Industrialists in the state feel that the Centre's move to offer tax rebate in 21 districts of Bihar does not imply an immediate rush of investors.

While welcoming the Centre's decision to offer investors 35 per cent additional depreciation on investments they make in plants and machinery over the next five years in 21 districts, including Patna, the common perception among a majority of industrialists and the office holders of industry bodies was that the state government first needed to solve the perennial issues of land, power and connectivity to ensure that investments from outside came.

A lot would depend on the state's efforts to cash in on the tax relief by providing basic infrastructure and enabling factors, they added.

Arun Agarwal, the chairman of Bihar Industries Association, said on Thursday: "The decision is good but I don't think that this would ensure outside and big-ticket investments in the state. The Centre's decision would surely help the local industrialists though. Any industrialist wishing to enter a state to invest always looks at the broader aspects and not small-time benefits. He would look at the policies the state government has regarding industrialisation, land availability, power condition and transportation mechanism among other things. Without these, investments from outside would not come. The rebates in taxation are not something, which would really lure big investors. However, the decision would help local entrepreneurs. If the Centre wanted to help, they could have provided total income tax rebate for Bihar."

Apart from the 35 per cent depreciation, the income tax department has said the manufacturing company would also be eligible for a 30 per cent investment allowance for investments above Rs 25 crore.

Satyajeet Kumar Singh, the chairman of the Bihar chapter of PHD Chamber of Commerce, also had similar feelings.

"If the Centre has declared 21 districts, including Patna, backward, all 38 districts should have been be included in the same bracket. While the decision is welcome, one has to say that just incentives would not do much good to the state. The state has been grappling with issues of land availability, power, proper connectivity and the negative attitude of financial institutions since long. The state and the Centre must take a proactive approach to solve these primary issues. With banks not helping the industries here much, there is a need to create a specialised financial institution in Bihar and hold a diagnostic study to identity issues related to Bihar's industrialisation. The state and the Centre need to work out the basics other than incentives," said Singh.

Land availability has been one of the biggest problems the state has been facing and Bihar Industrial Area Development Authority (Biada) has just 159 acres of land left with it. The industries department is on with a drive to get back unused Biada land from investors. The power situation may have improved but the single window system in the state remains a distant dream.

Principal industries secretary Tripurari Sharan had said they were working on the same seriously.

The state too seems to have accepted that big investments in Bihar would not come by and chief minister Nitish Kumar, while requesting the banks to cooperate, has said Bihar's industrial growth was being written by the small- and medium-scale industries.

The credit deposit ratio of Bihar stands at 44.03 per cent against the national average of 78. O.P. Sah, the president of the Bihar Chamber of Commerce and Industries, was optimistic though.

"Land is not available only in Patna and adjoining areas. Other areas in the state are not facing the problem," he said.

HAMS senior leader Nitish Mishra hailed the Centre's decision.

"Bihar has got a golden opportunity to take great stride in developing the industry and generating new jobs. The special package and tax exemption for Bihar have done away with the need of special status for the state now," Mishra said.