Novel bacterial isolates producing Poly-β-hydroxy Butyrate (biodegradable plastics) were isolated from waste water and soil and were able to produce PHB at higher concentration S11 (59% w/w), S14 (58 % w/w) and S27 (57% w/w). For decreasing the production cost, agricultural byproduct such as sugarcane molasses and potato peels were used as cheap carbon sources for the fermentation process. After comparing different combinations of agricultural wastes it was found that sugarcane molasses was most suitable among them as it resulted in higher PHB production of 67% w/w on dry weight basis. For large scale PHB production the fermentation was carried out in a 10 L controlled reactor using S11 strain and it resulted in intracellular PHB accumulation of 70% PHB w/w on dry weight basis.