Job ahead: Attracting investment
Entrepreneur Irfan Alam's successful start-up in Bihar won him an audience with US President Barack Obama, and his unique business model that helps richshaw pullers earn more has been adopted by the Madhya Pradesh government.delhi Updated: Nov 25, 2010 01:48 IST
Entrepreneur Irfan Alam's successful start-up in Bihar won him an audience with US President Barack Obama, and his unique business model that helps richshaw pullers earn more has been adopted by the Madhya Pradesh government.
But the Indian Institute of Management Ahmedabad graduate knows it will need more than his success story to attract investment to his state.
"People like Anand Mahindra and Mukesh Ambani told me on the sidelines of our interaction with Obama that they have their eyes on Bihar as an investment destination. But they are waiting and watching. It will need the government to create incentives to lure them. The challenge for the government begins in earnest now," said the 35-year old originally from Begusarai.
Drawing investment to the state is likely to prove one of the biggest challenges for the Nitish Kumar government that today returned to power. But dramatic changes are needed first, argue young entrepreneurs from the state who are a part of Bihar's legendary army of Indian Institute of Technology (IIT)and IIM graduates.
"I think it will take a long time for Bihar to become investment friendly.
First, the mindset of the bureaucracy needs to change. Bureaucrats are worse than politicians and business is still not considered 'good' by them," said Gyanesh Pandey, CEO of Husk Power Systems and graduate of India's youngest IIT in Varanasi.
Husk Power Systems coincidentally tries to tackle what entrepreneurs across the board identified as Bihar's biggest roadblock to attracting investment - the lack of electricity. Pandey started the firm, which produces electricity from husk, with a fellow Bihari and college classmate.
"Even the posh parts of Patna where I stay on an average suffer from four to five hours of power cut a day. Which infrastructure industry can be set up without electricity," Alam questioned.
The state government's "failed land acquisition policy" - where it is seen to have succumbed to political pressures to avoid private firms acquiring land for industry - needs to change, the entrepreneurs argue.
"We had a proposal that could have led to a major manufacturing hub emerging in the state, but the government did not wish to take any risk with land acquisition," said Sumit Mishra, an IIT Delhi graduate born in Gaya, who runs his own consultancy firm.
Bihar also needs to create a single window system for all clearances required to set up industries, Alam said. The state needs to establish top notch higher educational institutions to avoid the outward migration to students to other states, the entrepreneurs argued.