The economy of Bihar is largely service oriented, but it also has a significant agricultural base. The state also has a small industrial sector. As of 2008, agriculture accounts for 35%, industry 9% and service 55% of the economy of the state.Manufacturing performed very poorly in the state between 2002–2006, with an average growth rate of 0.38% compared to India's 7.8%.But now there is rapid growth and its manufacturing growth rate has reached 36.07% ,which has become the second best manufacturing state in India Bihar was the lowest GDP per capita in India, although there are pockets of higher than the average per capita income.Between 1999 and 2008, GDP grew by 5.1% a year, which was below the Indian average of 7.3%.More recently, Bihar's state GDP recorded a growth of 18% between 2006–2007, and stood at 942510 Crores Rupees ($21 billion nominal GDP). This makes Bihar the fastest growing major state. In actual terms, Bihar state GDP is ranked 2nd out of 28 states. Corruption is an import hurdle for the government to overcome according to Transparency International India, which highlighted Bihar as the Union's most corrupt state in a 2005 report. Despite many recent economic gains, significant challenges remain to do business in the state and the government has also stated that combating corruption is now the biggest challenge facing the administration.In Nitish Kumar's governance there has been an immediate change in Bihar. Life expectancy in Bihar (61 years) which is almost on par with the national life expectancy of 62.7 year.
Bihar has significant levels of production for mango, guava, litchi, pineapple, brinjal, cauliflower, bhindi, and cabbage in India.Despite the states leading role in food production, investment in irrigation and other agriculture facilities has been inadequate in the past. Historically, the sugar and vegetable oil industries were flourishing sectors of Bihar. Until the mid fifties, 25% of India's sugar output was from Bihar. Dalmianagar was a large agro - industrial town. There have been attempts to industrialize the state between 1950 and 1980: an oil refinery in Barauni, a motor scooter plant at Fatuha, and a power plant at Muzaffarpur. However, these were forced to shut down due to central government policy which neutralized the strategic advantages of Bihar. Hajipur, near Patna, remains a major industrial town in the state, linked to the capital city through the Ganga bridge and good road infrastructure.
The state's debt was estimated at 77 percent of GDP by 2007. The Finance Ministry has given top priority to create investment opportunities for big industrial houses like Reliance. Further developments have taken place in the growth of small industries, improvements in IT infrastructure, the new software park in Patna, and the completion of the expressway from the Purvanchal border through Bihar to Jharkhand. In August 2008, a Patna registered company called the Security and Intelligence Services (SIS) India Limited took over the Australian guard and mobile patrol services business of American conglomerate, United Technologies Corp (UTC). SIS is registered and taxed in Bihar.The capital city, Patna, is one of the better off cities in India when measured by per capita income.
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