You have been doing business and living in Bihar for a long time now. What difference do you see when it comes to ease of doing business now and 10-15 years ago? 

Before Bihar’s bifurcation, the business region was divided into two parts. North Bihar was trade-centric and south Bihar (present-day Jharkhand) industry-centric, both in the public sector and private sector because of the availability of raw material for mines and minerals. The climate, 1990 onwards, was not investor-friendly, mainly because of law and order problems, poor management of the power sector and overall, a negative perception about governance. After the NDA government led by Nitish Kumar and Sushil Kumar Modi came to power, the perception changed. Administration and financial management by the duo created a sense of confidence among local investors and they started participating in the investment process. Policy modification and interaction with the private sector also smoothened the process of doing business. Till the NDA government was in power in Bihar (before the JDU severed its ties with the BJP), investment proposals worth over Rs 2 lakh crore had been finalised.

What according to you is the biggest challenge for any industrialist in Bihar now and why? What kind of challenges do new entrants face?

If you analyse the challenges before industry in Bihar, you will realise industrialisation was in a very nascent stage when the NDA government came to power in 2005, because there was no scope for investment earlier. Over here, there is no institutional memory of successful business houses such as the Birlas in Bengal or Adani and Reliance in Gujarat. So, the first generation of businessmen lacked experience. Most of them started their industries on a sub-nationalism platform — they wanted Bihar to grow and contribute to the state’s development. Lack of capital, infrastructure, a well-implemented taxation policy, non-cooperative bureaucrats and financial institutions, the negative attitude of political leaders towards the private sector and the absence of an industrial model made private investments directionless, vitiating the business environment. First-generation entrepreneurs need to be held by the hand, guided and encouraged to pursue their vision because they are not going to be successful overnight. Learning from one’s mistakes and then finding the right direction is the only way to become successful.

Do you think the state government is doing enough for the business community? If no, what is the need of the hour for industrialists here and what is the first thing the government should do for them?

In the absence of an industrial culture and dominance of trade culture, the government’s focus is more on trade-related issues than industry-related ones. Bihar constitutes 5 per cent of India’s market and with such a base, one can establish a manufacturing economy. The state should come up with an industry development model that targets local, national and international markets. 

In the past two years there have been a major political changes and unrest. Do you think this has harmed the industries sector?

Political drama and instability in the past two years has damaged investment prospects. The political experiment in the name of secularism has brought Bihar back to square one. Policy implementation paralysis, frequent bureaucratic transfers, deteriorating law and order and political instability have ruined the initial enthusiasm in the state’s industry sector.

Do you feel the state government is serious about outside investments? If yes,what steps has the government taken? If not, why isn’t the government serious?

Certain factors have to be worked out for outside investments, like world-class infrastructure, access to highly qualified/skilled workforce, leading location for manufacturing facility, political stability with investor-friendly leadership, ease of doing business, supportive financial institutions. The government has never taken these aspects seriously because of their state-led development growth model. The construction-centric model, adopted by the state, was good in the beginning because it restored investor confidence, but it failed to initiate work to attract outside investors. The problem with the political leadership here is they never plan beyond their mandate and never initiate policies that have a longer gestation period.

What future do you see for Bihar’s industrialisation?

In the historical perspective, everywhere in the world and in India, too, the process of industrialisation started with state support — the continental system of Europe by Napoleon, the Nehruvian model in India, the Japan model or the Singapore model. In Bihar, we had to start from scratch in 2005 and first of all decide on an industrial development model based on available resources. It needs to be decided what would be the core model (one based on available resources) and for that we have to take bold and courageous decisions with an economic vision and with respect to infrastructure (power, land, road, port), finance, skills, entrepreneurship and political will. States or countries are poor not because of their geography or culture. Botswana has become one of the fastest growing countries in the world but other African countries such as Zimbabwe, Congo, Sierra Leone are mired in poverty and violence. In India, Kamraj (former chief minister) in Tamil Nadu, Sahuji Maharaj (architect of sugar industry) and Y.B. Chavan (former chief minister) in Maharashtra and Biju Patnaik (former chief minister) in Odisha brought industrialisation to their states with bold economic initiatives and policies. A key factor behind development of industry in Bihar must necessarily be entrepreneurship and enterprise. A strategy to focus on small and medium enterprises in the first phase will ensure local entrepreneurs take the lead and become the backbone of industrial development. The policy to promote local entrepreneurs should be prioritised with clear, out-of-the-box thinking, planning and an open mindset of the government. 

The state government claims its industry incentive policy is among the best in India. Then why has the state not received big-ticket investments?

Investment in any state depends on two parameters — investment climate, referring to the institutional economic, political and infrastructure environment that shapes the manufacturing sector operations; and expectations and returns on investment. Macro-level issues concerning economic and political stability, the efficacy of regulatory framework for entry or starting a business, labour relations and flexibility in labour use, efficiency and transparency in financing and taxation, and regulations concerning the environment, safety, health and other legitimate public interests need to be improved. The quality and quantity of physical and financial infrastructure such as land, power, transport, telecommunication and banking and finance have to be improved too. Investors often cite infrastructure bottlenecks such as land and power, cost, access and efficiency of finance as key obstacles. For big-ticket investments, availability of land at affordable prices, power, finance and the government’s commitment to an investor-friendly policy are core decision-making factors. The recent craze of Nitish Kumar and Lalu Prasad to protest against the Centre’s land acquisition bill is surprising because in the past 25 years, these leaders never acquired any land for private investors. They are protesting only to gain political mileage. Prosperity and poverty are determined by incentives created by institutions and politics determines what type of institutions a state should get. 

The state is participating in many national and international trade fairs. How can the state ensure such participation translates into investments and not just assurances?

Participation is good for any government. Learning to improve their capacity to formulate a policy and create a vision according to the current demand of industrial products in terms of technology, infrastructure, market and others are also welcome. The government should include entrepreneurs and researchers from different sectors, as state delegates can prepare a strategy to tie up state industry with the international industry, which can help bring technology, capital and market for local industries. Detailed planning is a must before participating with stakeholder industry and advantages have to be worked out so that there is positive output. The government should participate in fairs that match the state’s resources and raise chan-ce of scaling up tie-ups with entrepreneurs.

You are among one of the first businessmen in Bihar to have successfully started an e-commerce venture. How did you get this idea? What advice would you give others?

We are working with gorgon nut (makhana) for the past 10 years and are still looking to achieve its potential in Bihar. The idea came to me after a meeting with Dr Janardan, a former director of the makhana research centre in Darbhanga, under Indian Council of Agricultural Research. The project started after many challenges. In Bihar, success of an industry is a time-taking process and requires a lot of devotion and perseverance. I am a first-generation entrepreneur and have faced a lot of teething problems because in a state like Bihar, the lack of an equity culture and a negative mindset about entrepreneurship among families and society always create entry barriers. I have one simple advice to young people — there are no short-cuts in life, go for detailed interaction with experts in a field you are interested in and develop a strong core of your business model. For instance, Reliance has as strong core competence in the refinery business. So, work with patience and devotion.

Do you feel the JDU’s alliance with the RJD will negatively impact industrialisation in Bihar?

The alliance is unique because of the two leaders, one known for failure in governance and the other a strong believer in the capacity of the state to deliver a governance model. We have to wait and watch for the final model to come of this alliance. The present proposed alliance has no ideological programme for Bihar’s development. Historical evidence suggests that for the development of any state or country, you need three players — the state, private sector and civil society. Every stakeholder has to work closely but the current socialistic leadership is not eager to give any space to the private sector and civil society. The result of this alliance is not going to be positive so far as investment and industrialisation are concerned.

If you weren’t an industrialist, what would you have been?

I wanted to become an IAS officer and after completing my masters from Patna University sat for UPSC exams twice. I faced the interview board after completing the preliminary and mains but was not selected for the finals. The idea to join the administrative services is to work for the people. Today, after 10 years in the industry, specially with gorgon nut, I feel happy that God has given me the right responsibility. In the last 10 years, I have seen the system very closely and thank God that I am not part of a system where delivery is so inefficient. I am happy to work for the benefit of thousands of small landless farmers, trying to improve their livelihood. Three years ago, while visiting a group of farmers in Manigachi block of Darbhanga, the people told me they were getting good prices and immediate payment in this project — not only from us but also from the buyers from outside the state. So, I feel I have fulfilled my objective.

Know Satyajit 

The chief executive officer of Shakti Sudha Industries, which processes and markets gorgon nut (makhana), was born in Jamui on May 12, 1968. He is the first 
person from his family to venture into business

He topped his masters course in history at Patna University in 1994

He has received several awards, including the World Bank Innovation Award in 2008 and ICAR 
Agriculture Business Award 2006. IIM-Ahmedabad, in 2008, mentioned his name among 20 young entrepreneurs who succeeded in business without an MBA degree.