Resource mapping of Bihar

RESOURCE MAPPING OF BIHAR &

STRATEGIC ACTION PLAN FOR DEVELOPMENT

Prepared Jointly By :

Gherzi Eastern Ltd.

&

Genesis Fintec Ltd.

RESOURCE MAPPING OF BIHAR & STRATEGIC ACTION PLAN FOR DEVELOPMENT

Gherzi - Genesis

BACKGROUND & OBJECTIVES

FLOWCHART OF OVERALL STRATEGY

- Facilitating Business & related Infrastructure

- Strengthening & Installing support systems

A. Facilitating Business & related Infrastructure

1. Potential sectors identified

2. Sub Sector /Industry wise info

3. Summary of parks & RBHs

B. Strengthening & Installing support systems

Enable & facilitate

- Infrastructure Development

- Financial Network

Strengthen

- Research & Capacity Building

Install

- Policy Initiatives suggested

- Project Implementation mechanism

CONCLUSION

I Map

II Current Situation

III Strategic Solution

IV Business Models

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Sectoral Composition of GSDP

48.78 40.85 42.00

9.9212.08 9.02

41.29 47.06 48.98

0%

20%

40%

60%

80%

100%

1993-94 1999-2000 2004-05

Tertiary

Secondary

Primary

Over the decade, the share of secondary sector has remained at a level of 9%

• With the registered manufacturing having become a small sub-sector yielding a larger share to the construction activities

• negative growth rate in manufacturing

The increase in tertiary sector share reveals that the economy is witnessing a process of tertiarisation much before a process of industrialisation

Background


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Objective of the study

So a comprehensive development strategy for the development of Bihar is called for and would require a ‘multidimensional approach across sectors’

So the major challenges sought to be addressed through this study are to:

Provide Linkage for Farm & Non-farm produce with industry /business to ensure that rural masses & artisans are economically empowered

Add Value to the primary produce within the state so that the secondary sector grows and the economy of the state develops


Identify major resources & bring

in anchor industries as prime movers

Create a higher no. of smaller oases

(RBH) to facilitate linkages into the rural hinterland

(RBH - PPPP model)

Create a few oases of

competence / Parks as Hubs (PPP model)

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OVERALL STRATEGY


Creation of core

Infrastructure

Enable & facilitate

Research

Strengthen Institutions & Resources (Public sector & PPP model)

Credit flow into identified sectors

Capacity building

Project implementation mechanism

Pragmatic Policy

Install

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OVERALL STRATEGY


Fruits & Vegetables

Cereals & Pulses

Spices

Potato

Makhana Herbal & medicinal Plants

Jute

Sugarcane

RESOURCE GROUP ACTIVITY & SPECIFIC RESOURCES

INDUSTRY SEGMENT FOR RESOURCE UTILIZATION/ REVITALISATION

Milch Cattle & Dairy Farming activity

Bees & Orchards, Apiary activity

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Water bodies / rivers & fishery skills

Agriculture & Horticulture Agro & Food

Processing Industry

Herbal Medicine & Aromatic Industry

Jute Industry

Sugar Industry

Animal Husbandry & Allied Sector

Milk Processing

Honey

Fisheries

POTENTIAL SECTORS IDENTIFIED


Poultry Farming & Animals Rearing

Animal Hides

RESOURCE GROUP ACTIVITY & SPECIFIC RESOURCES

INDUSTRY SEGMENT FOR RESOURCE UTILIZATION/ REVITALISATION

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Handicraft Skills

Handloom Weavers & Looms

Limestone

Steel scrap, Sponge Iron, Ingots & Millets

Places of Heritage, Culture, & Religious interests

Animal Husbandry & Allied Sector Poultry & Meat Processing

Leather

Handicrafts

Handlooms

Handicrafts

Handlooms

Minerals Cement Industry

SteelMini Steel, Secondary

Steel & Castings

TourismHospitality & Tourism

Industry

POTENTIAL SECTORS IDENTIFIED


Agriculture & Horticulture

Sector wise development strategies

Fruits & Vegetables

Cereals & Pulses

Spices

Potato

Makhana

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Food Parks under PPP Model are suggested at Hajipur (Vaishali), Purnea, Bihta (Patna) and Begusarai

Suggested supply chain model for agro & Food Processing


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Jute


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RBHs earmarked for agri products are suggested for use 1 No. of Park is suggested at Purnea with backward linkage 3 No. of Jute Mills are suggested at Jute Park with backward linkages 10 No. of Processing Units for weaving are suggested at Jute Park with backward linkages 50 No. of Units for Jute Diversified Products are suggested at Jute Park with backward linkages

Current situation

Availability of raw jute: ******

Jute cultivator sells to Agents/ JCI for minimumPrice

Strategic solution

Set up a Jute Park at Purnea

Procure raw jute through RBHs (using existing agricultural mandis in nearby districts)

No value addition in the state

Business Models Location Investment potential (Rs Cr)

Employment potential

Jute Park Purnea 20 100

Jute Mills & Processing units

Jute Park at Purnea

165 5350

Total 185 5450


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Milch Cattle & Dairy Farming

activity


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Current situation

50 lac MT of raw milk produced in Bihar annually, of which only 5% is processed

Strategic solution

Involve SME for milk processing independently, or as JV/ Franchisee of COMPFED/ Branded Players



Bulk Coolers (60 Nos.) 30 designated milk-shed Districts

4.5 120

Comm. Dairy Farms (45 Nos.)

4.5 225

AI services (60 Nos.) 1.2 120

Cattle Breeding Farm (3 Nos.)

Muzaffarpur, Saharsa, Bhagalpur

1.05 60

Milk Processing Units (9 Nos.)

Gaya, Gopalganj, Motihari, Muzaffarpur, Saharsa, Bhagalpur, Aurangabad, Purnia, Darbhanga

45 450

Milk Powder Plant (1 No.) Khagaria 1.5 30

Ice Cream Plant (3 Nos) Muzaffarpur, Barauni, Gaya 3 90

Cattle Feed / Fodder block mfg Unit (3 Nos.)

Barauni, Biharsharif, Bhagalpur 2.25 45

Total 63 1140

Limited storage, transportation & processing infrastructure

Involve farmers/ SHGs/ local entrepreneurs at Village/ Block level for bulk cooling & transportation facilities

Set up Commercial Dairy Farms; Mobile Vet/ AIServices at farm gate to improve animal health; More Cattle Breeding Farms to increase productivity


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Bees & Orchards, Apiary activity


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Water bodies / rivers & fishery skills

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Aqua Park under PPP Model is suggested at Muzaffarpur & Bhagalpur


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Poultry Farming & Animals Rearing


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Suggested supply chain model for poultry & meat processing


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Animal Hides


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Leather Parks under PPP Model are suggested at Muzaffarpur & Katihar

Current situation

Availability of raw hides: 36 lakh pieces

Only few private units for Primary processing at Muzaffarpur: raw to wet blue stage

No secondary processing. Wet blue leather is sent to Kolkata, Kanpur & Chennai for final processing

Strategic solution

Set up leather park at Muzaffarpur and Bihta

Local units will get finished leather from thetanneries

6003Muzaffarpur, Baruini, Siwan

Revive leather tanning units

6600

200

5000

800


2Bihta (Patna), BetiahRevive leather processing plant

Investment potential (Rs cr)

Location Business Models

125Total

100Tanneries

20Parks at Muzaffarpur & Katihar

Processing units


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Handicrafts



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Suggested supply chain model for Handicrafts

Create marketing outfit for ‘bihar brand


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Handlooms



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handloom

Current situation

40000 handlooms and 90000 skilled weavers (approx); majority of weavers have shifted to otherProfession; the weavers are unable to cope with the market demand

No Design, Dyeing, Printing & Quality testing facilities Or are located far beyond the reach of the weavers

Strategic solution

Cluster based CFC to be developed by involving NGOs like ASEED, that is easily accessible to the weavers

Thus proper market linkage, financial assistanceand access to all facilities under one roof will lead to increased production



Common Facility Centre with market Hub

Bhagalpur, Gaya, Banka, Madhubani, Nalanda

12 400

Revive Central Processing Plant, Finishing Plant, Dyeing & Cooperative Spinning Mills

Biharsarief, Darbhanga, Bhagalpur, Pandaul, Siwan

15 2000

Total 27 2400

Common Facility Centre with market Hubs under PPP Model are suggested at:

1. Bhagalpur – Champanagar, Puraini, Tirpainti, Kharikbazar2. Gaya – Maanpur3. Banka 4. Madhubani 5. Nalanda - Biharsarief


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cement

Current situation

Bihar is a net steel importer

Currently construction steel units are operating mainly around Patna

Raw material (coal & iron ore) for DRI/Sponge iron plants accessible from Jharkhand/ Orissa

Strategic Solution

To target regional demands in Infrastructure projects

Competitive advantage of skilled pool of human resource

Plants near markets are the trends everywhereThrust on mild steel ingots through induction furnace route

Prioritize production of long products

Linkage with the miners on long term basis



Pig Iron with Mini Blast Furnace route

Dalkhola 20 150

Sponge Iron(DRI) Patna area 20 200

Ferro Alloy Unit Patna area 12 120

Wagon making Heavy Unit Muzaffarpur 100 600

Mini Steel Plant Patna, Vaishali, Muzaffarpur 140 1200

Mini Integrated Steel Plant 250


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Current Situation Strategic Solution

No holistic Plan for developing this sector

Prepare Master Action Plan for Brand building and promotion Location specific Projects and Related infrastructure and amenities

Form a State Tourism Promotion Board with a Task Force to monitor implementation of programs & projects

Create a Tourism Development Fund

Little incentive for private participation

in this sector. Not treated as a potential revenue earning industry.

Encourage private sector to take the lead in setting up Hotels, Restaurants, Tours, Parks & other projects in the State.

For operations of Government run hotels, restaurants etc, tie-up with private players where feasible


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Action Points Model Relevant Sub Sector / Industry

Develop Parks Get the identified Parks developed by Private developer (PPP model) - Should be set up & maintained by SPV on BOT basis

Agriculture & Horticulture: - Fruits & Vegetables - Cereals, Pulses, Spices, Potato & Makhana - Jute Animal Husbandry/ Agriculture Allied Sector: - Leather - Fisheries

Create Rural Business Hubs (RBH) with customized common facility centres

For the agricultural products, the existing Infrastructure under the erstwhile bazaar samitis can be redesigned and redeveloped to suit the Industry needs through Private players (under PPPP model) and for other sectors new Infrastructure to be developed thorough Pvt. Players (under PPPP model)

Agriculture & Horticulture - Fruits & Vegetables - Cereals, Pulses, Spices, Potato & Makhana - Herbal & Medicinal Plants - Jute Animal Husbandry/ Agriculture Allied Sector: - Fisheries - Poultry Farming & Animal Rearing Handicraft Handloom

Enable setting up of related infrastructure

Appoint a Project Management agency to help the department in implementing the identified projects


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Location Type of Park/Mega growth centre

Size (acres)

Designated code for this report

Remarks

Food Parks

Purnea Food Park & Terminal market (F&V based)

100 FP-II Instead of Madhepura

Bihta Food Park 100 FP-III Agri based

Hajipur Already proposed

Begusarai

Aqua Culture Park

Mazaffarpur Aqua Culture Park ACP 1

Bhagalpur Aqua Culture Park ACP 2

Leather Park

Mazaffarpur Leather Park LP1

Katihar Leather Park LP2

Jute park

Purnea Jute park JP1 Instead of the one proposed at Fobesganj / Katihar

Summary of parks and business hubs

Restructure BIADA and Restructure the existing Industrial Areas


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Summary of parks and business hubs

Cluster based rural infrastructure

Proposed Number

Location Function


Rural Business Hub for Agri & Horti Produce

100 (as per list in Annexure 6.7C)

Nodal point of all market linkages, extension and capacity building activities. For all the resources falling under the Agri & Horti group like, Cereals & Pulses, Fruits & Vegetables, Medicinal & Aromatic Plants, Spices, Makhana, & Jute. This hub will also be used for products like Honey.

Animal Husbandry / Agriculture Allied Sector

Rural Business Hub for Fishery activity

32 As per Table 12.4

Conduit for market linkages, extension activities and capacity building of fish farmers. Will also prove to be catalytic for fishery activity

Rural Business Hub for Poultry & Meat

32 As per table 13.4

The hub will act as a nodal point between the poultry / livestock farmers & processors as well as markets

Handicraft

Rural Business Hub for Handicraft

21 As per table 15.4B & 15.4C

RBH will act as a conduit points for providing market linkages and technical inputs to artisans

Handloom

Business Hub with CFC 8 As per table 16.

This business hub with CFC will help weavers in accessing common facilities and in creating marketing linkages


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Sector Current Situation Strategic Solution

Power Huge Demand- Supply Gap, though beginning to show improvement

AT&C losses 70% against national average of 40%

State Generation practically Nil

Restore the non-functioning power stations at Barauni, Muzaffarpur and Kosi Hydel

Industry should get Priority for power distribution . Provide un-interrupted supply to Industrial Parks & RBHs

Invite Private sector participation for generation. Transmit & distribute Electricity under PPP model

Provide incentives to industries with captive power generation

Roads Road connectivity still poor in most areas of State.

Connect all proposed Parks & Hubs with hinterland & major towns with 2/4 lane roads on priority

Air & Rail Poor Air connectivity, except for Patna city

Inadequate facilities for promoting Exports

Passenger / Freight movement within State unreliable / uneconomical

Conduct feasibility for rejuvenating 25 old Air strips & Feasibility for new Airports at Raxaul and Birpur. Improve passenger amenities at Patna

Build a Air Cargo Complex at Patna.

Initiate - Fast inter-city express trains & upgraded, fast & reliable freight movement. Take up the matter with the concerned Ministry

Assessment of Infrastructural needs


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Sector Current Situation Strategic Solution

Industrial Infrastructure

Most Industrial Estates resemble industrial graveyards

Infrastructure/ facilities non –existent

Large portions of land locked in Units closed down

Substantial vacant land in Estates lying un- utilized

Prepare an overall Restructuring PlanRestructure working of BIADA

Hand over O&M of Estates to private players under PPP modelConduct viability study of sick / closed units and Unlock / Recycle land held by unviable Industrial Units

Develop contiguous portions of vacant land in PPP model as specialized Parks through private developers

IT Connectivity Exploitation by middlemen due to lack of knowledge & information amongst rural farmers

Information flow for State Administration very poor

Connect identified Rural Business Hubs / Clusters through IT backbone on priority under ‘Common Service Centers’ schemeEstablish therein e- kiosks or Gyan Chaupals under PPP modelSet up SWAN (State Wide Area Network) For state level connectivity under PPP model

Assessment of Infrastructural needs


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Institutions Current Situation Strategic Solution

Central Financial

Institutions/ Banks

Poor Recovery & CD ratio track record

Set up Special Cell to co-ordinate & monitor implementation of resolutions

Cell to monitor and ensure. Time bound Action from Banks for Innovative models of lending, to increase credit

flow Special packages for specific sectors Special focus for MSMEs Liberal margin/ security norms

Lack of focus & cohesiveness between Institutions & State

Requirements of private sector in Bihar not being understood by Banks/ Institutions

Rural segment not being reached effectively

Fund SHGs through micro-finance. Involve NGOs for capacity building

State Financial Institutions

All State Financial Institutions are defunct

Restructuring Plan by professionals with an objective to : Merger of entities Rationalization by closing / merging unviable

branches Increasing fee based activities like consultancy

services for improving bottom line Appoint competent professionals for

administration & credit appraisals Adopting an overall need based and customer

friendly approach

Paucity of Funds to participate in Industrial Revival

Create initial corpus through state intervention or public issue / private placements,

Tie-up with Commercial Banks for consortium lending and refinancing

Financial


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Action Points Model Relevant Sub Sector / Industry

Set up Research & Development Institution

Set up under Public Sector

Agriculture & Allied Handloom Handicraft

Rejuvenate & set up Testing labs & Quality control

Operations on franchise basis through graduates

Appoint Inspection & Monitoring Agency

Involving NGOs

Organising SHGs / setting up co-operatives

Involving NGOs

Extension services / Capacity building & Training

NGOs / graduates to be involved on franchise basis

Rejuvenate & set up Seeds farms / nurseries / hatcheries

Set up new ones & bring existing set ups under Joint Venture (PPP)

Agriculture & Allied

Operate Vet hospital, clinics; AI centers

Operations on Franchise basis (under PPP)

Animal Husbandry

Enable credit inflow NGOs – Banks linkages to be established Special cells to liaison with NABARD / Banks to enable increase in outlay

Entire primary sector

Measures for Capacity Building


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Research & capacity Building

Simply allocating funds to ineffective delivery institutions is not likely to bear any result The thrust should be to leverage public resources through

The participation of local communities

The ingenuity of private sector

Only then, PPP can prove to be effective


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Project Implementation

Set up directorate of food processing Project management agencies for various sub sectors / Industries

Policy initiative

Capital subsidy support is very much needed for inducing any appreciable investment in Bihar

Capital subsidy on Plant & Machinery @ 25% subject to a maximum of 100 lacs

Interest subsidy @3% on working capital

Study for revival of ailing industries

Initiatives at farm level

Encouragement of SHGs

Allowing contract farming with safeguards

Involvement of panchayats


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Policy initiative


Resource mapping of Bihar

Business

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