The economy of Bihar is mainly based on agricultural and trading activities. The soil of Bihar is extremely fertile which makes it ideal for agriculture.
Bihar is the first largest producer of vegetables and second largest producer of fruits in the country. Production of maize, sugarcane, litchi, makhana, mango, vegetables, and aromatic rice is also carried out. Bihar is the largest producer of honey in the country.
The major agro based industries of Bihar are of rice, sugar, edible oil.
The rice mills are located at Bauxer Karbisganch in Purnia district, Araria. Sugar mills are located at Banmankhi in Purnia District, Bauxer, Madora in Saran District, Samastipur and Bihata in Patna District.
The edible oil mills are located at Araria, Banmankhi in Purnia District, Bauxer, Lakhisarai at Munger district. The textile industries are at Bhagalpur, Gaya, Nalanda, Darbhanga, Madhubani, Siwan and Patna.
The principal agricultural crops are rice, paddy, wheat, jute, maize and oil seeds. Cauliflower, cabbage, tomato, radish, carrot, beat etc. are some of the vegetables grown in the state. Sugarcane, potato and barley are some of the non-cereal crops grown. The entire agricultural operations is divided into two crop seasons Kharif and Rabi. The Kharif season starts from the third week of May and lasts till the end of October followed by the Rabi season
Bihar has significant levels of production for the products of mango, guava, litchi, pineapple, brinjal, cauliflower, bhindi, and cabbage in India. Despite the states leading role in food production, investment in irrigation and other agriculture facilities has been inadequate in the past.
Bihar accounts for 71 per cent of India's annual litchi production
Maize accounts for 1.5 million MT(or 10% of country production)
Sugarcaine produces 13.00 million MT
Litchi production is 0.28 million MT(Bihar contributes 71% of national production)
Makhana levels are 0.003 million MT(Bihar contributes 85% of national production)
Mango is 1.4 million MT(13% of All India)
Vegetable production is 8.60 million MT (9% of All India)
Honey Production is 1300 MT (13% of All India)
Aromatic Rice 0.015 million MT
Milk Production (Present) :4.06 million MT. COMPFED has established 5023 cooperative societies with 2.54 lakh membership -highest among the eastern states.
Fishery production levels are 0.27 million lakh MT
Bihar has a number of major public sector projects like the Oil refinery of Indian Oil Corporation and Fertilizer manufacturing plant of Hindustan Fertilizer Corporation Ltd (HPCL) at Barauni, Pyrites, Phosphates and Chemicals Ltd (PPCL) at Amjhor; Cotton spinning mills at Siwan, Pandaul, Bhagalpur, Mokamah and Gaya; 13 sugar mills in private sector and 15 in public section located in South and North Bihar. In addition distilleries at Gopalganj, West Champaran, Bhagalpur and Riga (Sitamarhi District); finish leather industry in West Champaran, Muzaffarpur and Barauni; Jute mills at Katihar and Samastipur; Medicine manufacturing unit at Hajipur; Food processing units and Vanaspati manufacturing units at Aurangabad and Patna; Kalyanpur Cement Ltd at Banjari are some of the notable industries in Bihar. Bihar has tremendous resources and their utilisation in the interest of its growing population has to be the supreme responsibility of both the state administration and the national planners.
The Indian Business Directory states that the Bihar Sugar Industry has flourished in the last couple of years due to the efforts taken by the state government to revive the industry. The Sugar Industry has been helped by the climate of the state, which is very suitable for the growth of high-grade sugarcane. The main benefit of the industry is that it provides employment to many people, especially in the rural areas. Further, it provides facilities of transport and communication, and also helps in the development of the rural areas by mobilizing the rural resources. The total number of sugar mills in Bihar Sugar Industry is 28 out which only 9 are operational. The total area under sugarcane production is 2.30 lakh hectares and the total production of sugarcane is around 129.95 lakh M.T. The location of the sugar mills of Bihar Sugar Industry are Samastipur, Gopalganj, Sitamarhi, West Champaran, Chorma, Dulipati, and Supaul.
The industry can be divided into 2 groups - the unorganized sector, which comprises traditional sweeteners manufacturers, and the organized sector, which consists of sugar factories. The producers of traditional sweeteners are considered to be a part of the rural industry and they manufacture khandsari and gur. These are consumed mainly by the rural people and are produced in substantial quantities. The total production of sugar in Bihar Sugar Industry was 4.21 lakh tons in 2002-2003 and in 2003-2004, the figure stood at 2.77 lakh tons. Again, in 2004-2005, the figure was 2.77 lakh tons. The state government, in order to boost the Sugar Industry in Bihar has decided to privatize the state-run sugar mills that have not worked for many years. The state government has also approved the proposal for the setting up of 15 new sugar mills in the state which will bring in an investment of Rs. 3,771 crore in Bihar Sugar Industry.
Bihar has emerged as brewery hub with major domestic and foreign firms setting up production units in the state.Three major firms - United Breweries Group, Danish Brewery Company Carlsberg Group and Cobra Beer - are in the process to setting up new units in Patna and Muzaffarpur in 2012.
The state is very rich in cattle population.There are 50,000 footwear artisans in the State. State has tanneries in the private sector. More tanneries & footwear units are to be set up in the private sector. Bihar has a thriving wood carving industry, with wood inlay work being one of the state's oldest crafts. Bihar is also known for its unique folk art paintings. Many Madhubani ceremonial folk paintings are produced around the Patna area, by artists that have settled there.
Total number of weavers in Bihar is more than 90,000. Bhagalpur is known as leading silk city. Gaya -another major weaving centre -around 8000. There is a strong traditional handloom clusters in the districts of Bhagalpur, Gaya, Nalanda, Darbhanga, Madhubani, Siwan, Patna. Infrastructure Leasing and Financial Services is preparing Project Report for Textile Parks and also for Cluster Development Programmes. However, most of textile centres in state on decline, producing low value goods.
Small Scale Industries
The small scale industries have contributed to Bihar's economic upsurge. The total investment of SSI's is Rs 88.75 crore. Small/artisan-based industries are generating 5.5 lakh mandays in the current fiscal till December.
The Finance Ministry has given top priority to create investment opportunities for big industrial houses like Reliance. The capital city, Patna, is one of the better off cities in India when measured by per capita income.