Employment, Growth, and Gender: Exploring the Dynamics of Bihar’s Economy

Bihar has emerged as one of the fastest growing states with an impressive annual GDP growth rate of 10-15 percent, surpassing the national average. The state has experienced swift and notable growth in spite of the contraction in economic activities during the 2020-21 fiscal year owing to the Covid-19 pandemic.

Figure 1: GSDP Growth rate

Source: Handbook of Indian Statistics, RBI, 2023

As per the development framework, the level of urbanisation and percentage of the population residing in urban areas are pivotal indicators of economic growth. Driven by rapid growth in the industrial and services sector, Bihar’s urbanisation process has recently gained momentum.

Figure 2 showcases the contribution of different sectors to gross value added in the year 2022-23. Services is the largest sectoral contributor to gross value added.

Figure 2: Sectoral Composition of GSVA at Constant Prices (2022-23)

Source: Economic Survey 2023-24, Government of Bihar

The primary sector, though the principal employer in Bihar, is a modest contributor to the gross value. Vulnerabilities associated with agricultural productivity have resulted in income and job instability.

Figure 3: Percentage distribution of working persons by sectors

Source: Periodic Labour Force Survey (2022-23), Annual Report, MOSPI

Despite having achieved a decent growth rate in the last decade, employment in Bihar remains an area of concern. There are significant gender disparities in labour force participation rates, with numbers lower than the national average.

Figure 4: Labour Force Participation Rate (LFPR) (in per cent)

Source: Periodic Labour Force Survey (2022-23), Annual Report, MOSPI

The figure below shows that the Worker Population Ratio (WPR) of women (15 years and above) is significantly lower than that of men, and fewer urban women (11.4 percent) participated in the workforce in comparison with rural women (23 percent). An important reason for this could be women’s engagement in agriculture and allied activities (80.65 percent).

Figure 5: Worker Population Ratio (15 yrs and above)

Source: Periodic Labour Force Survey (2022-23), Annual Report, MOSPI.

Due to the lack of agricultural and other allied activities in urban areas, the unemployment rate of women is higher in urban areas, whereas unemployment rate of men in rural areas is higher than female.

Table 1: Sectoral Composition of percentage of person employed by industry of work

Source : Periodic Labour Force Survey (2022-23), Annual Report, MOSPI.

Figure 6: Unemployment rate in Bihar (15 yrs and above)

Source: Periodic Labour Force Survey (2022-23), Annual Report, MOSPI.

The gender gap in the workforce participation rate is also reflected in the fact that less time is spent on paid and unpaid activities by men compared to women in Bihar. According to the Time Use Survey data 2019, almost all women (95.7 percent) in Bihar are involved in unpaid caregiving and domestic activities, while only a little more than half the men (65.2 percent) are engaged in unpaid activities.

Figure 7: % of persons participating in a day in activities

Source: Time Use Survey, 2019. MOSPI

On average, in Bihar, women spend 8.1 hours on unpaid activities per day, pointing to one of the reasons for women not having the time to participate in employment. This burden is significantly greater on women in rural areas who spend longer time on unpaid activities and negligible time on paid activities.

Figure 8: Hours spent in a day on an average per women

Source: Time Use Survey, 2019. MOSPI

Bihar’s journey towards economic development has been marked by impressive strides. However, stark gender disparities persist in the area of employment. These gaps must be addressed for a more nuanced and inclusive approach towards equitable growth in the state.