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3 Feb 2026·Source: The Hindu
4 min
EconomyNEWS

Bihar's Economic Growth Exceeds National Average: Economic Survey 2025-26

Bihar's economy grew by 13.1% in 2024-25, surpassing the national average.

Bihar's Economic Growth Exceeds National Average: Economic Survey 2025-26

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The 20th edition of the Bihar Economic Survey 2025-26, tabled in the Assembly, reports that the State recorded 13.1% economic growth in 2024-25, higher than the national average of 9.8%. Finance Minister Bijendra Prasad Yadav said Bihar is progressing along a high-growth trajectory, supported by macroeconomic stability, sectoral diversification, increased investment, and a sustained focus on human capital development, employment generation, and infrastructure enhancement. The State's fiscal trajectory demonstrates disciplined financial management, with government expenditure increasing from ₹1.66 lakh crore in 2020-21 to ₹2.82 lakh crore in 2024-25. The Survey notes that Bihar’s per capita GSDP at current prices rose from ₹46,412 in 2020-21 to ₹76,490 in 2024-25. Economist Sudhanshu Kumar explained that the State’s GSDP growth has remained higher than the national average over the past three years.

Key Facts

1.

Bihar growth: 13.1% in 2024-25

2.

National growth: 9.8% in 2024-25

3.

GSDP increase: ₹46,412 to ₹76,490

UPSC Exam Angles

1.

GS Paper 3 (Economy): Economic growth, development, planning, government policies

2.

Connects to syllabus topics like fiscal policy, monetary policy, infrastructure development, inclusive growth

3.

Potential question types: Statement-based, analytical, critical evaluation of government policies

Visual Insights

More Information

Background

The economic growth of a state is a complex phenomenon influenced by various factors, including policy decisions, investment climate, and infrastructure development. Understanding the historical context of economic planning in India is crucial. The concept of Five-Year Plans, initiated in 1951, aimed to achieve planned economic development. These plans, inspired by the Soviet model, focused on sectors like agriculture, industry, and infrastructure. The Planning Commission, established in 1950, played a pivotal role in formulating these plans. Over time, the focus shifted from a centrally planned economy to a more market-oriented approach. The economic reforms of 1991, driven by a balance of payments crisis, marked a significant turning point. These reforms, including liberalization, privatization, and globalization, aimed to integrate the Indian economy with the world economy. The Planning Commission was replaced by NITI Aayog in 2015, signaling a shift towards a more collaborative and decentralized approach to economic planning. State governments play a crucial role in driving economic growth through their policies and initiatives. The Constitution of India empowers states to legislate on various subjects, including economic and social planning. The division of powers between the Union and the states is outlined in the Seventh Schedule of the Constitution. States have the autonomy to formulate their own economic policies, taking into account their specific needs and priorities. The Finance Commission, a constitutional body, recommends the distribution of tax revenues between the Union and the states.

Latest Developments

Recent years have witnessed significant changes in the economic landscape of India. The implementation of the Goods and Services Tax (GST) in 2017 has streamlined the indirect tax system and promoted ease of doing business. The focus on infrastructure development, particularly through initiatives like Bharatmala Pariyojana and Sagarmala Programme, has boosted connectivity and economic activity. The government's emphasis on digital transformation, through initiatives like Digital India, has promoted financial inclusion and improved access to services. However, challenges remain in achieving sustainable and inclusive growth. Issues such as unemployment, income inequality, and regional disparities need to be addressed. The COVID-19 pandemic has had a significant impact on the Indian economy, leading to job losses and economic contraction. The government has implemented various measures to mitigate the impact of the pandemic, including fiscal stimulus packages and social safety nets. The Reserve Bank of India (RBI) has also played a crucial role in maintaining financial stability and supporting economic recovery. Looking ahead, the Indian economy is expected to grow at a rapid pace. The government has set ambitious targets for economic growth and development. The focus is on promoting investment, innovation, and entrepreneurship. The success of these efforts will depend on addressing the challenges and leveraging the opportunities that lie ahead. The sustainable development goals (SDGs) provide a framework for achieving inclusive and sustainable growth.

Frequently Asked Questions

1. What are the key facts about Bihar's economic growth in 2024-25 that are important for the UPSC Prelims exam?

The key facts to remember are: Bihar's economic growth was 13.1%, which exceeded the national average of 9.8%. Also, the state's GSDP per capita increased from ₹46,412 in 2020-21 to ₹76,490 in 2024-25.

Exam Tip

Focus on remembering the percentage figures and the GSDP increase as these are frequently asked in prelims.

2. What is GSDP, and why is the increase in Bihar's GSDP significant?

GSDP stands for Gross State Domestic Product, which is a measure of the total economic output of a state. The increase in Bihar's GSDP indicates economic growth and development within the state, reflecting increased income and productivity.

3. How does Bihar's economic growth exceeding the national average impact the common citizen?

Higher economic growth can lead to increased job opportunities, better infrastructure, and improved public services. This can result in a higher standard of living for the common citizen through increased income and access to better amenities. However, the benefits must be equitably distributed.

4. Why is Bihar's economic performance in the news recently?

Bihar's economic performance is in the news because the Economic Survey 2025-26 reported that the state recorded a 13.1% economic growth in 2024-25, surpassing the national average of 9.8%. This high growth rate has attracted attention and sparked discussions about the factors contributing to it.

5. According to the Economic Survey 2025-26, what factors have supported Bihar's high-growth trajectory?

As per the Economic Survey 2025-26, Bihar's high-growth trajectory is supported by macroeconomic stability, sectoral diversification, increased investment, and a sustained focus on human capital development, employment generation, and infrastructure enhancement.

6. What is the historical background of economic planning in India, and how does it relate to Bihar's current economic growth?

The concept of Five-Year Plans, initiated in 1951, aimed to achieve planned economic development in India. While the Five-Year Plans have been discontinued, the focus on planned development and investment in key sectors continues to influence state-level economic policies, including those in Bihar, contributing to its growth.

7. What are some potential reforms that could further boost Bihar's economic growth?

While the topic data does not specify reforms, generally, reforms could include improving infrastructure, attracting more private investment, enhancing skill development programs, and streamlining regulatory processes to promote ease of doing business. These are general areas for improvement.

8. What are the recent developments related to infrastructure development in India, and how might they impact Bihar's economy?

Initiatives like Bharatmala Pariyojana and Sagarmala Programme aim to boost connectivity and economic activity. Improved infrastructure can enhance Bihar's connectivity, facilitate trade, and attract investment, thereby contributing to its economic growth.

9. How does Bihar's fiscal management contribute to its economic growth, as highlighted in the Economic Survey?

The Economic Survey indicates that Bihar's fiscal trajectory demonstrates disciplined financial management, with government expenditure increasing from ₹1.66 lakh crore in 2020-21 to ₹2.82 lakh crore in 2024-25. This suggests efficient allocation of resources and investment in key sectors, supporting economic growth.

10. What are the implications of Bihar's economic growth exceeding the national average for other states in India?

Bihar's strong economic performance can serve as an example for other states, demonstrating the potential for high growth through effective policies and investments. It can also foster healthy competition among states to improve their economic performance.

Practice Questions (MCQs)

1. Consider the following statements regarding the Bihar Economic Survey 2025-26: 1. The survey reports that Bihar's economic growth in 2024-25 was 13.1%, exceeding the national average. 2. According to the survey, Bihar's per capita GSDP at current prices rose to ₹76,490 in 2024-25. 3. The survey indicates that government expenditure in Bihar increased to ₹3.82 lakh crore in 2024-25. Which of the statements given above is/are correct?

  • A.1 and 2 only
  • B.2 and 3 only
  • C.1 and 3 only
  • D.1, 2 and 3
Show Answer

Answer: A

Statement 1 is CORRECT: The Bihar Economic Survey 2025-26 reports that the State recorded 13.1% economic growth in 2024-25, higher than the national average. Statement 2 is CORRECT: The Survey notes that Bihar’s per capita GSDP at current prices rose to ₹76,490 in 2024-25. Statement 3 is INCORRECT: The survey indicates that government expenditure in Bihar increased to ₹2.82 lakh crore in 2024-25, not ₹3.82 lakh crore.

2. Which of the following factors, as highlighted in the Bihar Economic Survey 2025-26, contributed to the state's high economic growth? 1. Macroeconomic stability 2. Sectoral diversification 3. Decreased investment Select the correct answer using the code given below:

  • A.1 and 2 only
  • B.2 and 3 only
  • C.1 and 3 only
  • D.1, 2 and 3
Show Answer

Answer: A

The Finance Minister Bijendra Prasad Yadav said Bihar is progressing along a high-growth trajectory, supported by macroeconomic stability, sectoral diversification, increased investment, and a sustained focus on human capital development, employment generation, and infrastructure enhancement. Therefore, factors 1 and 2 are correct, while factor 3 is incorrect as the survey highlights increased investment, not decreased investment.

3. Assertion (A): Bihar's GSDP growth has remained higher than the national average over the past three years. Reason (R): Bihar has demonstrated disciplined financial management, with government expenditure increasing significantly. In the context of the above, which of the following is correct?

  • A.Both A and R are true, and R is the correct explanation of A
  • B.Both A and R are true, but R is NOT the correct explanation of A
  • C.A is true, but R is false
  • D.A is false, but R is true
Show Answer

Answer: B

Assertion (A) is true: Economist Sudhanshu Kumar explained that the State’s GSDP growth has remained higher than the national average over the past three years. Reason (R) is true: The State's fiscal trajectory demonstrates disciplined financial management, with government expenditure increasing from ₹1.66 lakh crore in 2020-21 to ₹2.82 lakh crore in 2024-25. However, disciplined financial management and increased government expenditure are contributing factors but not the sole explanation for higher GSDP growth. Other factors like sectoral growth and investment also play a role.

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