WHY BIHAR IS POOR | WHY THERE IS NO INDUSTRY IN BIHAR

This question has arrived in every educated bihari outside the state. There are multiple regions behind it I am going to accumulate all the major regions in one article. you will not need to know about this topic after this.

Okay !! An Industrialist here. I would like to bring to light those hidden factors why Bihar lacks industries. I request my readers please read this answer it will certainly open your eyes on many unseen things happening in Bihar.

First of all lets analyze what kind of industries may blossom over here. We find its mostly food processing or agri based industries. In year 2000 all our mineral and coal mines areas where cut away from us due to some foolish ambition of then CM. What we were left with is also very good. We have most fertile lands, sands from rivers etc. And fools who never thought it as an opportunity or opportunity in different way.

On road to industrialization we have secured few good amenities like electricity and road connectivity.

But, electricity dept. is suffering terribly due losses it face every year. Electrifying villages meant almost free supplies of electricity in villages. This mismanagement has put a lot of pressure on urban and industrial electricity supply. Due to which they has been continuous hikes in electricity bills.

As per 2011 industrial policy in bihar, food Industries were to enjoy lots of benefits . Like almost free electricity for 5 years from date of commencement, 80% refund on VAT deposits , no charge . 35% capital subsidy. No charges on company registrations fees project reports etc.

In above paragraph I gave a basic picture of benefits an industrialists should've enjoyed. Even though the scheme started pretty well and lots of enthusiasts welcomed it. Interested people got into it mortgaging all their properties, homes, gold and whatever they could. Had the scheme been well implemented Bihar would have seen a kind of industrial revolutions of its own.

Now, readers might want to know what went wrong . What went wrong is greed, vote insecurities, that took over government and concerned officers. The scheme was centrally funded, though centrally funded it was state government job to monitor and control the scheme proceedings. There is a god level corruption in industry department and chief secretary is puppet of CM. What CM projects himself as a kind of Messiah to Bihar is all rubbish and mostly surfacial. All he cares about is his image he can kill some one for that. In treachery he surpasses even levels of Mr. Lalu .

Almost 100% of industries didn't get electricity incentive that they were entitled to. Almost 95% of industries didn't get their 100% capital subsidies and whatever they got were not in due time.due to this their loan burdens increased exponentially. And today almost all industries which Incorporated to 2011 or other scheme suffered NPA atleast once and even surviving industries are somehow managing. In 2011 industrial scheme even industries with NPA were to be given benefits as per their conditions. Mr. Nitish hasn't even secured proper markets for finished goods.

Most of the goverment offices are corrupt and unless you have some sort of influence you are not getting what you deserve they simply delay the process to extent that damage becomes inevitable. Commercial dept. Fire dpt. Electricity dept. Pollution dept. Name it it's all the same. Tackling these depts To obtain licences is one big headache they are mostly not favourable or if they are favorable they have set a price for it,which is still better.

What Nitish government is doing seems to be doing is criminalizing industrialist for no good reason. He is one big pain in ass. He hasn't really contributed anything to Bihar. What he has done kept illusions of development alive. He is less of politician and more a sorcerer.

Now, after all these things I would like to share with my readers the biggest scam running happily in India and no body is concerned about it.

Do you know why people in Bihar are poor. Let me elaborate you, because this is what governments wants. Yes, if poverty is reduced poverty based schemes would reduce and if poverty based schemes would reduce they won't have much options to loot taxpayers fund.

Now, about the scam. SFC,FCI, PACs system is biggest scam running in our country and no one is concerned about it.

Just for a thought,

1. Go ask any SFC official since when they didn't get their salaries they would say oh, like 5–12 months. Still they aren't even complaining why?
2. When we have better food industries why Bihar is still purchasing grains from Haryana and Punjab.?
3. When an established food processing unit can out perform any PACS system any day why do we need one.
4. Why government is not making food industries as nodal agencies as simple as that they are better equipped than their nonsensical PACs system.?
5. Why government like in any other states doesn't buy rice from its rice Millers?Like Up, Punjab etc. They purchase food grains directly from their food industries.

Like these there are 100s of unanswered such questions. What is really happening here.

Bihar government purchases rice(arwa mansoori) from punjab. Punjab millers purchase mansoori paddy from Bihar, (why ? Because Bihar industries are suffering due to idiotic procurement policy of government.)Punjab Millers also purchase arwa mansoori at very low cost from Bihar.Infact most of Punjab rice mill is running due to Bihar paddy and rice.Punjab Miller sell arwa mansoori to FCI at higher rate. Now, due to low procurement and government idiocies Bihar government purchases rice from Punjab. Rice they purchase from outside and through PACs is sent to PDS(public distribution system). Now, in Bihar there are very few so called garib who buys rice through PDS(mostly because it's not edible) . Now, taking advantage of this situation PDS distributors sell paddy and wheat at a minimal price(this is illegal process but everyone from officials to politicians is involved), to mostly rice millers or traders. Either way it's again sold to Punjab or other states where government directly purchase grains from food industries. Thus, the rice becomes a medium of dark business, it makes rounds and rounds till it becomes not edible and then it is either auctioned or sold to some beverage company in Assam or chattisgarh or Jharkhand etc.Good thing from government POV is that it's 100% in control of government. They make unnecessary changes here and there just to proove their mettle.

I would really love to share about SFC and PACs system but then I will have to write one whole book on their methods of corruption. In brief just know that PACs purchase crops from farmers, and if it is processable they process it through food processing units at an laughable processing costs and deposit it at SFC(State food corporation )godowns, from there it's sent to PDS godowns .

What I inferred in all these years is the heart wrenching events

1. Government hasn't strengthened it's food industries which could economically enhance Bihar condition.
2. Government purposely is trying to screw agri based industries.
3. Government surfacial development is nothing but an illusion.
4. Caste based diversification is on rampant and is a trademark tool to fool people of Bihar. It is so deeply rooted that one has to take calculated steps for anything.
5. Government has successfully disillusioned people of Bihar as well as outsiders.
6. Bihar can grow much better quality crops given proper circumstances. Infact Bihar rice is on demand in international market.
7. Government is happily funding PACs while most of industries incentives are dues.
8. Government is funding PACs to establish much lower quality of rice mills and this is most ridiculous thing while much better pvt. Industries are denied of their incentives rights.

Looking into other answers I don't find anyone touching these current facts while it's a sad reality! Please, people of Bihar awaken from this slumber. Bihar is much better than what they portray us.

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There is a lot of debate is going these days about Bihar. Lots of Bihari people demanding industries and jobs in Bihar.

All these debates and demands started after seeing the problem of migrant workers. There are more than 28 lac Bihari people who are living in different states. Most of them work as daily wage laborers.

So here I just want to discuss some points like Is really Bihar lack in industries??

And if there is a lack of industry then who is responsible for this?

So first we discuss what is the position of Bihar in the industry?

When we look at number factories it will be hard that you will find anyone factories that have more 1000 laborers working capacity.

Bihar is one of the strongest agricultural states in India and 74% of the state's population is engaged in the sector.

Bihar is 5th most producing state of sugarcane. Still, we have only 29 sugar mills, and most interesting is in a list of 29 only 9 of them is running.

Bihar produced large amounts of lychee, mangoes, and other fruits but still, there is no big food processing unit in the state.

We produced Bamboo in a larger amount but still sending them to other states for operational purposes.

When we look at IT Company their there are not the single head offices of national and multinational companies.

TCS opened his first branch here but it is or his call center office not as development unit.

So now it is clear that Bihar lack in industry.

Who is responsible for this:

It will be harsh to blame the current government for this. They are doing there best for establishing industry in the state.

There are now developing more than 50 industrial areas and industrial mega parks. They are giving high priority to Agriculture, IT, and textiles. So it's show's they are working on this.

But this is also true that they got more than 15 years but still, they do not get bigger success in establishing industries. Nitish Kumar government works well in making roads and providing electricity but they need more to work on this.

The reason for which Bihar's lack in the industry is the previous government. Mainly the Lalu Yadav government.

In 1991, when Dr. Manmohan Singh was a finance minister and he gave a new theory of Globalization and liberalization after which each state and the central government started to send invitations to other industrialists for setting up factories in their states.

The government of Bihar was busy in playing caste politics. Many scams were found in these times. But still, that government was able to get three more terms.

Lalu Yadav government was not able to set any single plants in the state. Due to the poor performance of his government crime increased in the state.

Kidnapping and extortion become an industry in which Bihar people are not able to go outside the home after 7.

All these create a negative image of Bihar so industrialist fears to open plants in the state.

Other reasons:

• The division of states also increases this problem. In the year 2000 all our mineral and coal mines areas were cut away from us and given to Jharkhand. Only Mica is found in Bihar in large amounts.
• And there is also some bad mentality of Bihari people that they do not want to work in their own villages. If someone asks anyone to work as guards then he will refuse it. But when he got outside he is doing the same kind of job. so these need to be improved.

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I am from Bihar. We are not only poor, we also lack the progressive culture.

In our culture, there is an acceptance for corruption and nepotism. When someone wants to grow, there are 10 other people who want to pull him down. This is a general trait of a poor region. A kind of culture of poverty.

How did we reach here?

The last 10 centuries have been unkind to the state.

Throughout the medieval periods, Bihar was ruled from the outside. Pala and Sena dynasties ruled it from Bengal. Mughals ruled it from Delhi. For a brief period, a Bihari sat on the Delhi throne - Sher Shah!. Patna was revived by him. But soon he fell down to an accident.

In the mean time, centers of culture like Nalanda university were burnt down while Vikramshila university died out of lack of focus and funding.

Amid all this, Bihar did not lose its economy. By the 17th century, Bihar had a flourishing textile industry. Then came the Britishers and changed the whole game.

The economy shifted to port cities which Bihar had none. While the home grown textile industry was destroyed by the policies of Colonialism and mercantilism.

More misfortune was to come as Bihar and Bengal were the first to fall down to the British rule in 1764. The loot and plunder started here way before in any other state.

While British looted the state, they let loose another set of economic goons - The Zamindars. Zamindars would own most of the land. They would sit idle and do nothing of economic value but live a luxurious life. Zamindari destroyed the morals and values of the society. It created a culture of rent seeking and nepotism. Hard work was seen as a trait of the poor and thus a matter of shame. Its legacy hurts Bihar even today, in many ways than you can imagine.

The hard working Bihari that you see today, does not work hard in his own state. It is only when he goes outside the state, that he is able to leave his cultural baggage of rent seeking and laziness.

As a result of all this, Bihar was already lagging behind most states by 1947. Yet its future was bright. Modern Indian economy was to be based on industries and Bihar had one thing that held it in advantage. It had minerals - coal and iron.

The first steel plant was set up in Bihar by the Tatas. More were coming.

But the misfortune continued as the government adopted the policy of freight equalization. With this, minerals from Bihar could be loaded to anywhere in India almost free of cost. The one thing that Bihar had, was also neutralized.

This policy continued till the 1990s. Then it was called off and Bihar was about to benefit. But then, the state got divided, lost its mineral parts to the new state of Jharkhand.

For all these years, Biharis never cried of foul play. The thought that their state could be discriminated never came to their minds. Because Biharis lacked sub-nationalism! - That special feeling for the state.

In fact, Bihari identity is not a self made identity. It was given to us by the others. When Bihar became the butt of jokes, when outsiders started making fun of the state, it was then that Biharis realized their separate existence from the rest of India.

This was also natural. Unlike Maharashtra, Punjab, or Bengal, Bihar lacked regional movements in the recent history. Maharashtra had Shivaji, Punjab had Ranjeet Singh, Bengal had its own resurgence in art and culture. Bihar had none. The ancient past was glorious, but it is all but forgotten. It is not only so distant in the memory lane, it has already been appropriated by the whole of India. Today, the names of Budha, Jaina and Ashoka do not evoke the image of Bihar as the name of Shivaji would do to his state. Biharis do not associate themselves with any particular figure or image. As such Bihari identity is weak, and so is the sub-nationalism.

The Punjabis, the Bengalis, the Marathis would bargain hard from the center. There would always be a tension between the center and the state and a sense of competition. Bihar lacked this. In fact in Bihar, regionalism was looked down upon as an idea.

Final blow to Bihar was the emergence of caste politics. Years of Zamindari and lack of land reforms had made Bihar a feudal society where the few among the upper castes owned all of land. Together they controlled the power, politics and economy. Caste discrimination was maximum. Politics of social justice started as a repercussion. It started in 1970s, and reached a crescendo in 1990s. Lower castes started to replace upper castes in power politics. In the 90s, when all other states were busy plucking the fruits of liberalization and foreign investment, Bihar was in a socio-political termoil. Lower castes were too happy to gain their share of the pie, so much, that they were ready to condone all forms of misgovernance. Development became a secondary consideration.

Today, there is a realization sweeping in Bihar that caste politics has held them down. That they need to develop and catchup with the rest of India. Today, all parties talk of development. Some serious, some not so serious, But they talk!

With this realization, there lies a ray of hope!

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• Bihar has no mineral wealth and it is mainly dependent on agricultural. The land of Bihar is very fertile and it is very suitable for agricultural based industries.
• Bihar has hardly any heavy industries (except power plants). Before liberalization Bihar did get a fair share of heavy industries. But all the industries were based in Southern Bihar (which went to Jharkhand).
• The decline of Bihar has started in 80s under Congress rule and Lalu accelerated the decline of Bihar. Bihar missed the bus after liberalization due to poor governance and law & order.
• Generally industrial growth happens in clusters. Now Bihar has a few industries and this is the biggest factor in attracting investments.
• The environment of Bihar is also not very industry friendly. The attitude of government and people also hinders the growth. Criminals would demand cut money from industries.

Bihar needs the fundamental change for attracting industries. A great “change” is needed to break the current way of equilibrium.

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Mr. X wishes to invest in Bihar. OK. Let's go & get various permissions from state secretariat about land, electricity, water, labour, import, export etc. Mr. X see only fatty chairwarming Babus whos pen won't move until money refill is refilled. But but but, how can you get permissions from babus when their daddy controls everything in ministry. Mr. X reaches bungalow of Mantri ji. Mantri ji gets money in lunch. Babus get money in evening snacks and Mr. X successful get all permissions. This happens in all states in India.

All good. Let's go and aquire land. You paid all the governt fixed rates and started working on aquired land. Suddenly, president of farmer union appears from nowhere and next day 20–100 people are sitting on dharna calling governt capitalist and Mr. X is declared a looter. Mr. X knows how to move forward. Farmer union president is happy with fresh money in account. This also happens in many Indian states but not all.

All good. Construction completes. Ruling party Mantriji inaugurates X industries limited. Election arrives. Politicians, Mantriji, local MLA, MP all need money. Who provides the 💰? Mr. X.

Elections done. If same party continues all OK. If new party comes, Mr. X returns to new Mantriji. Money again flows to Babus and politicians. All good.

Mr. X has to live under boots of Mantri, Babus, MLA, MP, labour union president and all nasty local gunda gang continuously.

This is story of not only Bihar but West Bengal, Kerala, Jharkhand, Orrisa, Chattisgarh. No localized industries except governt PSUs and big market leaders. Wherever state parties with socialism or communism as ideology comes in power, that state cannot expect industrial development.

Mr. X has better option to invest in Gujarat, Maharastra, Western UP, Delhi NCR, Haryana than anti-industry states. That's why private industries in India are concentrated in “Capitalist States” rather than Socialist or communist states.

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It is the people of UP and Bihar who has to bear the responsibility of their poverty and backwardness.

The people of these states have a history of electing casteist, corrupt, communal and criminal leaders in elections.

The people of these two states are highly divided on the basis of caste and religion even in their day to day life.

These two states are, only great in playing politics and they dominate Indian politics like no other state since Independence.

Due to poor law and order situation, pathetic infrastructure and widespread corruption, hardly any businessman or investor wishes to invest in these two states.

The total number of business and industries in the entire states of UP and Bihar put together would be less than the business and industries in a single city like Chennai or Mumbai.

As a result, the people from these two states don’t get jobs in their own states and they have to migrate to other states in search of jobs.

However, neither the people nor the politicians have learned any lessons in these states.

They must take a tour of the developed states of India like Maharashtra, Gujarat, Tamil Nadu and Karnataka to learn how they developed despite having lesser natural resource.

If UP and Bihar have to ever become a developed state by even Indian standard, they must stop playing politics, create social harmony and take the responsibility of their state rather than blaming other states or always looking for assistance from Central government to develop themselves.

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My answer might not satisfy you but still i will try hard to make you understand.

Bihar is a state that is very hard to understand on any perspective.

If you talk about eductaion, Bihar's literacy rate is just 69.83% making it one of the least educated states in India but every year state becomes the headline of producing tens of UPSC toppers or IIT toppers.

If you talk about infrastructure, I think in last 16 years (Nitish Kumar's period) the only devlopment in Bihar was about, everyone agrees on this point, building roads, Bridges, flyovers, ring roads and local roads etc.

Hospitals and Universities are not up to the mark except few.

Although in order to promote education he launched some schemes such as giving away cycles so students can easily commute frome home to the school especially if he lives far from the school.

After completing 10th and 12th he offered scholarship for those who passed by A grade.

If you talk about politics, currently Bihar is in a safer hand because I dont think that anyone has similar caliber than that of Nitish Kumar, Neither in opposition nor in entire Bihar's political arena.

I'm not saying he is the best but probably one of the best in the given scenario.

I just want to say that Bihar is not engulf in a political problem, at least now, that a lot of people think.

Bihar has been suffering from social problems -

Castism, uncivilized people( even the rich people) and corruption these are name of a few.

◆OPINION◆

In my opinion Bihar is not a suitable state for democracy at all because democracy is by the people, for the people, of the people. But if the people are assholes then the democracy is by the assholes, for the assholes, of the assholes.

He is the product of democracy -

Anant kumar singh, Google it for more information.

Or at least impose union rule in Bihar for 20 years by making it a union territory.

No election for 20 years.

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Bihar has the most fertile land in India.

Secondly, till a century ago, when there weren't manufacturing, IT and other sectors, agriculture was the main stay of the economy, Bihar contributed the most owing to the most fertile and arable land.

The very same region, whey India and China has almost 50% population of entire world. Because they have 50% of the most fertile and arable land in world.

Yes, now this population has become a bane for Bihar owing to bipartisan attitude of the Union government. Bihar was one of the most developed and industrialized state of India after independence. Freight Equalization Policy in 1960's robbed the then developed states like Bihar, West Bengal, Madhya Pradesh. And other states developed on their cost. I remember my father telling me their village had electricity in 1960's and irrigation facilities then. When I was born in 1985, all I could see was dilapidated electric poles, and defunct irrigation canals. Raxaul or Dalmianagar once a thriving business center and town of India, is a ghost town since 1970's. Marhaura had a sugar and alcohol industry, iron factory, Morton factory, Arms factory, Union government moved it out all by the time I was born.

Moreover, the Union Govt gave very less funds to Bihar than other states every year. Infact, Delhi which might be the size of a district in Bihar receives thrice to four times the fund Bihar receives. Be it per person wise, or in general. Central's spending on Bihar has been negligible. Union government set up educational, research, technological, defence institutions of repute in different states, and industries in every other places other than Bihar. Just because And at the same time, it took away reputed institutes from Bihar like Pusa University to Delhi.

Every year out of 40 districts, 28 district face drought, 12 faces flood. Kosi's fury cannot be tamed by Bihar, because it involves two nation. Despite several requests by Bihar, Union Government plays no role in trying to build a proper dam or barrage. We are at the mercy of Dam in Nepal. This aspect is beyond the realm of your question, but have added to let you know of a condition where a farmer puts in everything he has for one crop, and ultimately his house, his cattles, his crop, his savings everything goes away, and since he has no other training he ends up as a labourer in Punjab or a rickshaw puller in Delhi, or as a milkman in Mumbai. Next time one abuses a Bihari, think of the abuses India as a nation has inflicted on Bihar.

THE ECONOMIC STRANGULATION OF BIHAR!
The Prime Minister yesterday announced a Rs.50,000 crores package for Bihar. Just as he announced a Rs.100,000 crores package for J&K on July 12. The first question one must ask is why twice as much for J&K than over India's most poor and backward state? Bihar has a population of over 103 million andJ&K has a population of 12.5 million.
This is not a new story. Bihar has been systematically exploited by denying it its rightful and deserved share of central funds from the First Plan.
That Bihar is India's poorest and most backward state is undeniable. The facts speak for themselves. But what makes its situation truly unique is that Bihar is the only state in India where the incidence of poverty is uniformly at the highest level (46-70%) in all the sub-regions. The annual real per capita income of Bihar of Rs. 3650 is about a third of the national average of Rs.11, 625. Bihar is also the only Indian state where the majority of the population - 52.47% - is illiterate.
But Bihar has its bright spots also. Its infant mortality rate is 62 per 1000, which is below the national average of 66 per 1000. But what is interesting is that it is better than not just states like UP (83) and Orissa (91), but better than even states like AP and Haryana (both 66). Even in terms of life expectancy, the average Bihari male lives a year longer (63.6 yrs.) than the average Indian male (62.4 yrs) and the state's performance in increasing life spans has been better than most during the past three years. Bihar has 7.04 mn. hectares under agriculture and its yield of 1679 kgs. per hectare, while less than the national average of 1739 kgs. per hectare is better than that of six other states, which include some big agricultural states like Karnataka and Maharashtra. Despite this, in overall socio-economic terms, Bihar is quite clearly in a terrible shape.
As opposed to an All-India per capita developmental expenditure during the last three years of Rs.7935.00, Bihar's is less than half at Rs.3633.00. While development expenditure depends on a bunch of factors including a state's contribution to the national exchequer, no logic can explain away the per capita Tenth Plan size, which at Rs. 2533.80 is less than a third of that of states like Gujarat (Rs.9289.10), Karnataka (Rs.8260.00) and Punjab (Rs.7681.20).
Simple but sound economic logic tells us that when a region is falling behind, not just behind but well behind, it calls for a greater degree of investment in its progress and development. It is analogous to giving a weak or sick child in the family better nutrition and greater attention. Only in the animal kingdom do we see survival of the fittest with the weak and infirm neglected, deprived and even killed. But instead of this we see that Bihar is being systematically denied, let alone the additional assistance its economic and social condition deserves, but also what is its rightful due.
From the pitiful per capita investment in Bihar, it is obvious that the Central Government has been systematically starving Bihar out of funds. Quite obviously Bihar has also paid the price for being politically out of sync with the central government for long periods. The last one was for a dozen years from 1992 to 2004. For the last one year Bihar had a government in New Delhi that was supposed to be favorably disposed to the regime in Patna. Now it is out of sync again.
Quite clearly states that are in political sync do much better in terms of central assistance. Lets take a look at how Andhra Pradesh, a state that has stayed largely in political sync with New Delhi, has fared in the past few years. In terms of grants from the Central Government (2000 to 2005), Bihar fared poorly receiving only Rs. 10833.00 crores while AP got Rs. 15542.00 crores. Bihar has also been neglected as far as net loans from the center are concerned. It received just Rs.2849.60 as against Rs.6902.20 received by AP from 2000-02. It's only in terms of per capita share of central taxes do we see Bihar getting its due. This gross neglect by the central government is reflected in the low per capita central assistance (additional assistance, grants and net loans from the center) received by Bihar in 2001. While AP received Rs.625.60 per capita, Bihar got a paltry Rs.276.70.
The results of the economic strangulation of Bihar can be seen in the abysmally low investments possible in the state government's four major development thrusts. Bihar's per capita spending on Roads is Rs.44.60, which is just 38% of the national average, which is Rs.117.80. Similarly for Irrigation and Flood Control Bihar spends just Rs.104.40 on a per capita basis as opposed to the national average of Rs.199.20.
Now the question of how much did Bihar "forego"? If Bihar got just the All-India per capita average, it would have got Rs. 48,216.66 crores for the 10th Five Year Plan instead of the Rs.21,000.00 crores it has been allocated. This trend was established in the very first five-year plan and the cumulative shortfall now would be in excess of Rs. 80,000.00 crores. That’s a huge handicap now to surmount. Then it would have got Rs. 44,830 crores as credit from banks instead of the Rs. 5635.76 crores it actually got, if it were to get the benefit of the prevalent national credit/deposit ratio.
Similarly Bihar received a pittance from the financial institutions, a mere Rs.551.60 per capita, as opposed to the national average of Rs.4828.80 per capita. This could presumably be explained away by the fact that Bihar now witnesses hardly any industrial activity. But no excuses can be made for the low investment by NABARD. On a cumulative per capita basis (2000 to 2002) Bihar received just Rs.119.00 from NABARD as against Rs.164.80 by AP and Rs.306.30 by Punjab. It can be nobody's argument that there is no farming in Bihar. If the financial institutions were to invest in Bihar at the national per capita average, the state would have got Rs.40, 020.51 crores as investment instead of just Rs.4571.59 crores that it actually received.
Quite clearly Bihar is not only being denied its due share, but there is a flight of capital from Bihar, India's poorest and most backward state. This is a cruel paradox indeed. The cycle then becomes vicious. This capital finances economic activity in other regions, leading to a higher cycle of taxation and consequent injection of greater central government assistance there. If one used harsher language one can even say that Bihar is being systematically exploited, and destroyed by denying it its rightful share of central funds.
To even make a dent on the abysmal state that Bihar is now in, Bihar will need at least twice what it gets from the Centre, as of yesterday.
-Mohan Guruswamy, renowned scholar, financial expert

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Bihar is a state which has rich heritage and past. It's name was Magadha. It was kingdom of Chandragupta Maurya. Vision of India as united country started from here by Vishnugupta Chanakya. Mahatma Gandhi started his freedom struggle from champaran. At present bihar produces maximum number of civil servants. But these facts don't govern the present state of bihar. It Lacks Development. Bihar is a victim of caste based politics. In this state caste based politics always dominate the development based politics. Here I am going to explain some points why bihar is considered as backward state and lacks industries and infrastructure.

• Geographical Disadvantage-:

It is a land locked state. Locked from all sides. It has no sea ports. So it never get any advantage of heavy revenues.

Some areas of bihar are drought ridden while some are hit by flood each year.

• Political instability -:

Bihar is a victim of caste based politics.

Government has changed 40times in 70 years.

It has seen 23 different cheif ministers.

On an average one CM stayed for 1.5 years in power .

• Bihar-jharkhand split-:

Before split south bihar( now jharkhand ) was one of the most miniral rich area of country. But due to split in 1990 it all went in jharkhand. All the tata corporates, tatanagar, bokaro were lost by bihar.

• Freight equalisation policy-:

Government provided subsidy on export of minirals from bihar. All the factories were located in other states. Instead of bringing companies to bihar, government provided subsidy to corporates. If the factories have got shifted to bihar then there would have been no such problems which bihar is facing nowadays.

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In precise

• Corruption - Corrupt officials & minister in state makes entire process difficult for a newcomer.
• Security concerns - State like Bihar which was known for crime during 90s, has created a perception that there can be risk of lives here. It's the duty of government to make sure there is sense of fear in the mind of criminals. No industry will ever come until & unless they are assured of their security.
• 24 hour Electricity - Bihar has improved a lot in electricity generation. Many villages which were still living in darkness since independence, witnessed electricity in last few years including my own village. If government promises & start working on giving 18–24 hours of electricity, industry will come for sure.
• Government negligence - It seems like Bihar government is in no mood to actually work in bringing new industry. They need to be awaken from sound sleep. You have to do something for the people.

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Bihar lacks in industries due to many reasons which i am going to explain but many of them have improved still it will take some time to show its effect on actual ground.

1. Industries need electricity and that too for 24 ×7 and the condition of electricity till last 10 years was no so good. Urban places did not have continous supply of electricity and rural places had no electricity at all.
2. Industries need proper infrastructural supports for proper growth. Several cities were not properly connected to the capital by either roadway or railways. Some cities had only partially connectivity due to absence of proper bridges and they would cutoff from rest of the part during flood season.
3. Mineral and resource content in the state was mainly concentrated in jharkhard part that was with Bihar until 2000 but at that time FREIGHT EQUALISATION POLICY was into effect that gave option to the companies to not invest in the state.
4. Rise of crime- During previous government , jungle Raj was dominant in the state and you have to bargain with politicians , criminals and naxalites in order to survive in the state. Sometimes this bargains would cost too much.
5. No sea route connectivity for cargo transport. So the industries cannot contribute in export to foreign market and have to totally rely on domestic market only. Hence expansion possibility get reduced.
6. Communist / Socialist nature of the society - Many people just hate capitalist theory and every rich person is seen as oppressor of poors and politicians promote the theory for their own benefit.
   

reference:-

1.Jharkhand - Wikipedia

2.Freight equalisation policy - Wikipedia

3.jungle raj in bihar