Bihar: Catching Up From Behind

Why Bihar has long had India's lowest income per person, the improvements in governance and growth since the mid-2000s, and its remaining challenges.

Bihar, in eastern India, has among the lowest income per person of any Indian state. Yet it has also experienced periods of rapid growth and notable reforms.

Historical challenges

Colonial legacy: under British rule, much of Bihar was governed by the Permanent Settlement of 1793, which gave landlords rights to collect land revenue. Research by Abhijit Banerjee and Lakshmi Iyer found that districts with landlord-based systems had lower agricultural investment and worse public goods decades later.
Floods: northern Bihar faces frequent floods from rivers flowing from Nepal, such as the Kosi, sometimes called the “sorrow of Bihar”.
Weak governance and law and order problems in the 1990s.
Low industrialisation, especially after the state’s mineral-rich southern region became the new state of Jharkhand in 2000.

Reforms and growth

From the mid-2000s, Bihar’s government focused on law and order, roads and public services. The state grew faster than India’s average in many years. A notable programme gave bicycles to girls attending secondary school, starting in 2006. Research by Karthik Muralidharan and Nishith Prakash found it increased girls’ secondary school enrolment by around a third, by reducing the difficulty of travelling to school.

Remaining challenges

Very low income per person, still well below the national average.
Out-migration: millions of Bihari workers work in other states, sending remittances home.
Limited industry and jobs.
Health and education indicators below national averages, though improving.
Floods and climate risks.

The bicycle programme

A girl in a Bihar village lives several kilometres from the nearest secondary school. Walking there takes a long time and can feel unsafe. When the state gives her a bicycle, the trip becomes quick and safer. Her parents allow her to continue studying. A simple, low-cost programme removed a key barrier to education for many girls.

Thinking Bihar's poverty has one simple cause

Bihar's challenges reflect a mix of colonial history, floods, governance problems, the loss of mineral regions and low industrialisation. Its periods of fast growth show that improvement is possible.

Key takeaways

Bihar has among India's lowest income per person.
Colonial landlord systems, floods, past governance problems and low industrialisation contributed.
Reforms from the mid-2000s brought faster growth and better services.
Bicycles for girls raised secondary school enrolment by around a third.