India’s BUB challenge: Why Bihar, UP and Bengal must industrialize rapidly
Subscribe to enjoy similar stories. Creating meaningful employment opportunities for those who seek paid work among India’s nearly 900 million working-age individuals is a central concern for policymakers. Along with the number of jobs, the job quality and distribution across the country are critical for ensuring widespread economic prosperity for most Indians.
Three of India’s four most populous states—Bihar, Uttar Pradesh and West Bengal (let’s refer to them as ‘BUB’)—account for one-third of the overall population, or about 452 million in 2021, as estimated. If just UP and Bihar were a single country, estimates suggest that it would probably be the third most populated in the world by 2036. BUB states are also the poorest of India’s large states, with their per-person real income, proxied by per-person real gross state domestic product, below ₹5,000 per month in 2022-23.
The working-age population of BUB was about 281 million in 2021. As per Census 2011, the latest data point available for state-wise migration, the number of people who migrated for work out of these states was 5 million. Even if it has increased rapidly in the past decade, most young people in these states must find meaningful jobs locally.
We calculated the sectoral employment to population ratio of 20-35-year-olds at the state level, using data from the first and latest Periodic Labour Force Survey, for agriculture and allied sectors, industry (mining, manufacturing and utilities, with manufacturing comprising the bulk of employment) and services, including construction. UP saw no change in the share of industrial employment among 20-35-year-olds between 2017-18 and 2023-24; it remained at 6.4%. Bihar experienced a decline from 4.3% to 3.2% in the
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