Assocham backs special status demand for Bihar

Lauding Chief Minister Nitish Kumar for changing perception about Bihar, industry body Assocham on Monday backed the demand for grant of special status for industrial development of the state.

The Nitish Kumar government has worked hard to help change the perception about Bihar by improving law and order situation and usher in development on several fronts, Assocham Secretary General D S Rawat told reporters.

Bihar has hit the road on way to economic recovery and among the BIMARU states comprising Bihar, Madhya Pradesh, Rajasthan and Uttar Pradesh it has attained top position in Gross State Domestic Product growth at 9.3 per cent in terms of GSDP on the Compounded Annual Growth Rate between 2004-05 to 2012-13, he said.

Bihar's growth rate in the industrial sector (14 per cent), services sector (10 per cent), agriculture and allied sector (4.7 per cent) and per capita income (7.6 per cent) has been better than other states with BIMARU tag, Rawat said.

There has been an impressive decline in poverty ratio from 54 per cent in 2004-05 to 33 per cent in 2011-12, while rural road infrastructure has grown by 41 per cent and rural road density 37 per cent, he said.

Rawat said that the grant of special status to Bihar, recently recognised by the Raghuram Rajan panel as among 10 least developed states, would fast track economic development in Bihar and bring in private investment.

The special status grant to Bihar would be in the interest of not only the state, but in the national interest as no country could sustain development without pushing growth in poor and backward states through incentives and financial devolution, he said.

The backwardness of Bihar and other least developed states was bound to adversely affect the growth story of India, Rawat said, adding that the special status grant could be one of the measures to push development activities in the state.

The Assocham official lauded the Raghuram Rajan panel report saying that it would bring about an inclusive growth in the country

by providing additional financial devolution to backward states.

Its recommendations would bridge the gap between rich and poor states on long-term basis.

Underlining that the Nitish Kumar government deserves kudos for recording impressive development on several key indices, Rawat said that Bihar continued to grapple with many challenges with the state having more of poor population at 33 per cent as compared to the national average of 21.9 per cent.

Bihar had registered negligible growth in the urban road infrastructure even as there had been least improvement in infant moratality rate between 2001-10 requiring urgent improvement in healthcare response system starting from pregnancy to after delivery, he said.

The state's performance on attracting private investment had been poor in comparison to other BIMARU states as Bihar had received only Rs 429-crore (Rs 4.29-billion) investment out of Rs 30,000 crore (Rs 300 billion) coming to these four poor states with Rajasthan walking away with the lion's share at Rs 15,355 crore (Rs 153.55 billion) and Madhya Pradesh with Rs 10,598 crore (Rs 105.98 billion), he said.

Stating that the industrial development was necessary to propel economic growth, Rawat said that the Assocham had suggested to the state government to improve industrial scenario by offering sops, tax rebates, easing of land acquisition process and related incentives to woo the private investors on a large scale.

The Assocham official identified food processing, agriculture and consumer items as key areas for private investment, but rued that Bihar lacked essential ingredients like raw materials, electricity and land for development of heavy industries.

Rawat advised the state government to create a land bank to woo the private investors for setting up food processing and agro-based industries.

He said that the compilation of data by the Assocham researchers focussed on economic developement of the BIMARU states with a view of find out the status of the four states on various parameters as these states represented 37 per cent population of the country, but shared only 20 per cent of the gross domestic product.