Enterprises Sector in Bihar-II

Agro-based Industries:

• Given the existing cropping pattern of Bihar, the state has substantial comparative advantage for agro-based industries. This comparative advantage is reflected in the pattern of investment in the food processing industries.
  • The Bihar Industrial Area Development Authority (BIADA) reports that, in 2017-18 and 2018-19, a sum of Rs. 742.54 crore has been invested in food processing industries, the highest among all the industries classified under ‘High Priority Sector.’
• Sugar Industry:
  • Bihar accounts for 3.5 percent of the total sugarcane production in India. The State Government has been seriously harnessing the potential of sugarcane cultivation and sugar production.
    • At the time of independence, 25% of India’s sugar output was from Bihar
  • The sugar production also becomes very important as the by-products obtained from the production process have multiple usages.
    • The most important by-products of the sugar industry are — cane top, bagasse, filter muds, and molasses.
    • Cane tops are primarily used for animal feed.
    • Bagasse is the fibrous residue of the cane after cane crushing and can be used to generate electricity. Bagasse can also be used to produce particleboard, that can reduce the use of timber, plywood, and fibreboard. Furthermore, bagasse is also used to produce paper.
    • Another by-product, filter muds, is used as animal feed and a good input as bio-fertiliser.
    • Molasses again has multiple usages, as molasses fermentation produces ethyl alcohol, acetic acid, acetone, etc.
    • So, a ‘sugar mill’ is now a days characterised as a ‘sugar complex’ because of its production of both sugar and a large number of by-products.
  • In Bihar, 11 sugar mills are presently operating, spread across six districts. Of these 11 sugar mills, seven are situated in two districts — West Champaran (four sugar mills) and Gopalganj (three sugar mills).
    • This indicates the concentration of sugar mills in the north-western Bihar.
  • In 2018- 19, 810.17 lakh quintals of sugarcane were crushed to produce 84.02 lakh quintals of sugar. Between 2017-18 and 2018-19, sugarcane production has increased by 8.3 percent, while sugar production has increased by 17.4 percent in the state.
    • The reason for higher sugar production was a remarkable improvement in the recovery rate, which has improved from 9.57 percent in 2017- 18 to 10.37 percent in 2018-19.
  • Apart from sugar production, all sugar mills (except two at Sasamusa and Gopalganj) have installed capacity to produce useful by-products, such as ethyl alcohol, electricity and bio-fertiliser.
    • The total distillery capacity installed by six sugar mills to produce ethyl alcohol was 395 KLPD (kilo litres per day).
  • Out of 11 sugar mills, 8 mills undertook generation of electricity from bagasse and together generated about 88.5 MW electricity during the crushing season of 2018-19. Apart from that, bio-fertiliser units were set up at Harinagar, Narkatiaganj, Gopalganj, and Riga sugar mills.
  • Further, Sidhwalia and Hasanpur sugar mills have started producing vermicompost.
  • Due to improvement in utilisation of installed capacity, the crushing season in Bihar has been elongated in 2018-19.
    • In the crushing season of 2015-16, the number of days of operation was only 95, which increased to 145 days in 2018-19, registering an increase of 52 percent in just four years.
    • This, in turn, resulted in an increase in employment opportunity.
  • To encourage sugarcane cultivation, the State Government is presently implementing the three tier seed replacement programme, known as Mukhya Mantri Ganna Vikas Yojana. The following measures were implemented under the programme in 2018-19.
    • The sugar mills have received in incentive of Rs. 25,000 per hectare for growing foundation seed. For this purpose, the State Government had earmarked a sum of Rs. 162.5 lakh, of which Rs. 59.56 lakh has been disbursed.
    • To promote certified seeds for higher productivity, a subsidy of Rs. 160 per quintal for general category farmers and Rs 200 per quintal for SC/ST farmers was given to the cultivators on purchase of 16 listed certified varieties of seeds. Under this programme, a sum of Rs. 682.78 lakh has been distributed.
    • To encourage the production of certified seeds, farmers were offered Rs 30 per quintal as bonus. For this purpose, the State Government has allocated Rs. 351 lakh in 2018-19, of which Rs. 126 lakh was distributed among the cultivators of certified seeds.
• Dairy Industry:
  • Since 1983, the Bihar State Milk Co-operative Federation Ltd. (COMFED) became a major institutional support for the rural households producing milk in Bihar.
    • Operationally, COMFED has three-tier co-operative structure in Bihar –
      • milk producers’ cooperative society at the village level,
      • milk union at the district level, and
      • milk federation at the state level.
  • In 2018-19, COMFED has inducted more societies in Supaul Milk Union in Bihar and Bokaro Dairy in Jharkhand. So, in 2018-19, 22,971 organised societies were functioning, registering a growth of 9.4 percent over 2017-18.
    • The daily milk collection across all dairies increased from 1627.25 thousand kg per day in 2017-18 to 1931.11 thousand kg per day in 2018-19, implying a growth of 18.7 percent.
    • Importantly, this growth was registered at all the locations of the project.
  • Value addition is the key in marketing activities of COMFED. Though milk sale has declined marginally between 2017-18 and 2018-19, sale of milk products like lassi, peda, paneer, gulab jamun has increased commensurately.
  • COMFED also provides various services like artificial insemination of animal, vaccination, de-worming, seed distribution, and cattle feed distribution. Except seed distribution and De-worming, all other service provisions have registered a significant improvement in 2018-19.

Non-Agro Based Industries:

• Handloom and Powerloom:
  • In the era of automation of cloth production and early stage of adoption of Artificial Intelligence (AI) in the textile industry, handloom survives by catering to upscale markets, both at home and abroad
  • The weaving community also plays an important role in preserving the legacy of cultural history of the state. To preserve the cultural history of Bihar and to support the handloom weaving community, the policy of protection of the State Government has played a crucial role.
  • 13 locations in Bihar have specialised in the production of different fabrics and clothing materials. Some of the clusters also produce handloom products, exclusively for export market. Handloom Concentrated Districts in Bihar:
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  • The State Government has been conducting training programmes to impart skill among the weavers at various locations.
    • Since 2013-14, the State Government has been helping to organise 204 training programmes each year and the reported achievement rates ranged between 78.4 percent (2014-15) and 82.8 percent (2016-17). In 2018-19, the achievement rate was 75.9 percent.
  • Various schemes adopted by the State Government to promote and subsidise the handloom and powerloom weavers in the state.
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• Sericulture:
  • Bihar has remarkable potential in silk-based production. Three types of silks are cultivated in Bihar — mulberry, tasar, and castor (eri).
  • To improve the performance of sericulture, the State Government has allocated Rs. 6.00 crore in 2019-20 in the following schemes.
    • First, an allocation of Rs 1.51 crore is made to construct sericulture farms at different locations and for providing irrigation facility.
    • Secondly, the State Government has also felt the need to construct a Mulberry Reeling Bhawan in Kishanganj, and allocated Rs. 56.46 lakh for this purpose. Apart from that, the State Government has undertaken renovation of reeling units in Supaul.
      • To construct administrative building, grainage building, cocoon bank as different locations, it has allocated Rs 100 lakh.
    • Lastly, the State Government also proposed to provide Rs 200 lakh as subsidy to mulberry and eri farmers for plantation or rearing appliances, irrigation facility and construction of rearing house, etc.
• Udyog Mitra:
  • Over the years, Udyog Mitra has played a pivotal role in promoting industrialisation in Bihar. Udyog Mitra provides consultancy services to prospective industrialists to establish and/or expand their industry, make required project profile, provide necessary information and address various issues that arise during the operation of industrial units.
  • Simultaneously, Udyog Mitra, along with industrialists, policy makers and researchers also organise seminars, capacity building activities and disseminate information regarding industries.
  • Major activities performed by Udyog Mitra :
    • Udyog Mitra has provided consultancy services to prospective industrialists to establish industries and also helped them to prepare their project proposal.
    • Udyog Mitra has helped industrialists by answering their queries through online communication portal.
    • Additionally, the CEO of Udyog Mitra has signed MOUs with Central Institute of Plastic Engineering and Technology (CIPET), Footwear Design and Development Institute (FDDI), National Institute of Technology (NIT), and Institute of Entrepreneurship Development (IED) for skill development training in compliance with departmental orders.
    • Under the ‘Chief Minister Scheduled Castes and Scheduled Tribes Entrepreneurship Development’ programme, the relevant brochures, standees and pamphlets were prepared by Udyog Mitra and distributed at every District Industries Centre.
• Mining and Quarrying:
  • The share of mining and quarrying in the GSDP of Bihar is very small and this sector’s role in generating economic growth for Bihar is rather limited.
    • However, in recent times, the revenue from the mining and quarrying sector has increased substantially, thanks to various steps by the State Government.
  • The major revenue sources were sand, works department, stone and crusher, bricks, and others. Between 2017-18 and 2018-19, the revenue collected from sand mining, stone crushing, and bricks increased by 87, 27 and 5 percent, respectively. This essentially indicates an increase in construction works in the state.
  • The State Government has been using Geo-mapping application to track revenue collection from brick kilns.
  • The State Government has also been pursuing the sustainable Sand and Stone Mining Policy to minimise the impact of mining activities on the environment.
• Tourism:
  • Both at the national and international level, the attractive tourist spots in Bihar are generally known to be the historical sites at Bodhgaya, Rajgir, Nalanda and Vaishali. But this perception about Bihar is untrue.
  • Taking into account other places of tourist attractions in Bihar, the State Government has planned as many as eight tourist circuits in the state —
    • Buddhist Circuit,
    • Jain Circuit,
    • Ramayan Circuit,
    • Shiv Shakti Circuit,
    • Sufi Circuit,
    • Sikh Circuit,
    • Gandhi Circuit, and
    • Eco Circuit.
  • In the last decade, the Department of Tourism, along with the Union Ministry of Tourism, has made provisions for additional amenities and tourist-friendly infrastructure along different tourist circuits.
  • To promote tourism, the State Government has generously allocated funds to the Department of Tourism during the recent years, and the expenditure as a percentage of the budget has been quite high throughout this period, except 2018-19.
    • In 2019-20, a sum of Rs 275 crore was allocated to the Department, which was three times more than the allocation of 2018-19.
  • The number of tourist arrivals in Bihar has increased substantially from 183.96 lakh in 2011 to 336.21 lakh in 2018, growing at an annual rate of 7.8 percent.
    • Further, between 2011 and 2018, the annual growth rate of foreign tourists was 1.4 percent.
  • It is important to mention that the majority of tourists arrived in Bihar for religious and heritage tourism. To realise the potential of other types of tourism, the State Government has been encouraging the development of nature and adventure tourism to attract tourists from different parts of the world.
  • It is important to note that the growth of footfall of foreign tourists has a positive impact on the balance of payment of our country. Foreign tourists, along with domestic ones, can also contribute substantially to the generation of employment opportunities, increase in income of the local service providers, reduce incidence of migration and development of real estate at the tourist destinations.
  • The Department of Tourism of the State Government has undertaken various projects worth Rs 45.67 crore in 2018-19.
    • This includes renovation and beautification of Baba Ganinath Temple in Vaishali.
    • For Sitamarhi, an amount of Rs 10.68 crore was allocated for beautification and creation of amenities for tourists.
    • In Bhojpur, Vir Kunwar Singh Vijay Stambh will be constructed at four locations (Shivpur Ghat, Bibiganj, Kayam Nagar, Barasingha Buzurg). For this purpose, an amount of Rs 7.78 crore was earmarked by the State Government.
• Government steps:
  • Khadi and Village Industries:
    • The Khadi and Village Industries Commission (KVIC), together with the KVI Board in Bihar, performs various activities to promote khadi and village industries. The major activities are — dissemination of knowledge of newer skills, transfer of technology, and research and development.
    • The KVIC is also responsible for handling the Scheme of Fund for Regeneration of Traditional Industries (SFURTI) and Prime Minister’s Employment Generation Programme (PMEGP), which started in 2008.
      • This programme is implemented by the KVIC, KVI Board at the state level and the District Industries Centres (DIC) at the district level.
  • Chief Minister Micro and Small Industries Cluster Development Scheme:
    • Under the Chief Minister Micro and Small Industries Cluster Development Scheme, a Detailed Project Report (DPR) was prepared to establish Common Facility Centres for 8 clusters, approved by the state level committee.
    • As part of the scheme, an apparel park in Bihta (Patna) and a leather goods complex in Muzaffarpur have been proposed.
    • The DPR of makhaana cluster in Supaul, sanitary pad cluster in Lodhipur, Sabaur, Bhagalpur have been approved by the state level committee
    • Under Industrial Incentive Policy-2011 and the Bihar Industrial Investment Promotion Policy, 2016, an amount of Rs. 284.75 crore has been approved by the State Government to provide basic facilities to the industrial units.
  • Bihar Industrial Area Development Authority (BIADA):
    • To promote industrialisation, BIADA was constituted under the statutory provision of the Bihar Industrial Development Act, 1974.
    • The key function of BIADA is to undertake planned development of Industrial Areas and matter appurtenant thereto in Bihar with its regional offices in Patna, Muzaffarpur, Bhagalpur and Darbhanga.
    • As of September, 2019, BIADA has acquired cumulatively 6061.7 acres of land and, hence, added 876.5 acres of land between October 2018 and September 2019.
      • Of the total acquired land, 3363.77 acres (55.5 percent) has already been allotted to entrepreneurs.
      • Between September 2018 and October 2019, the major land acquisition took place in Muzaffarpur (877.78 acres), followed by Darbhanga (148.88 acres). This also suggests that the State Government has tried to disperse industrialisation across the state, rather than encouraging its concentration in and around Patna.
    • To facilitate industrialisation in the state, several important reforms have been carried out by the State Government. The following are the key reforms:
      • Bihar Industrial Area Development Authority (BIADA) (Amendment) Act, 2017 was passed, replacing the earlier BIADA, 1974 Act.
      • Various policies were formulated which included — Exit Policy, Allotment Policy, Allotment Facilitation and Surrender Policy, Lease and License Policy, and a Land Pooling Policy, as per the new BIADA (Amendment) Act, 2017.
      • Industrial Area Management Committee (IAMC) has been constituted for better industrial area management.
      • Provision for direct purchase of land from land owners for the establishment of new Industrial Areas.
  • To give an account of the extent of investment in the state thus far, about Rs 6446.05 crore was invested in 1641 production units and 33,076 people have received direct employment till 2019. It is observed that the number of production units has been increasing consistently since 2005-06.
    • Food processing was the major constituent of the new production units. The food processing sector attracted Rs 601.01 crore, plastic and rubber sector attracted Rs 73.87 crore, and textile received Rs 53.69 crore.
    • The major investors were Britannia Industries Limited (Rs 205.6 crore), ABIS Exports (India) Private Ltd., UNO Digital Private Ltd., and Rakesh Masala Udyog (Rs 54.61 crore).
    • In 2018-19, 37 small-scale enterprises invested around Rs 103.27 crore and, on an average, generated employment for 45 persons per unit.
    • Detailed Information on Investment by Sector (2017-18 and 2018-19):
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