Patna, Oct. 31: Chief minister Nitish Kumar today directed chief secretary Anjani Kumar Singh to form a committee to resolve problems faced by entrepreneurs because of the transition from the previous industrial promotion policy to the new Bihar Industrial Investment Promotion Policy (BIIPP) 2016.

The chief secretary will preside over the committee, while principal secretaries of finance, commercial taxes and industries department will be members.

Nitish's directions came at a closed-door Udyami Panchayat (entrepreneurs' meet) held at the chief minister's secretariat to listen to grievances and suggestions of industrialists and entrepreneurs from the Bihar Industries Association (BIA) and the Bihar Chamber of Commerce and Industries. Deputy chief minister Tejashwi Prasad Yadav, industries and science and technology minister Jai Kumar Singh, education and IT minister Ashok Choudhary, energy and commercial taxes minister Bijendra Prasad Yadav, excise minister Abdul Jalil Mastan and several other ministers and officials were present at the meeting. Nitish asked the chief secretary to ensure that the problems are resolved and suggestions from industrialists are reviewed before the next Udyami Panchayat, which is held on the fifth Monday of a month. The last such meeting was held on May 30.

"Several beneficial suggestions have come from the entrepreneurs," Nitish is learnt to have told officials. "They should be reviewed and action should be taken on the ones which can be implemented. Agriculture and industry are the fundamental areas and Bihar will develop if they develop."

Asserting that Bihar with its 11 crore population was a big market with ample human resources, the chief minister claimed that a conducive environment for investment has been formed in the state. "Basic infrastructure like road, water, electricity, health, education and others have rapidly developed," he is learnt to have said, "We have ensured the rule of law in the state."

According to a World Bank list on ease of doing business that was released today, Bihar improved to 16th from 21st position in 2015.

At the closed-door meeting, industrialists and investors called for modifications in the BIIPP and also raised grievances related to interest subvention and annual minimum guarantee (AMG) and monthly minimum guarantee (MMG) that entrepreneurs have to pay under the new policy.

BIA president Ram Lall Khetan said the biggest issue raised by entrepreneurs was that several investment proposals submitted to the State Investment Promotion Board (SIPB) during the previous policy - which was in force between 2011 and 2016 - have not been cleared. According to state government data, the SIPB had approved 2,345 investment proposals, of which 313 are working.

"We want that the proposals and applications submitted to the SIPB should be quickly cleared. The new industrial policy, effective from 2016 to 2021, should be modified for this if needed," Khetan said.

He said entrepreneurs were peeved because the new policy does away with capital subsidy and has reduced 300 per cent VAT reimbursement over capital investment offered under the previous policy to 80 per cent. "The state government has offered to pay up to 10 per cent interest rate charged by commercial banks on loans. This is a good step, but the provisions in the previous policy were more attractive to investors. We will be raising the issues again before the committee headed by the chief secretary," Khetan added.

Bihar Chamber of Commerce and Industries president O.P. Sah said ending power subsidy to industrialists was a retrograde step.

"In the previous industrial policy framed in 2011, industries were exempted from paying AMG or MMG to power companies. It was because electricity supply used to be less than the total connected load. Though power scenario has improved much in the state, industries are still getting much less power than their requirement and it hampers their work. We have demanded that exemption from paying AMG and MMG should be restored," Sah said.

Among those who presented their views at the meeting were former BIA president K.P.S Keshri, former BIA vice president Sanjay Goenka and former chamber of commerce president P.K. Agrawal.

Industries department principal secretary S. Siddharth said the decision on power subsidy will be taken as per the laws, and legal options will be explored on the entrepreneurs' demand for modifications in the exit policy or transfer policy. He also pointed out that under the BIIPP, investors whose proposals have been approved can choose between the old and the new policy on the condition that they start commercial production by March 2017.