The Hindu Business Line : `This is the time to come to Bihar'

Industrial activity in Bihar has reached such a low that as the reconstruction of the State gets under way under, industries and businesses making investments "will have a beginner's advantage," says Mr K. P. S. Kesri, President, Bihar Industries Association, talking to Business Line.

Excerpts from the interview:

Do you see any change in the four months this Government has been in power?

Yes, things are changing. At the Pravasi Bharatiya Divas held in Hyderabad in January, for the first time in 20 years nobody said, "Arrey, you're from Bihar" in a derogatory way. Everybody was positive and said it is good to see Bihar coming up. And the presentation by the Chief Minister, Mr Nitish Kumar, was excellent; he said, "come and see for yourself — you don't have to necessarily invest — whether Bihar is changing or not. If you want to invest, we'll give you all the facilities."

But Bihar has always had an image problem...

Yes, and because we were not serious about ourselves, we couldn't convince others to look at us for investment. With change of leadership, the change in image has already occurred.

What else has changed?

For the first time in 15 years we've had a full Budget. But while Mr Nitish Kumar is experienced, most of his ministers are new to governance. The only problem is that the expectation is so high that delivery cannot match it.

What about the response of the bureaucracy?

The bureaucracy played a role in holding a free election. But now it will have to meet the expectations of both the government and the people.

What does the industry want the new government to do?

Today we are behaving more as a watchdog or civil society rather than as an industrial body. So, when we met the Chief Minister recently we didn't talk of industry alone; we also talked of issues of governance such as chain of command, delivery mechanism, monitoring systems, feedback mechanisms, consultative committees in agriculture, industry, tourism, energy and social sector.

What is being done to attract investment; the last time I was here — two years ago — industrialists, businessmen, professionals, were leaving Bihar...

Industries never fly out because of the high investment made in fixed capital. They might stop working and wait for the right time. So except for a few cases, exodus didn't take place. Traders have gone and also professionals; those who didn't have investment in fixed assets.

Obviously business goes where returns are best...

Yes, a lot of traders have gone out of Bihar. They had reasons; the climate was not conducive for best returns. And chances of their coming back are low. Muzaffarpur had a lot of textiles traders, each of them worth a few crore; the majority left for Surat and switched from trading to manufacturing.

They are not going to return. But the (Bihar) Government has come up with an excellent sugar policy. So 36 proposals have come in and if all of them materialise, we should get an investment of Rs 4,000 crore. There is a huge opportunity in sugar. But the Government will have to ensure that the farm sector gives adequate support to the mills.

What are the other opportunities?

We have three sectors, agriculture is our primary sector, and in this we are at sustenance levels. Paddy, wheat, pulses, oilseeds... all sorts of things are grown. Normally this should not be done. You should focus on a particular crop, commercialise it and import what you don't grow. We consume a lot of mustard oilseeds, but most of the oil comes from Madhya Pradesh and Rajasthan.

We need an oilseeds mission. Also we consume a lot of pulses but are deficient in them.

It fetches you more money per hectare. Commercialisation does not mean you go only for spices.

And you have no water problem either...

Not now, but this will be a problem in the future. I come from a farming background and know this for sure. Our sub-soil water is good compared to Tamil Nadu and other States, but the level is falling from 25 feet to 50 ft and now to 110 ft. We need to build a number of reservoirs...

Next, tourism has fantastic potential. Nobody has what we have: Significance for Jain, Buddhist, Hindu and Sikh tourists.

Are you optimistic about investments coming to Bihar?

Any investment will go to a peace-loving place with no labour problems and with incentives.

What about IT?

There is nothing here so far. We have requested the Chief Minister to talk to Mr N. R. Narayana Murthy and Mr Azim Premji and tell them that whatever they want we're prepared to give. But we need skill levels...

But these days IT majors are looking for talent not only in metros but also at Tier II cities.

That would be wonderful. If any company can put up just 20,000 sq ft facility and take in only 200... we have a huge educated manpower and they'll get manpower very cheap and at one-third the cost in Bangalore or Chennai. And real estate is also cheap here.

What other sectors can you attract?

We have nothing, so investment can come in any sector. We don't have a textile, or even a cycle manufacturer.

The Chief Minister is keen on a steel plant; he thinks that's a symbol of industrialisation. When we were children we used to say, "ek chimney honi chahiye aur dhua nikalna chahiye" (there should be one chimney through which smoke should come out).

But we hardly have 500 working units out of 2200 units. We have 19 sugar mills that are closed. In the small sector — Rs 10 lakh to 50 lakh — the majority of the units — in light engineering, sports goods, wax units, etc — are closed.

Is there scope for food processing industry here?

Of course, very big scope. We have quite a few major strengths. Leechi is our premium product. We also have what is called makhana, an aquatic crop that is fat free.

Normally it is toasted and eaten; it is very light and a sort of a munchie. There is over Rs 5,000 crore worth of incremental business in these. In paddy we're surplus and it sells much below the MSP...

Why?

Because the procurement system is not very well established.

So people have to sell at discounted prices; at Rs 7-8 a kg you can get good quality rice.

Do you grow basmati?

Yes, not trademark basmati but long-grained and aromatic table rice of different variety that you can buy at Rs 25 a kg... what you get elsewhere for Rs 50 a kg.

Our productivity in maize is very high and this is grown round the year. Also we are high in cattle head, particularly goat.

So is there scope for the leather industry?

Yes, but all our leather units are closed. At times the government needs to intervene and give directions; that has not happened in Bihar. In Tamil Nadu you have the Leather Promotion Council, a prototype development centre and a lot of support services for the industry.

Here we don't have anything, including technical people. So how do you work?

How does the future appear?

Very bright. I'd like to request investors in India that this is the time to come to Bihar.

As this is a rebuilding phase, there is lot of scope for profit. This is what industries need. And security is not a hassle today.