Recent changes to India’s GST rates are set to give a big lift to Bihar’s economy, which relies heavily on farming, handlooms, handicrafts, and food processing. These reforms will ease costs for everyday consumers, support rural families, help small and medium enterprises (MSMEs), and make Bihar’s exports more competitive, according to an official statement released Saturday.
The benefits spread far and wide across Bihar, from makhana farmers in the Mithila region to silk weavers in Bhagalpur, dairy producers tied to the Sudha cooperative, and workers at Madhepura’s rail factory. Traditional sectors like agriculture and crafts, plus modern ones like rail manufacturing, will all feel the positive effects.
Agriculture stands to gain the most. Bihar leads India in makhana production, supplying 80-90% of the country’s fox nuts and supporting around 10 lakh families in northern districts like Darbhanga, Madhubani, Purnea, and Katihar. The GST cut on makhana-based snacks—from 12% to 5%—means processors and exporters could save 6-7% on costs, helping these products compete better at home and abroad.
Farmers growing Bihar’s famous GI-tagged Shahi Litchi in Muzaffarpur, Vaishali, Champaran, and other areas will also benefit. The state produces nearly 35% of India’s litchis, sustaining thousands of small farmers and seasonal workers. Lower GST on litchi juices, jams, and pickles (from 12% to 5%) offers similar 6-7% savings, boosting local processing and opening doors to markets in places like the Gulf.
Processed foods get a major boost too. MSME clusters in Patna, Hajipur, and Bhagalpur produce snacks, pickles, bakery items, and sauces, often run by micro-units and women-led self-help groups. Brands like Sudha serve Bihar and eastern India, while makhana products reach nationwide markets. The Bhagalpur industrial estate alone has over 40 food and agro units, with new parks and bottling projects creating jobs. GST reductions on biscuits (18% to 5%), namkeens, and sauces (12% to 5%) should drop prices by 6-11%, driving demand and padding MSME profits.
In the dairy sector, which anchors Bihar’s rural economy, about 9.6 lakh mostly small farmers rely on the COMFED (Sudha) cooperative, with women playing a key role in collection and self-help groups. Processing, chilling, transport, and retail create thousands of jobs in hubs like Patna and Barauni. Now, UHT milk and paneer face zero GST, while ghee and butter drop from 12% to 5%, and ice cream from 18% to 5%. This makes products 5-13% cheaper, eases cash flow for dairies, strengthens cooperatives, and puts affordable dairy within reach for households across Bihar and eastern India.
Handlooms and handicrafts thrive too. Items like Bhagalpuri silk, Madhubani art, Sujini embroidery, and Patharkatti stone carvings will cost less to produce, making them more appealing in markets. Farmers get relief from cheaper fertilizers, micronutrients, and machinery, with savings of 7-13%.
Other areas see gains as well. Rail manufacturing hubs, AYUSH products (traditional medicine), honey clusters, bamboo, and cane crafts could cut costs by 6-13%. These GST reforms promise to revitalize Bihar’s mix of old and new industries, fostering growth in exports and rural livelihoods.
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