Sudhir Singh
Updated on June 15, 2026
Bihar’s Laghu Udyami Yojana gives Rs 2 lakh as a direct grant to poor families to start small businesses. This is not a loan. You do not repay it. The money is released in instalments tied to your business progress.
The scheme targets 94 lakh families from BPL households across Bihar, covering General, OBC, SC, ST, and minority communities. If you are in Bihar and your family income is below the poverty line, this scheme is worth applying for.
What You Get
Rs 2 lakh total. Released in three instalments:
First instalment: 25% (Rs 50,000), at the time of selection, for business setup.
Second instalment: 50% (Rs 1 lakh), after first instalment is utilised and business has started.
Third instalment: 25% (Rs 50,000), after further business progress is verified.
Each instalment goes directly to your bank account. A government-appointed verifier visits to confirm usage before the next instalment is released.
Who Can Apply
The applicant must belong to a family whose name is on the Bihar government’s BPL (Below Poverty Line) list. Family annual income should be below Rs 72,000.
Age: 18 to 50 years.
The scheme covers all communities: General, OBC/EBC, SC, ST, Muslim minorities. Each category has reserved seats in the selection pool.
You must not already be a beneficiary of Bihar Mukhyamantri Udyami Yojana (the Rs 10 lakh scheme) in the same year.
What Business Can You Start?
The scheme covers 62 business categories across 5 sectors:
Food processing: Papad, pickle, biscuit, jam, bakery, flour mill, oil mill.
Wood and furniture: Furniture making, door-frame work, wooden goods.
Construction: Brick laying, painting, floor and tile work.
Daily use goods: Soap, detergent, agarbatti (incense sticks).
Service businesses: Mobile repair, tailoring, beauty parlour, tent house, cycle/motorcycle repair.
You pick one category from the approved list when you apply. You cannot change it after selection. Match your existing skill or family background to what you select, verifiers check that the business is real, not just on paper.
How to Apply
Go to laghu-udyami.bihar.gov.in
Register with your mobile number and Aadhaar.
Fill in your family details, BPL status, and the business category you want to start.
Upload: Aadhaar, BPL certificate or ration card, bank passbook, caste certificate (if applicable), and a passport-size photo.
Submit. Selection is done through a computerised lottery if applications exceed seats. Results are published on the portal.
Offline applications through your block development office are also accepted if you face difficulty with the portal.
Laghu Udyami vs Mukhyamantri Udyami: Which One to Apply For?
Laghu Udyami Yojana: Rs 2 lakh, no repayment, for BPL families, simpler business categories, lottery-based selection.
Mukhyamantri Udyami Yojana: Rs 10 lakh, 50% subsidy + 50% interest-free loan (so Rs 5 lakh grant + Rs 5 lakh loan), for SC/ST/OBC/women/youth with 12th pass minimum, manufacturing focus, merit-based selection.
If you qualify for Mukhyamantri Udyami Yojana (which needs 12th pass minimum), go for that, the benefit is larger. We covered it in our next article at indiansouls.in/bihar-mukhyamantri-udyami-yojana-2026/.
If you are below the Rs 72,000 income threshold and do not have the 12th pass qualification, Laghu Udyami is the right one.
After Selection: Training
Before the first instalment is released, selected beneficiaries attend a 2-day training organised by the district industries centre. This covers basic business registration, GST, bank account management, and record keeping.
Training is free. A stipend of Rs 250-500 per day is usually paid during training.
After training, the first instalment goes to your account.
Connection to PM Vishwakarma
If you are a traditional artisan in Bihar, PM Vishwakarma Yojana runs alongside Laghu Udyami and covers 18 crafts with a Rs 15,000 toolkit and Rs 3 lakh collateral-free loan. You can benefit from both if your business qualifies under different categories. PM Vishwakarma guide is at indiansouls.in/startup/pm-vishwakarma-yojana-guide/.
For street vendor businesses specifically, PM SVANidhi at indiansouls.in/pm-svanidhi-scheme-2026/ and PM Mudra at indiansouls.in/pm-mudra-yojana/ are better fits.
Key Links
Apply online: laghu-udyami.bihar.gov.in (check for active registration window)
District Industries Centre: Find yours at industry.bihar.gov.in
Helpline: 0612-2547071 (Department of Industries, Bihar)
📩 If you notice any incorrect data in this guide or wish to share additional information, please write to us at info@indiansouls.in.
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