Bihar Industries Association - Industrial Policy 2016

Industrial Policy 2016

बिहार औद्योगिक निवेश प्रोत्साहन नीति 2016

Industrial Policy is the set of standards and measures set by the Government to evaluate the progress of the manufacturing sector that ultimately enhances economic growth and development of the country.

Objectives of Industrial Policy

  1. To maintain steady growth in productivity.
  2. To create more employment opportunities.
  3. Utilize the available human resources better
  4. To accelerate the progress of the country through different means

To achieve this goal the State Government has formulated the Industrial Investment Promotion Policy, 2016.

  • The main strategy for achieving the goals of this policy is to focus on development of support infrastructure, prioritizing core sectors of future development with emphasis on advanced technology, skill development, a modified structured package of assistance and balanced regional development i.e. uniformly extending the benefits of investment to all geographical areas of the State.
  • This policy also focuses on uplifting the socially marginalized groups & women entrepreneurs by offering specialized packages of assistance to them.
  • The policy has well-defined provisions for effective implementation, monitoring & grievance redressal for the entrepreneurs.
  • Thus the Industrial Investment Promotion Policy, 2016 has an integrated approach towards industrial development in the state and offers a wide range of benefits to the investors coming to Bihar.

Factors Favoring For Investment In Bihar :

  • Bihar is one of the fastest growing states in India. During the period 2005-06 to 2014-15, the GSDP of Bihar at constant prices grew annually at 10.5 percent, which is one of the highest among all major Indian states.
  • Bihar has a unique location specific advantage because of its proximity to the vast markets of eastern and northern India, access to ports such as Kolkata and Haldia and to raw material sources and mineral reserves from the neighboring states.
  • Bihar is primarily an agrarian state and is one of the largest producers of vegetables and fruits in India. Bihar is endowed with water resources – both ground and surface water– as it receives an average rainfall of 1009 mm each year. Ganga is the main river that flows through the state, joined by tributaries that originate in the Himalayas. Some of the other major rivers are Saryu, Gandak, Budhi Gandak, Bagmati, Kamla and Mahananda.
  • The state has a large base of cost effective, industrial labor, making it an ideal destination for a wide range of industries.
  • Food processing, dairy, manufacturing, healthcare are some of the fastest growing industries in the state.
  • The State has planned initiatives for the development of other sectors such as agricultural implements and small machine manufacturing, tourism, information technology, renewable energy etc.
  • The State Government has resolved to connect the capital city of Patna to the remotest areas in the state, so that people can reach the capital within a maximum of six hours from any place. The total length of the State Highways (SH) is 4253 km (in 2015) and approximately 65% of these highways are double-lane roads. The total length of National Highways in the state is 4595 km (as of 2015) and efforts are being made to further increase the network at a rapid pace.
  • Golden Quadrilateral Highway that passes through Bihar is in close proximity to some of the districts, viz. Kaimur, Sasaram, Aurangabad Gaya & Patna.
  • It provides connectivity to major industrial, agricultural, and cultural centers of India. The length of the Golden Quadrilateral Highway that passes through the State, i.e. 204 km, has been widened.
  • Eastern Dedicated Freight Corridor passes through the state and would connect Bihar with West Bengal, Jharkhand, Uttar Pradesh, Haryana and Punjab and is expected to be immensely beneficial for industries in the state.
  • It is targeting to achieve a total generating capacity of 1330 MW by 2016-17, 3310 MW by 2017-18 and 7270 MW by 2021-22. In order to turn its vision into reality, Bihar State Power Generation Corporation Limited (BSPGCL) has entered into joint ventures with reputed companies in the power sector, like National Thermal Power Corporation (NTPC) and National Hydro Power Corporation (NHPC). Some of the major power sector projects, at different stages of commissioning, are Nabinagar Stage-1 Plant, power projects in Buxar, Bhagalpur, Lakhisarai and Banka.
  • Strong emphasis is being placed on Micro, Small and Medium Enterprises (MSME). Cluster based development is being promoted by the State Government and it is in the process of setting up specialized clusters for development of leather, small machinery, plastics, garments, jute & textiles, and food processing to boost the manufacturing sector and well-being of MSME entrepreneurs.

Mission Of Bihar Industrial Investment Promotion Policy, 2016

  • Achieve industrial development growth rate of 15% per annum
  • Increase contribution of the secondary sector to the GSDP to more than 25% in line with the National Manufacturing Policy and ―Make in India‖ initiative
  • Create direct employment opportunities for 5 lakh people across all economic sectors
  • Create high-end infrastructure facilities to attract investments in the state
  • Eradicate regional industrial imbalance by uniformly extending the benefits of investment to all geographical areas of the state
  • Provide relatively more economic benefits to the priority sections of society such as SC/ST, women, differently abled, war widows, acid attack victims and third gender entrepreneurs.
  • Ensure that industries facilitate skill development of local people, so as to achieve the target of 15 million skilled youths as per the ―Seven commitments‖ of the State Government.
  • Increase the competitiveness of MSMEs and adoption of ―Zero Defect Zero Effect‖ manufacturing practice



You Can Also Read This Policies: Bihar Agri Investment Promotion PolicyPMFME SchemeStartup Policy 2022


Strategy Of Bihar Industrial Investment Promotion Policy, 2016

  • Encouraging investments that add value to the farm produce and increase the income of the cultivators through processing and preservation of food crops, particularly vegetables and fruit crops.
  • Utilizing the traditional skills of artisans by finding a wider market for handloom and handicrafts.
  • Investing in skill development and technical education so as to make Bihar the preferred source for skilled manpower – for which an acute shortage has been forecasted not only in different parts of the country but even markets abroad.
  • Creating preference for Micro, Small and Medium Enterprises (MSME) in view of their limited requirement of land, and their capacity to absorb more labor per unit of capital and energy.
  • Encouraging cluster development in MSME sectors.
  • Emphasizing on industries that rely on local production, local skills, and local consumption.
  • Providing preference to low energy and non-polluting industries
  • Encouraging large scale industrial units in the proposed Integrated Manufacturing Cluster under the proposed Amritsar-Kolkata- Industrial Corridor (AKIC). While the State Government will assist investors in finding suitable land for setting up units, they will be expected to find land on their own for units outside these designated areas.
  • Encouraging new investment in developing heritage tourism for which the state offers tremendous opportunities.
  • Investments in developing new facilities and/or managing existing facilities under PPP mode will be encouraged.
  • Promoting development of ancillary units to cater to the upcoming investments in public and private sector.


Q1. What is the aim of industrial policy?

Ans. The industrial policy seeks to provide a framework of rules, regulations and reservation of spheres of activity for the public and the private sectors. This is aimed at reducing the monopolistic tendencies and preventing concentration of economic power in the hands of a few big industrial houses.

Q2. How does industrial policy affect the economy?

Ans. By using a set of means, such as credit, taxation, subsidies and entry threshold reduction, industrial policy can decrease market failures caused by factors such as externalities and imperfect market mechanisms, improve resource allocation efficiency and promote industrial development.

Q3. What are the advantages of industrial policy?

Ans. The shift of capital and human resources towards manufacturing provides at least four major benefits: productivity growth, development of more and deeper linkages, economies of scale and new export opportunities.


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