Introduction
The Bihar government’s recent decision to lease 1050 acres of land in Muzaffarpur to the Adani Group for just ₹1 per year has triggered a nationwide debate. Critics call it a corporate giveaway, while supporters view it as a bold development strategy. The lease, valid for 60 years, has raised questions about whether Bihar is losing revenue or securing its industrial future.
In this blog, we break down the deal, the positives, the negatives, and what it really means for the people of Bihar.
Background of the Land
The land was once home to the Hanuman Sugar Mill, which shut down decades ago. Since then, it has remained idle and unproductive. For years, successive governments failed to revive the land for industrial use. The Nitish Kumar government finally decided to hand it over at a nominal lease rent to attract big private investment.
What Adani Plans to Build
The Adani Group will set up a 500 KLPD ethanol plant, with an investment of over ₹1,200 crore.
- KLPD = Kilo Liters Per Day
- Raw Material: Maize and sugarcane, both abundant in Bihar
- Goal: Contribute to India’s ethanol-blending policy, reducing fuel imports
This project is expected to be one of Bihar’s largest industrial investments in decades.
Positive Impacts
- Job Creation
- An estimated 2,000+ direct and indirect jobs.
- Local youth will have opportunities in operations, logistics, and support services.
- Reduced Migration
- Bihar has a long history of labor migration.
- If industries come to Bihar, workers won’t need to move to Delhi, Mumbai, or other states for employment.
- Support for Farmers
- The ethanol plant will purchase maize and sugarcane from local farmers.
- Assured procurement = better income stability.
- Industrial Revival
- Idle land will finally see activity.
- The project may encourage other companies to consider investing in Bihar.
- Alignment with National Policy
- India aims to achieve 20% ethanol blending in petrol by 2030.
- Bihar, with high maize production, can become a key contributor.
Negative Impacts & Criticism
- Nominal Rent
- Critics argue that 1050 acres of land for just ₹1 per year is practically free.
- Potential revenue loss for the state if leased at market rates.
- Corporate Favoritism
- Opposition parties allege the government is favoring large corporates like Adani.
- Small local businesses rarely get such benefits.
- Monopoly Concerns
- With Adani entering multiple sectors, some fear reduced competition and over-dependence on one corporate group.
- Execution Risk
- If the plant fails or stalls, the land remains locked for 60 years.
- The state has limited control once the lease is signed.
The Government’s Stand
The Bihar government defends the deal strongly:
- The land was unused for decades, generating zero revenue.
- Attracting ₹1,200 crore investment is worth more than rent.
- Industrial growth will lead to taxes, jobs, and farmer support — far outweighing the lease value.
FbsCoach Thought Box:
At FbsCoach, we believe this deal is more than just a ₹1 land lease. It represents Bihar’s attempt to end its cycle of mass migration and bring jobs back home. For decades, lakhs of Biharis have moved out in search of work. Now, the government is taking steps to ensure opportunities grow within the state.
Yes, the criticism of corporate favoritism is valid, but the bigger picture is about long-term development vs. short-term revenue. By reviving unused land and enabling private investment, Bihar could finally change its industrial image.
In our view, this decision was necessary for Bihar’s future. The true test, however, will be in execution, whether the Adani Group delivers on its promises and whether ordinary Bihari families see the benefits.
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