Bihar Chamber of Commerce office in Patna. Telegraph picture

Setting example for others

Do you think prospects for trade and business have improved in Bihar?

A conducive atmosphere is building up for trade and industries. Bihar has witnessed a tremendous change over the past five-six years in every sphere of life. This has helped the state build its image. There have been works and schemes initiated by the state government, which have inspired not just other states but also the Centre. The Union finance minister is talking about transferring cash subsidy directly to the beneficiaries for kerosene and fertiliser much like the Bihar model adopted for several government schemes, including bicycle yojana, school uniform plan and 50 per cent quota for women in panchayat elections.

What has the state government done to promote trade and investment?

The government has created a conducive atmosphere, a key element for investment, which increases the confidence of the entrepreneurs of both outside and inside the state. Besides this, the government has provided a good governance, better industrial policy, food processing policy, income tax policy and infrastructure for investment.

 

Check on ‘capital flight’

Can you single out the biggest achievement of the state government?

Yes, the biggest achievement of the government is that it has been successful in checking the “capital flight” from the state, which was quite rampant before 2006. Local entrepreneurs, instead of making investments outside the state, are now looking at the local market. All big names of biscuit industries such as Britannia, Parle, Anmol and others have started their work in the state and many other companies would come up in future. As far as the big investments are concerned, it will not start pouring in in a day. It will start with smaller ones such as companies with an investment of Rs 10 to Rs 20 crore as the local entrepreneurs do not have the capacity to make investments of say Rs 1,000 crore or Rs 2,000 crore at a time.

You said the state government has been spending on schools, roads, health but there is still one major area — power sector — where the state is lagging behind...

All the efforts and energy of the government was spent on putting the house in order in its first five years. Now it has been paying attention to improve and strengthen the power scenario in the state but again thermal power plants need a gestation period of five-six years and I am quite hopeful that in the coming years, this government would produce fruitful results in this sector too. Besides, the state investment promotion board (SIPB) has already cleared private investments to the tune of Rs 1.5 lakh crore in the power sector.

 

Power pangs & land issues

Proposals have been cleared but the result is far from satisfactory as not a single private power company has made any progress in setting up a plant nor has the state government been able to set up its own plant. Don’t you think that land acquisition is becoming a big problem for the government?

Yes, land acquisition is a major problem which has held up the private sector power plants. The state government should come forward to play the role of facilitator, which of late it has started doing, between the farmers and the interested parties. The other major bottleneck is non-allocation of coal linkages. The Centre has allocated coal blocks which would not serve any purpose. The state government is trying its best to complete the modernisation and expansion work of several power plants (like Barauni and Nabinagar projects).

What would you prescribe for the resolution of the ongoing power crisis in the state as these projects, even if they are commissioned now, would take another five years to start generation?

The state government should put pressure on the Centre to get its allotted quota of power from the central sector to reduce the impact of energy shortfall. Also, Bihar State Electricity Board (BSEB) should purchase power from energy exchange where power is auctioned per day. The board has taken the guarantee of supplying minimum 3500MW to the state but has not been able to fulfil even half of its promise.

 

Fuel surcharge ‘unreasonable’

The BSEB has also imposed fuel surcharge on all consumers, including the industrial users, with retrospective effect. What is your take on this?

The electricity board has become a “white elephant” whose inefficiency is proving to be a major stumbling block in the industrialisation process. Imposing a fuel surcharge with retrospective effect has adversely affected all industries, particularly the small-scale ones. The board should try to keep the electricity tariff at a reasonable rate that should be on par with the neighbouring states. The tariff rate should be revised after longer intervals like a year or two, and that too after taking into account the inflation rate. The board should shed its habit of making sudden announcements of imposition of fuel surcharge as it is vitiating the business environment of the state created during the past five years of the NDA government.

As per your chamber’s figure, SIPB, as on March 1, 2011, has received 461 proposals worth Rs 2,15,212 crore from private investors but a meagre sum of Rs 2,200 crore has been translated into reality. What are the reasons behind this?

The rate of translation of proposed figures into real investments is low due to the fact that bulk of proposals has come from power and sugar sector (Rs 1.49 lakh crore in thermal power sector and around Rs 21,000 crore in sugar/ ethanol sector) and the Centre has thrown a spanner in the state government's efforts by not granting coal linkages and subsequently changing the sugar control order, prohibiting production of ethanol directly from sugarcane.

Despite this, Rs 2,200 crore has been actualised and many more projects, particularly in the food processing sector, would be translated into reality in future.

 

Implement budget promises

As the representative of a trade and commerce body what is the one thing you would like from the state government?

Whatever the government announces in its budget must be implemented in true sense. Otherwise, it would not only send a wrong message to the traders but would also create confusion among them regarding government’s policies. Notification should be issued promptly on the scheme or policy announced in the state budget. Besides this, the government should strengthen the “single window system” meant to facilitate smooth private investments.

About O.P. Sah...

The Sah family shifted to Patna from Bhagalpur in 1890. O.P. Sah was born on June 17, 1952. He did his B.Com from Patna University in 1972. Sah inherited his family business, which was initially engaged in food processing industry, but later shifted to distribution business of FMCG (fast moving consumer goods) companies. Later, he established a detergent plant at Hajipur for one of the biggest FMCG company — HUL (Hindustan Unilever Ltd). Sah has been elected BCC president five times (one term is for one year).

 

Writing new business chapter

What would you have been had you not been a politician?

I had the penchant for reading newspapers since my childhood, particularly the news related to politics. I also used to write on issues relating to politics and society in my early days. Had I been not in the family business, I would have either been a politician or a journalist.

Special status must

What is the state government doing to attract big corporate houses of the country?

The state’s dream to attract investments from big corporate houses would be fulfiled only when it gets the “special category” status. Unless the state gets full support from the Centre, it is quite impossible catch up with the national average growth rate in all sectors. If India has to become a “superpower” then Bihar will have to progress by leaps and bounds and this will not be possible without the special status. This is the demand of the people of the state too. Special status, which would allow concessions in central taxes besides other facilities, coupled with the state's fertile land and vast human resource, would certainly attract big corporate houses like Reliance, Tata, Mittal etc. to the state.