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
9.92
12.08 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
Gherzi - Genesis
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
Gherzi - Genesisc
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
Steel
Mini Steel, Secondary
Steel & Castings
Tourism
Hospitality & Tourism
Industry
POTENTIAL SECTORS IDENTIFIED

Agriculture & Horticulture
Sector wise development
strategies
 Fruits & Vegetables
 Cereals & Pulses
 Spices
 Potato
 Makhana
Gherzi - Genesis

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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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strategies
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 minimum
Price
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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Animal Husbandry & Allied Sector
strategies
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
(Rs Cr)
Employment
potential
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/ AI
Services at farm gate to improve animal health;
More Cattle Breeding Farms to increase productivity

Gherzi - Genesis
strategies
Bees & Orchards,
Apiary activity

strategies
Water bodies / rivers
& fishery skills
Gherzi - Genesis

Gherzi - Genesis
Aqua Park under PPP Model is suggested at Muzaffarpur & Bhagalpur

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strategies
Poultry Farming &
Animals Rearing

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Suggested supply chain model for poultry & meat processing

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strategies
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 the
tanneries
6003Muzaffarpur, Baruini,
Siwan
Revive leather tanning units
6600
200
5000
800
Employment
potential
2Bihta (Patna), BetiahRevive leather processing plant
Investment potential
(Rs cr)
LocationBusiness Models
125Total
100Tanneries
20Parks at Muzaffarpur &
Katihar
Processing units

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Handicrafts
strategies

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Suggested supply chain model for Handicrafts
Create marketing outfit for ‘
bihar brand

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Handlooms
strategies

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handloom
Current situation
40000 handlooms and 90000 skilled weavers
(approx); majority of weavers have shifted to other
Profession; 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 assistance
and access to all facilities under one roof will lead to
increased production
(Rs Cr)
Employment potential
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, Kharikbazar
2. Gaya – Maanpur
3. 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 everywhere
Thrust on mild steel ingots through induction
furnace route
Prioritize production of long products
Linkage with the miners on long term basis
Business Models Location Investment
potential (Rs Cr)
Employment
potential
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

Gherzi - Genesis
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

Gherzi - Genesis
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)
- 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

Gherzi - Genesis
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

Gherzi - Genesis
**********************

Gherzi - Genesis
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

Gherzi - Genesis
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 Plan
Restructure working of BIADA
Hand over O&M of Estates to private players
under PPP model
Conduct 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’ scheme
Establish therein e- kiosks or Gyan Chaupals
under PPP model
Set up SWAN (State Wide Area Network) For
state level connectivity under PPP model
Assessment of Infrastructural needs

Gherzi - Genesis
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

Gherzi - Genesis
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

Gherzi - Genesis
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

Gherzi - Genesis
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

Gherzi - Genesis
Policy initiative

Resource mapping of Bihar

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