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Industry home truths: For sons of soil, sops come before state

Both are sons of the soil, both are big names of India Inc. and both are apprehensive about investing in their own state.

And in their stand, both have sent out a message,

loud and clear, to chief minister Nitish Kumar: unless the government offers incentives, it would be difficult for entrepreneurs to set up shop in the state.

Samprada Singh, the 87-year-old chairman of

Alkem Laboratories Limited who was recently named as the 48th richest Indian by Forbes, has made it clear that incentives have to be given to attract industry.

His younger brother, Alkem’s managing director Basudev Narain Singh, told The Telegraph on Tuesday that his company was keen on investing in Bihar provided the government offered financial incentives in the form of excise and income tax relief as extended by states such as Goa, Sikkim, Uttarakhand, Jammu and Kashmir and Himachal Pradesh.

Basudev Singh said Alkem, based in Mumbai, was keen on investing in the state and added that he was hopeful the government was working towards allowing incentives for the pharmaceutical sector.

“We are always keen to invest in Bihar. Not just we, there are many other pharmaceutical companies which are interested. But the state should be giving us incentives in the pharmaceutical sector. By incentives, we mean I-T (income tax) and excise relief. There are many states in India which have offered these benefits and investments have been made there. Some of these states are Sikkim, Goa, J&K, Uttarakhand etc,” Basudev Singh told The Telegraph on the sidelines of the felicitation ceremony of Samprada Singh, organised by Oriental Insurance Company Limited.

Samprada Singh, who hails from a farming family in Okri (Jehanabad), had started his career as a small retail chemist in Patna in 1953. He launched Alkem Labs in 1973.

Tax incentives given to the pharmaceutical sector in Sikkim has been able to attract investments worth more than Rs 3,500 crore. More than 14 pharmaceutical companies, including Alkem, have made significant investments in the northeastern Himalayan state.

Asked whether Alkem had contacted the Bihar government regarding the incentives, Basudev Singh said he was sure that the state was doing its best.

“We hope the state government is doing its best,” the MD said.

Anil Agarwal, the Patna-born chairperson of the UK-based Vedanta Group, had also pledged help for the state last year.

Agarwal is an active member of the Bihar State Industrial Investment Advisory Council, which was formed by the state government last year. He was present at the first meeting of the council in Patna on September 16 last year.

A US$ 50 billion group listed at London Stock Exchange, Vedanta is a natural resources-based organisation dealing in aluminium, copper zinc, lead, silver iron ore, oil and gas.

While addressing a meeting of the Bihar Chamber of Commerce and Industries last year, Agarwal, while stopping short of committing any big-ticket investment for Bihar, had pledged Rs 100-crore financial support for the government in the education and healthcare sectors.

“We are a natural resources-based company.

There are no mines available in Bihar at present. But the state has huge potential in sugarcane production. We are exploring what we can do for the state. Right now, we have pledged financial support of Rs 100 crore to the Bihar government in healthcare and the education sector,” Agarwal had announced.

But the pledge remains a pledge until now. The Telegraph’s attempts to contact Vedanta by email did not elicit any response.

“He (Agarwal) had clearly stated that Bihar didn't have any mines. But he had also promised a sum of Rs 100 crore,” said Satyajit Kumar, chairman of the PHD Chamber of Commerce and Industries.

In an earlier talk with The Telegraph, senior BJP leader and former deputy chief minister Sushil Kumar Modi had said that even if the state were successful in getting special status, investments would be difficult to come by.

“Special status means incentives and sops, but the state has got a bigger issue in the form of land scarcity. Unless this problem is solved, big-ticket investments will not come. Even if our (the BJP’s) government comes to power, it will be a major challenge for us,” Modi had told The Telegraph.