Textile Value Chain talks with Shri Sandeep Poundrik IAS (Bihar 1993) Principal Secretary, Industries Government of Bihar, India at Technotex 2023 on the pretext of Bihar Industrial Investment Promotion Policy (Textile & Leather) 2022
Share about the Bihar Industrial Investment Promotion Policy
Bihar govt. in 2022 has come up with a new policy. The policy in addition to other incentives which is given to all sectors. The general incentives are interest subvention, state GST reimbursement and stamp duty exemptions, registration fee exemptions. Apart from that the new policy gives the capital subsidy of 15%. The most significant incentive in my opinion is the employment subsidy. That government gives Rs 5000 per employee per month for a period of five years to the unit. So if the unit is giving say Rs 15000 (per month), the government will give Rs 5000 (per month) out of that to the unit. The third incentive to textiles industries is power subsidy of 2 Rs/ per unit. This new policy will come in 2022 and the applications (for the policy) can be given by June 2023.
Criteria or requirements companies for eligibility
Any unit or company who wants to put up a unit in textile and leather can participate. The employment subsidy is available for units which are more employment oriented for example garmenting, product manufacturing. It is a very simple format, they just have to apply online and we give clearance immediately. Along with this, the government is also giving a lot of infrastructure support. For instance we are creating 24, 00,000 sq. ft. of industrial sheds, (50000 Sq.ft. each). So companies who don’t want to invest in lands or buildings, can take this sheds on rent which is also very low from Rs 4 to Rs 8/ Per Sq. ft. and the companies can simply come with the machines and start their production. We are also giving lands, and the land cost is reduced up to 80% then the general land cost in Bihar, which is quite high due to population density. But the government has provided a specific discount to the industry. The main attraction for Bihar I would say is that we have got a huge pool of skilled resources. If you go to any cluster in India, you will find about 50% of workers from Bihar. So these people want to come back to Bihar. Apart from huge man power, water and power are other benefits as we are surplus in both these resources. The government is with the industry and all the clearances are given through the single window. So anybody who wants to set-up a textile unit in Bihar. They would find it a smooth experience.
Connectivity of industrial areas in Bihar
Connectivity wise, Bihar has one of the best logistical networks, there are four lane and six lane highways which are crisscrossing the state from north to south and east to west and there are many new highways under construction by national highway authority. So connectivity by road is very good. The eastern dedicated freight corridor is passing through the state. There are three airports within the state and four airports on the border. So there are a total of seven airports catering to the state. And also you don’t have to travel more than two hours to reach the airport in the state. So the connectivity wise state is very good, we have 75 industrial areas. The industrial sheds are being developed in the ten of these industrial areas and all of them are very well connected by road and by train.
The industrial future for Bihar
I think the future is very bright and I think Bihar is perhaps the only state which can give real competition to other countries which are doing well in textiles and garmenting. Bihar because of its resources like man power, water, electricity and land, we are in a very good position to give competition to Vietnam, Bangladesh and develop it as the next textile hub. We already have the biggest bag cluster in Muzaffarpur. So willingly we will be a big textile cluster in coming times.
Relocation, Environmental policy and Ease of Business
For the environmental policy, everybody has to follow the country’s law, however we as state government and Bihar Industrial Development Authority provide all help to process the requirement. And I don’t see any problems getting the environmental clearances in the state. About re-locating the units, our policy applies to them also who are shifting their unit in the state. They will get the same benefits. We have an investment promotion team. We assign one person to each unit and he leads them, guides them and supports them in getting all the clearances. So the company or the units don’t have to go to different departments, they just interact with the industries department and we get all the clearances done from the state.
Export Oriented units
Of course, when we are promoting textiles it is not only for the domestic market, it is in fact I am happy to say that there is a leather apparel manufacturer who has started construction on a 10 acres plot and he is investing Rs. 110 Cr. And it is a 100% export oriented unit. Right now they are in Delhi NCR. They have four units there and they are now putting a big facility in Bihar. So, one of the requirements for exports these days is you need big land because of compliance issues, second is sustainability and the third is requirements such as gender sensitivity. In Bihar we are capable of doing these things. We are also promoting involvement of the women workforce, there is a govt. organization for women called ‘Jeevika’. We are training women so the workforce can be predominantly women in the garmenting. And then for sustainability we are focusing on the good infrastructure. So in short, Bihar will be a good hub for export.
Technical Textile and MSME’s Support in Bihar
Our government has recently taken a decision that in all government procurement we will give price preference to the units in the state. So in all government tenders the price preference of 2% will be given to large industries and 7% of preference will be given to MSMEs. So with this we are promoting manufacturing in the state. So whoever puts the unit in the state will not only get purchase preference but the price preference also.
Cluster Development in Bihar
With all our policy and measures we are trying to replicate the same successful models, so we are not only developing in textile, we are also promoting the same model in food processing as Bihar has a big food processing potential. So we are trying to develop the same model of anchor investor led small industries in food processing, textile and leather. I am sure that in coming times more and more people who are working outside will return to the state.
Message to Investors
My message to the investors will be first come to the state, what I see is that many people have different perceptions about the state and they have never visited the state. So please come to the state, explore the opportunities, we are there to support you and if you think it is a good place to invest then you should invest. But for that you have to visit the state first.
