In a bid to shed its image as one of India’s most challenging places to do business and attract fresh investment, the Bihar government has notified the BIADA land allotment & management policy 2026, replacing the 4-yr-old 2022 version with a more streamlined, transparent system designed to cut red tape and speed up project setup.
The Bihar Industrial Area Development Authority (BIADA), the nodal agency under the state’s department of industries, will now handle all plots and shed allotments exclusively through an online portal where available land is listed publicly. Officials say the move aims to eliminate discretion and backroom dealings that have long plagued land allocation in many states.
Secretary of the industries department and BIADA managing director Kundan Kumar on Monday described the policy as a “significant step” toward making industrial establishment in Bihar transparent, time-bound, and genuinely investor-friendly. “We are introducing online allotment, e-auction where necessary, plug-and-play facilities, simplified payments, and clear timelines,” Kumar said.
The policy divides industrial areas into unsaturated, normal, and saturated categories. Plots in prime locations or those drawing multiple applications will go through competitive e-auction or e-bidding. Earnest Money Deposit has been kept modest — 2% for micro and small enterprises, 5% for medium and large ones — with full exemption for Bihar-registered startups.
Land leases will run for 30, 60 or 90 years with renewal options. Advance payments have been calibrated to project size: 40% for investments up to ₹50 lakh, scaling down to 25% for projects above ₹7.5 crore. The balance can be paid in 10 installments over a period of 1.5 to 5 years at a rate of 9% simple interest and a penal interest of 12% in case of delay.
Strict time limits have been fixed for the commencement of production, viz. 12 months for micro units, 18 months for small, 24 months for medium and 30 months for large enterprises with limited extension in genuine cases. Units operating below 50% of approved capacity risk being declared non-functional and facing penal rent. For the first time, the policy includes a structured “surrender and exit mechanism” to quickly reclaim and reuse idle land.
A detailed land-use plan seeks balanced development: 55-65% for industrial plots, 15-25% for roads, 10-33% for green and open spaces, and smaller shares for utilities, commercial and social infrastructure.
Plug-and-play sheds, seen as particularly attractive for smaller players and quick-starters, will get initial five-year allotments extendable to 15 years, with mandatory operations within 90 days.
Broader push for industrialisation
The new policy lands amid Bihar’s aggressive drive to industrialise. Under then chief minister Nitish Kumar, the state has doubled the number of industrial units since 2005, pushed exports from a meagre ₹25 crore to around ₹17,000 crore, and lifted the industry share of GSDP from about 5.4% to over 21%. Recent months have seen BIADA clearing dozens of allotments, including 20 acres to 19 units in early May promising ₹284 crore investment and 1,200 jobs.
The government has set an ambitious target of attracting ₹50 lakh crore in investments over the next five years and generating one crore jobs, backed by the Bihar Industrial Investment Promotion Package 2025 and other sector-specific incentives.
Industries experts say that whether the new land rules deliver on their promise will depend on execution — clearing bottlenecks in power, logistics and skilled labour that have historically held the state back. But for an administration that has steadily improved law and order and basic infrastructure, the policy signals a sharper focus on turning policy into factories on the ground. Investors watching eastern India’s rising prospects will be taking note.
