approved 529 industrial
projects, with the investment involved of INR 2,53,942 crore and 275 food processing projects
with an investment of INR 3,884 crore.
In a bid to provide a major boost to the State Industrial Sector, the Industrial Incentive Policy2011, has been announced with the following features Stamp duty and registration fee waiver in lease/sale/transfer of land for setting up Units
VAT reimbursements @ 80 per cent of deposited amount for 10 years (max. 300 per
cent of capital investment)
Reimbursement of 50 per cent capital investment on plant & machinery for captive
power generation/Diesel generating set with no upper limit
25 per cent VAT reimbursement for existing industries for 5 years
The State Government has also initiated special scheme for integrated development of food
processing sector and setting up Food Parks. Highlights of these schemes are For SPV Grant up to 40 per cent of the project cost, subject to maximum INR 10 crore in
case of common cluster infrastructure
Up to 35 per cent of the project cost subject to maximum INR 5 crore in case of an
individual investor.
To be set up by a Special Purpose Vehicle (SPV), registered as a corporate body with 51
per cent equity of the private entrepreneurs while rest of the equity may be with state
government agencies, banks and financial institutions etc.

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Infrastructure Status
Land Availability
As per the Bihar Industrial Area Development Authority, the following is the land available for
use and in use as per current information available.

Land Details

Availability

No. of Industrial Areas

50 Nos.

Total acquired land

5,517.29 acres

Total allotted land

3,909.76 acres

Total No. of units

2,399

Total Vacant land

1,021.45 acres

Source: Department of Industries, Govt. Of Bihar

Physical Infrastructure

Infrastructure Type

Details

Improvement of National Highways

3,734 Kms

Improvement of State Highways

2,035 Kms

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Two lane construction work in newly declared

820 Kms

State Highways
Completion of Bridges (major-150 Nos.)

645 Nos.

Social Infrastructure
The infrastructure development status in the Health sector is as follows -

Infrastructure Type

Number Available

New District hospitals

11

New Sub divisional hospitals

45

New Primary Health Centers (PHC)

132

New Sub Health Centers (SHCs)

7,765

The infrastructure development status in the Education sector is as follows

Infrastructure Type

Number Available

Schools (Govt. & Aided)

71,855

Teachers (Including Aided)

344,588

Classrooms

279,575

Student Classroom Ratio

72

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Pupil Teacher Ratio

58

Separate Girls Toilet

31,664

Common Toilets

45,623

School Buildings

61,058

Drinking Water

63,748

Expenditure (SSA)

INR 335,135.91 crore

The state government has also taken up initiatives in the education sector of the state. Some of
the recent progressive works done by the state government of Bihar are Mukhyamantri Balak & Balika Cycle Yojana Started
Mukhyamantri Poshak Yojana Started
Samagra Vidyalaya Vikas Yojana for repairing of school buildings and play grounds
Mid day Meal for all Primary Schools
Mukhya Mantri Chatra-vritti Yojana started
Saikshanik Parivramahan Yojana started
E-Samarth Scheme launched
Anusuchit jaati / Janjaati Medha - vritti Yojana
Alpa sankhyak Veedyarthi protsahan Yojana
Mukhyamantri Nishaktjan siksha Rin Yojana
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Uthaan Kendra Opened for Maha-dalit Children

Key PPP Projects
The State undertakes various projects under Public Private Partnership to boost
industrialisation and infrastructure in the state.
Please click on the following link for the PPP projects in the state of Bihar.
Industrial Clusters
Patna

Trade in Agricultural commodities , Manufacturing

Tirhut

Food & Beverage, Manufacturing

Muzzarfarpur

Cloth, Fruits

Barauni

Refinery

Bhagalpur

Silk, Agricultural commodity, Cloth, Sugar, Wool

Gaya

Weaving, Tourism

Special Economic Zones (SEZs)

The Government of Bihar has taken a policy decision not to set up SEZs in Bihar. The reason is
the socioeconomic conditions specific to Bihar. The ownership of most rural land in Bihar is still
in the hands of farmers and peasants of the state and their interests would be directly hurt if
land for SEZs is acquired in Bihar.

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Special Facilities for NRIs / PIOs

The Bihar Foundation has been set up to help connect people of Bihar origin in different parts
of the world to the land of their ancestors and preserve their ancestral language, Bhojpuri.
State Policies & Incentives of the State
The main highlights of the state of Bihar are:
The policy identified nine thrust areas food processing, agro-based industries,
tourism, super specialty hospitals, IT, technical and high education, electronics,
hardware and non-conventional sources of energy.
The government assures it would try its best to make land available to the
entrepreneurs.
The state has made available Rs 1,500 crore to the authorities concerned for
strengthening the land bank.
The new policy provides for a subsidy grant of 50 per cent for setting up captive power
plants. The amount of grant/subsidy would go up to 60 per cent if any unit decides to
set up non-conventional sources of energy for captive use.
Entrepreneurs would not have to pay any stamp duty for land registration when setting
up a new industrial unit or carrying out expansion to existing units.
The policy will provide a capital subsidy of about Rs 5 crore to those making less than Rs
500 crore of investments whereas Rs 30 crore would be given as capital subsidy to
industrial units that invest Rs 500 crore or above.
According to the scheme if any industrial unit follows government reservation policy, it
would get 10 per cent additional funds.
The government would provide special incentive to entrepreneurs from Scheduled
Castes or Scheduled Tribes. Women and the disabled would also get similar benefits. For
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these categories, 100 per cent VAT would be reimbursed if their turnover crosses Rs 30
lakh per annum.
Investment subsidies for NRIs
The state of Bihar is focusing its efforts to ease out norms and procedures for setting up and
operating the industrial units in the state. The State government plans to launch the Single
Window System for granting speedy approvals for setting up industrial units through foreign
investments. Additionally, the state government has offered incentive packages in the form of
various tax concessions, capital and interest subsidies, reduced power tariff, etc. to attract
foreign funds in the region.
Incentives for NRIs
The Bihar Foundation is one of the major organizations in the state that undertakes efforts to promote
Bihar a preferred investment destination, branding it as Indias New Investment Destination. The
initiatives taken by the foundation aim to create conditions, partnerships and institutions that will best
enable Bihar to connect with its Diaspora comprehensively. In a bid to attract foreign investment

into the state, Bihar Foundation is organising the two-day global meet of Non Resident Biharis
(NRBs) on Feb 18-19, 2012 with the aim to attract Non-Resident Biharis (NRBs) from across the
world and share their views on the state and its development. NRIs from Bihar who have been
successful in their respective fields are invited to the event to share their experience and be a
part in the growth story of the Indian state with the highest growth rate of 14.15 per cent.
Availability of Finance for NRIs
Bihar Government in the recent past has been focusing on improving the law and order
situation, and subsequently using the climate of relative peace and safety to attract
investments. Further, the state government is also stressing on the agenda of inclusive growth
which is manifested in the form of welfare schemes reaching out to most sections of society.
Bihar Deputy Chief Minister Sushil Kumar Modi said the government had made a huge
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turnaround in the State, which was now growing at 11 per cent. He said the government had
improved the law and order situation to a great extent.
Meanwhile, Deputy Chairman of Bihar Legislative Council Saleem Perwez, advised NRIs to invest
in Bihar and contribute to its development. He also said the state government would provide
adequate facilities to enable NRIs to start small-scale industries.

Business Opportunity
Single Window
The State Government has introduced the Single Window Act for speedy implementation of
industrial and other projects in the State, which provides single point clearances to promoters
and ensures early commercial production of projects. The aim is to promote an all round
development of the state and industrial development and provide for an investor friendly
environment in the state of Bihar.
Special agencies to facilitate Industrialisation
Bihar Industrial Area Development Authority (BIADA)
The BIADA was constituted under the statutory provisions of the Bihar Industrial Area Development Act,
1974 with a mission to promote and assist industrialization and create awareness about the Industrial
Policy of the state as well as create an environment for the consistent growth of Industries in the state.
The principal objectives are:
To promote and develop infrastructure such as road, drainage, water and power in the industrial
area
To support entrepreneurs in setting up industries and provide assistance and incentives under
the Industrial Policy of the State.

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To disseminate information about the Industrial Policy and create an investor friendly
atmosphere in the state
Bihar State Financial Corporation (BSFC)
BSFC is a state level institution providing term lending facilities to entrepreneurs; it has been
restructured and strengthened to meet the growing needs of entrepreneurs; it also undertakes the
appraisal of projects coming up in the state with a view to raise money from the capital market. BSFC

was established in the year 1954 under SFC's Act, 1951 to promote Small and Medium Scale
Industries by way of providing financial assistance. Since then it is playing major role in growth
of tiny, small and medium industries.

Investment Opportunities
E- Districts
Government approved four districts namely Nalanda, Madhubani, Aurangabad and Gaya for eDistrict Project. e-District aims to deliver services through Common Facility Centre by
undertaking backend computerization of the various Govt. Departments.
IT Parks
Department of Information Technology, Government of Bihar is going to establish a State of the
Art IT Park in Bihar on Public Private Partnership model. The land would be provided to the
private sector participant on a Concession-cum-Lease basis for a period. IT Park will contain
plots with minimum lease area with the provision of all basic infrastructure facilities for
authorized industries for development of their own office facilities, training centre, campus
facility etc and common facilities. Government of Bihar has sanctioned a budget about 8.85
Crore for IT park.
Energy
In the energy sector for the state of Bihar, there are a number of PPP projects and joint
ventures coming up. Some of the latest Investments in the state are as follows

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Bihar power infrastructure company constituted as a joint venture between IL&FS and
BSEB
Kranti bijli Utpadan Nigam ltd. established as a joint venture between BSEB and NTPC
Installation of 1980 MW Nabinagar Thermal Power station as a joint venture between
BSEB, NTPC and GoB
For expansion scheme of BTPS , RS. 3067 crores approved in State Plan
Handloom and Jute Sector
There are a number of investment initiatives by the State government in the Handloom and
Jute sector.
Common Handloom Production Infrastructure at Bhagalpur - A Common Production
Facility with state of the art infrastructure for handloom being set up at Kahalgaon,
Bhagalpur in 25 acres of land, with an estimated capacity to employ 4000 individuals.
The total project cost of Rs. 24 Crores.
Jute Park at Purnea- This will be the first Jute Park of the country and the project cost is
Rs. 42 Crores
Health
In the health sector in Bihar, the state government has done a lot of investments. Some of
the investments carried on by the State government and other opportunities in the health
sector are as follows
Mobile medical unit service in 24 districts launched
Remaining 14 districts under process
PHCs established in all 534 blocks
Muskan ek aviyaan started for universal immunisation
Dial 1911 (toll free) for medical consultation and grievances re-addressable system
established
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108 life support ambulance service

102 ambulance service
Out sourcing of Hospital maintenance service on PPP mode
Bihar Rajya Jansankhya Parishad constituted under the chairmanship of CM
Bihar Medical services and infrastructure corporation established
Patient welfare committee & untied fund availability at all levels
Collaboration with Building construction department
3 New Medical colleges will be established at Nalanda, w. Champaran and Madhepura
Tourism
The Tourism sector in the state has undergone a sea change. The state government has
been actively investing in the state tourism to attract more tourists and open up more
investment related opportunities. Some of the initiatives taken up by the Bihar Government
are as follows Bihar Paryatan neeti formulated
Paryatan Suraksha Bal sanctioned
48 Seater A.C. Floating Restaurant on river Ganga
Hotel Management Institute Bodh Gaya and Food Craft Institute, Muzaffarpur
established
15 day river cruise on Ganga river under PPP mode in between Bhagalpur and Kolkata
Buddhist Conclave organized in collaboration with Ministry of Tourism, GoI in Nalanda
Buddha Smriti Park in Patna

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Sugar and Allied Sectors

Since the Sugarcane and the Allied industries form a major part of the state industrial sector
and contribute the largest portion to the state economy, the state government has taken up
new measures and initiatives to enhance the performance of the sector.
Proposed Financial Package for Setting up New Sugar Mills :
To reimburse Central Excise Duty on Sugar.
To reimburse Administrative Charges on Molasses.
To reimburse Purchase tax on Sugarcane.
To exempt Land Stamp Duty and Registration Fees.
To grant 10% Subsidy on capital investment or a maximum Rs. 10.00 Crores, whichever
is less.
Proposed Financial Package for Distillery and Ethanol :
To exempt Administrative Charges on Molasses.
To exempt Sales Tax (VAT).
To exempt Land Stamp duty and Registration Fees.
To grant 10% Subsidy on Capital Investment.
Proposed Financial Package for Co-Generation :
To exempt electricity Duty on Co generated Power.
To grant 10% Subsidy on Capital Investment.
To exempt Land Stamp duty and Registration Fees.
Transmission Line from factory to Grid Station to be laid by Electricity Board.
Investment opportunities in the Sugarcane and Allied sectors
New green field Sugar Mills
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Molasses based Alcohol and Commercial Spirit manufacture

Press Bud Based Organic manure
Expansion of Sugar Mills
Power generation
Baggasse based paper Manufacture

Key Policy Updates

Bihar Industrial Policy 2011
Bihar IT Policy 2011
For more information, please contact:
Department of Industries
Principal Secretary
Bailey Road, Vikas Bhawan
New Secretariat
Patna 800 015
Tel: +91 612 2215211
Email: idc_bihar@yahoo.co.in
Website: www.industries.bihar.nic.in
Bihar Industrial Area Development
Authority (BIADA)
Managing Director
Udyog Bhawan, 1st Floor
East Gandhi Maidan
Patna 800 004
Tel: +91 612 2302914 / 2302945
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Email: md@biadabihar.in
Website: www.biadabihar.in
Bihar Infrastructure Development Authority
Managing Director
Udyog Bhawan, First floor
East Gandhi Maidan
Patna 800 004
Tel: +91 612 2675914
Email: md@idabihar.com
Website : www.idabihar.com
Department of Energy
Principal Secretary
Seenchai Bhawan, Harding Road
Patna 800 015
Tel: +91 612 2217412
Email: energy-bih@nic.in
Website: www.energy.bih.nic.in
Department of Information Technology
Principal Secretary
Vidyut Bhawan, Bailey Road
Patna 800 001
Tel : +91 612 2545615
Email : prsec_it@bihar.gov.in
Website: www.biharonline.gov.in/it
Department of Tourism
Principal Secretary
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Old Secretariat
Patna 800 015
Tel:+91 612 2234194 / 2215531
Email:secy@tourismbihar.org
Website: www.tourismbihar.org
Department of Urban Development
Principal Secretary
Vikas Bhawan, Bailey Road
Patna 800 001
Tel: +91 612 2215580
Email: urbansec-bih@nic.in
Website: www.urban.bih.nic.in
Registrar of Companies
Maurya Lok Complex
Block A Western Wing 4th Floor Dak Bunglow Road
Patna 800001
Tel: +91 612 222172
Email: roc.patna@mca.gov.in
Website: www.mca.gov.in

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