Patna: As the who’s who of business and administrative worlds discussed ideas at a just concluded global investors’ summit, a general consensus emerged that Bihar is saddled with a negative perception belying its progress made over the years.
Legacy concerns arising from poor law and order, governance and infrastructure have formed a stubborn image that comes in the way of Bihar’s ambitious target — entering the list of top 10 industrialised states in three years and progressing to the top five in as many years.
“Bihar has all the strengths that are required for any industry – human resources, raw material, market and infrastructure,” Sandeep Poundrik, Additional Chief Secretary, Department of Industries, Bihar told ThePrint. “But the only issue is perception.”
“A large percentage of people have not actually come to Bihar but still have a very poor perception of the state,” Poundrik said on the sidelines of Bihar Business Connect 2023. “We are trying to change that. For that, we think it is important that people should visit Bihar.”
To change the negative perception — which many attribute to historical reasons and its portrayal in movies— and to usher in an industrial transformation, Bihar last week organised the two-day summit, the first such event in over a decade.
The summit saw the participation of 600 firms, including 400 firms from outside Bihar, and notched up investment commitments worth Rs 50,000 crore from companies such as Bharat Petroleum, Adani Group, Holtech International, Ultratech Cement, Varun Beverages, Savi Leathers, Bharti Airtel, Micromax and Patel Agri Industries, across sectors as diverse as general manufacturing, food processing, services, IT and ITes, and textile and leather.
“The last major investor meet happened in Patna in 2012,” Poundrik said. “In preparation for this global meet, we held road shows, smaller investor meets in different metros and some countries such as Bangladesh, the UAE, the US, Taiwan and Japan. But on this scale, an investors’ meet is happening after a long time.”
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Bihar in reel and real life
While labour supply is never a problem for the third-most populous state, companies willing to spend and invest are turning to Bihar, impressed with the progress on infrastructure creation — roads, electricity supply, connectivity.
According to Poundrik, the state spent about Rs 2,000 crore in the past year alone to improve infrastructure in industrial areas.
Road network has grown by over 130 percent in the last decade, while power availability has gone up by 10 times from 700 MW to 7,000 MW. Besides being connected by railways, there are about 54 flights, including 13 from Delhi, to Patna airport every day, according to data from the Bihar government.
But, it’s an uphill fight to win the perception battle. “Movies play a very important role in our lives,” Tushar Jain, managing director of High Spirit Commercial Ventures, among biggest Indian manufacturers of backpacks, told ThePrint. “The image of Bihar which is shown there is what people believe.”
Jain set up his first factory in Bihar 18 months ago, and started operation in just 56 days.
“I was told that you are mad and the factory won’t run in Bihar,” he recounted. “But here we are. We have set up another factory in Champaran. The best thing is that we were able to migrate around 4,000 people back who had to leave them (their families) to look for jobs.”
Satyajit Kumar Singh, vice-chairman of the Confederation of Indian Industries’ Bihar State Council and managing director at Ruban Patliputra Hospital, said that, earlier, financial institutions had a bias but that has changed.
Singh left Bihar in 1979 and returned in 1996 to set up the medical care facility in Patna. “Financial institutions also had bias,” he said. “I had a difficult time in 1996 to get my first one crore loan. Also, not giving a credit card, but debit, because I am in Patna. These things were there…”
Today, he said, things are different, with financial institutions more open.
“There are places that are worse in terms of law and order and corruption but despite that, their perception is not negative like that of Bihar,” Singh said. “So, perception needs to change.”
“Infrastructure has become a lot better,” Faiz Ahmad, who is business head at EDIF Medical Systems, said. “Bihar has good roads, electricity is not an issue, and law and order is also not a problem now. Man power was never an issue. The connectivity is very good. We have airports in Patna and Darbhanga…People can travel to and from Bihar easily.”
EDIF Medical Systems has started constructing a medicine manufacturing plant in Madhubani’s Pandaul, he added.
Trying to push Bihar out of ‘perception paralysis’
Ahmad, who has studied and worked in Delhi, added that earlier the general thought was such that parents would want their children to venture out. Even villagers would count those people as successful only if they had jobs outside Bihar, he said.
“My father used to tell me 15-20 years ago not to do any investment because the goons will harass on a regular basis. The fear was so strong,” he recounted. “But with time, the fear has diminished and people have started doing businesses and achieved success. We decided to invest in Bihar around two years ago and have not faced any major discomfort in doing business.”
The idea, he said, was to produce pharmaceutical products in Bihar for domestic market as well as exports.
“Government is also becoming very proactive in listening to industry issues and working to solve them,” Ahmad explained. “Bihar’s problem was that of perception paralysis.”
The change in the government’s attitude is driven by political exigencies, CII’s Singh explained, adding that the negative perception is 70 percent based on pre-existing biases and 30 percent on facts, but that things are now changing even in that second category.
“The government and political parties have realised that for survival they have to deliver something,” Singh said. “There are other changes including single-window clearances, incentives to businesses, making land available, 24×7 electricity supply and even subsidies for employing people… about 40 percent of capital expenditure is taken care of by the government.”
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‘Giving back to Bihar’
At one of the summit sessions, Kamal Oswal of Nahar Industries, one of India’s largest producers of cotton yan, fabrics and apparels, suggested that if Bihar wants to focus on textiles it should send a delegation to Bangladesh to see how the industry works.
“In Bangladesh, there are a lot of international companies…we need strong compliances, strong infrastructure, and labour laws… only then orders will come from countries such as the US etc,” he said.
Textile industry is one of the largest sources of employment generation in India, engaging directly about 45 million people with a large chunk being women and rural workforce.
The investors ThePrint interacted with also agreed that there was a huge scope for the IT sector to grow, and many high-level executives from Bihar in MNCs evinced interest in contributing to the development of their state.
Patna-born Hasmukh Ranjan, the AMD chief information officer settled in the US, said the company is looking at how to branch out to Bihar. “Rajya ka, shehar ka karz chukana hai (have to repay the state’s/city’s debt),” he said at a session.
Accenture AI head for global growth markets Prashant Kumar chipped in promising to put forth the case of Bihar in Accenture. “Bihar has an image problem totally due to historical reasons… for many MNCs and Indian firms, Patna as a destination is not on priority list,” he said.
Poundrik said whenever he speaks to people from software companies, they ask if Bihar can provide power. “Somehow the perception is that Bihar doesn’t have power. We have enough power to give 24×7 to any unit, including IT.”
Tiger Analytics CEO Mahesh Kumar, who left Bihar 30 years ago and is now settled in California, announced the opening of a new office in Patna.
“I had a phenomenal experience with the Bihar government,” Kumar said. “We have this perception that it is difficult to work with the public sector, especially Bihar. But it just took three months to set up the office here. Some of the other countries we have offices in like Mexico, Malaysia, Philippines took more than six months.”
A little help from Bihar’s friends
Bihar youngsters, after graduating from engineering and polytechnic colleges, want to stay back even at a lower salary, so this “is a potential which can be exploited in terms of human resource”, Poundrik said.
The state is working on bringing in a new policy to support and provide subsidies to the IT and electronics industry, he said.
Trying to rope in the state’s diaspora is an idea Bihar borrowed from Andhra Pradesh, Poundrik explained, saying that 20-25 years ago, Hyderabad was not what it is now in the IT industry. But then the Andhra government decided to invite IT companies and attract local talents working abroad such as the US.
“We hope that the same thing happens here,” Poundrik said. “We have people from Bihar who are all well placed and running successful companies in the US. I am sure that with them, not only their companies, we will be able to also bring many more companies and create an IT ecosystem.”
During an interaction with reporters on the sidelines, Bihar Industries Minister Samir Kumar Mahaseth said a lot of negative perception is due to how the state is portrayed in serials and movies.
“Bihar is at the stage of coming out of the teething problems,” he said. “It just needs a little push from the private industry… Bihar wants to be among the top 10 states of the country in the next three years, and among the top 5 in the next 5 years. This is our target and we are working on policies with this vision.”
Reversing the perception trend is going to be a long battle, Poundrik acknowledged as the two-day summit wound down. “The response we have gotten during the summit is a good start,” he said. “Now the challenge is to actually get these investments into the state.”
Disclaimer: This correspondent attended the global investors’ summit on the invitation of the Bihar government.
(Edited by Tony Rai)
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