PATNA: After the carving out of Jharkhand from Bihar in November 2000, the latter was virtually left without any industry. So, when the NDA government led by Nitish Kumar took over in November 2005, it faced a formidable challenge of industrial development. The government tried to woo big investment from outside Bihar and also by Non-Resident Indians (NRIs) by organizing investors' meets, but this has not materialized so far.
Analysing this situation, Bihar Industries Association (BIA) president K P S Keshri says, "This (outside investment) could not happen despite several meets as only a vibrant industrial economy backed by local entrepreneurs in the SME sector could have generated confidence among the outsiders to set up their ventures in Bihar." This view was echoed by RBI governor D Subbarao while addressing the 'Global summit on changing Bihar' here in February this year. He had said that for the holistic development of Bihar, local industries had to be strengthened to prepare the ground to attract big investments. It gradually became apparent, Keshri says, that for generating jobs, secondary sector (industries) and tertiary sector (services) had to be developed on the strength of primary (agriculture) sector. So, the Nitish government changed tack. The ongoing green revolution in the state made the government come out with policies for accelerating development of food processing sector as it provides value addition to agricultural produce, fruits and vegetables and strengthens the rural economy. With the sector requiring less power, it was considered suitable in the power-deficient state.
The Second Agri Roadmap for Development (which came into force from April 2012) conceptualized Rainbow Revolution, in which growth of poultry, goatry and piggery were important components. These require fodder and feed, opening a vast potential for industries by using maize which is grown in plenty in the state. The Bihar government came up with its Food Processing Policy under its 2015 Vision document, providing for 35% of the project cost for setting up industries subject to a maximum of Rs 5 crore in case of an individual investor and 40% of the project cost subject to a maximum of Rs 10 crore for a Special Purpose Vehicle (SPV) for creating common cluster infrastructure.
Under Vision 2015, development of two mega food parks at Muzaffarpur and Bhagalpur were planned by the state government's project management agency. But later, the two food park projects were shifted to other states, including one to Jharkhand. There were some bureaucratic delays in Bihar, but the shifting of the mega food park projects was described in the political circles here as the examples of Centre's apathy to Bihar. Of late, a food park at Kahalgaon in Bhagalpur district has been planned. Bihar being a power-deficient state must have come as a dampener for many big investors. Local industries have long been seeking quality power supply, i.e. uninterrupted power supply to industrial estates/areas, said BIA secretary general Sanjay Goenka. Near absence of barren and fallow land in Bihar, unlike Gujarat and Rajasthan, is also a factor impeding industrial growth in the state.
In its bid to revive the industrial economy, the state government had set up State Investment Promotion Board (SIPB). Till April, 2012, SIPB had approved 724 project proposals for investment of about Rs 2.87 lakh crore with likely generation of jobs for about 1.95 lakh people. Out of this, 63 industrial units have come into operation, work on 152 others is under progress and 509 projects are at a primary stage.
Interestingly, around 80% of the projects approved by SIPB are for setting up large power projects, but the Union government has not provided them coal linkage, except for one project, said an official in the SIPB. He blamed the Union government for denying Bihar the opportunity of developing power sector. The SIPB approved 69 power projects with a projected investment of Rs 2.35 lakh crore, but only Rs 1,830.23 crore has been invested in them.
SIPB has approved 373 food processing projects with an investment of Rs 4,919 crore, of which Rs 446 crore has already been invested. The board has approved 42 steel and cement projects with an investment of Rs 10,189 crore. But only Rs 317.5 crore has been invested in them and these units have not reached the starting stage. SIPB approved setting up of 28 sugar mills at an investment of Rs 6,507.8 crore, and till April, 2012, an investment of Rs 502 crore had been made. SIPB also approved extension of 10 sugar mills at an investment of Rs 956.64 crore and till April this year the investment was Rs 405 crore.
Director, Micro Small and Medium Entrepreneur (MSME) Development Institute, Patna, D K Singh, says, "Logistics in the form of air cargo facilities, container service, common facility centre for providing cold chain through refrigerated containers for eliminating wastage of vegetables, fruits and their products, a dry port and tetra pack plants for packaging fruit juices are needed to be provided by the state government. Without such logistic support from the government, the MSME sector would not prosper." The MSME Development Institute has catalysed setting up of a cluster-based common facility centre under PPP mode at Pareb in Patna district for improving the quality of brassware and German Silver utensils as well as engineering and brassware decorative items. Singh said that PPP mode may be applied in starting other industries too.
Industries
Proposals okayed by State Investment Promotion Board (SIPB): 746
Completed/Functional units: 65
Units under progress: 150
Investment approved by SIPB: Rs 2,90,794.47 crore
Actual investment: Rs 4,069.49 crore
(Figures till April 2012)
source : TOI
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