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Patna, Dec. 15: Federation of Indian Chambers of Commerce and Industry (Ficci) has listed non-availability of land and poor power scenario as the main reasons behind the “dismal” industrial growth of Bihar.
Ficci, in association with Germany-based organisation Konrad Adeneur Foundation, carried out a six-month-long study to assess the investment environment in the state. The industry body has earlier done similar studies in Rajasthan, Maharashtra, Uttarakhand, Punjab and Karnataka. The report titled “State Level Reforms — Increasing Investment in Bihar” was released two days ago.
According to the Ficci findings, there is a significant gap in the proposal of investments intended towards Bihar and the amount of real investments in the state. The report said there were investment proposals worth Rs 13,577 crore in 2008, but only Rs 62 crore translated to reality. The situation, in fact, deteriorated in 2011 when the state did not receive any investment against proposals worth Rs 42,941 crore.
The report attributed non-availability of land for starting a new unit as well as for expansion of the existing units as a major problem in industrialisation. “In Biada-promoted developed industrial areas, difficulties appear in obtaining large plots of land. The plots available with Biada (Bihar Industrial Area Development Authority) are small and dispersed across different industrial zones. Also, the land price is stated to be very high in some of the industrial areas,” the report said.
Ficci has recommended that Biada should make efforts to provide large plots of land at reasonable rate to investors for starting or expanding industrial units. Emphasis should be on restoration of unutilised land of closed and sick PSUs, which can be offered for new industrial units.
Power is another key area where the state needs to work hard, said the report. The state is heavily dependent on the central sector allocation as it gets around 800-1,000MW against the scheduled allocation of 1,753MW per day. The state’s two power plants at Barauni and Kanti are deficient to meet the requirements of the entire state. In order to catch up with the national average consumption, the power availability has to increase seven folds — 5500MW — the report suggested.
It also laid emphasis on skill development to reach the optimum level of labour productivity in the state. The report suggested increase in central allocation for each Industrial Training Institute from the existing Rs 2 crore to Rs 10 crore.