Bihar doubles down on major investments as industrial growth surges

In recent months, Adani Group has announced investment of Rs 8,700 crore in Bihar, Ambuja Cements is setting up a Rs 1,200-crore unit, and Coca-Cola is expanding its bottling capacity

Bihar, once seen as less industry-friendly, has seen a surge in big ticket investments from the likes of Adani Group to Coca-Cola as it packages its vast resources with progressive policy to lure investors.

Its industries and tourism minister Nitish Mishra, with his CEO-style approach to governance, is pivoting Bihar into a state that could be a gateway for investors to eastern India.

Mishra says the perception bias regarding Bihar's industrial capabilities is slowly being overcome.

In recent months, Adani Group has announced investment of Rs 8,700 crore in the state, Ambuja Cements is setting up a Rs 1,200-crore unit, and Coca-Cola is expanding its bottling capacity. Bihar Business Connect-2023 -- the state's investor meet -- last year saw memoranda of understanding (MoUs) worth over Rs 50,000 crore being signed with 300 companies. And the second edition this week is expected to rake in more.

 

Bihar's industrial potential is limitless, he says. "Bihar has been a victim of perception. But that is changing now."  The state offers investors fiscal incentives ranging from interest subvention to reimbursement of state GST, stamp duty waiver, export subsidy and concessions for transportation, power, and land fee. Plus, it offers a single window clearance not just at the time of approval but also in disbursal of incentives.

Combine that with its resource endowment, inexpensive labour and vast market, Bihar has a potent mixture for industrial supernova.

Mishra says the Freight Equalisation Policy of 1948, which mandates uniform pricing for finished products like steel across India, discouraged industrialisation in mineral-rich Bihar.

Bihar is making up for the lost opportunity. With the new policies and massive spending on infrastructure -- be it roads and highways or power plants -- and "the abundance of human resource, I think now this is the time for us to move on," he says.

Bihar, he says, enjoys a strategic locational advantage because of its proximity to the vast markets of eastern and northern India and Nepal as well as accessibility to Bangladesh and Bhutan.

A fundamentally agrarian economy, the state has a large agricultural and animal production base offering abundant supply of raw material for a range of industries -- from agro-based (food processing, silk and tea) to leather and non-metallic minerals.

Plus, there is no water problem and there is abundant inexpensive labour.

The state has also built warehouses and mega food parks, leather processing hubs, integrated manufacturing clusters and multi-modal logistics parks. It is now building two special economic zones (SEZs).

"Our policy is good and fortunately our leadership here in Bihar has been so good that in these 19 years we have built a very good infrastructure," he says. "Bihar is ready (for investors)."  "I see Bihar as very strategically located. We have a huge population (more than 14 crore) of our own and it's a big market," he says, adding that an industry in the state also services market in eastern Uttar Pradesh as well as the entire eastern part of the country -- from West Bengal to the northeastern states.

Bihar has created a land bank of 3,000 acres for setting up industries. It is also offering about 2.4 million sqft of ready-to-move Plug and Play Industrial Sheds, equipped with all basic infrastructure requirements, situated in industrial areas across the state. These are available for any industry at fixed rate, he says.

It has addressed the law and order problem and now offers near round-the-clock electricity and infrastructure to reach seaports in Kolkata and Haldia, as well as to raw material sources and mineral reserves in neighbouring states like Jharkhand.

It will showcase its policy and achievements at the second edition of Bihar Business Connect 2024 investor summit on December 19-20.

Mishra says the Bihar government has labelled the food processing, IT and IT-enabled services (ITES), and textiles and leather sectors as high-priority and has separate policies to promote investments in each one of them. Also, it is going big on renewable energy, sources such as ethanol and biogas.

"I see huge potential in the IT sector because if you will see pan India or maybe across the globe, you will find professionals from Bihar who are working in big multinational companies," he said.

Also, the textile sector, which has a huge employment potential, is a focus area as the state has the raw material and skilled workforce, he said, adding that food processing is another sector with vast potential given the vast agro base that Bihar has. It also offers opportunities for the leather industry.

"Biofuels are emerging as a big sector, particularly ethanol and compressed biogas or CBG," he says. "Apart from that, there are big power projects also coming."  Mishra, who is also the tourism minister, says the state has a massive tourism potential, given that it is the birthplace of two of the world's greatest religions -- Jainism and Buddhism.

"We have an exclusive tourism policy to attract private investment and we are blessed because if you will see in terms of religious tourism or ecotourism, waterfalls, tiger reserves, bird sanctuaries, Bihar has got everything."  Alongside, big metro projects are also coming in the state.

"So I think it (investment opportunities) are huge, but if you will see what our core strength lies, I'll say information technology, textile, food processing, biofuels," he says. "There are a couple of cement factories which are coming."  There was a time when Bihar had witnessed negative growth rate but today it is clocking growth rate that is above the national average, he says.

On the second edition of Bihar Business Connect, the minister says the two-day event will not only see the industry department but all relevant government departments present to clarify to investors. "We would be presenting Bihar and the investment opportunities which are available in Bihar. 2024 is totally different. We are planning different sessions. It will be better. It will be more interactive"  Last year, the meet got Rs 50,000 crore of commitments. "It is not limited to only papers that were signed and nothing happened. Things have really moved and the units have started functioning now. That is a big thing," he says. If developed India wants to grow, developed Bihar has to be created. This event, Bihar Business Connect 2024 will be a booster for it.