Patna, June 17: The investors’ confidence could freefall owing to political turmoil in the state, casting a shadow on funds flow for new industries.

Given the political uncertainty, most entrepreneurs, especially those from outside the state, would wait until the next Assembly elections before making any commitment for investments. Bihar hardly managed to draw the attention of big-ticket investors despite improved law and order situation in the NDA regime. Now, even small-scale investments would be hard to come by.

The Nitish Kumar government has been flaunting the proposals for private investments of more than Rs 3 lakh crore since 2006. The State Investment Promotion Board cleared them, but less than one per cent of the proposal amount has fructified. Investment worth Rs 1,500 crore has translated into reality so far, industry sources said.

Even the slow-paced investments that were trickling in to the state could slow down further because of the investors’ dwindling confidence following the divorce of the alliance partners — the BJP and the JD(U).

Sanjay Bhartiya, the director of Dina Iron and Steel Ltd, said there was political stability in the state in the past seven-and-a-half years, especially in the absence of strong opposition. But now things would change because the government might not be enjoying the same liberty and freedom to work, he said.

“The step (break-up of the alliance) is likely to bring political instability, which would affect the investors’ confidence. Now investors will tread a path of wait and watch until the next Assembly elections before making any long-term commitment,” Bhartiya told The Telegraph.

Bhartiya expressed hope that the phase of uncertainty would end after the Assembly elections.

Satyajit Kumar, who set up the Shakti Sudha Industries at Patliputra Industrial Area, echoed Bhartiya. The makhana (fox nut) processing unit owner said the break-up would affect the enthusiasm and zeal created in every sector — be that of services, manufacturing or real estate — in the past seven-and-a-half years of the erstwhile NDA regime.

“People (entrepreneurs) will certainly have doubts in their mind on what would happen in future as Sushil Kumar Modi — the man who managed the financial affairs of the state for all these years — is suddenly out of the scene. Better financial management, including robust double-digit economic growth and other strong economic fundamentals of the state was the result of Modi’s hard work. Suddenly, there is a vacuum. Who would spearhead the economic and financial matters in the state?” Kumar asked.

“The fragile government would now invest more of its time and energy in surviving, impending Lok Sabha polls in 2014 and the Assembly elections in the following year,” Kumar said. “Do you think the government will get time to work on development?” he asked.

An entrepreneur, on condition of anonymity, said: “Even chief minister Nitish Kumar used to say to meet Modi on almost all crucial and important issues. Entrepreneurs are waiting eagerly to see who the chief minister nominates the next finance minister.”

KPS Keshri, the president of Bihar Industries Association and the director of Amrapali Foods Ltd, said: “The JD(U) government would certainly be different from the erstwhile NDA government, which functioned successfully and smoothly for the past seven-eight years on all fronts — be it law and order or governance. The entrepreneurs from outside the state willing to invest have decided to adopt a wait-and-watch policy till the next Assembly elections.”

Subhash K. Patwari, the owner of Patwari Udyog Limited, lamented that the fate of local entrepreneurs would remain the same as it was during the Lalu regime or in the current Nitish dispensation. “The investors’ confidence will certainly not be the same as it used to be. There will be doubts in their minds. But again, where will the local investors go?”

Bihar Retail Dealers’ Federation general secretary Ramesh Chandra Talreja told The Telegraph: “There may be some adverse impact of the separation on industries but I don’t think the trade would be affected at all as the head of the government is the same. Had the chief minister changed, it would have its impact even on trade.”