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Bihar has been one of the oldest pillars of Indian civilization. It is home to Nalanda University, the Mauryan & Gupta empires, and Jain-Buddhist traditions. Archaeological evidence in Bihar suggests human settlements since the Stone Age. For instance, sites like Chirand and Sonepur have Neolithic footprints. Subsequently, Bihar became a prominent region in the later Vedic age, forming part of the Magadha kingdom under the Harayanka, Shushunaga, and Nanda Dynasty.
Later, Chandragupta Maurya established the first pan-Indian empire with its capital at Pataliputra after overthrowing the Nanda dynasty. In this empire, the rule of Ashoka further strengthened the empire and propelled Buddhism. Subsequently, during the Gupta empire, Aryabhata, the famous mathematician-astronomer, flourished in Bihar during this period. However, today Bihar is lagging in development on various parameters – social, economic, human development, etc – due to several historical, economic, and political factors.
Historical Setbacks
The region first received the thrust from Islamic rulers in Medieval history. In this process, Nalanda University, one of the greatest centers of learning in the ancient world, was burned down by Bakhtiyar Khilji in 1193 CE. The vast library, containing thousands of manuscripts, burned for months. Also, Vikramashila University, another Buddhist center of learning, met a similar fate. Thus, The destruction of educational centers also affected the intellectual and economic life of Bihar. Trade, which had flourished under the Mauryas and Guptas, declined as many skilled artisans, scholars, and traders fled.
Subsequently, the British rule in Bihar (1764–1947) was marked by economic exploitation, social disruption, and political suppression. In this process, The tax burden on peasants increased drastically due to the Zamindari system in 1793, leading to widespread poverty and famine. Also, The British forced farmers to grow cash crops (indigo, opium, and sugarcane) instead of food crops, leading to food shortages, poverty, and famine. Similarly, the British forced poor Bihari laborers to work in colonies like Fiji, Mauritius, Surinam, etc under the Indenture System as virtual slaves.
Failed to gain traction in the early decades of Independence
After independence, there were rays of hope for rebuilding Bihar. But it hopes didn’t last long. Pundit Nehru focused on heavy industries (like steel, power, and mining). Thus, states like West Bengal, Maharashtra, and Tamil Nadu got attention, while Bihar was largely ignored. For instance, The Bokaro Steel Plant was approved only in 1964 (after Nehru’s death), while earlier steel plants were set up in states like West Bengal (Durgapur) and Odisha (Rourkela).
Additionally, the Freight Equalization Policy (FEP) 1952 further suffocated Bihar. Alfred Weber’s theory of industrial location, also known as the “least-cost theory,” posits that industries are best located near raw material sources to minimize transportation costs. However, the FEP 1952 offered financial subsidies for transporting minerals to factories located anywhere in the country. Therefore, it destroyed Bihar’s natural advantage in mineral-based industries.
Limitation of Green Revolution at the door of eastern India
India and Pakistan fought the war in 1971 that led to the bifurcation of Pakistan. Before this, migration and refugee influx from the then east Pakistan created additional stress on resources in the Bihar-Bengal region. Later, the Green Revolution promised to boost agricultural productivity in India. But it was largely limited to Punjab, Haryana, and western Uttar Pradesh. Bihar, despite being an agriculturally rich state, was ignored in this revolution due to several reasons.
One of the reasons was that the central government under Indira Gandhi focused on North-Western India (Punjab, Haryana) to ensure rapid food security and use it as a tool to negate extremism in Punjab. Also, the Green Revolution required assured irrigation, but Bihar depended heavily on monsoon rains. At that time, Bihar’s irrigation systems were underdeveloped. Along with this, unlike western UP, the farmer’s union in Bihar was not strong primarily due to the surge of caste conflict. Therefore, Bihar missed leaders like Mahendra Singh Tikait.
Missed the bus of communication revolution and NEP 1991
Another opportunity came in India in the face of the communication revolution. The communication revolution brought rapid expansion of telecommunications, internet, and digital connectivity across India. But, largely it failed to gain traction in Bihar. One of the reasons was that there was a lack of roads, electricity, and telecom towers made it difficult to expand communication networks in the state of Bihar. Also, Bihar lacked an IT ecosystem, meaning there was no local demand for advanced communication networks.
Subsequently, the New Economic Policy 1991 opened up one more gate of opportunity to develop. Unfortunately, Bihar again missed the Bus. Already, private industries were discouraged due to Nehru’s socialist model, preventing industrial growth in Bihar. NEP 1991 helped states like Maharashtra, Karnataka, Tamil Nadu, and Gujarat grow rapidly. One of the reasons was that the politicization of caste had taken the shape of the castecization of politics with the surge of socialist regional parties. They were not interested in privatization. For instance, in the below graph, the two tenures of RJD under Lalu Prasad Yadav from 1990 to 2005 have negative growth rates.
Bifurcation of Bihar and Jharkhand
Along with these, after missing many opportunities, Bihar suffocated further after the Bihar-Jharkhand separation in 2000. After separation, Bihar lost valuable resources, industries, and revenue. For instance, Jharkhand took away over 80% of Bihar’s mineral wealth. It was left with very few mineral resources, making industrial growth difficult. Most of Bihar’s large industries were located in Jharkhand, including Tata Steel (Jamshedpur), Bokaro Steel Plant, Hindustan Copper, and Heavy Engineering Corp. (HEC) in Ranchi, and Coal-based industries in Dhanbad.
Before 2000, Jharkhand contributed nearly 70% of Bihar’s total revenue due to industries and mining. With industries shifting to Jharkhand, thousands of workers in Bihar lost their jobs. It subsequently acted as a push factor for migration during the first decade of the 21st century. Bihar became one of the largest migrant labor suppliers in India. However, after 2005, the state of Bihar understood the missed opportunities and rewired to assert its capabilities.
The idea of new Bihar: Bihar post-2005
The government of Bihar acted structurally post-2005. First of all, it improved the law and order situation which has boosted confidence among investors in the first place. Subsequently, it focused on infrastructure development, the second platform for industries to grow. Recently, the economy survey suggests that rural road connectivity has increased significantly from 835 km in 2005 to 1.2 lakh km in 2025. Consequently, today Bihar became the 3rd largest state in terms of road density.
Consequently, Bihar saw double-digit economic growth (average annual growth of 12%) in the last 7 years, one of the highest in India. In terms of quality, the Hajipur shoe industry, particularly Competence Exports Pvt. Ltd., has gained international recognition by manufacturing safety boots for the Russian Army as well as the Ukrainian Army. Also, the governance of Bihar has been centered around – the first state to provide 50% reservation to women in the panchayat, school girls were provided cycle by govt, financial support through Jeeva Scheme, etc.
Now, the government has been organizing Bihar Business Connect. Thus, notable companies such as Sun Petrochemicals, Adani Group, Shree Cement, Ashoka Buildcon, and Haldiram committed to investing approximately ₹1.8 lakh crore in Bihar. Also, it has been looking to become a sports hub in the coming years. For this, increased investment in sports and building Rajgir sports complex and Sports university, promoting non-popular sports and Masal initiatives to talent hunt for Olympic 2036, Jobs for medal winners, etc. are lights at the end of the tunnel.
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