Topic summary
Economy of Bihar
The economy of Bihar has been among the fastest-growing state economies in India in recent years. During the financial year 2025–26, Bihar's gross state domestic product (GSDP) is projected to grow by around 10–12% at current prices. The economy of Bihar is largely based on services, though agriculture and industry also contribute substantially. At current prices (not adjusted for inflation), the state's GSDP was estimated at ₹1,309,155 crore (US$140 billion) for 2026–27. After forming a new state government in 2025, Nitish Kumar's cabinet has proposed a new initiative called the New Age Economy, which aims to promote economic development in the state.
As of 2021, the service sector accounted for 58.6% of the state's economy, with industry contributing 21.5% and agriculture 19.9%. During 2002–2007, the average growth rate of manufacturing in the state was 0.38%, significantly lower than the national average of 7.8%. In the financial year 2021–22, Bihar's manufacturing sector grew by 3.9%, and it has shown continued improvement in recent years. Bihar has the lowest GDP per capita in India, but there are pockets of higher per capita income, such as the southern half of the state and its capital city, Patna.
The GSDP for 2024–25 is estimated at ₹9,91,997 crore (approximately US$116 billion) at current prices, recording a growth of 13.1%; for 2025–26, the GSDP is projected to be ₹10.97 lakh crore. In actual terms, as of 2025–26, Bihar's state GDP is ranked 11th out of 28 states in India. Corruption is an important challenge for the government to overcome, according to Transparency International India, and the government has acknowledged this situation. Since November 2005, the state government, led by Nitish Kumar, has implemented some economic and social reforms. Such reforms have yielded improvements in the state's and Patna's economies. For example, in June 2009, the World Bank reported that Patna was the second-best city in India in which to start a business, following Delhi.
Between 1999 and 2008, Bihar's GDP grew by 5.1% a year on average, which was below the Indian average of 7.3%. However, in January 2010, the Indian government's Central Statistics Organisation (CSO) reported that in the five years between 2004–05 and 2008–09, Bihar's GDP grew by 11.03% – making Bihar the second-fastest-growing economy in India during those five years, just behind Gujarat's growth of 11.05%. Another survey conducted by the CSO and the National Sample Survey Organisation (under the Ministry of Statistics and Programme Implementation) reported that Bihar showed a 14.80% growth in factory output in 2007–08, which was slightly less than the overall Indian rate of 15.24%.