The incident took place in a government school in Chakradharpur in the Chaibasa district on Thursday. There were 40 students in the class when the accused attacked the children.
The school has only one teacher. He was not in class at the time of the incident.
"We all were studying in the class when the murderer came. Then he started stabbing with a knife. Other class students and I were petrified to see this so we ran from the class to save our lives. We only saw him stabbing two students," said a student from the same class.
The injured student has been admitted to the Tata Main Hospital in Chaibasa. According to the doctors his condition is critical.
The police says the accused tried to flee after the stabbing the Class 1 students, but the school children chased him and informed the villagers about him.
The accused was then caught by the villagers, who after thrashing him, handed him over to the police.
"We all were working that time, when the villagers started shouting then we came to know about the incident then we rushed to the spot," said the father of the victim.
The police is investigating the incident.