New Delhi, Sep 27 The recent GST rate rationalisation is set to boost Bihar’s economy, rooted in agriculture, handlooms, handicrafts and food processing -- easing the burden on consumers, supporting rural livelihoods, strengthening MSMEs and enhancing competitiveness in exports, an official statement said on Saturday.
From makhana farmers in Mithila to silk weavers in Bhagalpur, dairy producers linked with Sudha, and engineers at Madhepura’s rail factory, the GST reforms are expected to reach across the state’s traditional and modern sectors alike.
The impact will be visible across agriculture, handlooms, handicrafts, dairy, fertilisers, rail manufacturing, bamboo and cane crafts, and emerging areas such as AYUSH and honey.
The reforms will boost agriculture with Makhana, Shahi Litchi and processed foods gaining from GST cuts, benefitting lakhs of farmers and MSMEs.
It will also bring relief to Sudha’s 9.6 lakh farmers, supported through GST-free milk and paneer and lower rates on ghee, butter and ice-cream.
Handlooms and crafts like Bhagalpuri silk, Madhubani art, Sujini and Patharkatti stone carving will become more competitive, and farmers will benefit from cheaper fertilisers, micronutrients and machinery with 7-13 per cent expected cost savings.
In an industry push with rail hubs, AYUSH products and honey clusters will see 6-13 per cent relief in costs in the state.
Bihar produces 80-90 per cent of India’s makhana, sustaining about 10 lakh families engaged in cultivation and processing. The crop is concentrated in northern Bihar’s Mithilanchal region, grown in pond networks across Darbhanga, Madhubani, Purnea, Katihar, Saharsa and adjoining districts.
With GST on makhana-based snacks reduced from 12 per cent to 5 per cent, processors and exporters are expected to gain from an effective cost reduction of about 6-7 per cent, making the product more competitive in both domestic and overseas markets.
Muzaffarpur’s GI-tagged Shahi Litchi, also grown in Vaishali, Champaran, Sitamarhi and Samastipur, sustains thousands of small farmers and seasonal workers.
Bihar accounts for nearly 35 per cent of India’s litchi output. With GST on juices, jams and pickles reduced from 12 per cent to 5 per cent, there is an expected cost saving of 6-7 per cent, encouraging more local processing and supporting access to niche markets in the Gulf.
Bihar’s MSME clusters in Patna, Hajipur and Bhagalpur handle a wide variety of processed foods, with micro-units and women-led SHGs engaged in snacks, pickles, bakery and sauces.
Brands like Sudha cater to Bihar and East India, while makhana-based products are reaching pan-India markets.
Bhagalpur industrial estate alone hosts over 40 food and agro units, with new food park and bottling projects adding jobs. With GST on biscuits cut from 18 per cent to 5 per cent and on namkeens and sauces from 12 per cent to 5 per cent, prices are expected to fall by 6-11 per cent, supporting demand and strengthening MSME margins.
A backbone of Bihar’s rural economy, the dairy sector sustains about 9.6 lakh mostly marginal farmers through COMFED (Sudha), with strong participation of women in collection and SHGs.
Processing, chilling, transport and retail provide thousands of jobs across the state, anchored in hubs like Patna and Barauni. With UHT milk and paneer now GST-free, ghee and butter cut from 12 per cent to 5 per cent, and ice-cream from 18 per cent to 5 per cent, products are expected to be 5-13 per cent cheaper.
These cuts will ease working capital pressures on dairies, strengthen cooperative networks, and improve affordability for households across Bihar and East India, according to the official statement.
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