Investment Opportunities in Bihar Pravasi Bharatiya Divas New Delhi, January 2008 Agenda • 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 implemented 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+ crore Direct employment 95000+ possibilities in the proposals cleared 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 450 426 400 350 168% Growth 300 YoY in the 250 allotment of 200 159 Industrial Units 150 100 105 106 in Bihar 50 34 0 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 -50 Total No. of Units Linear (Total No. of Units) BIADA-Projects Cleared Project Cost (Rs. in Lakhs) 140000 131328.19 120000 100000 Projects worth 1313 Crores 80000 have been 60000 cleared/ 40000 initiated 20000 17245.7 5615.77 5843 1299.43 0 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) Roads 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 Power Current installed capacity of 587 MW insufficient 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 projects Power • 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 2007. 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 Hospital PHC to be 3 converted in 533 533 201 CHC 331 per year 4 APHC 1544 1236 308 for 3 years 1553 per year for 3 5 HSC 16580 8815 7765 751 years 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 implemented.” 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 adopted. 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 vegetables 8.60 MT vegetables (9% of all India) 3.35 MT fruits (8% of all India) 0.28 MT litchi (71% of all India) 1.45 MT mango (13% of all India) 0.003 MT makhana (85% of all India) 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 Opportunities • Litchi, Mango, Potato, Makhana Processing • Honey Related • Vegetable & Grains Sugarcane & Ethanol – Immediate Opportunity Sugarcane industry is the largest agro-based industry in Bihar. 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 MT/Hecters. • 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 sugar. Sugarcane & Ethanol Proposals Cleared Sugarcane • 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. Ethanol • 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, weavers. – 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 centers. competitiveness • 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. Initiatives 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 implementation. • Special Purpose Vehicle has been formed. Land has been identified. Jute • 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 tourism. Cultural Tourism: Bihar has rich cultural heritage which is exhibited through the various fairs and festivals and dances. Facts • 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 Bihar • 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 Participation 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 opportunity. • 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. Governance 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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