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									Investment Opportunities in Bihar
                  Pravasi Bharatiya Divas
                 New Delhi, January 2008

•   The Changing Face of Bihar

•   Investment Friendly Policies Adopted

•   Infrastructure Development Initiated and Gaps that can be Bridged
    with PPP

•   Sectors Ripe for Investment in Bihar

•   Be Part of Bihar’s Growth.
                     Changing Face Of Bihar

                        •   New Industrial and Other
Investment Climate          Policies initiated and being

Infrastructure          •   Large Scale Infrastructure
                            Projects Initiated

                        •   Fast-track Court System. Not
Law and Order               Just Talk. Results have even
                            encouraged World Bank.

                        •   Greater Accountability
Governance                  Measures for Departments.
    Major Investment Policy Initiatives Underway

•   Bihar Single Window Clearance Act-2006
•   Bihar Infrastructure Development Enabling Act 2006.
•   New Industrial Policy -2006
•   Price Preference Policy- 2006
•   New Policy Initiatives for Entertainment, Tea Processing and Sugar
    Sectors - 2006.
•   Amendment of Sugarcane Act 1985 to provide for other products
    from sugarcane apart from sugar.
•   Policy for establishing higher Technical Institutions in Private Sector
    - 2006.
•   Simplification of VAT Regime - 2006.
    Clearances By The SIPB

Total proposals cleared                 108
Investment involved              Rs.38,000+

Direct employment                   95000+
possibilities in the proposals
Distribution of The Cleared Projects

         1-    New Sugar Mills                             21

         2-    Mega Projects                               14
         3-    Expansion of existing Sugar Mills (7 + 2)   9
               & addition of Ethanol Plant Proposals

         4-    Cement Plants                               4

         5-    Power Projects                               3

         6-    Jute Mill                                    3

         7-    Handloom Park                               1

         8-    Textile Park                                 1

         9-    Tractor Projects                            1

         10-   Mini Steel Plant                             1
                          BIADA- Allotment of Industrial Units

                       ALLOTMENT OF INDUSTRIAL UNITS

450                                                                                426


350                                                                                          168% Growth
                                                                                             YoY in the
                                                                                             allotment of
                                                                        159                  Industrial Units

                    105                        106
                                                                                             in Bihar
50       34

      2003-2004   2004-2005                2005-2006                 2006-2007   2007-2008

                          Total No. of Units    Linear (Total No. of Units)
                                                                     BIADA-Projects Cleared

                               Project Cost (Rs. in Lakhs)

140000                                                                        131328.19


100000                                                                                    Projects worth
                                                                                          1313 Crores
                                                                                          have been
40000                                                                                     initiated
20000                                                              17245.7
                     5615.77                  5843
         2003-2004   2004-2005             2005-2006              2006-2007   2007-2008

                                    Project Cost (Rs. in Lakhs)
    Improving Investment Climate – Infrastructure Focus

•   Public investment postulated to go     •   Roads & Transportation
    up from Rs 21,000 cr in 10th Plan to
    over Rs 60,000 crores in 11th Plan
                                           •   Power
•   Share of private investment in total
    investment postulated to go up
    from the present 59 % to 65 % -        •   Education
    1,08,283 cr.

                                           •   Telecommunication
•   State intends to attract large share
    of private investment and FDI
                                           •   Health
•   Strategy would be through
    Infrastructure Development as well
    as Investments in Social Services      •   Social Development
    (Education, Health and Nutrition)
In three years the State will have Road Infrastructure which will rival the
best in the country
                                          •   The State has
                                               –   3629 Kms of National Highways
                                               –   3232 Kms of State Highways
                                               –   7714 Kms of Major District Roads

                                          •   As against an average outlay of 40-50
                                              Crores per year for roads under Plan
                                              outlay for 06-07 was 600 Crores. This
                                              financial year outlay is 922 Crores for
                                              roads alone.

                                          •   This does not include the allocation for
                                              State Highways under which the
                                              expected expenditure during this year is
                                              approx. 1000 Crores.
                     Roads & Transportation

•   Speed and Quality
     –   Work Programme for every road with weekly physical and financial
         targets – fines for slippage from work programme and bonus for
         early completion.
     –   Network of own Quality Control Labs.

•   In addition Third Party Quality Control.
     –   Computerised Monitoring – Data Centre at H.Q. – computers with
         every Division.
     –   GIS Road Network Map with Database being drawn up.
•   Capacity Enhancement
     –   Equipment Bank
     –   New simplified registration system for contractors
•   Contracting
     –   Two Bid System for all contracts.
     –   New Standard Bidding Document – includes best features of
         MORTH & CPWD bid documents.
Roads & Transportation

 National Highways
     –   2123 Kms being 4- laned - 1608 Kms
           under NHDP, 245 Kms under
         Buddhist Circuit Project & 270 Kms on
         BOT basis

 State Highways
     –   All State Highways being 2-laned–
         2035 Km under RSVY &
           927 Km with assistance from ADB.
     –   162 Kms being 4-laned on BOT basis.

 Major District Roads: - 7714 Kms
     –   4500 Kms taken up in 06-07 for
         widening and strengthening – in
         various stages of completion.
     –   2000 Kms being taken up this year.

 Mukhya Mantri Setu Nirman Yojana
     –   445 bridges taken up for construction in
         06-07 at a cost of 785 Crores

                                      Current installed   capacity   of   587   MW
                                      Expansion of Barauni and Kanti Thermal
                                      Power Stations by adding 500 MW each.
•   For power a 3 fold strategy has   Setting up of new power plant under joint
    been adopted                      venture with NTPC at Nabinagar (3x660
     – enhancing Generation,          MW).
                                      New Hydro Power       plant    proposed    at
     – improving transmission         Dagmara(126MW)
       efficiency and
                                      Shell company under joint venture with
     – increasing distribution and    IL&FS to develop new sites at Katihar and
       rural electrification.         Pirpainti (to be handed over through
                                      competitive bidding).
                                      Nuclear Power Corporation team visited
                                      Rajauli for setting up of a Nuclear Power
                                      Plant of 1000 MW. NPC to expedite the work
                                      Coal blocks/linkages needed for the new

•   Total Public Investment envisaged-
         •   Muzaffarpur Thermal Power Station           Rs 222 crores
         •   Strengthening of Transmission Lines         Rs 2500 crores
         •   Strengthening of Distribution System        Rs 150 crores
         •   Rural Electrification under RGGVY           Rs 1694 crores
             (all villages to be elctrified by 2009 under Bharat Nirman)
•   New Potential Projects 12750 MW Rs 59350 crores
         •   Muzafferpur TPS     750 MW      Rs 3350 crores
         •   Nabinagar TP       4000 MW      Rs 16000   crores
         •   Katihar TPS        2000 MW      Rs 8000    crores
         •   Pirpainty          4000 MW      Rs 16000   crores
         •   Nuclear Power      2000 MW      Rs 16000   crores
•   The state is on track for achieving 100%
    electrification of all rual areas by 2012 under the
    Rajiv Gandhi Grameen Vidyut Yojna.
                      Health & Education Improvements

Education - 19 proposals have been cleared, which include 3 Medical college
cum Super Speciality Hospital, Engineering Colleges, Management Institutes.
Communication Institutes and Entrepreneurs Training Institute.

To Raise the Infrastructure and Services in Health Sector to Indian Public
Health Standard
 –   24*7 service in all Hospitals and PHCs
 –   Free medicine (100 normally required)
 –   Diagnostic facilities at PHC level
 –   Ambulance facilities at PHC level
 –   Recruitment of doctors and nurses
 –   Modernization of PHCs, Distt. Hospitals, Medical hospitals (Rs 300 crores being spent)
       Policy Interventions – Private Investment in Health

•   Private participation is being encouraged in this sector
•   Government will facilitate availability of land at market rate
•   50% concession on prevailing rates will be given on registration fee
    and stamp duty
•   Government will provide road, electricity and water up to one point
    within the boundary of the institution
•   Government will provide 50% of the cost (maximization of Rs.
    75,000) of preparation of DPR to the private party
•   Ambulances have been provided to all primary health care centers
•   Two landmark initiatives for 24x7 healthcare:
     – Dial 102 for ambulance services
     – Dial1911 for specialist and emergency health services round the clock
       in Patna
                                                    Health Infrastructure
Up gradation of facilities in PHC has resulted in the no of patients going up
from 39 per month in January 2006 to 4524 patients per month in October

          Name of the                                              Work
  Sl.                       No. as per               No. to be
            Health                       Existing                 Already       Plan
  No.                       the IPHS                 created
           Facilities                                            taken up

  1     District Hospital      38          25           11         11

         Sub Divisional
  2                            101         22           79         20
          PHC to be
  3      converted in          533                     533         201
                                                                            331 per year
  4          APHC             1544        1236         308
                                                                             for 3 years
                                                                             1553 per
                                                                             year for 3
  5           HSC             16580       8815         7765        751
Opportunities for Investment-Education & Health Care

                         Technical Eduction
                         • 30,000 students migrate from Bihar
                         • Medical Colleges
                         • Engineering Colleges 1 NIT, 3 govt and
                            6 private
                         • Management Institutes
                         • Polytechnics

                         Health Care
                         • Large no of patients go outside the
                            state- Kolkata, Delhi, Chennai, Mumbai,
                            Varanasi- lack of adequate facilities
                         • 1.5 million OPD and 80,000 Indoor
                            patients in AIIMS from Bihar
                         • 50% patients in AIIMS from Bihar
                         • Hardly any super specialty medical/
                            diagnostic facilities in Bihar
                                    Not Just Show & Tell

                                “A slew of fiscal & legislative reforms
                                Silent transformation is taking place.
                                First state to abolish Agriculture Product
“RECENT REFORMS GIVE A          Marketing Control Act.
  RAY OF HOPE TO BIHAR”         Urban Land Ceiling Act repealed.
    -The World Bank in India,   Model Municipal Act adopted, 2007.
                     Sept.07    Bihar Apartment Ownership Act, 2006
                                Implementing Comprehensive Flood
                                Management Information System to
                                support flood control and management
                                through early warning & emergency
                                response system.
Sectors Ripe For Investment

    •   Food Processing

    •   Sugarcane (Ethanol etc)

    •   Textiles & Handlooms

    •   Leather

    •   Education, Healthcare & Pharma

    •   Tourism
Food Processing- Bihar’s Strength

 Largest producers of fruits and

     8.60 MT vegetables (9% of all

     3.35 MT fruits (8% of all India)

     0.28 MT litchi (71% of all

     1.45 MT mango (13% of all

     0.003 MT makhana (85% of all

 Maize1.5 MT (10% of all India)
     For ethanol
                                 Food Processing Projects

•   Total project cost - Rs.1,670 crore
•   Total period -          5 years
•   IL&FS appointed as Project Management Agency.
•   In the first phase, Integrated Food Zone, Rural Agri Business
    Centre/Primary Processing Centre, Air Cargo Complex, Quality
    Assurance Centre with R & D facilities and development of rice mills
    cluster will be taken up

• Litchi, Mango, Potato, Makhana Processing
• Honey Related
• Vegetable & Grains
Sugarcane & Ethanol – Immediate Opportunity
       Sugarcane industry is the largest agro-based industry in

       Visualizing the potential of this sector, the strategies of
       Bihar include:

            • Expanding the area under cultivation from 2.30 lakh
              hectares to 5 lakh Hectares

            • doubling the production of sugarcane from 143.64
              lakh MT

            • Strengthening of research institutions in the state.

            • Increase productivity of sugarcane to 70.00

            • Encourage the production of ethanol from
              sugarcane juice

            • Encourage co-generation of power.
Sugarcane & Ethanol – Incentive Policy

              The main features of this policy are:

              • Revitalization of closed sugar mills.

              • Exemption from purchase tax on
                sugarcane for 5 years.

              • Grant of 100% subsidy on capital
                investment (plant and machinery) to a
                max of 10 crores whichever is less

              • Reimbursement of central excise duty on
Sugarcane & Ethanol Proposals Cleared

          • 21 proposals were cleared.
          • Study Undertaken for the Revival of closed Units
          • SBI Caps have submitted the diagnostic study report.
          • 8 out of 17 units are viable for revival.
          • In other cases, sale of assets for other industrial
            purposes is suggested.

          • 4 Ethanol plants from Maize at Hajipur, Begusarai,
            Khagaria and Bhagalpur.

          • 10 plants for Ethanol from Sugarcane juice at Araria,
            Katihar, Bhagalpur, Jamui, Munger, Nalanda
            Aurangabad, Rohtas and Buxor.

          • The total investment is around 4.00 billion USD.
                                 Opportunities for Investment-
                             Sugar mills, ethanol, cogeneration

•   Potential for manifold increase in productivity and area
     – 55.43 MT/Hect to 120 MT/Hect
     – 227,000 Hect to 1.5 million Hect
     – Sugar Recovery from 9.6% to 10.36%
•   Ideal agro-climate
•   Ethanol manufacturing
•   Electricity- Cogeneration
                                                    Leather Sector

•   Bihar is a major producer of good   •   State Govt. approached Ministry
    quality hides and skins.                of Commerce, Govt. of India for
                                            establishment of Footwear Design
•   Bihar ranks 3rd in production of        & Dev. Institute in Bihar.
    hides and skins in the country.
    Produces 2.64 million bovine        •   Report on potential of leather
    hides per annum.                        industry in Bihar has been
                                            prepared by CLRI.
•   Square shaped goat hide is world
    famous for its quality.             •   CLRI is also making project report
                                            for establishment of CETP at
•   Acute shortage of trained               Muzaffarpur.
    manpower in footwear industry.
                                              Textile, Handloom & Jute

                                          •   The opportunities in this sector
•   Bihar has a strong weaving                exist in the setup of
    tradition with more than 1.3 lacs          – Raw material bank,
                                               – dyeing centers, and
•   This sector has Skilled and cheap
    labour.                                    – in the post weaving,
                                                 packaging and finishing
•   The government has announced
    many new initiatives to improve the
•   Schemes for modernizing        the    •   There is tremendous need for
    handloom sector.                          design and product
•   The strengthening of the training         development.
    institutions has been initiated and
•   Computer aided design      training
    also being introduced.

Textile & Handloom
• Handloom Park at an estimated cost of Rs. 25 cr. is being established at Bhagalpur,
   Biharsharif and 5 other places.
• Special Purpose Vehicle has been constituted at Bhagalpur for this purpose.
• Land has been identified.
• Textile Park at Kahalgaon, Bhagalpur at an estimated cost of 120 cr. Is under
• Special Purpose Vehicle has been formed. Land has been identified.

• M/s Bengali Jute Twine Ltd is establishing unit in Begusarai at an estimated cost of
   Rs 8.00 crore.
• Land has already been allotted.
• Civil work has started.
• M/s Rameshwar Jute Mill is going to establish a jute mill in Kishanganj.
• Land is yet to be identified by the proposers.
Bihar Tourism Has Huge Potential - Lots to Work With

                                  Bihar has enormous potential for
                                  development of new product ideas,
                                  some of which are the latest craze in
                                  the western world today.
                                  Heritage Tourism: The state has an
                                  abundance of historical places,
                                  Religious Places, Archeological Sites
                                  and forts, which can be suitably
                                  renovated and opened up for tourism.
                                  Health Tourism: Spring sites have
                                  tremendous potential for health tourism
                                  due to their medical values.
                                  Entertainment Tourism: Bihar have a
                                  great potential for features like;
                                  entertainment complexes such as
                                  amusement parks, water parks, cable
                                  car rides, aquariums, casinos, sound
                                  and light shows, etc
                                  Waterfront Tourism: Bihar has
                                  significant potential for water-based
                                  Cultural Tourism: Bihar has rich
                                  cultural heritage which is exhibited
                                  through the various fairs and festivals
                                  and dances.
•   Currently getting <5% of Domestic
    Tourists and 1.3% of Foreign
    Tourists in India.

•   Lack of Infrastructure, Security and
    Awareness are main reasons of
    underdevelopment of Tourism in

•   Current Tourism Circuits:-
     –   Buddhist Circuit
     –   Jain/Tirthankar Circuit
     –   Islam/Sufi Circuit
     –   Sikh Circuit
     –   Ramayana Circuit
     –   Gandhi Circuit
     –   Nature & Wild Life Circuit
                                                          Actions Taken

Actions initiated                             Work in progress
• Development of Airport of international     • Development of Natural Hot Springs at
   standard - International airport at Gaya     Rajgir
   -flights from Thailand etc – land for      • International Convention Centre at
                                                Nalanda /Rajgir
   extension being made available.
                                              • Consultant from WTO visiting to draw
• International Golf Course (18 Holes) –        strategic plan
   designed by PGA - Land acquired at
   Bodh Gaya
• A tourist police force has been setup
   for safety of tourists.
• Steps initiated to enlist Nalanda ruins
   in UNESCO list
Opportunities for Private Investment and Participation In Tourism

                               •   Development of hotels and resorts
                               •   Construction of Yoga and
                                   meditation centres
                               •   Rejuvenation centres providing
                                   ayurvedic and other services
                               •   Promotion of arts and crafts of the
                                   state which are popular even
                                   outside the country
                               •   Water sports
                               •   Organized tour operators and
                                   service providers
Other Opportunities for Private Investment and
                   Entertainment & Hospitality
                   •   82 million population -8 million middle class
                   •   Hardly any standard shopping complex,
                       multiplex, entertainment centres
                   •   Shortage of budget hotels

                   Information Technology - Advantages
                   •    Cheap trained manpower
                   •    Low attrition rates
                   •    Low real estate costs
                   •    Can overcome infrastructure constraints
                   •    Problems of high manpower cost, high attrition
                        rate, and high real estate costs

                   Government investing in
                   •  Rs 2500 crores in State Wide Area Network
                   •  Rs 10 crores as revenue support for e-Services
                      in about 9000 panchayats
                   •  State Data Centre
                   •  Secretariat Local Area Network and Metropolitan
                      Network in Patna
                   •  Computerized e-services- land records,
                      registration of property, employment exchange,
                      driving license, treasury networking,telemedicine
                       Why Bihar Now

•   Investment Friendly Government
     – Stable Government
     – Better business Policies
•   Security fast becoming on par with the best in
    the country
•   Fertile Land
•   Abundant Water
•   Cost effective Skilled/Unskilled Labor
•   Infrastructure Requirement represents huge
•   Untapped Market of 8.2 Crore
                                 Law & Order - Results

Action                                   Results

Fast Track Courts
                                       15394 Criminals Convicted (Between
                                       January 2006- October 2007)
Mobile Courts
                                       More night time family outings
Induction of Ex-Army Personnel
in Police (SAP)                        Increased Tourism

Speedy Conviction of Criminals         Increased communal harmony &
                                       all festivals being celebrated with
Enforcing Accountability               gaiety and fervor.
Regular “CM Janata ke Darbar Main”

Online Grievance Redressal System in CM Office

State Administrative Reforms Commission

Delegation of Powers to Departments

Election of Panchayats

Enforcing Accountability

Strengthening Vigilance set up- Ex CBI officials

Enactment of Bihar Panchayat Raj Act

Empowerment of women and other disadvantaged
sections of the society through affirmative action.

Gram Katchhary – Speedy, cheap and accessible,
justice delivery system at door steps to function with
the help of Nyayamitras
                                 Be Part of Bihar’s Growth
Bihar is the next frontier for businesses in India both as an
Investment destination and untapped market potential.

                                   Bihar is on the move - The state is
                                   poised for major development and
                                   growth in the next few years.

                                   We invite all of you to visit Bihar – today
                                   a land of boundless opportunities across
                                   many sectors including infrastructure
                                   development, food processing,
                                   sugarcane and ethanol production,
                                   textiles, leather, health care and tourism.

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