Bihar vs Gujarat vs Uttar Pradesh

A Three-Way Comparison

To understand what Bihar missed out on, let’s compare it with Gujarat (Modi’s home state) and Uttar Pradesh (a state with similar population and challenges). The differences in how these three states developed since 2014 tells us a lot.

The Tale of Three States

Why Bihar Lagged Behind Both Gujarat and UP

When Narendra Modi became Prime Minister in 2014, Bihar needed urgent help. Bihar had over 120 million people, similar problems as Uttar Pradesh, and 1.8 times more people than Modi’s home state Gujarat. Bihar badly needed industries and jobs. But eleven years later, Bihar is still stuck while both Gujarat and even UP (under Yogi Adityanath from 2017) have made major industrial progress.

The comparison with Uttar Pradesh tells us a lot. Both states face similar problems: huge populations, farming-based economies, no access to sea ports, and a history of being backward. Yet UP attracted $26.8 billion in foreign investment since 2014 while Bihar got barely $2.5 billion. UP set up over 16,000 factories while Bihar could manage only 3,200. Why this huge difference between two similar states?

This is not just about numbers and statistics. This is about millions of young people from Bihar who had to leave their homes and go to other states for work. This is about factories that never came to Bihar. This is about roads, electricity, and facilities that were promised but came too late. This is about ignoring Bihar while calling it development.

The Numbers Don’t Lie

A Decade of Three-Way Divergence

Bihar’s 300% factory growth rate sounds good, but we need to understand what it really means. Growing from 800 factories to 3,200 is very different from Gujarat growing from 18,000 to 33,311 or UP growing from 10,500 to 16,234. Bihar needed massive, fast growth, not slow growth. This needed strong and immediate action in 2014, not announcements during election year in 2024.

The comparison with Uttar Pradesh is shocking. Even though UP faces similar problems, under Yogi Adityanath (from 2017), UP brought strong industrial policies. The UP Investors Summit 2018 got promises of ₹4.68 lakh crore investment. The Purvanchal Expressway and Bundelkhand Expressway improved roads and transport. The Defence Industrial Corridor created special manufacturing areas. Bihar got no such focused and continuous attention from Modi government.

The Human Cost: Migration and Brain Drain

Every year, about 2.8 million people from Bihar leave their state and go to other states for work. This is the highest in India. Delhi alone has over 4 million Bihari workers, Mumbai has 2.5 million, and Pune has 1.2 million. This is not just numbers. This means families living apart, children growing up without their parents, and Bihar’s young and talented people making other states rich.

The money these workers send back home (about ₹1.2 lakh crore every year) helps people in Bihar buy things but does not create jobs or industries in Bihar. Imagine if even 30% of these workers got good jobs in Bihar itself. The impact on Bihar’s economy would have been huge.

Economic Indicators Tell the Real Story

• Per Capita Income (2023-24): Gujarat: ₹2,85,000 | Bihar: ₹55,000 (5.2x gap)
• Poverty Rate: Gujarat: 9.6% | Bihar: 33.7% (3.5x higher)
• Literacy Rate: Gujarat: 82.4% | Bihar: 70.9% (critical gap in human capital)
• Infant Mortality Rate: Gujarat: 24 per 1000 | Bihar: 35 per 1000
• Female Workforce Participation: Gujarat: 29.4% | Bihar: 6.9% (shocking disparity)
• Bank Credit-Deposit Ratio: Gujarat: 92% | Bihar: 31% (banks collect Bihar’s savings, lend elsewhere)

What Modi Could Have Done

The Missed Blueprint

1. Industrial Transformation: The Decade That Never Happened

• Bihar Industrial Corridor Act (2015) Launch a dedicated Delhi-Kolkata-Patna Industrial Corridor with special economic zones in Muzaffarpur, Darbhanga, Gaya, and Bhagalpur. Similar to the DMIC (Delhi-Mumbai Industrial Corridor), this should have been operational by 2018, not announced piecemeal in 2024.
• Sugar Mill Revival Mission (2015-2017) Immediately revive all 30 closed sugar mills with a ₹15,000 crore package. Instead of waiting until 2025 to make announcements, this should have been Modi’s first major Bihar initiative, creating 100,000+ direct jobs by 2018.
• Bihar Food Processing Mega Zones (2016) Establish dedicated food processing parks in litchi-growing Muzaffarpur, makhana-producing Darbhanga, and maize-belt Katihar. Bihar produces 80% of India’s makhana (fox nuts) but has virtually no processing infrastructure—a criminal waste of economic potential.
• Manufacturing Incentive Scheme (2015) Create Bihar-specific manufacturing incentives: 10-year tax holidays, 50% subsidy on land, and dedicated power connections for industries setting up before 2020. This would have attracted early movers when land was cheaper.

2. Power Infrastructure: The Foundation That Came Too Late

No industry will invest in a state with unreliable power. Modi knew this from Gujarat’s transformation, yet Bihar’s power sector received sustained attention only after 2022.

• Bihar Power Grid Modernization Mission (2015) Allocate ₹50,000 crore for complete grid overhaul by 2018. Instead, power projects worth ₹40,000 crore were announced only in 2024—a decade too late for industries that needed reliable electricity from day one.
• 24/7 Power Guarantee Districts (2016) Designate 10 industrial districts with guaranteed uninterrupted power supply by 2017. Gujarat did this in the 2000s—Bihar could have replicated this immediately.
• Solar Power Revolution (2015-2017) Launch massive rooftop solar programs for industries with 70% central subsidy. With Bihar’s agricultural land constraints, rooftop solar should have been priority number one.

3. Education and Skill Development: A Generation Lost

Bihar has India’s youngest population but ranks ninth in unemployment. The recent ₹60,000 crore PM-SETU scheme for ITI modernization is welcome but should have been launched in 2015, not 2024.

• IIT-Bihar Campus (2015) Establish a full-fledged IIT campus (not just a temporary setup) in Bihar by 2017. Tamil Nadu has 2 IITs, Karnataka has multiple technical institutions—Bihar with 12 crore people deserves the same.
• Skill Development Mission (2015-2020) Train 5 million youth in manufacturing skills by 2020 through 500 new ITIs. Instead, Bihar’s ITI infrastructure remained pathetic until recent announcements.
• AIIMS Expansion (2016-2018) Beyond Patna AIIMS, establish 4 more AIIMS-level institutions in Muzaffarpur, Bhagalpur, Darbhanga, and Gaya by 2020. Health education infrastructure creates high-quality jobs and stops brain drain.
• Bihar Knowledge City (2017) Create a dedicated knowledge hub like Hyderabad’s HITEC City or Pune’s IT parks, with central land acquisition support. This could have positioned Bihar as an IT outsourcing destination for eastern India.

4. Transportation and Connectivity: The Landlocked Liability

Bihar’s lack of seaport access is often cited as an industrial disadvantage. But landlocked states like Madhya Pradesh and Chhattisgarh have developed robust industrial bases through strategic connectivity planning.

• Dedicated Freight Corridors (2015-2019) Fast-track freight rail connectivity from Bihar to Kolkata Port and Paradip Port with dedicated industrial goods trains. Instead, rail projects remained delayed or underfunded until recent years.
• Bihar-Bengal-Bangladesh Economic Corridor (2016) Create a special economic corridor connecting Bihar to Bangladesh through West Bengal, tapping into Bangladesh’s booming garment and manufacturing sector. This required diplomatic and economic vision that never materialized.
• Inland Waterways Development (2015-2018) Massively develop the Ganga waterway for cargo transport, reducing logistics costs by 40-50%. The National Waterway-1 exists on paper but remains grossly underutilized.
• Multi-Modal Logistics Parks (2016-2019) Establish 6 logistics hubs across Bihar integrating road, rail, and waterways. These should have been operational by 2019, not announced in 2024.

5. Agricultural Transformation: From Production to Processing

Bihar is a leading producer of litchi, makhana, maize, vegetables, and pulses. Yet Bihar’s farmers remain among India’s poorest because the state lacks processing infrastructure to add value.

• Cold Chain Revolution (2015-2018) Build 500 modern cold storage facilities with integrated transportation. Instead, Bihar continues losing 30-40% of perishable produce to spoilage—a problem solvable with ₹10,000 crore investment spread over 3 years.
• Makhana Processing Export Hub (2016) Bihar produces 80% of global makhana but earns minimal revenue because processing happens elsewhere. A dedicated makhana processing and branding initiative could have made Bihar a global superfood hub.
• Litchi Preservation Technology Centers (2016) Muzaffarpur’s litchi is world-famous but has a 15-day shelf life. Technology centers for preservation, canning, and export should have been established immediately, not left to private initiative.
• Dairy Cooperative Model (2015) Replicate Gujarat’s Amul model with a Bihar Dairy Federation having 10,000 collection centers and processing plants in every district by 2018. Bihar has cattle but no organized value chain.

6. Financial Infrastructure and Ease of Doing Business

Bihar’s credit-deposit ratio remains among India’s lowest. Banks collect deposits from Bihar but lend elsewhere because of perceived risks and lack of enabling infrastructure.

• Bihar Industrial Credit Guarantee Scheme (2015) Central government should have guaranteed 50% of industrial loans up to ₹50 crore to de-risk lending. This would have unlocked thousands of crores in private investment.
• Single-Window Clearance Portal (2015) A truly functional single-window system with time-bound approvals, backed by central monitoring. Recent initiatives came too late and lack teeth.
• Bihar Investment Promotion Board (2015) An autonomous board with representation from industries, direct central government support, and power to override bureaucratic delays. This needed immediate setup, not gradual evolution.
• Land Acquisition Fast-Track (2016-2017) Acquire and develop 50,000 acres of industrial land with clear titles by 2018. Land disputes remain Bihar’s biggest investment killer, something central push could have resolved.

The Electoral Timing Problem

Development as Political Strategy

A troubling pattern emerges when analyzing Modi government’s Bihar initiatives:

• 2014-2019 (First Term): Minimal industrial focus on Bihar. Total project announcements: ~₹50,000 crore spread over 5 years. Most remained on paper.
• 2019-2022 (Early Second Term): Gradual increase in attention, but still secondary priority. Bihar continued lagging in central allocations compared to industrial states.
• 2022-2025 (Pre-Election Phase): Sudden explosion of announcements. Over ₹100,000 crore in projects announced—more in 3 years than previous 8 years combined.

This timing isn’t coincidental—it’s calculated. Major announcements clustered around Bihar assembly elections and preceding the 2024 Lok Sabha polls. This approach treats Bihar’s development as an electoral tool rather than a governance priority.

• Lost Decade: 10 years of potential industrial growth, job creation, and skill development—an entire generation’s economic opportunity vanished.
• Migration Crisis: Millions of working-age Biharis migrated to other states, weakening Bihar’s human capital base permanently.
• Infrastructure Lag: Delayed infrastructure means Bihar enters the next decade still playing catch-up while other states race ahead.
• Investor Confidence: Early, sustained investment would have created momentum. Late, election-timed announcements signal unreliability to investors.

The Gujarat Model

What Bihar Needed to Learn

Modi frequently cites the “Gujarat Model” of development. Yet, ironically, he failed to replicate its core principles for Bihar:

• Infrastructure First: Gujarat prioritized 24/7 power and road connectivity before inviting industries. Bihar got announcements, not actual infrastructure, until very recently.
• Single-Window Reality: Gujarat’s single-window clearance actually worked, with time-bound approvals. Bihar’s version remained bureaucratic until recently.
• Investor Hand-Holding: Gujarat assigned officers to each major investor for problem-solving. Bihar lacked this personalized approach for most of Modi’s tenure.
• Vibrant Gujarat vs. Forgotten Bihar: Gujarat’s biennial investment summit became globally recognized. Bihar’s investment summits remained low-key affairs with minimal follow-through until recent years.
• Sustained Focus: Gujarat’s development was a continuous 15-year process (2001-2016). Bihar got sporadic attention concentrated in election years.

Conclusion

A Decade of Squandered Potential

Bihar in 2014 was like a very sick patient needing emergency treatment in ICU. Instead, it got occasional check-ups with serious treatment delayed until the patient’s condition became too bad to ignore during elections.

The data is damning: Gujarat added 15,311 factories since 2014 while Bihar added 2,400. Gujarat attracted $57.65 billion in FDI while Bihar got a fraction. Gujarat’s manufacturing sector thrives at 32% of GDP while Bihar’s stagnates at 5-6%. These aren’t accidents of geography or history – they’re outcomes of policy choices.

What makes this very sad is that Bihar’s recent fast growth (2020-2025) proves that quick development is possible. Factory setup jumped 73% after 2020, investments increased by 434.5%, and new industry jobs increased six times. This shows what could have happened if the same effort was put in from 2014 itself.

Bihar deserved better. Its 12 crore people deserved immediate, continuous, and real action, not promises that came eleven years too late. As Bihar heads into another election with fresh announcements, the question is not whether these projects will actually happen, but whether Bihar will finally get the continuous attention it needed ten years ago.

The data, the patterns, and the timing tell a clear story: Modi could have made Bihar his second Gujarat. He chose not to. That choice defined ten years and possibly destroyed one whole generation’s economic future.