Bihar’s industries are going to go supernova. But how?

Nitish Mishra, Minister, Department of Industries and Tourism, Government of Bihar, says that there has been a surge in industrial growth in the state.

Friday July 05, 2024 , 5 min Read

Key Takeaways

Nitish Mishra, the minister for industries and tourism in Bihar, is optimistic about the state’s industrial outlook.
He believes that there is a renewed demand for industrial expansion in Bihar.
From FMCG to cement, and IT, several new factories and projects are being set up in the state.
He thinks that private capital is essential for improving the industrial output of the state.

Large companies are betting on Bihar. The state, once seen as less industry-friendly, has sprung into the limelight with multi-billion dollar investment announcements. The Adani Group will invest an additional Rs 8,700 crore in the state, Ambuja Cements is setting up a Rs 1,200 crore worth unit, and Coca-Cola is expanding its bottling capacity. The state’s industries and tourism minister, Nitish Mishra, believes Bihar’s industrial potential is limitless.

“There was a mindset that Bihar does not and cannot have big industries. That perception is changing,” says Nitish Mishra, Minister, Department of Industries and Tourism, Government of Bihar. “Infrastructure is no longer a bottleneck in Bihar. We believe it is Advantage Bihar right now.”

Mishra is optimistic that the perception bias regarding Bihar’s industrial capabilities is slowly being overcome. His views come at a time when the state has witnessed transformation on the ground. A case in point is the Bihar Business Connect-2023 that concluded in December, where memorandums of understanding (MoUs) worth over Rs 50,000 crore were signed with 300 companies.

Building an industry-first Bihar

Abundant in agricultural produce such as sugarcane, Bihar was once among the largest sugar producers in the country. In fact, the first documented modern sugar factory, also the first sugar mill, in India was established in 1904 in Marhaura, Saran district of Bihar. However, the closure of several sugar factories diminished the state's importance in the country's sugar sector.

The Freight Equalisation Policy of 1948, one of the first industrial policies of post-independence India, led to a further deterioration of Bihar’s economic prospects. This policy, by mandating uniform pricing for steel across India, effectively discouraged industrial development in mineral-rich Bihar.

Without delving too much into the past, Mishra says it is time to recover lost ground and keep a close eye on revival plans. Some of them include renewed policies to incentivise companies in sectors such as toy-making, electric vehicles, and pharmaceuticals.

“While government spending is important, we also need private capital. And we have developed policies,” he explains. “For instance, when I took over as a minister in the department of sugarcane in 2005, I was tasked with reviving the sugarcane industry. Soon after, I made a revival plan and helped two factories restart again.”

In addition, the Bihar government is working to revive numerous defunct sugar mills in the state. That is not all. The minister explains that the state’s sugar factories generate power (~50 megawatts) and have even started supplying it.

From an infrastructure and land bank perspective, Bihar has acquired 1,800 acres on the Amritsar-Kolkata Industrial Corridor to further boost the state’s investment prospects.

Inculcating an entrepreneurial spirit

Even as change is in progress and new industries and projects are being established in the state, the Minister believes it is equally important to cultivate entrepreneurship. He envisions every district to have at least 200-300 enterprises.

“People from Bihar were typically known to be fond of sarkari jobs that offer stable income. But that mindset is changing. We need large companies in Bihar, but we also need to create a lot of small industries in our districts because these small enterprises make a big difference,” he adds.

The state has instituted the Startup Bihar policy to build a conducive startup ecosystem in the region and encourage youth to set up their businesses in the location. The government offers a seed grant of up to Rs 10 lakh per startup as an interest-free loan for 10 years.

Between 2020 and 2023, over 40,000 entrepreneurs have been offered financial grants of more than Rs 2,408 crore. This includes special initiatives for women entrepreneurs and those belonging to scheduled castes and scheduled tribes.