Complete Notes on Major Changes in the Economy of Bihar – Post-Independence for BPSC and Other Competitive Exams in 2025
Economics- 8
Economy of Bihar
Bihar, located in eastern India, possesses a largely service-based economy despite a significant agricultural foundation. While still facing developmental challenges, the state has witnessed commendable economic growth in recent years.
Key sectors
- Services: This sector forms the largest contributor to Bihar’s economy, accounting for approximately 58.6% of its Gross State Domestic Product (GSDP).
- Industry: The industrial sector, including manufacturing and construction, contributes around 21.5% to the GSDP. Construction is a major driver within this sector. Rapidly expanding industries include food processing, dairy, sugar, and healthcare.
- Agriculture: Though its share in GSDP has declined, agriculture and allied sectors remain crucial, employing the largest portion of the workforce (around 76%). Major crops include rice, wheat, maize, pulses, and sugarcane. Bihar is a significant producer of vegetables, fruits, litchis, makhana, and honey.
However here we will focus on the “Major Changes in the Economy of Bihar – Post-Independence” in brief
- Agrarian Economy
- Low Industrial Base
- Heavy Dependence on Agriculture and Allied Activities
Major Changes in the Economy of Bihar – Post-Independence
Under: Economic Profile Post-1947
1. Agrarian Economy
Post-1947 Scenario:
- Dominated by agriculture: More than 80% of the population dependent on farming.
- Zamindari abolition (1950s): Land redistribution aimed at empowering small farmers but implementation remained weak.
- Agriculture remained subsistence-oriented, not market-driven.
Features of Agrarian Bihar:
- Small and fragmented landholdings.
- Low productivity and minimal mechanization.
- Heavy dependence on monsoons and traditional methods.
- Dominance of paddy, wheat, maize, and pulses in cropping pattern.
Land Reforms (attempted but partially successful):
- Bihar Land Reforms Act, 1950 abolished Zamindari.
- Land Ceiling Acts were introduced but evaded by landowners.
2. Low Industrial Base
Post-Independence Conditions:
- Bihar had rich mineral resources (coal, iron ore, bauxite), but industrial development was minimal.
- Lack of infrastructure, skilled labor, and political will hindered growth.
Post-Bifurcation (2000 onwards):
- Jharkhand carved out in 2000, taking away major mineral-rich areas.
- Remaining Bihar was left with limited industrial base.
Challenges to Industrialization:
- Poor power supply and road connectivity.
- Law and order issues (especially during 1980s–1990s).
- Low private investment.
- Weak policy implementation and bureaucratic hurdles.
Current Initiatives:
- Promotion of Food Processing, Textiles, Leather, Handicrafts, and IT parks.
- Industrial corridors and startup policies under consideration.
- However, Bihar still ranks low in per capita industrial output.
3. Heavy Dependence on Agriculture and Allied Activities
Occupational Structure:
- Around 70% of workforce engaged in agriculture and allied activities.
- Dairy, fisheries, animal husbandry supplement rural income.
Issues in Agriculture:
- Landlessness and marginal landholding.
- Low irrigation coverage (~60% area irrigated).
- Frequent floods (North Bihar) and droughts (South Bihar).
- Low crop diversification.
Crop Pattern:
- Kharif: Paddy, maize
- Rabi: Wheat, pulses, mustard
- Limited horticulture and cash crops
Recent Developments:
- Bihar Agricultural Roadmap (latest version: 2017–2022) focused on:
- Irrigation
- Seed replacement
- Farmer Producer Organizations (FPOs)
- Agricultural mechanization and extension
Allied Activities:
- Dairy sector has seen growth due to Sudha Dairy cooperative model.
- Fisheries and poultry have become major rural employment sources.
- Mushroom cultivation, bee-keeping, and organic farming are being promoted.
Summary of Key Challenges:
| Area | Challenges |
| Agriculture | Monsoon dependency, low productivity, land fragmentation |
| Industry | Low investment, weak infrastructure, post-bifurcation loss |
| Employment | High disguised unemployment in agriculture |
| Migration | High out-migration to other states for jobs (UP, Delhi, Maharashtra) |
Objective Questions
1. Which sector dominates Bihar’s economy post-Independence?
A) Industry
B) Services
C) Agriculture
D) Tourism
Answer: C
2. The Bihar Land Reforms Act was passed in which year?
A) 1947
B) 1950
C) 1962
D) 1975
Answer: B
3. The bifurcation of Bihar and Jharkhand took place in:
A) 1999
B) 2000
C) 2001
D) 2003
Answer: B
4. Which of the following is a major allied agricultural activity in Bihar?
A) Mining
B) Fishery
C) Textile manufacturing
D) Cement production
Answer: B
5. Which organization is responsible for dairy development in Bihar?
A) Amul
B) NAFED
C) Sudha (COMFED)
D) IRCTC
Answer: C
6. What percentage of Bihar’s workforce is engaged in agriculture and allied activities (approx)?
A) 30%
B) 45%
C) 70%
D) 90%
Answer: C
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