Explore the detailed economic profile of Jharkhand, highlighting its rich mineral resources, industrial hubs like Jamshedpur and Bokaro, growth trends, poverty statistics, and key budgetary insights—essential for competitive exams and policy analysis.
Mineral Resources and Industrial Significance
Jharkhand holds about 40% of India’s total mineral resources. ➤ Hence, it is referred to as “Ratnagarbha” or mineral-rich motherland.
Due to its mineral richness, Jharkhand is often compared with the Ruhr Region of Germany. ➤ The Rarika River (Koel) region earned it the title “Ruhr of India.”
According to the Indian Bureau of Mines, 58 types of minerals are found in Jharkhand.
The state’s economy is primarily based on mining and mineral-dependent industries.
Major industrial cities: Jamshedpur, Ranchi, Bokaro, Dhanbad.
Firsts in Indian Industrial History (Exam Relevant Facts)
First Fertilizer Plant: Sindri (Dhanbad)
First Iron & Steel Plant: Jamshedpur
Asia’s Largest Coal Washery: Piparwar (Chatra)
First Coal Washery in India: Ghatotand (Ramgarh)
First Methane Gas Project: Parbatpur (Bokaro)
In 1779, the first modern effort to produce iron-steel was made in Jharia, Dhanbad.
Economic Contribution by Sector (2022-23)
As per Economic Survey 2022-23, the Secondary Sector contributes 33.6% to GSVA.
Major mineral-based industries:
Tata Steel (formerly TISCO)
Tata Motors (formerly TELCO)
Sindri Fertilizers
Heavy Engineering Corporation (HEC)
Abundant minerals:
Iron ore, Manganese, Coal, Dolomite – supporting the steel industry.
Copper, Sulfur, Asbestos, Bauxite, Mica, Uranium – enabling the development of copper, power, and aluminum industries.
Transport and Connectivity
Jharkhand has developed road, rail, and air transport networks.
Inland water transport has not developed well due to the hilly terrain of rivers.
Mayurakshi River is the only river suitable for transport during monsoons.
Jharkhand, a mineral-rich state carved out of Bihar in 2000, presents a paradox of immense natural wealth alongside stark economic underdevelopment. The state’s economy can be analyzed under four major categories:
1. Economic Features
Semi-Developed Natural Resources
Jharkhand has abundant but underutilized or semi-utilized natural resources.
A significant portion of land remains barren or uncultivable.
Only 28.8% of the total geographical area (79,49,929.9 hectares) is under net sown land.
Around 30.22% of land is still classified as fallow, barren, or unproductive.
Despite having mineral wealth and water resources, their exploitation is limited due to institutional bottlenecks, flawed policies, and social structures.
Imbalance in the manufacturing sector hampers industrial development.
Jharkhand’s contribution to India’s Gross Domestic Product (GDP) rose slightly from 1.6% in 2000 to 1.84% in 2015-16, and then dropped to 1.61% in 2018-19.
Heavy Dependence on Agriculture
Agriculture remains the primary occupation of 70% to 85% of the population.
The economy is heavily reliant on the primary sector.
Dependence on agriculture stems from lack of opportunities in other sectors.
This leads to:
Fragmented landholdings.
Hidden/unutilized agricultural labor.
Lack of modern agricultural techniques and poor organizational efficiency.
As a result, agricultural productivity is low, per capita income is meager, and most farmers live at subsistence levels.
Agricultural contribution to the Gross State Domestic Product (GSDP):
14.97% in 2016–17,
15% in 2017–18,
22% in 2022–23.
Shortage of Capital
Jharkhand faces a dual capital deficiency:
Low per capita capital availability.
Poor capital formation rate.
Inadequate exploitation of resources hampers creation of capital goods.
Savings are minimal due to low income-consumption differential.
As per 2011 census, the population is 3.29 crore with only 10 banks per 1,00,000 people (as of 2020-21).
In 2018, agricultural loans formed only 15.55% of total bank loans, showing a decline from 15.82% in 2017.
Non-Performing Assets (NPAs) in Jharkhand’s banks were 5.87% of total loans.
Declining Industrialization
The state lacks large-scale, modern industries.
Only a small fraction of the population is employed in industrial activities.
Existing industrial units are concentrated in specific zones without widespread impact.
Industry’s contribution to GSDP:
41.9% in 2011–12,
Dropped to 34.93% in 2018–19,
Further reduced to 33.6% in 2021–22.
The tertiary sector contributed 44.1% to the overall output.
Low Per Capita Income and Poor Living Standards
Being a semi-developed economy, per capita income is low.
Most people suffer from poverty, illiteracy, malnutrition, and disease.
Around 70% of families lack access to government healthcare facilities.
Among poor families, less than 16% benefit from health services.
Per capita income:
₹10,129 in 2001–02,
₹76,806 in 2018–19,
₹51,365 in 2020–21 (based on 2011–12 base year).
National average was ₹1,12,835 in 2020–21.
Jharkhand ranked 26th among Indian states in per capita income, just above Assam, Manipur, Uttar Pradesh, and Bihar.
Economic Inequality
Wealth and income are unevenly distributed in the state.
A small section controls a large share of income, while the majority survives on minimal resources.
The disparity is more pronounced in rural areas than urban centers.
Wealthy classes enjoy greater saving and investing capacity, maintaining a continuous income flow.
Meanwhile, the poor remain excluded due to the absence of effective redistributive mechanisms.
Unemployment and Disguised Unemployment
Jharkhand suffers from widespread unemployment and underemployment.
Unemployment rate in 2018–19:
National average: 3.6%,
Jharkhand: 7.7%.
Primary reasons include:
Lack of capital,
Absence of complementary development infrastructure,
High hidden unemployment in agriculture and traditional industries.
Vicious Cycle of Poverty
Jharkhand’s economy is trapped in a vicious cycle of poverty:
Poverty leads to low income,
Low income leads to poor nutrition,
Poor nutrition reduces work capacity,
Reduced work capacity further lowers income.
Breaking this cycle requires strategic development of production resources.
Banking and Financial Institutions
Banking facilities in Jharkhand remain limited.
As of the latest available data:
Number of bank branches: 3,008
Number of ATMs: 3,473
In 2020-21, there were 3,203 bank branches and 3,262 ATMs (as of June 30, 2020).
Less than 1% of the state’s ATMs are located in Simdega, Lohardaga, Latehar, and Khunti districts.
10-20% of the ATMs are concentrated in Dhanbad and East Singhbhum.
The ratio of branch to currency is significantly low, indicating poor financial penetration.
Financial institutions are often reluctant to issue loans, leading to a sluggish pace in economic activities.
Population-Related Challenges
(i) High Birth and Death Rates
The state experiences relatively higher birth and death rates, mainly due to underdeveloped rural areas.
In 2015, the birth rate was 23.5 per thousand, and in 2016, the infant mortality rate was 29.
As of 2020:
Birth rate: 16.66
Death rate: 3.06
Ranchi had the highest district-wise death rate: 5.52
(ii) Rapid Population Growth
Decadal population growth rate (2001–2011): 22.34%
Much higher than the national average of 17.70%
Urban areas are growing faster than rural areas.
Districts with higher-than-average growth rates: Koderma, Latehar, Chatra, Giridih, Pakur, and Deoghar.
Districts with lower growth than the state average: Dhanbad (11.91%), Ramgarh (13.06%), East Singhbhum (15.53%), Bokaro (15.99%), Simdega (16.62%), Dumka (19.39%)
(iii) Predominantly Rural Population
Total population: 32,966,268
Rural population: ~76%
Urban population: ~24%
The rural-urban divide significantly impacts the state’s economic structure, reflecting a semi-developed economy reliant on agriculture and primary sectors.
(iv) Heavy Burden of Dependents
Estimated 16% of the population is below 5 years of age.
15–59 age group accounts for around 99.9% of the working-age population, yet a large portion of income goes toward consumption rather than investment.
Rising percentage of the elderly (60+), while children’s population is decreasing due to better birth control measures.
A large dependent population adds pressure on the productive section of society.
(v) Nutritional Deficiency
A significant portion of the population suffers from a lack of nutrition, affecting physical strength and productivity.
The government has implemented the Integrated Child Development Services (ICDS) to combat malnutrition.
Social, Cultural, Political, and Administrative Aspects
(i) Low Literacy Rate
Literacy rate: 54.13%, significantly below the national average of 64.2%
In contrast:
Chhattisgarh: 65.2%
Uttarakhand: 72.3%
Female literacy: Only 39.38%
High illiteracy leads to ignorance, superstition, and limited participation in developmental initiatives.
Women are particularly disadvantaged, both educationally and socially.
(ii) Lack of Social Motivation and Outlook
Social backwardness and orthodox mentality impede progress.
Lack of motivation discourages the flow of labor and capital.
Persistent poverty has fostered a sense of fatalism, leading to loss of willpower to improve conditions.
This mindset must be addressed to promote economic development.
(iii) Law and Order
As per the National Crime Records Bureau (2021):
Jharkhand recorded 1,792 cases of violent and cognizable crimes, including abduction—less than Bihar (10,252), Maharashtra (10,680), and Uttar Pradesh (14,714).
Murder cases: 1,606 (1,594 adults)
Crime reflects administrative weakness and affects economic activities and investments.
Technical and Infrastructural Challenges
(i) Lack of Technical Knowledge
Jharkhand follows traditional methods in most sectors due to limited access to modern technical know-how.
Low per-worker productivity and high economic costs result from lack of technical training.
While modern technologies have reached some areas, most sectors remain untouched.
High prevalence of unskilled and illiterate labor with a shortage of skilled workers.
(ii) Inadequate Transportation and Communication
Infrastructure for transportation and communication is underdeveloped.
Hinders smooth economic development and access to markets and services.
The state lacks large-scale economic structures required for industrial and service sector expansion.
Agricultural and Industrial Growth
Agriculture remains the backbone of Jharkhand’s economy.
Rice production:
2014-15: 2,007,881 metric tons
2019-20: 3,402,173 metric tons
Wheat production:
2014-15: 93,253 metric tons
2019-20: 186,903 metric tons
Between 2004–05 and 2017–18:
Rice increased from 1,677 to 5,109 thousand tons.
Wheat rose from 150 to 470 thousand tons.
Food grain production grew by 37%.
Pulse production increased by 33.6%.
Improved irrigation, high-yield seeds, and scientific farming methods have led to rising productivity.
Industrial progress, especially in basic industries, has begun contributing to economic and social capital.
Signs of Emerging Development
There are visible indicators of development, though not yet extensive or rapid.
Per capita income has increased by about 5%.
Savings and investment rates are rising, with investment reaching 25.9%.
Despite this progress, current capital formation and investment levels remain insufficient.
Many structural impediments are gradually weakening, opening the way for accelerated development.
Land, Soil, Irrigation, and Agriculture in Jharkhand: Challenges and Progress
Jharkhand, with its diverse geography and climate, is rich in agricultural potential. However, factors such as acidic soil, rugged terrain, and limited irrigation have posed significant challenges. Below is a detailed overview of the state’s land use, soil classification, irrigation, and agricultural production:
Soil and Land-Related Agricultural Challenges
Acidic soil and uneven terrain are major obstacles to agricultural development.
Forest cover in the state is 29.76% (as of 2021), limiting the availability of cultivable land.
About 72% of Jharkhand’s land is rocky, plateau-like, and barren, making it unsuitable for cultivation.
Deforestation leads to soil erosion, further increasing barren land.
Out of Jharkhand’s 79,714 sq. km:
23.22 lakh hectares are forests
5.66 lakh hectares are barren
7.24 lakh hectares are usable for agriculture and non-agricultural purposes
0.9 lakh hectares are used as pastures
Land Use Patterns in Jharkhand (in %)
Land Use Type
Percentage
Net sown area
18.12%
Current fallow land
16.13%
Forest land
28.09%
Other fallow land
13.86%
Land unavailable for cultivation
16.07%
Non-agricultural use
8.6%
Barren land
4.62%
Grazing land
1.59%
Tree-covered area
1.52%
Cultivable waste land
3.44%
Key issue: Even where cultivable land exists, the lack of irrigation facilities hinders productivity.
Most agriculture is rain-dependent, and uneven rainfall distribution negatively impacts yields.
Only 8% of Kharif and 6% of Rabi crops are cultivated on irrigated land. The rest depend entirely on natural rainfall.
Soil Classification by Farmers in Jharkhand
Farmers classify soil fertility into six categories based on terrain and properties:
Tand-I (Upper land)
Tand-II
Tand-III
Don-III (Medium land)
Don-II
Don (Lower land)
Upper land (Tand):
Soil: Red to reddish-brown
Properties: Well-drained, acidic, low in organic carbon, nitrogen, calcium, magnesium, and sulfur
Medium land (Don):
Soil: Yellowish-red
Properties: Moderately acidic, contains nitrogen, calcium, magnesium, and sulfur
Conclusion: Jharkhand surpasses the national average in vegetable output, but still meets only 80% of its internal demand. The remaining 20% gap needs to be addressed.
Forests, Wildlife, and Environmental Conservation in Jharkhand
Jharkhand is one of India’s most resource-rich and environmentally significant states. With a diverse forest cover, rich biodiversity, and a wide range of conservation initiatives, the state plays a vital role in India’s environmental sustainability and development planning. Below is a detailed look at Jharkhand’s forest policy, forest types, biodiversity, protected areas, and conservation bodies.
National Forest Policy and Its Implementation
India has had a formal forest policy since 1894, revised in 1952 and again in 1988.
The 1988 National Forest Policy focuses on the protection, conservation, and development of forests.
Key objectives of the 1988 policy include:
Ensuring environmental stability through ecological balance.
Conserving natural resources, forests, and reforestation.
Controlling soil erosion and forest degradation in river catchment areas.
Preventing expansion of sand dunes in desert and coastal areas.
Promoting mass afforestation and social forestry.
Meeting the needs of rural and tribal communities for fuelwood, fodder, and minor forest produce.
Enhancing forest production to meet national demands.
Encouraging the optimal use of forest products and finding alternatives to wood.
Promoting people’s participation, especially women, in conservation efforts.
Forest Cover in Jharkhand (as per Indian Forest Survey, 2021)
Forest Type
Area (sq km)
Percentage
Very Dense Forest (70%+ cover)
2601.05
3.26%
Moderately Dense Forest
9688.91
12.16%
Open Forest
11,431.18
14.34%
Scrub Forest
584.20
0.73%
Major Tree and Plant Species in Jharkhand
Dominant species:Sal.
Other species include: Asan, Gamhar, Bija Sal, Karam, Salai, Khair, Dhawra, Semal, Bamboo, Mahua, Karanj, Palash, Kusum, Ber, Amaltas, and Kend.
Shrubs and grasses: Include species like Putush and Sawai grass.
Legal Provisions and Forest Conservation
The Forest Conservation Act, 1980 is implemented in Jharkhand.
Central government approval is required before converting forest land for non-forest purposes.
State-level Principal Conservators of Forests can approve up to 5 hectares of land conversion (excluding illegal encroachments and mining).
Forest Act provisions are not applicable for survey works like transmission lines, hydropower projects, seismic surveys, and oil exploration.
A 100% centrally sponsored scheme is being implemented to rejuvenate degraded forests in tribal-dominated areas by involving local communities.
This scheme is named “Regeneration of Degraded Forests on a usufruct basis by Tribal and Rural Poor”, aiming to provide employment and forest-use rights to tribal people.
Wildlife in Jharkhand
Forests of Jharkhand host a wide range of wildlife, including:
