R K Khandelwal IAS Secretary (Resources) Finance

Dept. GOVT OF BIHAR

BIHAR

Constraints to Industrial

Development in

Bihar

Present Scenario

No major industry in the state

The small industries in the state are dominated

by tiny enterprises and artisan based and its share

is as high as 99.9 percent among all the Medium,

Small and Micro Enterprises (MSME) units.

According to Economic Census 2005, out of a

total of 12.25 lakh enterprises, only 7 percent

functioned by banks, 80 percent enterprises did not

have power linkage, 11 percent functioned without

premises.

Annual Survey of Industries (2007-08 and 2008-09)

Characteristics

2007-08 2008-09

India

Bihar

India

Bihar

Total Percentage Total Percentage

Number of Factories 146385 1785 1.22 155321 1777 1.14

Fixed Capital (Rs. lakhs)

84513209 301470 0.36 105596614 303254 0.29

Working Capital (Rs. lakhs)

31695306 163563 0.52 31123298 147072 0.47

Total Persons Engaged (No.)

10452535 73676 0.7 11327485 73659 0.65

Value of Output (Rs. lakhs)

277570904 2187362 0.79 327279786 2953967 0.90

Net Value Added (Rs. lakhs)

48159268 115947 0.24 52776558 3183796 0.60

Law & Order and Crime Situation

The attitude of Delivery Machinery

Political Climate

Continuity of Policy

Ease of Investment

Single Window Clearance

Land Availability

Availability of Power –sufficiency ,reliability

Finance

Type of Labour-Hostile /Aggressive/Cooperative

Existing Industrial Relations

Public Attitude

Infrastructure - Roads, Railway, Air ,water - Health, - Water

Availability of raw materials

Govt. Incentives Policies

Availability of skilled manpower

Availability of technical institutions

Etc.

Category States

Low North Eaxtern States, Assam, Bihar, Jammu & Kashmir, Rajasasthan

Low-medium Himachal Pradesh, Madhya Pradesh, Orissa, Uttar Pradesh, West Bengal

Medimum-medimum Andhra Pradesh, Karnataka

High-medimum Gujarat, Haryana, Kerala, Tamilnadu

High Goa, Maharashtra, Punjab

Statewise Road Density (Kms. Per lakh of Population) (2001) States/Uts Road Density (2001) States /Uts Road Density (2001)

Arunachal Pradeh 1682.9 Assam 327.2 Nagaland 1057.1 Rajsthan 251.5

Orissa 645.6 Andman & Nicobar Islands 332.1 Goa 711.5 Maharashtra 270.6 Himachal Pradesh 485.6 Punjab 253.3 Manipur 478.7 Chandigarh 224.8 Tripura 439.7 Gujrat 271.5 Dadra & Nagar Haveli 255.8 Andhra Pradesh 253.6 Kerala 472.7 Delhi 187.1 Sikkim 368.6 Haryana 133.6 Meghalaya 411.8 Jammu & Kashmir 231.4 Tamil Nadu 262.6 Uttar Pradesh 148.9 Pondicherry 265.7 Bihar 93.5 Madhya Pradesh 268.9 West Bengal 112.5 Karnataka 289.1 All India 237.8

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Sl. No. States Total Rural Road (kms.)

Rural Road Density per lakh of Population

1 Andhra Pradesh 66,071 112.99 2 Arunachal Pradesh 11,904 1283.83 3 Assam 27,183 107.58 4 Bihar 29,891 36.75 5 Chhattisgarh 41,576 227.61 6 Goa 859 111.31 7 Gujarat 43,650 127.13 8 Haryana 12,954 79.10 9 Himachal Pradesh 29,471 508.53

10 Jammu & Kashmir 18,822 215.74 11 Jharkhand 37,654 165.98 12 Karnataka 66,679 179.94 13 Kerala 16,039 64.53 14 Madhya Pradesh 104,710 213.15 15 Maharashtra 81,035 135.21 16 Manipur 8,627 449.81 17 Meghalaya 9,432 474.26 18 Mizoram 3,513 730.30 19 Nagaland 80,395 4555.84 20 Orissa 25,235 76.01 21 Punjab 25,235 147.01 22 Rajasthan 90,125 188.43 23 Sikkim 2,893 560.88 24 Tamilnadu 66,878 183.13 25 Tripura 6,341 223.48 26 Uttrakhand 21,446 313.1 27 Uttar Pradesh 151,767 104.20 28 West Bengal 50,400 81.57

Total 1,134,112 141.34

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Road (kms.) 1 Delhi 1.45 18 Madhya Pradesh 7.93 2 Chandigarh 0.86 19 Karnataka 5.64 3 Punjab 8.65 20 Orissa 6.29 4 West Bengal 4.56 21 Chhattisgarh 5.68 5 Bihar 4.15 22 Uttrakhand 4.20 6 Uttar Pradesh 5.16 23 Himachal Pradesh 4.42 7 Haryana 7.34 24 Tripura 1.42 8 Tamilnadu 6.74 25 Nagaland 0.65 9 Assam 9.45 26 Jammu & Kashmir 0.95

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Rail-route Density per lakh of population (2002)

Total Rural Road (kms.)

BIHAR

Administrative Weaknesses Dismal Law & Order Weak Finances Low Development Expenditure Poor Service Delivery

What are the factors behind this turn-around ? What have we done in last 6 years to achieve it ?

Year GSDP Rate of Growth

2010-11 14.8

2011-12 13.1

Bihar is now the fastest growing state with an impressive 13.1% GSDP growth.

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Rs

Cro

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GSDP at constant (2004-05) prices

Good Governance Discharge of constitutional obligation to

prosecute and protect Improved state finances and higher planned

outlays Supportive Infrastructure for industrial

development Boost in investor’s confidence

Implementation of “Right to Public Service Act, Bihar” from 15th Aug. 2011 Vikas Yatra and Seva Yatras by CM has

positively impacted delivery of public services Zero Tolerance policy against corruption :

Implemented at all levels

Improved Law and Order

Safety and security ensured Strict control over street crime Dip in overall crime graph Setting up of Speedy Trial Mechanism Quick

Convictions Women police stations set up in all 38 districts Flourishing Public life

Roads: ◦ Large road infrastructure programme implemented ◦ Maximum six hours from Patna to any district ◦ No longer bad roads

Energy: ◦ Power availability has improved ◦ Several new power plants coming up ◦ Existing plants modernised ◦ Modernisation of Transmission system

Long term vision for development of agriculture Development of tourism and hospitality sector

No. of Industrial Areas 50

Total acquired land 5517.29 acres

Total allotted land 3932.99 acres

Total No. of industrial units 2343

Total Vacant land 739.61 acres

Economic development that is sustainable Industrial development Boosting agricultural growth Ensuring inclusivity of development Human development through public

investment in health and education

New Strategy for Industrial Development

Conducive Environment for Fresh Investments Incentives to Industries Industrial Incentive Policy 2011 among most

attractive Special strategy for Food Processing sector Thrust Areas identified

State Investment Promotion Board functional for

Speedy Clearance

Pre Production Facility:

100% Exemption from Stamp Duty / Registration Fees

being levied on Lease/ Sale / Transfer of Industrial

Land/Shed

Post Production Facilities 50% Reimbursement of the cost of project report (max. 2

lakhs)

50% incentive (max. 15 lakhs) for Micro/Small units & 25%

incentive (max. 30 lakhs) for large/medium/mega units for

investment on land/shed

30% Reimbursement (max.15lakhs) on tech know how.

50% on plant/machinery for captive power generation without

any ceiling.

60% subsidy on plant/machinery (no ceiling) for captive

power generation if non conventional sources are used.

20% capital subsidy, max. 75 lakhs for MSME and max.

500 lakhs for large units.

Additional Incentive as capital subsidy @20% subject to a

max. of Rs30 crores for investment proposals more than

500 crores.

Exemption on MMC charges on Electricity.

Reimbursement of 75% expenditure incurred on obtaining

ISO standard or equivalent.

Tax Related and other incentives 80% VAT reimbursement for New units and 25% VAT reimbursement

for New Brewery and distillery units.

100% exemption in luxury Tax for 7 years.

100% Reimbursement of Electricity duty for 7 years.

100% exemption in land conversion charges.

25% of VAT/Entry Tax reimbursed for working units.

MSME registered units will pay only 1% CST.

Subsidy on Employment Generation for 100 direct employment

equivalent to EPF Amount

Focus on Infrastructure Development for aiding

Industrial Development ◦ Bihar Industrial Area Development authority allots

Land and sheds ◦ A total of 50 Industrial Areas established ◦ Land bank being strengthened ◦ Private Industrial Estates will be welcomed

Food processing units Educational and Technical Institutions Sugarcane processing Solar Energy Power Projects Super speciality hospitals Information Technology based

industries Electronic hardware industry Textile industry