Bihar’s development agenda has struck the right chord with investors across the country and outside. The improved law and order situation, road construction and welfare schemes have boosted the morale of not just the citizens but also the entrepreneurs and industrialists. Still, the state is yet to get big investments that would propel its rise on the industry front. Vice-chairman of Confederation of Indian Industry (CII), eastern region, Satyajit Singh talks to The Telegraph about the impediments in the way of investment flow

Perceptible growth in state

Do you think the state’s environment has become conducive for trade and industry?

There has been a perceptible change on the law and order front. Kidnapping for ransom was rampant when the NDA-I took over the reins. Sectors like roads, schools, bridges, education and health, which were in a shambles, have certainly seen improvement over the past five years. The state government has formulated policies to carry out development work in the state. Utilisation of funds has increased tremendously. State budget has gone up from Rs 2,000 crore to Rs 20,000 crore which shows the government has taken initiatives for the state’s growth.

Does that mean you have no qualms about the state government’s agenda for development?

No, it’s not that. You have to see things in a different way now. This was the case for NDA-I when people were comparing its performance with that of the Lalu-Rabri regime and in that sense NDA-I performed well. But now you have to compare the performances of NDA-I and II. In other words, it is NDA-I vs NDA-II. The second stint of Nitish government has bigger challenges. For example, people would like to see/know how much investments are coming to the state in the NDA-II regime as compared to NDA-I, which attracted more than Rs 2 lakh crore investment proposals cleared through State Investment Promotion Board (SIPB). If investments are not coming, this means that implementation and delivery mechanisms are not working enough to get these proposals translated into ground realities

Need to play pro-active role

Do you think the Nitish Kumar government has taken concrete steps to boost investments in the state?

The state government, despite making tall claims, has not played a pro-active role to attract investments. Chief minister Nitish Kumar has not shown an aggressive approach. Merely formulating industrial policy, as has been witnessed in the past five years, would not serve the purpose. The chief minister must take more initiatives to attract investments.

What do you mean by ‘aggressive approach’ of the chief minister?

Sometimes even the most attractive policies are not good enough to attract investors, particularly in a state like Bihar, which has had a history of poor law and order and deficient economy. To gain the investors’ confidence, the chief minister should hold one-on-one talk with each prospective investor and dispel his/her doubts. The confidence which a chief minister can instil among the investors cannot be expected from the bureaucrats, as is being practiced in the state currently.

Direct talk can win investors

How do you think the government can gain investors’ confidence?

The chief minister, under his chairmanship, should constitute a small group of experts who would directly talk to the investors and resolve their problems in quick time. If the state does not have proper infrastructure like land, water, power etc., it must offer something additional to the investors. The government must also have the courage to say yes or no to any proposal.

What about the investment proposals of Rs 2.15 lakh crore cleared by SIPB. What are the reasons behind these not translating into industry?

Out of Rs 2.15 lakh crore investment proposals, half would never translate into reality, as they do not have the support of matching policy. For example, SIPB cleared proposals of more than Rs 20,000 crore for producing ethanol directly from sugarcane but the central government brought an amendment into the sugar control order, prohibiting the production of ethanol from sugarcane. The government should not clear such proposals which do not have matching policy support.

Mend single window system

As the representative of a prestigious industry body like CII, what is that one assurance you would want from the state government?

The government’s single window system (facility for industrialists/investors to submit regulatory documents at one location) has failed completely. It is there in theory but not practiced anywhere. Even if you submit an application through the single window system, you will have to keep making rounds of each and every department for clearance. Where is the single window system? There is an urgent need to make the system more effective, transparent and practical. If any entrepreneur goes to Gujarat, he/she would get all facilities such as electricity, water, license etc within seven days under one umbrella.

Even if the single window system is strengthened, power will remain a problem area for the government…

The political leadership of the state must have the courage to take bold and decisive steps if it really wants to strengthen the power sector in the state. The government has not taken concrete steps to augment power generation. Land, finance, coal linkage and water are inherent problems which must be taken care of. If the government wants to set up a hydel project, it will have to enter into an agreement with Nepal for which the central government’s help is required. In the given scenario, getting power plants operational before 10 years from now is certainly not possible.

Power exchangequick remedy

What do you suggest as immediate measures to enhance power generation?

The government should contact power exchange for purchase of surplus power at the rate of Rs 2.5 to Rs 3 per unit. Besides this, the government should talk to the central government to increase its allocation to 2500MW from current 1772MW. If that happens, energy requirement of industries, expected to be around 1000MW, would be fulfiled as the state has small and medium enterprises.

Despite the government’s efforts, not a single big investment has come its way. The government says big investments would not come unless the state is accorded the special status. What is your take on it?

Though the Centre has made it clear that no special status would be accorded to any state, still states like Orissa, Chhattisgarh, Madhya Pradesh, Rajasthan and Bihar have been pitching for the same, as it has become a politically emotive issue for them. Another point that the status would bring in huge investments is a wrong perception. Had it been true, the entire northeast region, having been accorded special status, would have attracted investments but that has not happened. A report prepared by the central government says that 90 per cent of total investments, accruing because of incentives given under special status category, has gone to Uttarakhand, Himachal Pradesh (Baddi) and Jammu & Kashmir and the remaining 10 per cent has gone to the northeastern states’ kitty. The reason is obvious: northeastern states have poor law and order coupled with inadequate infrastructure to attract private entrepreneurs/investors.

Industrialist with a vision

About Satyajit Singh…

Born on May 12, 1968 in Jamui district, Singh did his schooling from Jamui High School. He was the topper in the MA (history) examination in 1994 from Patna University. He is the first person from his family to venture into the field of business. He started as a distributor of BPL appliances in Bihar and Jharkhand. In 2003, he was engaged in the white ball revolution (makhana). Later, he established his own makhana processing unit — Shakti Sudha Industries — at Patliputra Industrial Area, a venture which brought approximately Rs 50 crore to the state.

He has received several awards, including World Bank Innovation Award 2008, ICAR Agriculture Business Award 2006, US-based Entrepreneurs Development TIT Enterprising India Award 2011. IIM-Ahmedabad has included his name among 20 young entrepreneurs who have been successful without an MBA degree.

What would you have been had you not been an industrialist?

I always wanted to be an IAS officer but unfortunately could not clear it despite reaching the interview level twice. I wanted to do public service after becoming an administrative officer but now I am trying my level best to contribute to the society by helping people get associated with the business ring.

The office of Confederation of Indian Industry at SK Puri in Patna. Picture by Deepak Kumar

SEZs answer to special status

Do you think the Bihar government should shelve its rigorous campaign for special status, which, if granted, would bring tax waivers and other incentives for entrepreneurs?

The solution lies in setting up special economic zones (SEZs) under which industry gets the same treatment and other incentives which it would get under the special status category. The state government just has to notify SEZ. The Centre, in normal course, puts its seal of approval on state’s proposal for setting up SEZs. So, as long as the demand for special status is pending, the state government should try to set up SEZs. Smaller zones, say 50 acres, I think, are not a difficult task. There are states like Maharashtra, Gujarat, Tamil Nadu, Karnataka, Andhra Pradesh, Haryana and Punjab where SEZs are functioning quite smoothly, making the state prosperous. Besides this, the government should also think of setting up a cycle cluster as it would add around Rs 250 crore to the state’s coffers, a huge sum which is currently going to Punjab. Bihar, after the introduction of Mukhyamantri Balika Cycle Yojana, has become one of the biggest markets of bicycles.

Next week in ‘Hard Talk’ with The Telegraph:Parveen Amanullah, social welfare minister. Readers can send their queries at ttbihar@abp.in