Investment Opportunities in BiharInvestment Opportunities in BiharPravasiPravasi BharatiyaBharatiya DivasDivas

New Delhi, January 2008New Delhi, January 2008

Agenda

• The Changing Face of Bihar

• Investment Friendly Policies Adopted

• Infrastructure Development Initiated and Gaps that can be Bridged with PPP

• Sectors Ripe for Investment in Bihar

• Be Part of Bihar’s Growth.

Changing Face Of Bihar

Investment Climate

Infrastructure

Law and Order

Governance

• New Industrial and Other Policies initiated and being implemented

• Large Scale Infrastructure Projects Initiated

• Fast-track Court System. Not Just Talk. Results have even encouraged World Bank.

• Greater Accountability Measures for Departments.

Major Investment Policy Initiatives Underway

• Bihar Single Window Clearance Act-2006• Bihar Infrastructure Development Enabling Act 2006. • New Industrial Policy -2006• Price Preference Policy- 2006• New Policy Initiatives for Entertainment, Tea Processing and Sugar

Sectors - 2006.• Amendment of Sugarcane Act 1985 to provide for other products

from sugarcane apart from sugar.• Policy for establishing higher Technical Institutions in Private Sector

- 2006.• Simplification of VAT Regime - 2006.

95000+Direct employment possibilities in the proposals cleared

Rs.38,000+ crore

Investment involved108Total proposals cleared

Clearances By The SIPB

4- Cement Plants 4

1- New Sugar Mills 21

2- Mega Projects 143- Expansion of existing Sugar Mills (7 + 2) 9

& addition of Ethanol Plant Proposals

5- Power Projects 3

6- Jute Mill 3

7- Handloom Park 1

8- Textile Park 1

9- Tractor Projects 1

10- Mini Steel Plant 1

Distribution of The Cleared Projects

BIADA- Allotment of Industrial Units

ALLOTMENT OF INDUSTRIAL UNITS

34

105 106

159

426

-50

0

50

100

150

200

250

300

350

400

450

2003-2004 2004-2005 2005-2006 2006-2007 2007-2008

Total No. of Units Linear (Total No. of Units)

168% Growth YoY in the allotment of Industrial Units in Bihar

BIADA-Projects Cleared

Project Cost (Rs. in Lakhs)

1299.435615.77 5843

17245.7

131328.19

0

20000

40000

60000

80000

100000

120000

140000

2003-2004 2004-2005 2005-2006 2006-2007 2007-2008

Project Cost (Rs. in Lakhs)

Projects worth 1313 Croreshave been cleared/ initiated

Improving Investment Climate – Infrastructure Focus

• Public investment postulated to go up from Rs 21,000 cr in 10th Plan to over Rs 60,000 crores in 11th Plan

• Share of private investment in total investment postulated to go up from the present 59 % to 65 % -1,08,283 cr.

• State intends to attract large share of private investment and FDI

• Strategy would be through Infrastructure Development as well as Investments in Social Services (Education, Health and Nutrition)

• Roads & Transportation

• Power

• Education

• Telecommunication

• Health

• Social Development

Roads

• The State has– 3629 Kms of National Highways– 3232 Kms of State Highways– 7714 Kms of Major District Roads

• As against an average outlay of 40-50 Crores per year for roads under Plan outlay for 06-07 was 600 Crores. This financial year outlay is 922 Crores for roads alone.

• This does not include the allocation for State Highways under which the expected expenditure during this year is approx. 1000 Crores.

In three years the State will have Road Infrastructure which will rival the best in the country

Roads & Transportation

• Speed and Quality– Work Programme for every road with weekly physical and financial

targets – fines for slippage from work programme and bonus for early completion.

– Network of own Quality Control Labs.

• In addition Third Party Quality Control. – Computerised Monitoring – Data Centre at H.Q. – computers with

every Division.– GIS Road Network Map with Database being drawn up.

• Capacity Enhancement– Equipment Bank– New simplified registration system for contractors

• Contracting– Two Bid System for all contracts.– New Standard Bidding Document – includes best features of

MORTH & CPWD bid documents.

Roads & Transportation

National Highways– 2123 Kms being 4- laned - 1608 Kms

under NHDP, 245 Kms under Buddhist Circuit Project & 270 Kms on BOT basis

State Highways– All State Highways being 2-laned–

2035 Km under RSVY & 927 Km with assistance from ADB.

– 162 Kms being 4-laned on BOT basis.

Major District Roads: - 7714 Kms– 4500 Kms taken up in 06-07 for

widening and strengthening – in various stages of completion.

– 2000 Kms being taken up this year.

Mukhya Mantri Setu Nirman Yojana– 445 bridges taken up for construction in

06-07 at a cost of 785 Crores

Power

• For power a 3 fold strategy has been adopted

– enhancing Generation,

– improving transmission efficiency and

– increasing distribution and rural electrification.

Current installed capacity of 587 MW insufficient Expansion of Barauni and Kanti Thermal Power Stations by adding 500 MW each.Setting up of new power plant under joint venture with NTPC at Nabinagar (3x660 MW). New Hydro Power plant proposed at Dagmara(126MW)Shell company under joint venture with IL&FS to develop new sites at Katihar and Pirpainti (to be handed over through competitive bidding).Nuclear Power Corporation team visited Rajauli for setting up of a Nuclear Power Plant of 1000 MW. NPC to expedite the workCoal blocks/linkages needed for the new projects

Power

• Total Public Investment envisaged-• Muzaffarpur Thermal Power Station Rs 222 crores• Strengthening of Transmission Lines Rs 2500 crores• Strengthening of Distribution System Rs 150 crores• Rural Electrification under RGGVY Rs 1694 crores

(all villages to be elctrified by 2009 under Bharat Nirman)• New Potential Projects 12750 MW Rs 59350 crores

• Muzafferpur TPS 750 MW Rs 3350 crores• Nabinagar TP 4000 MW Rs 16000 crores• Katihar TPS 2000 MW Rs 8000 crores• Pirpainty 4000 MW Rs 16000 crores• Nuclear Power 2000 MW Rs 16000 crores

• The state is on track for achieving 100% electrification of all rual areas by 2012 under the Rajiv Gandhi Grameen Vidyut Yojna.

Health & Education Improvements

Education - 19 proposals have been cleared, which include 3 Medical college

cum Super Speciality Hospital, Engineering Colleges, Management Institutes.

Communication Institutes and Entrepreneurs Training Institute.

To Raise the Infrastructure and Services in Health Sector to Indian Public

Health Standard– 24*7 service in all Hospitals and PHCs– Free medicine (100 normally required)– Diagnostic facilities at PHC level– Ambulance facilities at PHC level– Recruitment of doctors and nurses– Modernization of PHCs, Distt. Hospitals, Medical hospitals (Rs 300 crores being spent)

Policy Interventions – Private Investment in Health

• Private participation is being encouraged in this sector • Government will facilitate availability of land at market rate• 50% concession on prevailing rates will be given on registration fee

and stamp duty• Government will provide road, electricity and water up to one point

within the boundary of the institution• Government will provide 50% of the cost (maximization of Rs.

75,000) of preparation of DPR to the private party• Ambulances have been provided to all primary health care centers• Two landmark initiatives for 24x7 healthcare:

– Dial 102 for ambulance services– Dial1911 for specialist and emergency health services round the clock

in Patna

1553 per year for 3

years7517765881516580HSC5

331 per year for 3 years30812361544APHC4

201533533PHC to be

converted inCHC

3

207922101Sub DivisionalHospital2

11112538District Hospital1

PlanWork

Already taken up

No. to becreated Existing No. as per

the IPHS

Name of theHealth

Facilities

Sl.No.

Health InfrastructureUp gradation of facilities in PHC has resulted in the no of patients going up from 39 per month in January 2006 to 4524 patients per month in October 2007.

Opportunities for Investment-Education & Health Care

Technical Eduction• 30,000 students migrate from Bihar• Medical Colleges• Engineering Colleges 1 NIT, 3 govt and

6 private • Management Institutes• Polytechnics

Health Care• Large no of patients go outside the

state- Kolkata, Delhi, Chennai, Mumbai, Varanasi- lack of adequate facilities

• 1.5 million OPD and 80,000 Indoor patients in AIIMS from Bihar

• 50% patients in AIIMS from Bihar• Hardly any super specialty medical/

diagnostic facilities in Bihar

“RECENT REFORMS GIVE A RAY OF HOPE TO BIHAR”

-The World Bank in India, Sept.07

“A slew of fiscal & legislative reforms implemented.”

Silent transformation is taking place.

First state to abolish Agriculture Product Marketing Control Act.

Urban Land Ceiling Act repealed.

Model Municipal Act adopted, 2007.

Bihar Apartment Ownership Act, 2006 adopted.

Implementing Comprehensive Flood Management Information System to support flood control and management through early warning & emergency response system.

Not Just Show & Tell

Sectors Ripe For Investment

• Food Processing

• Sugarcane (Ethanol etc)

• Textiles & Handlooms

• Leather

• Education, Healthcare & Pharma

• Tourism

Food Processing- Bihar’s Strength

Largest producers of fruits and vegetables

8.60 MT vegetables (9% of all India)

3.35 MT fruits (8% of all India)

0.28 MT litchi (71% of all India)

1.45 MT mango (13% of all India)

0.003 MT makhana (85% of all India)

Maize1.5 MT (10% of all India)For ethanol

Food Processing Projects

• Total project cost - Rs.1,670 crore• Total period - 5 years• IL&FS appointed as Project Management Agency.• In the first phase, Integrated Food Zone, Rural Agri Business

Centre/Primary Processing Centre, Air Cargo Complex, Quality Assurance Centre with R & D facilities and development of rice mills cluster will be taken up

Opportunities • Litchi, Mango, Potato, Makhana Processing • Honey Related• Vegetable & Grains

Sugarcane & Ethanol – Immediate Opportunity

Sugarcane industry is the largest agro-based industry in Bihar.

Visualizing the potential of this sector, the strategies of Bihar include:

• Expanding the area under cultivation from 2.30 lakhhectares to 5 lakh Hectares

• doubling the production of sugarcane from 143.64 lakh MT

• Strengthening of research institutions in the state.

• Increase productivity of sugarcane to 70.00 MT/Hecters.

• Encourage the production of ethanol from sugarcane juice

• Encourage co-generation of power.

Sugarcane & Ethanol – Incentive Policy

The main features of this policy are:

• Revitalization of closed sugar mills.

• Exemption from purchase tax on sugarcane for 5 years.

• Grant of 100% subsidy on capital investment (plant and machinery) to a max of 10 crores whichever is less

• Reimbursement of central excise duty on sugar.

Sugarcane & Ethanol Proposals Cleared

Sugarcane• 21 proposals were cleared. • Study Undertaken for the Revival of closed Units • SBI Caps have submitted the diagnostic study report. • 8 out of 17 units are viable for revival.• In other cases, sale of assets for other industrial

purposes is suggested.

Ethanol• 4 Ethanol plants from Maize at Hajipur, Begusarai,

Khagaria and Bhagalpur.

• 10 plants for Ethanol from Sugarcane juice at Araria, Katihar, Bhagalpur, Jamui, Munger, Nalanda Aurangabad, Rohtas and Buxor.

• The total investment is around 4.00 billion USD.

Opportunities for Investment-Sugar mills, ethanol, cogeneration

• Potential for manifold increase in productivity and area– 55.43 MT/Hect to 120 MT/Hect– 227,000 Hect to 1.5 million Hect– Sugar Recovery from 9.6% to 10.36%

• Ideal agro-climate• Ethanol manufacturing• Electricity- Cogeneration

Leather Sector

• Bihar is a major producer of good quality hides and skins.

• Bihar ranks 3rd in production of hides and skins in the country. Produces 2.64 million bovine hides per annum.

• Square shaped goat hide is world famous for its quality.

• Acute shortage of trained manpower in footwear industry.

• State Govt. approached Ministry of Commerce, Govt. of India for establishment of Footwear Design & Dev. Institute in Bihar.

• Report on potential of leather industry in Bihar has been prepared by CLRI.

• CLRI is also making project report for establishment of CETP at Muzaffarpur.

Textile, Handloom & Jute

• Bihar has a strong weaving tradition with more than 1.3 lacsweavers.

• This sector has Skilled and cheap labour.

• The government has announced many new initiatives to improve the competitiveness

• Schemes for modernizing the handloom sector.

• The strengthening of the training institutions has been initiated and

• Computer aided design training also being introduced.

• The opportunities in this sector exist in the setup of – Raw material bank, – dyeing centers, and – in the post weaving,

packaging and finishing centers.

• There is tremendous need for design and product development.

Initiatives

Textile & Handloom• Handloom Park at an estimated cost of Rs. 25 cr. is being established at Bhagalpur,

Biharsharif and 5 other places.• Special Purpose Vehicle has been constituted at Bhagalpur for this purpose.• Land has been identified.• Textile Park at Kahalgaon, Bhagalpur at an estimated cost of 120 cr. Is under

implementation.• Special Purpose Vehicle has been formed. Land has been identified.

Jute • M/s Bengali Jute Twine Ltd is establishing unit in Begusarai at an estimated cost of

Rs 8.00 crore.• Land has already been allotted.• Civil work has started.• M/s Rameshwar Jute Mill is going to establish a jute mill in Kishanganj.• Land is yet to be identified by the proposers.

Bihar Tourism Has Huge Potential - Lots to Work With

Bihar has enormous potential for development of new product ideas, some of which are the latest craze in the western world today.Heritage Tourism: The state has an abundance of historical places, Religious Places, Archeological Sites and forts, which can be suitably renovated and opened up for tourism.Health Tourism: Spring sites have tremendous potential for health tourism due to their medical values.Entertainment Tourism: Bihar have a great potential for features like; entertainment complexes such as amusement parks, water parks, cable car rides, aquariums, casinos, sound and light shows, etcWaterfront Tourism: Bihar has significant potential for water-based tourism.Cultural Tourism: Bihar has rich cultural heritage which is exhibited through the various fairs and festivals and dances.

Facts• Currently getting <5% of Domestic

Tourists and 1.3% of Foreign Tourists in India.

• Lack of Infrastructure, Security and Awareness are main reasons of underdevelopment of Tourism in Bihar

• Current Tourism Circuits:-– Buddhist Circuit– Jain/Tirthankar Circuit– Islam/Sufi Circuit– Sikh Circuit– Ramayana Circuit– Gandhi Circuit– Nature & Wild Life Circuit

Actions Taken

Actions initiated• Development of Airport of international

standard - International airport at Gaya-flights from Thailand etc – land for extension being made available.

• International Golf Course (18 Holes) –designed by PGA - Land acquired at Bodh Gaya

• A tourist police force has been setup for safety of tourists.

• Steps initiated to enlist Nalanda ruins in UNESCO list

Work in progress• Development of Natural Hot Springs at

Rajgir• International Convention Centre at

Nalanda /Rajgir• Consultant from WTO visiting to draw

strategic plan

Opportunities for Private Investment and Participation In Tourism

• Development of hotels and resorts• Construction of Yoga and

meditation centres• Rejuvenation centres providing

ayurvedic and other services• Promotion of arts and crafts of the

state which are popular even outside the country

• Water sports• Organized tour operators and

service providers

Other Opportunities for Private Investment and Participation

Entertainment & Hospitality• 82 million population -8 million middle class • Hardly any standard shopping complex,

multiplex, entertainment centres• Shortage of budget hotels

Information Technology - Advantages• Cheap trained manpower• Low attrition rates• Low real estate costs• Can overcome infrastructure constraints• Problems of high manpower cost, high attrition

rate, and high real estate costs

Government investing in• Rs 2500 crores in State Wide Area Network• Rs 10 crores as revenue support for e-Services

in about 9000 panchayats• State Data Centre• Secretariat Local Area Network and Metropolitan

Network in Patna• Computerized e-services- land records,

registration of property, employment exchange, driving license, treasury networking,telemedicine

Why Bihar Now

• Investment Friendly Government– Stable Government– Better business Policies

• Security fast becoming on par with the best in the country

• Fertile Land• Abundant Water• Cost effective Skilled/Unskilled Labor• Infrastructure Requirement represents huge

opportunity. • Untapped Market of 8.2 Crore

Law & Order - Results

15394 Criminals Convicted (Between January 2006- October 2007)

More night time family outings

Increased Tourism

Increased communal harmony & all festivals being celebrated with gaiety and fervor.

Fast Track Courts

Mobile Courts

Induction of Ex-Army Personnel in Police (SAP)

Speedy Conviction of Criminals

Enforcing Accountability

Action Results

GovernanceRegular “CM Janata ke Darbar Main”

Online Grievance Redressal System in CM Office

State Administrative Reforms Commission

Delegation of Powers to Departments

Election of Panchayats

Enforcing Accountability

Strengthening Vigilance set up- Ex CBI officials

Enactment of Bihar Panchayat Raj Act

Empowerment of women and other disadvantaged sections of the society through affirmative action.

Gram Katchhary – Speedy, cheap and accessible, justice delivery system at door steps to function with the help of Nyayamitras

Be Part of Bihar’s Growth

Bihar is the next frontier for businesses in India both as an Investment destination and untapped market potential.

Bihar is on the move - The state is poised for major development and growth in the next few years.

We invite all of you to visit Bihar – today a land of boundless opportunities across many sectors including infrastructure development, food processing, sugarcane and ethanol production, textiles, leather, health care and tourism.