The Bihar government and the Department of Industries are focused on promoting inclusive economic development in the state and have been working to improve the investment climate by developing supporting infrastructure and adopting best practices. To this end, they have established the Muzaffarpur bag cluster, using a market-led approach in which a Mumbai-based anchor unit collaborates with local aspiring women entrepreneurs. This is a unique initiative that aims to create a sustainable, inclusive, scalable, and replicable model for cluster development, using a plug and play model. This approach is intended to address common challenges faced by traditional clusters, such as inadequate supply chains, lack of market linkages, and insufficient technological and managerial capacity.

In the current economic scenario, post COVID-19 era, industrial clusters have become the new mantra for economic development. There has been tremendous growth in the practice of cluster-based competitiveness initiatives across India. Traditionally, clusters are developed by the concentration of homogeneous micro small and medium enterprises producing similar products in a particular geographic location sharing common opportunities and threats but many times it didn’t show significant output because of the inadequate supply chain, lack of market linkages, unavailability of the workforce, financial inability, lack of technological and managerial capacity. Enterprises also start competing, and as a result, they are not enjoying expected growth. Involving multiple enterprises from outside the cluster is also a challenge for the Government. Considering these issues, rather than developing the cluster in a traditional way, Department of industries adopted the reverse mechanism, they first roped in an anchor unit for an uninterrupted supply of raw material and market access then through convergence of schemes, developed a new sustainable, scalable, and replicable model of cluster. In fact, when world locked down, Industries in Bihar started transforming. The Government of Bihar had conducted the profiling and mapping the skillsets of migrant workers returning to the state amid the novel coronavirus disease (COVID-19) lockdown. The Department of Industries collected the details of their work experiences and noticed that a huge number of workers, from the same region of Bihar, returned from Mumbai who were working for Bag manufacturing firm in Dharavi. Department started looking into the possibilities of sustainable model for employment generation for these workers. Department invited the



Mumbai based anchor Unit – “The High Spirit Commercial Ventures Pvt Ltd ” and with the help of departmental convergence provided all the extended support in a transparent manner to setup its manufacturing unit in Muzaffarpur Bag Cluster.

Department developed a state-of-the-art plug & play (pre-constructed facilities with all necessary infrastructure: A bid to reduce the time taken for firms to launch manufacturing activity) to run the cluster. In addition to that, the Department is also developing a CFC through the “CM MSME Cluster Scheme”. CFC may primarily include plant and machinery for common uses by the bag cluster entrepreneurs.

Because of the Government enablement and multi-departmental collaboration, it took only 56 days from the date of application, to get the necessary approval and start the production with 160 machines. Earlier, beneficiaries had to visit multiple departments individually to get the support to establish a cluster, but current model allows them to avail the advantages in a more transparent way from one source. Further, to expand the capacity of cluster and to bolster entrepreneurship and sparking an Innovation culture among the rural aspiring women entrepreneurs, the Department started engaging with people and related regional communities collaborating with JEEViKA (Bihar Rural Livelihoods Promotion Society).

Bihar Rural Livelihoods Promotion Society (JEEViKA) has played a pivotal role in spreading the awareness and mobilizing the aspiring women entrepreneurs. Department selected the 39 JEEViKA didis and provided them the financial support of INR 10 Lakh to each woman through the “Mukhyamantri Mahila Udyami Yojna- 2022” to invest in plant and machinery. The Department of Industries provided the opportunity for becoming the “Principal firm(s) or key stakeholders” of the bag cluster to local these aspiring women entrepreneurs who have the spirit to start their businesses but couldn’t start just because of financial and technical limitations.

Through the help of the sector experts, the department provided the 1-month in house technical training to the women entrepreneurs and local workers for technical expertise. Further, to develop entrepreneurship and managerial skills, the Department of Industries organized a residential professional training at a prestigious management institution in Patna. All the handholding support and expenses incurred for the above training are covered by the Department only.



Innovation made ensuring transparent, inclusive, and responsive public service delivery. Effective capacity-building took place in a dynamic and interactive learning environment enabled by the Department of Industries in collaboration with the sectoral experts that combined a variety of tools and methods, including on job matching assessment platform specialized courses, soft skills and managerial trainings, tailor-

made technical trainings, peer-to-peer learning and knowledge exchange workshops that supported the beneficiaries in developing entrepreneurship and managerial skills required to run their own business.

All approvals and financial assistance provided directly to the beneficiaries’ accounts through online and transparent system starting from the firm registration, shed allotment to fund disbursement etc.Impact of the innovation and major measurable outcome

Now, Muzaffarpur has emerging as the major bag cluster in the State giving new hope for industrialization. The cluster shall be run majorly by women entrepreneurs and women workers. It has been projected that the total 40 units (including 39 women entrepreneurs, and 1 anchor unit) shall be manufacturing approx. 6,40,000 bags per month having a production value of INR 15 Cr. All these 39 women entrepreneurs, who were jobless before this innovative initiative, are now expected to earn a significant income.

Way Forward

This innovative sustainable, scalable, and replicable model has set an example for the inclusive growth of the state. After getting an overwhelming response from the business community and aspiring entrepreneurs, the Department of Industries has already started working on similar projects across various regions of Bihar. Approx. 24 lakh Sq. ft plug & play facilities are being developed with a vision to replicate the same successful model. The best part is that this innovation involves the local community with majority of women’s involvement. Other than the core business, Department of Industries is also encouraging and assisting aspiring entrepreneurs from local community to start their transportation business. Department shall provide the financial help for the same through “Mukhya Mantri Udyami Yojna” to the eligible entrepreneurs, if required. This has generated an entrepreneurship culture among rural and semi-urban women. This has emerged as one of the best ways to generate sustainable employment and to increase per capita income. This has immense potential in resolving the unemployment issue to a significant extent at the same time it may work as a catalyst for the ODOP (One District One Product) program.