Inclusive Urban Development in Bihar: An Exploratory Study

Aims & Objectives: Using both primary and secondary data, this project investigated the overall pattern of urbanization, sources of urban output and rural–urban linkages in Bihar to understand the slow process of urbanization and its implications for pace of and trends in development and poverty reduction.

Methodology: It conducted enterprise survey and household survey that was carried out in the towns of Madhubani and Bihar Sharif in 2014.

Findings:

• Main source of urban output is trade followed by manufacturing and services;
• Small average size of the enterprises with a large share of Own Account Enterprises (OAEs) and a low share of Directory Enterprises (more in Bihar Sharif than Madhubani). Trading units have been the driver for expansion while the manufacturing units have been facing output contraction;
• Strong rural-urban linkages where manufacturing units have the highest share of hired workers from rural areas. Many workers in vulnerable occupations such as rickshaw pullers, vendors commute to town daily from nearby rural areas;
• Availability of electricity is the main problem for all types of enterprises. Additionally, the Directory and non-Directory enterprises complain of poor public infrastructure and the OAEs are concerned with the lack of sufficient funds and limited markets and

Recommendations:

• Improved infrastructure and governance with dedicated plans for developing the agro-processing and manufacturing sectors (including makhana-processing activities) would promote the growth of enterprises.