MSMEs, Start-ups and Global Value Chains: Implications for Labour Development in Small-Scale and Cottage Industries

Economic development in Bihar has remained uneven and constrained due to limited industrialization and persistent structural bottlenecks. In this context, small and cottage industries play a crucial role as they are labour-intensive, require low capital investment, and are capable of promoting inclusive growth in rural and semi-urban areas. Industries such as handloom weaving, khadi and village industries, agro-based processing units, leather goods, pottery, and traditional food-processing activities constitute an important segment of Bihar’s industrial structure. The main objective of this study is to examine the present status of small and cottage industries in Bihar and to identify the major impediments that limit their contribution to economic development. The study is based on secondary data collected from government publications, reports of MSME departments, industrial surveys, and census-based sources. Handloom and khadi units remain largely dependent on traditional techniques, while agro-based industries face problems of storage, processing, and market access. Inadequate institutional credit, poor infrastructure, irregular electricity supply, weak marketing networks, and limited technological upgradation emerge as major constraints. Furthermore, lack of entrepreneurial training, low awareness of government schemes, and administrative delays adversely affect the functioning of these industries. The paper concludes that strengthening small and cottage industries is essential for accelerating Bihar’s economic development. Targeted policy interventions focusing on infrastructure development, access to finance, skill enhancement, technological modernisation, and effective institutional support can significantly improve the performance of this sector and promote sustainable and inclusive economic growth in Bihar.