Bihar’s Quest for Transformation: From Shadows to Startup Spotlight

Bihar’s Quest for Transformation: From Shadows to Startup Spotlight

Analysis:

1. Bihar continues to face a perception–reality gap: while historically known for political leadership, UPSC aspirants, and ancient centres of learning like Nalanda and Vikramshila, the state still struggles with infrastructure deficits and development challenges.
2. The viral social media post by Chandan Raj, founder of Suresh Semicon, highlighting poor local infrastructure, brought renewed national attention to governance and accountability issues, even as administrative action followed swiftly.
3. Structural challenges persist, including infrastructure gaps, law and order concerns, trust deficit for investors, and policy paralysis, which continue to affect Bihar’s investment climate and ease of doing business.
4. Socio-economic indicators underline these challenges:
   • Bihar ranked last in Human Development Index (2021) among Indian states.
   • Around 7 lakh people migrated out of the state for employment (Census 2011).
   • Ranked 26th in Ease of Doing Business (2020).
5. Political and governance concerns also shape perception:
   • 53% of MPs elected in 2024 from Bihar have criminal records.
   • 68% of MLAs reportedly face criminal charges, reinforcing investor apprehensions.
6. At the same time, incremental progressis visible:
   • Around 7% reduction in multidimensional poverty between 2019–21 and 2022–23.
   • Significant decline in crime indicators such as rape (47%) and dacoity (70%) between 2004 and 2019.
   • Unemployment reduced to 3.9% (2022–23), though still above the national average.
7. Bihar’s startup ecosystem shows early-stage momentum:
   • 2,786 DPIIT-recognised startups, ranking 13th nationally.
   • Categorised as an “Aspiring Leader” in the State Startup Ranking (Category A).
   • Patna ranked 16th best startup ecosystem in India (Startup Blink).
8. The Bihar Startup Policy (2016, amended 2017, revamped 2022) aims to address gaps through seed funding, grants, and incentives, with special benefits for women entrepreneurs and SC/ST founders.
9. Investment traction is improving, with MoUs worth ₹50,530 crore signed in December 2023 and major corporates like Britannia, PepsiCo, Tata Group, and Medanta entering the state.
10. Experts emphasize that Bihar’s transformation depends on institutional reforms, effective governance, and nationally visible startup success stories to permanently alter perception.

Background / Static Part (Startup Ecosystem & Policy in Bihar):

• Bihar Startup Policy provides:
  • Interest-free seed fund of ₹10 lakh for 10 years.
  • Grants up to ₹3 lakh for acceleration programmes.
  • 2% success fee on angel investments.
  • Additional incentives for women (+5%) and SC/ST entrepreneurs (+15%).
• Industrial push includes:
  • Land bank of 9,438 acres for industrial use.
  • Planned SEZs in West Champaran and Buxar.
• Export profile (2023–24): dominated by agri-based and textile products, with limited diversification and low value-added manufacturing.

Updated – 24 October 2024 ; 10:30PM | News Source:

BW Disrupt (BW Businessworld)