Bihar’s Economic Dilemma: What it can learn from some laggard states?

Agriculture and its allied activities remain the bedrock of Bihar’s economy, employing 54% of the state’s workforce depend and contributing 18% to state GDP. Yet there are seasonal issues ailing agriculture, primarily floods (north Bihar), droughts (south Bihar), and waterlogging, lack of power supply, and lack of irrigation and mechanisation in many areas. While some improvements are underway, the large number of small or marginal farmers operating on less than half a hectare of land remains a constraint. There is also the challenge of outward migration, with many young people leaving for other states due to lack of non-farm jobs at home.

 

Agricultural improvements therefore offer a foundation for rural incomes, but to make them sustainable requires greater valueaddition (food processing, agro-industries), better linkages to markets, more export orientation, and mechanisation. The livestock sector offers hope: both in the milk and poultry sub-segments, growth has been very significant. This can augment farmers’ incomes despite the small holding size constraint of land. There is scope for Bihar to leverage its horticulture, speciality crops (litchi, makhana, sugarcane) and build agroprocessing hubs. If non-farm employment remains stagnant, agriculture alone cannot be the growth engine. A structural transformation oriented towards industry and services remains critical. The 2025 elections are hence very important for Bihar: they could determine whether the state leans further into agriculture-led rural livelihoods or pushes more strongly into nonfarm industry/services. For farmers and rural voters, the key questions will be: “Will my farming income improve?”, “Will there be better non-farm jobs or agro-industries in my district?”, “Will infrastructure and resilience (to floods, climate) improve?” Politically, whichever side addresses agriculture and rural employment more convincingly will gain an edge.

 

The key question to look out for will be whether the ruling alliance is able to convert development and policy initiatives (especially for agriculture and rural jobs) into electoral support. Areas with frequent flood damage (North Bihar) or drought stress may swing depending on the credibility of the political
parties’ plans for disaster management, irrigation and drainage. The turnout of youth and women voters, and their verdict on how well their aspirations on jobs, non-farm opportunities and agricultural stability have been met will influence the outcome. Postelection, we will learn to what extent agriculture and rural policy are prioritised: e.g., whether more investment is forthcoming in agro-processing, market linkages, and mechanisation, and how the state handles structural employment shifts. This AFTAB issue looks at all these topics closely. I hope that policymakers find its suggestions useful for transforming Bihar’s agriculture and changing the fortunes of its people.