Progressive Bihar - Finally the sleeping giant is waking up

Progressive Bihar - Finally the sleeping giant is waking up
Progressive Bihar - Come support it's growth path.

Thursday, August 11, 2011

How long can politics come in the way of development

Bihar is arguably one of the most backward states of India. There have been significant changes in the last few years like GDP growing to about 3 folds in 6-7 years time, much better roads, better connections to Patna, AC buses etc. However post Independence Bihar has lived in despondency primarily due to
  1. Freight equalization
  2. Center's negligence
  3. Successive state governments only intention of enriching themselves rather than the state.
  4. A large contingent of  governments servants specially in the Police, PWD , etc who thought that their departments were there to milk the people and made as much money for themselves as possible without contributing much at work.
At the time of getting Independence the Annual plan outlay of Bihar and Punjab were almost the same but over the years the the Annual Plan outlay of Punjab had grown 10 times to that of Bihar. However successive governments have turned a blind eye to the plight of the people of Bihar. In today's day when media has become so strong and electronic media, social media ,etc make it so much more easier to get information across, we still see a gross neglect of some parts of India , driven by political compulsions that comes in the way of equal opportunity for all the people of India.

Politicians keep at bay the fundamental rights of every citizen of India (which includes the Right to Equality), the very essence of India's democracy. So when the news comes that "Pranab Mukherjee okays Rs 21,614 crore package for West Bengal, Mamata not fully satisfied" ; some questions start coming to my mind:
  1. Why was this special package not given during the earlier state government's tenure, if the special package was so much deserved by West Bengal?
  2. Why was the package given within months of a UPA alliance government coming into power?
  3. What has Mamata Banerjee been able to put together in a matter of 3-4 months to justify a special package which the economically weaker states like Orissa and Bihar have not been able to do in years?
  4. Why has a similar package not been given to Bihar when Nitish Kumar has been vehemently asking for a special status for almost a year or more? Multiple representations made have fallen to deaf ears?
  5. Once the special package for West Bengal was announced, the PM speaks about constituting an inter ministerial committee to look at the demands of Bihar. Was a similar committee formed to vet the requirements of West Bengal?

Like many others, I am not disputing why West Bengal was given this special package, I am sure the people there will benefit out of it... My grudge is why wasn't a similar support given to Bihar when everyone knows that Bihar really needs some active support, more than many of the states and possibly including West Bengal too,  so that the people of Bihar can live better lives.

First the politicians at the center did not do any good for Bihar stating that Bihar is very rich in minerals and thereby helping other states benefit from these minerals by implementing freight equalization. Then the politicians at the center did not do anything for Bihar because they required the support of the politicians from Bihar to continue in power at the center and these Bihar politicians did not want development in Bihar.  Third and finally now the central government does not hear the wishes of the current government of Bihar because the ruling party in Bihar is not an UPA ally.  In every situation, it is Bihar that has lost;  it is Bihar and the people of Bihar who have suffered.
When will the people of the stature of Dr. Manmohan Singh, Pranab Mukherjee and others rise above petty political decisions and for once start thinking about the real development of entire India? When will these people start thinking for the better of India ? How long can we let political compulsions win at the expense of development?

Monday, August 8, 2011

Small investments trickle in ... But where are the large ones!!!

There has been no rush to invest in Bihar after the improved environment in Bihar. However small investments do trickle in. The most recent news on this in Economic Times is that Britannia industries will setup a bakery unit in Bihar at a cost of about Rs. 50-60 crores and follow it up with similar factories in Orissa, Karnataka and some place in Western India.

A review of recent investment proposals shows that most of the larger investments (investments more than Rs. 100 crores) proposals are in power production and distilleries. There are many smaller investment in Rice mills, etc which are below Rs. 10 crore investments, mostly 1-5 crores. I guess once we have more power generation capacity complemented by these smaller investments, we will be able to attract more larger investments.

However, even though these investment proposals come in, the CM/Cabinet are taking a long time to approve these proposals. Shouldn't the Cabinet or the CM wherever necessary, give utmost priority to clearing proposals quickly. I am not saying that the due delligence made in approving these projects be diluted ; what I am saying is that the focus should be to complete the due dilligence of these projects quickly.

For example when I look at the list of all SIPB (State Investment Promotion Board) approved projects list , I am surprised that many of these project proposals from 2009 / 10 have not been cleared by the CM / Bihar Cabinet. Now I do not know if all these proposal require the CM / the Bihar Cabinet's approval but from the looks of it, they do. 

All the proposals cleared by the SIPB from January 2011 have not received the Bihar CM/Cabinet approval. I can understand that for Thermal power plants there are problems of coal linkages and water supply. However what about the other projects like a steel rolling mill, a ketchup plant, Coca Cola plant, maize processing unit, flour mill, etc . Why are they taking time to be cleared. If they can't be cleared then they should be rejected. Why leave them open after SIPB approval? Nitish Kumar ji, where are the delays? Why is it taking so much time?

Here is the list of large proposals (> Rs. 100 Crores) that have been cleared by the SIPB in 2011 but have not been cleared by the Cabinet / CM.
Sr. No.Company NameProposalInvestment (Rs. In Crores)Direct Employment

1

M/S Casecade Power Ltd, Lakhisarai.

Proposal for establishment of 1320 (2x660) MW coal based Thermal Power Plant at Lakhisarai District in Bihar.

8343.50

400

2

M/S The West Coast Paper Mills Ltd, Karnataka.

Proposal for establishment of one Lakh MT per year capacity Duplex Board unit in first phase at Dalmia Nagar, Rohtas

350.00

500

3

M/S Era Infra
Engineering Ltd, New Delhi.

Proposal for establishment of  2640 (4x660) MW coal based Thermal Power Plant at Rajauli, Nawada and 1320 (2x660) MW coal based Thermal Power Plant at Pirpainti, Bhagalpur.

14800.00


7374.00

700


350

4

M/S Winsome
International Ltd, Samastipur ( Unit of M/S Rameshwara  Jute Mills)

Proposal for establishment of 35 MT per day capacity Jute Processing Unit, 40
MT per day capacity Corn Flakes manufacturing unit and establishment of Marketing Complex at Dharmpur, Samastipur.

160.00

155

5

M/S Dalmia Power Ltd, New Delhi.

Proposal for establishment of 1320 (2x660) MW coal based Thermal Power Plant at Dona, Banka.

7960.00

1500

6

M/S Sravanthi
Infratech Pvt. Ltd, Gurgaon, Haryana.

Proposal for establishment of 450 MW gas based Power Plant at Dehri-On-Sone, Rohtas.

1620.00

90

7

M/S Moser Baer Power and Infrastructures Ltd, New Delhi.

Proposal for establishment of 1980 MW Coal based Thermal Power Plant at Morma, Lakhisarai.

11000.00

2000

8

M/S Chandigarh
Distillers and Bottlers Ltd, Chandigarh.

Proposal for establishment of 330 Kilo Liter per day capacity ENA, IMFL, Country Liquor, RS, IND Alcohol, DNS, Ethanol Absolute Alcohol production unit at Patna / Vaishali.

140.50

140

9

M/S United Breweries
Ltd, Bangalore,
Karnataka
(U B Group)

Proposal for establishment of 10 lac Hecto Liter per year capacity Beer
production unit at Kopakala, Naubatpur, Patna.

200.00

294
I think that for attracting more investments in all other areas and more larger investments, it is important that the proposals are cleared fast. Infact the government should setup a process such that the proposals have to be cleared within a specified period of time (maybe 3 or 6 months  , or as deemed to be necessary) and the necessary officers including minister's in the proposal evaluation chain be held accountable for delays and their salary payments / incentives / promotions be linked to it. Further any proposal that has not got evaluated in that period of time, say 6 months , then the proposal should be automatically rejected and the proposal come for immediate hearing with the CM and the relevant minister. All people who have defaulted should be effectively penalized including suspension when 3 proposals default in a space of one year.

Bihar's growth is linked to investments in the agriculture and industrial segments. We have to facilitate proper investments in optimal periods of time so that Bihar and Bihar's people prosper. The GDP growth in the last 5-6 years were primarily fuelled by road construction and government spending, but will the GDP continue to grow and will more and more people start to prosper without the investments that are required to be made....!!!

Nitish ji and all Bihar Government ministers and officials : This needs serious attention... Please do what is good for Bihar.

Thursday, August 4, 2011

Changing environment in Bihar - Public Private Partnership

Public private partnership is becoming a reality in Bihar. This is quite a change from before where Private firms are confident that they will be able to recover their investments made in Bihar.

Two major road projects
  1. Bridge over Ganga  (Estimated expense Rs. 1,602 crores)
  2. Road widening between Ara and Mohania (Estimated expense Rs. 917 crores)
will be constructed on a public private partnership. This step should give more business houses the confidence to invest in Bihar.

More details on the investments can be read in the Economic Times article Developers, investors queuing up to make the most of the growth story in Bihar

Per Capita Income of Bihar

Per Capita income of Bihar now stands at Rs 20,069 as per the Minister of State for Planing Ashwani Kumar. Delhi's per capita of Rs 1,35,814 income in reference is almost 7 times that of Bihar.

Ashwani Kumar added that During the first four years of the 11th Plan, "Bihar has registered an annual average per capital income growth rate of 18.4 per cent as compared to the growth rate of Delhi at 14.6 per cent," he said adding the higher growth rate was because of low base effect.

In contrast the per capita income of Bihar stood at Rs. 8,528 in 2004-05. It is significant change from Rs. 8,528 to Rs. 20,069 but there is still a lot of ground to cover.

A lot more investment is required in Bihar and unless investments come both in the Industries sector and the Agricultural sector, this gap will take a very long time to bridge.

More details about Minister of State for Planning, Ashwani Kumar's news can be read in the Economic Times at Delhi's per capita income 7 times more than Bihar's

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