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KNOW INDIA
Bihar
Economic Infrastructure
Major Industries
Policy Framework

click on image for zoom

INDIAN STATE : BIHAR

Major industries

Agriculture

The production scenario of agricultural sector is outlined below:

Crop/Enterprise
Annual Production(Million MT)
Bihar's share in National pool (%)
Marketable surplus (percentage)
Vegetables 8.59 9.0 100
Fruits 3.35 8.0 80
Food grains 11.90 5.6 75
Sugarcane 13 5.5 100
Fish 0.27 8.3 100
Milk 4.06 4.4 100

A brief profile of a few of the products is given here, in which the state has a comparative advantage.

Maize

The current maize production level in the state is 1.5 million MT (10 per cent of country's production) and the target for 2015 has been set at 4.5 million MT. Maize is grown round the year and the productivity level is higher than the national average. Producers' price of maize in the state is comparable to export parity price making maize internationally competitive. Huge potential exists for the private sector investment with respect to contract farming, industries based on ethanol, corn oil, feed and starch industry. Further, scope is there for export of baby corn from the state.

Sugarcane

The current level of sugarcane in the state is 13.00 million MT and the targeted production by 2015 is 46.72 million MT. Investment opportunities exist in the following segments for the private sector:

  • New green field Sugar mills Capacity expansion of existing mills
  • Ethanol manufacturing
  • Molasses based alcohol
  • Cogeneration of power
  • Bagasse based paper

Litchi

The current level of production in the state is 0.28 million MT and the production target for 2015 has been fixed at 0.5 million MT. Litchi's whole sale price in Bihar is less than that of competing states, giving comparative advantage for domestic and export market. Investment opportunities exist in the following segments for the private sector:

  • Contract farming
  • Export of fresh fruits
  • Export of processed fruits
  • Litchi honey

Makhana

Makhana is an aquatic organic crop rich in protein and low in fat content. The present production of Makhana in the state is 0.003 million MT (Bihar contributes 85 per cent of national production) and the target for 2015 has been fixed at 0.050 million MT. Investment opportunities exist in the following segments for the private sector:

  • Contract farming
  • Processing and exports (pure organic based cultivation gives an added advantage to the crop, particularly in the export market)

Mango

The present level of production of mango in the state is 1.4 million MT (13 per cent of all India production) and the target for 2015 has been fixed at 3.0 million MT. Several varieties such as Jardalu, Langra and Krishna bhog are produced in the state. Investment opportunities exist in the following segments for the private sector:

  • Contract farming
  • Export of fresh/processed food
  • Cold chain

Vegetables

The present level of production of vegetables in the state is 8.60 million MT (9 per cent of all India level) and the targeted production for 2015 has been fixed at
12.4 million MT. Investment opportunities exist in the following segments for the private sector:

  • Contract Farming
  • Processing & export
  • Cold chain

Honey

The present production capacity of honey in the state is 1300 MT (13 per cent of the all India level) and the target for 2015 has been fixed at 3900 MT. Investment opportunities exist for the private sector in the following segments:

  • Processing
  • Contact farming
  • Marketing

Aromatic Rice

The present production capacity of honey in the state is 0.015 million MT and the target for 2015 has been fixed at 0.05 million MT. Investment opportunities exist for the private sector in the following segments:

  • Contact farming
  • Modern rice mills
  • Exports

Sugar Industry

Sugar industry is the largest agro-based industry in Bihar. This industry generates sizeable employment in the farm sector directly as well as through ancillary industries and related activities. It is estimated that about five lakh farmers and their dependents are engaged in the cultivation of sugarcane and approximately another half a lakh unskilled and skilled personnel, including highly qualified and trained technologists are engaged in the sugar industry in the state.

Status of the sugar industry in Bihar (2004-05)

Total area under sugarcane 2.27 lakh hectare
Total production of sugarcane 122.51 lakh M.T.
Productivity of sugarcane 55.43 M.T./Hectare
Canecrushed 26.48 lakh M.T.
Sugar Produced 2.54 lakh M.T.

Investment opportunities in sugar and allied industries in Bihar:

  • Green field sugar mills
  • Capacity expansion of existing sugar mills
  • Ethanol manufacture
  • Manufacturing of Molasses based alcohol and commercial spirit
  • Cogeneration of power
  • Manufacture of bagasse- based paper
  • Press- mud based organic manure
  • Engineering units related to sugar industry
  • Manufacture of sugar- based confectionery items

Incentive package for sugar industry

For new sugar mills:

  • Reimbursement of central excise duty on sugar.
  • Exemption of purchase tax on sugarcane.
  • Exemption of stamp duty and registration fees on purchase of land.
  • Grant of 10% subsidy on capital investment (plant and machinery) to a maximum of Rs. 10.00 crores, which ever is less.

For distillery and ethanol units

  • Exemption of administrative charge on molasses.
  • Reimbursement of sales tax (VAT) on molasses.
  • Exemption of stamp duty and registration fees on purchase of land.
  • Grant of 10% subsidy on capital investment (plant and machinery).

Setting-up Co-generation Power Units

  • Exemption of electricity duty on co-generated power.
  • Exemption of stamp duty and registration fees on purchase of land.
  • Grant of 10 % subsidy on capital investment (plant and machinery).
  • Laying of transmission line from factory to grid station by electricity board.

Food processing industry

Bihar is the leading state in the production of fruits and vegetables. It is the first largest producer of vegetables and second largest producer of fruits in the country.

There exists huge scope of investment in the food-processing sector in the state Private Sector participation is being encouraged in packaging and food processing sectors to ensure better quality. Also, the state welcomes private investment for comprehensive development of tea industry and capital subsidy is available for setting up tea processing units.

Further, there is huge potential for development of farming and processing of medicine (herbal and aromatic plants) in the state on account of natural environment and geographical location of the state. The active participation of private sector and Non Government Organizations is encouraged and incentives are provided under the Industrial Policy.

Textile Industry

Textile sector also offers huge potential to the investors. The state has strong weaving traditions. The total number of weavers in the state is over 90,000. The major locations for the textile industry are Bhagalpur, Gaya, Nalanda, Darbhanga, Madhubani, Siwan and Patna.

Investment Opportunities

  • Agro based industries
    • Cattle feed
    • Jute, hemp, sisal and other fabrics
    • Tea cultivation, processing and packaging
    • Paper
    • Floriculture
  • Industries based on medicinal and aromatic plants
  • Sericulture /Tasar
  • Chemical based industries
  • Power generating and allied industries
  • Electronic and computers and IT based industries
  • Industries based on non-conventional energy
  • Livestock based industries, such as dairy, poultry, piggery, equipment meat processing, etc.
  • Industries based on recycling of wastes, eco-friendly raw materials and processes.
  • Super specialty Health services
  • Telecommunications and related products
  • Food processing industry
  • Tissue culture products
  • Seeds and planting materials
  • Foods and Vegetable processing
  • Bio-technological processes and products
  • Post Harvest technologies
  • Tourism
  • Cold storage
  • Plastic and Plastic based industries
  • Pharmaceutical drugs based industries
  • Leather based Industries
  • Technical education
  • Ceramics
  • Sports Goods
  • Packaging
  • Metallurgical industries including power intensive units like induction furnaces, furnaces ferro alloys, oxygen plants, graphite and gas plants and calcium carbide plants.
  • Textile, hosiery, knitwear
  • Handicrafts
  • Natural Gas based industries
  • Housing fixtures and related industries


 
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