Wednesday, March 29, 2006

Businessmen coming back to Bihar


"Policies have been put in place to facilitate investments. We have new policies for sugar, entertainment... Until you have policies, you can't implement anything...

"We can only go up," said the Bihar Chief Secretary, Mr G. S. Kang. While 100 days might be too short a time to judge any performance, the Nitish Kumar Government in Bihar has made a quick headstart, taking decisions and formulating policies to repair the State's infrastructure and attract investments. Results are showing as businessmen are returning to Bihar, said Mr Kang during an interaction with Business Line.

Excerpts from the interview:

The country wants to know if anything has changed after the present government assumed charge; there is a lot of hope riding on the Nitish Kumar government. Is change happening?

Things are changing; we've always been saying that we need decisions and polices on which we can work. The policies have been put in place to facilitate investment in most areas, we have new policies for sugar, entertainment... A new industrial policy is under consideration and a direction has been issued to all departments to come out within a fortnight their own vision and policy for the next five years. Decisions are being taken. This year we hope to spend Rs 5,000 crore, up from Rs 3,200 crore last year, and the Plan for 2007-08 should top Rs 8,500 crore.

So after a long time, expenditure will take place; the complaint with Bihar is that allocated funds are not used...

We're taking special care that money is being spent. In April the Chief Minister will review 10 major departments and their ministers to see what was the Plan expenditure last year and what is planned to be spent this year.

You talked about new policies and plans; governments are notorious for plans, but it is the execution of policies that is lacking...

Until you have policies, you can't implement anything. Policies have been notified and a State Investment Promotion Board has been cleared as a single window for speedy clearances. So we are now hopeful. Because of our new sugar policy, proposals have come for 36 new mills.

Collectively how much investment will these 36 sugar mills bring?

Today a 5000-tonne sugar mill costs about Rs 90 crore. So 36 would work out of over Rs 3200 crore.

Last time we met ? two years ago ? we had discussed how capital was going out of Bihar, how businessmen and industrialists were leaving the State. Has that stopped?

Not only stopped, but reversed; people are coming back. The Bajaj group has already bought land for two mills; the Dham group has taken 125 acres to put up a sugar mill. There was a lot of demand that we revive our old sugar mills but they had already run into liquidation, so we're trying to work out how to revive them. Also, 25 multiplexes are coming up in Bihar; Kishore Jha, who made the film Gangajal,held discussion with the Chief Minister and we have framed a policy on entertainment. The next day he (Kishore Jha) started work; of the 25 multiplexes, he is putting up 15 himself. Each will involve an investment of Rs 15 crore.

What about the IT sector? Many people feel this is the way to leap forward...

We have to find our niche. Though there are a few IT centres, at the moment our basic focus is on infrastructure. We are spending a lot of money on roads and power.

I can see some difference already on the roads. But has the power situation improved?

We are really worried about the power situation because as our consumption keeps increasing, the losses of the electricity board are going up and that is putting a pressure on the State exchequer. So we're trying to sort that out. In the next two years we'll spend Rs 2,500 crore to upgrade the power system, rural electrification, etc.

What about private participation in the power sector?

We're now getting offers for putting up super thermal power stations in the State, four or five queries have come particularly for the Nabinagar thermal power station. For our Muzzafarpur thermal power station, we've gone into a joint venture with NTPC.

What about the roads?

This year on the roads we're going to spend something like Rs 3,000 crore apart from what the Centre is spending. By the end of the year hopefully roads will be better; when that happens, the rest of the economy hots up.

In the past you've always stressed that Bihar has got an image problem. Even now the image is that while the rest of India is going ahead, there is no law and order in Bihar, kidnappings are going on, etc. As Bihar's Chief Secretary, what are the main challenges before you?

The main challenge was improving this negative image; I think there is now a perceptible change. Till last year Biharis were reluctant to admit they are from the State; today that has changed. There is no law and order problem and we've also sorted out the crime problem.

Why was all this not happening before? What has changed?

Will... the political will.

What about modernising the police force? The extremists are able to wreck havoc because the police force is not modern, well equipped...

We're spending Rs 105 crore to equip them with new weapons, etc. In the next two years we'll spend about Rs 250 crore on police modernisation, a fair share of which will go into police buildings. The police morale is up and they are now responding and repelling attacks.

Is Nitish a tough taskmaster?

Oh yes, he is a very tough taskmaster and wants things done quickly. But he is also a very polite and cultured person; he is never harsh with anybody or shouts at anybody. He is also very fair, and people respond.

There are huge expectations from him...

Yes, and he knows that he has to deliver because he has come to power on that promise. The expectations are actually a bit scary and one of our jobs is to tone that down!

Of course there is no magic wand...

And he says it... `I have no magic wand but in three months I have brought down the crime rate, controlled the law and order situation.' I joke that he wants today's thing done yesterday.

But a car that had not been running for long and suddenly you start running it at 100 km will break down. The system has to be slowly built, but the recovery is much faster than expected.

Lack of employment is a big problem in Bihar and it also increases the crime rate. So what are you doing on this front?

The Government of India had given us 23 out of 38 districts under the rural India employment guarantee scheme. We have taken the remaining 15 districts under our own plan which no other State has done. This will be a good beginning.

The CM is also very keen about rural connectivity; so in addition to the Bharat Nirman scheme, we'll connect an additional 500 villages with pucca roads; we've set apart Rs 125 crore this year for that. Bridges will be built over small rivulets, for that we've set apart Rs 50 crore.

The health-care scene is also quite scary; what improvements are you making?

Oh, we've started giving attention to this right from President's rule. We've outsourced our pathology labs right up to the sub-regional level to such private players as Ranbaxy, Lal Laboratories of Delhi, etc.

We have given 41 additional PHCs to private parties.

We have now outsourced the ambulance services too.

How long before some perceptible change takes place; in all fairness 100 days is too short a time.

Of course, but by June end, you'll see some results on the ground. Roads worth Rs 500 crore are under construction and a lot of that will be finished by June.

How do you see the future of Bihar?

You can't go below where we were already. So we have to only go up!
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