Women work at a food processing unit at Patliputra Industrial Area in Patna. Telegraph picture

Food processing units of the state are starving because of delayed payment of funds and subsidies.

A very slow process of granting of funds has affected the operations of these units, which are among the biggest investment sources of the state.

An official in the industries department told The Telegraph that the non-payment of grants and subsidies to these units had become a “major problem”.

“Around 106 of the 141 food processing units, which have been approved till September this year, are running while others are in the process of being set up. Recently, the state government released a grant of about Rs 103 crore for this purpose and they are in the process of being distributed. The units are functioning, but almost all of them are waiting for grants and subsidies, as the process is very slow,” the official said.

“It is a cause of concern. The units are moving at snail’s pace and the production is also being affected. The department needs to speed up the process or else the investments would not be of much help. The food processing industry is one of the biggest revenue generators in the state, with the production value rested at about Rs 1,031 crore,” the official added.

To make matters worse, Infrastructure Leasing and Financial Services Limited (IL&FS), a consultant appointed by the state government in 2007 for facilitating the investors interested in setting up food processing units, have not been paid for their services since May this year.

Sources in the IL&FS, whose contract with the state government ends in 2015, said the department was not serious when it came to the nurturing of food processing units in the state.

“The problem is many officials in the department are not very well versed with the functioning of the department. The process of providing subsidies and grants for most of the units is stuck in files at different phases. Nothing much is being done to check the delay in payments. Since May this year, the department has not even paid us for our services. An amount of Rs 5 crore is due. Because of this, our work has been severely affected,” a senior IL&FS official said.

Explaining the agreement with the state government, he said: “According to the agreement, we are supposed to bring investors for the food processing industry to the state, make detailed project reports for them and get the unit of an interested investor approved. The work also includes inspections to check the performance of the units. As a result of the non-payment of our dues, the inspection work has almost stopped. This has in turn started affecting the units.”

When contacted, P.K Jha, the director of food processing at the industries department, said he was “clueless” about the issue and did not speak any further.

Satyajeet Kumar, the vice-chairman of the eastern region of Confederation of Indian Industry (CII), said: “There are many investors who have set up food processing units in Bihar and are complaining about the slow process of getting grants and subsidies. The problem needs to be addressed fast or else the future is dark.”

The investors rued the present scenario.

Prakash Kumar Verma, the proprietor of Muzaffarpur-based Paras Agro Foods, said: “First, there is no single-window system in Bihar and setting up an industry is a tedious task. Besides, the government does not want to release the grants. I had to wait for over two years to receive a part of the amount I had applied for. The same payment should be made in six months. The department has a lot of problems — officials keep changing and those in the chairs do not have much idea, which delays things further. Under such conditions, running an industry for long is a fight in itself.”