VISION FOR ACCELERATED INCLUSIVE GROWTH

Transcription

1 Bihar th Approach to 11 Five Year Pan VISION FOR ACCELERATED INCLUSIVE GROWTH Government of Bihar Panning & Deveopment Department Patna 2006

2 Acceerated Incusive Growth th BIHAR APPROACH TO 11 FIVE YEAR PLAN VISION FOR ACCELERATED INCLUSIVE GROWTH Panning and Deveopment Department Pubication year : 2006 Pubisher : Secretary, Panning and Deveopment Department, Govt. of Biharcum-Member Secretary, Bihar State Panning Board Concept and Creation : Guidance : Sri N. K. Singh, IAS (Rtd.) Dy. Chairman, Bihar State Panning Board, Patna Sri A. K. Choudhary, IAS Chief Secretary, Government of Bihar Sri R. J. M. Piai, IAS Deveopment Commissioner, Government of Bihar Sri N. S. Madhwan, IAS Agricuture Production Commissioner, Government of Bihar Edited by : Sri Chaitanya Prasad, IAS Secretary, Panning and Deveopment, Government of Bihar Organisation and : Dr. Arvind Kumar, Panning Officer compiation Statistics Compiation : Bijoy Pratap Singh, Director, Statistics, Government of Bihar Nand Dua Roy, Research Officer, Bihar State Panning Board Printer : Skreena, Rajendra Nagar, Patna-16 Mob.: Cover Design : kumar amaresh Cover theme : Front Cover : Coage of newy constructed 'Chirayantadh Bridge', Patna; Farmers busy with 'Paddy Transpantation' in their fieds; 'Barauni Refinery' at Begusarai; The sweet 'Shahi Lichi' of Muzaffarpur; Scene of 'Green Forestry' and Ruins of the ancient 'Naanda University' at Naanda (Biharsharif). Back Cover : The famous ' Madhubani Painting' of Madhubani in which damses enjoying a vibrant fanfare of coourfu banges, the symbo of consistent happiness. ii

3 Contents Contents Chapter I. Overview Page No. 1.1 Macro Overview of the State Eeventh Pan Objectives Growth Potentia in the Eeventh Pan Cross-cutting issues : Meeting the Major Chaenges The Roe of Loca Bodies 17 Chapter II Acceerating Growth 2.I Agricuture Anima Husbandry and Fisheries Water Management and Irrigation Industry Sugarcane Industry 52 Chapter III Infrastructure 3.1 Roads and Bridges Energy Urban Deveopment 74 Chapter IV Promoting Incusive Growth 4.1 Empoyment - Unempoyment Scenario 82 iii

4 Acceerated Incusive Growth 4.2 Wefare Education Heath and Famiy Wefare Rura Deveopment 105 Chapter V Optimising Eco-Baance 5.I Environment 110 Annexure Annexure 1 : Projections for the Eeventh Pan 117 Annexure 2.A : Agricuture : Projected Area, Production and Productivity of Agricutura crops 118 Annexure 2 B : Agricuture : Fruit : Projected Area, Production and Productivity of Eeventh Pan 119 Annexure 2 C : Agricuture : Vegetabes : Projected Area, Production and Productivity of Eeventh Pan 120 Annexure 3 A : Roads : Projected Physica Targets for Nationa Highways Deveopment during the Eeventh Pan 121 Annexure 3 B : Roads : Projected Physica Targets for State Highways Deveopment during the Eeventh Pan 121 Annexure 3 C : Roads : Projected Physica Targets for MDR for Deveopment during the Eeventh Pan 122 Annexure 4 A : Heath : Status of present Infrastructure 123 Annexure 4 B : Heath : Status of Shortage of Trained Personne 123 iv

5 Foreword Nitish Kumar Chief Minister, Bihar cum Chairman Bihar State Panning Board, Patna 1, Anne Marg Patna, Bihar Foreword Deveopment is aways a compex matrix. In the case of Bihar, considering its ow eves of deveopment, this is douby so. Simutaneous action is required on mutipe fronts to pu the State from the morass of poverty and give the peope of the State a ife quaity consistent with human dignity. This requires acceerated growth, creation of gainfu empoyment opportunities, strengthening infrastructure and enhancing human resource deveopment. After the bifurcation of Bihar, our comparative factor advantages ie in the young demographic profie, fertie soi conditions, abundant water resources and a growing marker which can enabe vaue added harnessing of the rich agro-processing potentia of North Bihar. South Bihar requires an innovative approach to rejuvenate its water systems and harness newer technoogies for more optimum water utiization and conservation. Over the next five years, we wi strive to grow at 8.5% of GDP and aso ensure that the fruits of deveopment redress income inequities and confer benefits to the disadvantaged, particuary the Schedue Castes, Schedue Tribes and the Minorities. The Approach Paper outines our broad deveopment strategy and the sectora poicies covering Agricuture, Industry, Infrastructure and the Socia Sector. Redressa of poverty and inequities in mutipe forms remains our principa objective. I do beieve that the contours of our poicy outined in the Approach Paper and which wi be refected in th the fina 11 Five Year Pan for Bihar wi be a miestone in rapidy improving our growth indices and making Bihar a constructive partner in nationa growth initiative. (Nitish Kumar) v

6 Preface Preface Improving governance is inextricaby inked with enhancing the reach and efficacy of pubic deivery system. Besides, acceerated growth must be Incusive for enabing the benefits of deveopment to be shared equitaby by a segments of society. This woud not be possibe without quaitative improvement in human resource deveopment by way of ensuring hundred percent enroment for primary education, a sharp decine in dropout ratio, investing in teachers' training and creating additiona and more diversified Secondary Vocationa Education. Incucation of skis based on emerging demands is necessary to make the educated empoyabe. Simiary improvement in the heath of the popuation, apart from wefare gains, has many virtuous circes and enhances productivity. Strengthening infrastructure and making its cost more affordabe and more reiabe, particuary in roads and power, is centra to any growth strategy. This is aso critica in shaping perceptions and creating an attractive overa environment for investment as we as harness the scope for pubic-private partnership. The strategy for 8.5 percent growth rate necessitates much higher eves of both pubic and private outays as we as incentivising creative pubic-private partnership. This th wi enabe the XI Pan to buid on Bihar's comparative factor-advantage in agricuture, vaue added agro processing, a young demography with faing age dependency ratio and a arge growing market. The Approach Paper outines the strategy for achieving the aforesaid objectives and ays down the critica parameters which wi make the targets monitorabe. This wi aso improve accountabiity. Bihar ooks forward to a period where a deveopmenta centric approach can make the State more prosperous and be a significant partner in emerging nationa prosperity. (N. K. Singh) Deputy Chairman Bihar State Panning Board, Patna vi

7 Acknowedgements Acknowedgements The Approach Paper for the Eeventh Pan for the State of Bihar is an effort to ay down the broad macro framework of the State Government and give proper direction to the growth process on the basis of we conceived priorities and appropriate correction strategy to reverse the retarded growth trend of the economy of the State. The Approach Paper is the first scientific attempt made in Bihar to conduct simuation exercises for working out investment requirements for aternative scenarios of growth on the basis of Incrementa Capita Output Ratio (ICOR) for different sectors. It aso outines the broad vision and strategy of the State Government and it is intended to serve as a guide for the preparation of the Eeventh Pan proposas of the State. The Approach Paper has been prepared in tune with the poicy framework and inspiration provided by the Hon'be Chief Minister of Bihar, Mr Nitish Kumar, and has been formuated under the direction and design of the Deputy Chairman of the Bihar State Panning Board, Mr N. K. Singh. This Approach Paper woud not have been possibe but for his abe guidance and constant monitoring. I woud especiay ike to thank Mr N. S. Madhavan, IAS, for the inception of the work of preparation of the Approach Paper. I am aso indebted to Mr A. K. Choudhary, Chief Secretary, Bihar, Mr R. J. M. Piai, Deveopment Commissioner, Bihar and a the Departmenta Secretaries who have contributed various sections of the Approach Paper or improved on the quaity of the Approach Paper. I am peased to record my appreciation for the unstinting efforts of the officers and staff of the Panning and Deveopment Department and the Bihar State Panning Board. Dr Arvind Kumar and his team for the Eeventh Pan deserve specia mention for their immense organizationa support and coordination work. Thanks are aso due to Mr Nanda Dua Ray, Research Officer, Bihar State Panning Board for his econometric exercises reated to the formuation aspects of the Pan, Mr Bijay Pratap Singh, Director, Statistics and Evauation, for his invauabe statistica groundwork for the Pan and to the Officers and Staff of the Computer Ce of the Panning and Deveopment Department and the Directorate of Statistics for assistance in printing and pubication. Chaitanya Prasad Secretary, Panning and Deveopment Department vii

8 Overview Overview Bihar approaches the Eeventh Pan with optimism. Though the state is amost at the owest rung of the deveopmenta adder, a process of gradua growth based on the state's tremendous potentia has been set in motion during the ast year. Thus the Eeventh Pan provides Bihar with a unique opportunity to restructure poicies to achieve a new vision of growth that wi be much more broad based and incusive. With amost a its human deveopment and economic indicators far beow the nationa average, prioritizing Bihar's focus for the Eeventh Pan is a chaenge; in reaity, the state needs to focus attention on a fronts. Many significant initiatives recenty taken are beginning to yied resuts. The objective of the Eeventh Pan is to significanty raise the growth trajectory and improve the iveihood of its miions of poor peope. At the same time we must avoid a period of jobess growth but rather foster poicies which wi increase growth and aso create avenues for meaningfu empoyment for the young demographic profie of Bihar. By the end of the Eeventh Pan, Bihar beieves it can redress its deveopment deficits and join the nationa mainstream of the fast growing states. When a state of the demographic size of Bihar does so, it can easiy prope growth esewhere and Bihar coud become the engine to prope India's economic growth in the Eeventh Pan. 1.1 Macro Overview of the State Growth Trends The trend in the growth rate of Bihar's Gross State Domestic Product (GSDP) during the Tenth Pan has been voatie, mainy because of the dominance of the agricutura sector in the state's economy (see Tabe 1.1). During this period, against an average growth rate of 7 percent for the Indian economy, Bihar's average annua growth rate was

9 Acceerated Incusive Growth Tabe 1.1 : Trends in Bihar's Gross State Domestic Product (Ninth & Tenth Pans) Year State Domestic Change over Annua Average Growth Product Previous Year Rate (constant ) (akh Rs.) (%) prices) (%) ,92,076 (-) ,88, ,91, ,50, ,25,936 (-) ,15, (P) 32,90,950 (-) (Q) 36,88, (A) 36,19,819 (-) (Note :P:Provisiona, Q : Quick Estimate, A : Advanced Estimate) percent. During the Tenth Pan, Bihar's economy grew at a rate that was marginay higher than its growth rate in the Ninth Pan period and even its per capita income just crept up. However, the state's growth rates Tabe 1.2 : Growth in Income and GSDP : Bihar vs. India (Ninth and Tenth Pans) (Percent) Ninth Pan Tenth Pan According to Panning Commission CAGR 3 Years ( to ) India Bihar India Bihar India Bihar Per capita GDP growth rate NA NA Growth in GDP of which (a) Agricuture 2.00 (-) (b) Industry (c) Services

10 Overview have been ow compared to the nationa average Structure of the Economy Bihar's economy over the years has experienced itte structura change and is not we diversified. It is a predominanty agrarian economy with a sma manufacturing base. Whie the share of agricuture has decined, it remains very arge, the share of industry has remained stagnant, and services sector has increased its share from 41 percent to neary 50 percent of GSDP, which is in ine with the nationa average (Figure 1.1). The share of the primary sector has been decining from percent in to 50.6 percent in and further to 44 percent in However, this is sti higher than the average contribution of agricuture at the nationa eve which was 27 percent in The bifurcation of the state in 2000 had an impact on the structure of the economy; the state of Jharkhand was created from the industriay advanced and minera-rich southern-haf of the state. Whie 46 percent of the and area was transferred to Jharkhand, 75 percent of popuation remained with Bihar, eading to an increase in popuation density in the atter. The contribution of the secondary sector, which was percent in , rose to percent in and fe to percent in , ess than haf the share of the secondary sector nation-wide which is around 25 percent. The tertiary sector has grown Figure 1.1 : Sectora Distribution of GSDP, and % 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Services Industry Industry Industry Agricuture Services Agricuture Services Agricuture Bihar Bihar India Services Industry Agricuture India

11 Acceerated Incusive Growth disproportionatey and without concomitant growth in the secondary sector. Its contribution was percent in , but its high growth in the 1990s raised its contribution to percent of SDP in , which is at par with the country at arge. In the year , the contribution of Agricuture, Industry and Services Sectors in GSDP at prices was 40, 12 and 48 percent respectivey as against 20, 27 and 53 percent respectivey at prices for the country as a whoe. In spite of the efforts of panned deveopment in the past severa decades, the regiona disparities have widened and severa states ike Bihar are at the owest rung of the deveopment indicators. Infrastructura deveopments ike roads, power, heath and sanitation and other socio-economic indicators are abnormay poor compared to deveoped States. The backwardness of Bihar is due to historica reasons - ow per capita pan expenditure, inadequate centra assistance, recurrence of foods and droughts, ow C-D ratio, etc. The bifurcation of the State has added further miseries to it. With 46 percent of and transferred to Jharkhand, it has to sustain 75 percent of popuation of the undivided State, eading to an extremey high density of popuation. The and area transferred to Jharkhand was very rich in minera weath, power pants, industria units and human deveopment institutions. The bifurcation of the State has had its impact on income and revenue raising capacity of the State and consequent fa in State Domestic Product has been of the order of 40 percent whie revenue receipts have faen by 33 percent. As a resut of bifurcation, the State has become deficient in natura resources and mineras incuding coa which has impeded its industria deveopment. For a ong tern soution of this probem of energy deficiency, the State shoud be assigned mining bocks and not mere coa inkages. The Nationa Pan shoud ook into this probem in order to bring Bihar on the targeted industria growth path Eeventh Pan Objectives Bihar has a ot of catching up to do, and it has to do this rapidy. If the economies of Bihar and the country continue to grow at their respective Tenth Pan rates during the Eeventh Pan period, the per capita income of Bihar in wi be Rs 5,589 and India's woud be Rs 23,209. In this scenario, at the end of the decade, India's per capita income wi be 4.15 times Bihar's per capita income. Thus the gap has to be bridged by a significant 4

12 Overview increase in the growth rate and a pattern of growth which can permeate its benefits to a sections of the society. In Bihar's context, the Eeventh Pan mantra is aincusive growth at an acceerated pace, accompanied by improved deivery of socia services Incusive Growth : Reducing the Poverty Headcount Even after the formation of Jharkhand, Bihar remains the third most popuous state in the country with 83 miion peope. Around 40 percent of the popuation is beow the poverty ine, which is the highest in the country. As per Panning Commission figures of , rura poverty (44.3 percent) was substantiay higher than urban (24.7 percent), but with 9 out of every 10 persons in Bihar iving in viages, poverty in Bihar is significanty a rura phenomenon. The rura poor have imited access to and and ivestock, Tabe 1.3 : Deveopment and Demographic Indicators Indicators Bihar India Tota popuation (miion)* ,028.8 Popuation (rura) (%)* Birth rate** Chid popuation (0-4 years) (miion)* Sex ratio (a)* Sex ratio (0-6 years)* Literacy rate (tota) (%)* Literacy rate (femaes) (%)* Life expectancy at birth : mae*** Life expectancy at birth : femae*** Infant mortaity rate** Underweight chidren (beow 3 years) (%) Gross enroment ratio(6 14 years, %) Compete immunization (a) (before 24 months) (%) Materna mortaity rate (MMR) *Census 2001 ** , SRS *** (CSO) 5

13 Acceerated Incusive Growth education (80 percent of the bottom quintie househod's heads have no education), heath care, and we-paid jobs. Their main source of income is agricutura wages or casua non-farm jobs. A arge percentage of them are andess or nearandess, the ivestock they own is of poor stock, and they are often denied opportunities for socia reasons, such as caste. The state managed to reduce its poverty eves during the 1990s ( to ) by about 7 percentage points, but this was far beow the nationa average. Bihar's HDI rank among the states has remained unchanged at 15 since 1981, whie its score increased marginay from in 1981 to in 1991 and then fe to in Rapid growth has to be an essentia part of the strategy since it is ony in a rapidy growing economy that incomes of the majority of the popuation wi be raised sufficienty to bring about a genera improvement in iving conditions. Further, the country's own experience with growth throws up some essons for Bihar. Acceerated GDP growth in India during the 1990s did not ensure a simiar growth in empoyment. According to NSS (arge sampe) data, the rate of rura unempoyment (current daiy status) increased from 5.6 percent in to 7.1 percent in and from 7.4 percent to 7.7 percent in urban areas. Thus, aong with faster and more equitabe growth, sustained and gainfu empoyment generation at a faster pace - to tacke the unempoyment backog wi be one of Bihar's key goas for the Eeventh Pan. Vigorous efforts wi be needed to create an investment - friendy environment in abour-intensive sectors such as agricuture, anima husbandry, MSEs and the services sector Socia Deivery : Access to Services for A Education and good heath are essentia to empower peope to be productivey empoyed in their future. The state's poor socia indicators underine the importance of improving access to essentia pubic services, especiay education and heath (Tabe 1.3). Educationa indicators for Bihar are abysmay ow compared to the nationa average, argey because of the ack of educationa institutions and staff. Poor deivery of education has resuted in a high degree of migration from the state for education and empoyment, resuting in a arge and continuous oss of human 6

14 Overview potentia. The situation is amost identica in heath service deivery, where the shortages in medica personne and physica infrastructure are far higher than the nationa norms. The entire socia deivery system - covering anganwadis, ration shops, schoos, hospitas, and so on - needs substantia inputs and improved efficiency to be rejuvenated and made purposive. A Word Bank study indicates that at the present rate of progress, by 2015, Bihar wi be abe to achieve ony two (reduction in chid manutrition and access to safe drinking water) of the eight Miennium Deveopment Goas. These can ony be acceerated if the socia sectors receive substantia investment during the Eeventh Pan. At the same time, socia services wi have to be we targeted and responsive to the community's needs. There is sufficient evidence to show that funds are not the binding constraint to improving the deivery of service; rather it is the impementation capacity of the deivering agencies and appropriate monitoring of outcomes Growth Potentia in the Eeventh Pan The ow growth of Bihar's GSDP compared to the nationa average can be attributed to the ow accumuation of physica capita and ack of efficiency in the use of capita. From to , the investment rate has been around 27 percent for the country, against which Bihar's average rate of investment was an abysmay ow at 15 percent of GSDP(see Tabe 1.4). Of this, private investment as a percentage of tota investment for the state was on average 59 percent. The Panning Commission has projected an average growth rate cose to 9.0 percent with acceeration through the pan period to end with a rate of around 10 percent during the Eeventh Pan. For Bihar, four rates of growth of SDP - at 7 percent, 8.5 percent, 9 percent and 10 percent - have been assumed for working out different investment scenarios in the Eeventh Pan. Tabe 1.5 presents an assessment of investment requirements in Bihar for these target growth rates, which wi ca for varying average rates of investment, pubic and private. For Bihar, acceeration from 7 percent growth to 10 percent wi require an increase in the tota investment rate from percent to percent. The scae of the increased investment is substantia and wi have to be financed by increased 7

15 Acceerated Incusive Growth Tabe 1.4 : Trends in Rate of Investment (Percent of GSDP) Year Pubic Private Tota Tabe 1.5 : Aternative Investment Scenarios for the Eeventh Pan (Percent) Target rate of growth Average investment rate Pubic investment as % of GSDP Private investment as % of GSDP Year Tabe 1.6 : Projected Eeventh Pan SDP at Aternative Growth Rates State Domestic Product (Rs. crore at prices) 7 % rate of 8.5 % rate of 9 % rate of 10 % rate of growth growth growth growth ,784 71,776 72,107 72, ,739 77,877 78,597 80, ,041 84,497 85,671 88, ,714 91,679 93,381 96, ,784 99,472 1,01,785 1,06,541 domestic and government saving. These different growth scenarios give rise to aternatives estimates of GSDP for the state economy (Tabe1.6) The Incrementa Capita Output Ratio Based on data on capita formation in the state for the period to 8

16 Overview and data on SDP with a ag of two years, the incrementa capita-output ratio (ICOR) for major sectors works out to 2.78 (Tabe 1.7). In the Eeventh Pan for Bihar the ICOR can be reaisticay be assumed to be higher than the ICOR for , at 3.0 as the state wi be incurring vasty higher capita expenditures on deveoping infrastructure projects in roads, bridges, power, irrigation and food contro. Based on this postuated ICOR, proposed outays for the Eeventh Pan for the aternative rates of growth have been estimated (Tabe 1.8). Athough private investment is currenty 59 percent of tota Sector Tabe 1.7 : ICOR by Broad Sector ( ) ICOR 1 Agricuture & aied activities Industry Mining, manufacturing and construction Power, water suppy and gas Services Transport and communications Others, incuding socia services 1.02 A sectors 2.78 Tabe 1.8 : Projected Eeventh Pan Outays at Aternate Growth Rates (Rs crore) Rate of growth (Percent) Proposed Outay Pubic Private Tota ,600 86,551 1,33, ,310 1,08,283 1,66, ,355 1,15,804 1,78, ,680 1,31,257 2,01,937 9

17 Acceerated Incusive Growth investment, with the recent encouraging spurt in private investment, a moderatey higher proportion of 65 percent has been assumed for the Eeventh Pan. It may be recaed that the Panning Commission has assumed the share of the private sector in tota investment in the country to be 70 percent. The projected outay for the Eeventh Pan estimated at Rs 58,310 crore woud enabe the state to grow at 8.5 percent (see Annexure 1). The oan component of this outay is cacuated and pegged in conformity with the physica correction path under the FRBM Act. Whie the Panning Commission projects a growth rate of 7.6 percent, we beieve that 8.5 percent growth rate is feasibe for the reasons expained beow Feasibiity of 8.5 Percent Growth The question arises as to whether an 8.5 percent growth rate is feasibe for Bihar, given its present growth trends. The answer is in the affirmative, considering that the country has managed to make the transition from 5.5 percent growth during the Ninth Pan to 7 percent in the Tenth Pan. Recent initiatives in institutiona and poicy reforms are yieding resuts, with private capita beginning to enter Bihar. The investment projections do not incude direct investment by the centra government. Such investments in strategic areas such as power, food contro, construction of roads and bridges, and so on, wi further enhance the attractiveness of Bihar as an investment destination. Growth in the state wi be based on the efficient use of existing potentia and tapping into hitherto hidden potentias, especiay in the primary sector. The scope for increasing efficiency in certain sectors is very high, as many pubic sector projects are functioning far beow capacity. Areas in which efficiency eve can be increased have been identified: for exampe, power poicies, on the anvi, for improving efficiency, wi benefit not ony the pubic sector but aso the private sector. There is enough evidence to beieve that a arge stock of existing capita assets in pubicy funded infrastructure ike power, roads and irrigation have been ying ide for years. Priority wi be given to competing and upgrading such projects, as this woud be more cost-effective than undertaking new projects Sectora Growth Rates The sectora growth rates consistent with an 8.5 percent growth rate of GSDP during the Eeventh Pan Period have been 10

18 Overview projected at 5% for Agricuture, 11% for Industry and 10% for Services. It has been mentioned earier that we expect agricutura growth to be around 5% (even though Panning Commission expects this to be 7%, which is not unikey). But unike the Panning Commission's Projection of 8% growth in industria sector, we expect 11% growth in Industry, given the new surge of private investment. Agricuture has shown a deceerating trend after the '90s. The average annua growth rate of Agricuture in the Ninth Pan was negative and that in the Tenth Pan has been ess than 1 percent. The deceeration in Agricuture has been mainy due to suppy side constraints ike irrigation, power suppy, seeds, fertiizer use, etc., aong with certain institutiona factors. The Eeventh Pan wi endeavour to remove these suppy side constraints and aso create adequate demand for agricutura products by increasing the rea income of the rura and urban poor and setting up agro-based industries. Security of tenure of sma, margina farmers and andess abourers wi be ensured by the impementation of effective and reform measures. The performance of the Industry sector has been on the whoe satisfactory during the Ninth and the Tenth Pans. The trend rate of growth of Industry during has been of the order of 5.26 percent. With proper infrastructura deveopment and impementation of the new industria poicy, increased private investment in the industries sector is expected. With proper emphasis on the agricuture and the industry sectors, services sector wi get an automatic boost which has hitherto shown a trend rate of growth of around 6 percent Pattern of Investment The decining trend in the share of the primary sector in the state's economy can be expected to continue. But pubic investment needs to be directed so that this trend is accompanied by an increase in the share of the secondary sector. This, however, does not mean that the agricutura sector wi be negected. The Eeventh Pan wi raise the growth rate in agricuture by promoting measures to improve productivity through increased access to basic inputs ike irrigation, power, seeds, improved technoogy and marketing inkages which can incentivise vaue added agricuture activity, etc. Sectora programmes and poicies need to be comprehensivey restructured for faster and more incusive growth. New 11

19 Acceerated Incusive Growth initiatives are to be taken up and individua sectora strategy devised to enabe the state to achieve its targeted growth rate. Pubic sector outay in the Eeventh Pan is proposed to be doube the actua expenditure of the Tenth Pan. Much of this outay wi be aocated to the infrastructura sectors: about 18 to 20 percent of the tota outay to be aocated to the power sector, about 15 percent to irrigation and food contro and 23 percent to transport and communication. Socia infrastructure such as education, heath, sanitation, wi aso receive adequate outay. The private sector is expected to pay a greater roe in the Eeventh Pan, with its participation expected to rise from 59 percent to 65 percent of the tota investment on the basis of the postuated ICOR of 3.0. The state has unexpoited potentia for the setting up of industries based on agricutura products, food, eather, handooms, etc., and private entrepreneurs wi face a vasty improved cimate couped with investment in socia sectors and wi be given incentives to invest in these areas. The roe of the Pubic sector in this sector wi be faciitative and the pubic sector outay for industries wi increase substantiay over the outay in past pan periods to enabe the pubic sector to pay this roe. The rea breakthrough in the Eeventh Pan woud therefore ies in success in attracting a arge share of private investment and foreign direct investment; this can be brought about through infrastructure deveopment, and investments in socia sectors such as education, heath and nutrition. Bihar's ambitious pans to raise the state from its 'east-deveoped' ranking to an engine of growth for the rest of the economy wi ca for urgent attention to some of the major chaenges and impediments to incusive growth during the Eeventh Pan The Pubic-Private Investment Mix: A Critica Roe for Both One of the most serious impediments to the state's growth has been the shortage of investment fows from pubic sources, which in turn has impeded private capita formation. This has constrained other sectors of the economy, such as agricuture and industry. a. Pubic Investment The Eeventh Pan period targets wi rey on stepping up pubic investment, doubing the Tenth Pan eves, to about an average of between 8-9 percentage points 12

20 Overview of GSDP, whie emphasizing improved utiization of existing assets. Increased pubic savings and utiization of centra government funds for Bihar's deveopment are crucia for financing the increased pubic investment and better utiization of existing assets, as we as improving socia services. Accordingy, a we-panned fisca adjustment path and strategy to mobiize resources and savings is a core component of Bihar's deveopment strategy. This wi ca for strong budgetary discipine in government expenditure. Efforts to increase tax revenues wi need to be combined with restrictions on the growth of current expenditure (especiay subsidies) and a reduction in the osses of pubic sector undertakings. The state government has recenty begun to take serious steps towards fisca reform (see Box ). b. Private Investment Whie improving private investment rates wi be enabed by more and better State Government Initiatives in Improving Fisca Management The State Government has recenty begun the process of fisca reform. It has Enacted the Bihar Fisca Responsibiity and Budget Management Act 2006 (FRBM) which aims to: eiminate the revenue deficit by and contain the fisca deficit at 3 percent of GSDP from onwards; pursue poicies to raise non-tax revenue with due regard to cost recovery and equity; prescribe norms for prioritization of capita expenditure; and pursue expenditure poicies that woud provide an impetus for economic growth, poverty reduction and improvement in human wefare. Presented the State's first Medium-Term Poicy Statement consistent with the FRBM. Passed a fu budget before March 31, so that the government coud begin spending by Apri. In the past, the state's budget used to be passed in two stages: in March through a vote on account for four months, and in June/Juy for the fu year. As a resut, funds were aotted in instaments to Directorates and Districts, impementing agencies were kept waiting for the receipt of the funds, and this shortened the time frame for impementation of projects. Decentraized financia powers: Departments can now sanction schemes up to Rs 20 crore (compared to Rs 25 akh earier) for schemes sanctioned in the Budget. Presented the Finance Bi for the first time in 15 years (with the exception of 2001); and the outcomes budget for the first time. Introduced the VAT system instead of the saes tax. Introduced the defined contributory pension scheme for a new empoyees from September 1, Begun the process of unbunding state eectricity services, to improve the functioning of the SEB and attract private companies into distribution. 13

21 Acceerated Incusive Growth pubic investment in core pubic services, specific sectora poicies and improved governance and pubic administration wi hep ay the foundations for acceerated private investment that is essentia if the state is to meet targeted growth rates and socia objectives. The sectora sections that foow detai many areas for active participation by private investment, either directy or through partnerships with pubic agencies. Private entrepreneurs wi be given incentives to invest capita in these areas, such as agro industries, infrastructure, technica training and educationa institutes, heath services, etc. The state government has aready introduced severa measures aimed at improving the cimate for private investment. The New Industria Poicy incorporates severa incentives for private business, the state has estabished a singewindow cearance system by enacting the Singe Window Act, 2006, which is decentraized to district eve, and signed contracts with IDFC to provide technica and other assistance for fast-track PPP proposas. Agri-business, an important area for private investment, wi be encouraged by the severa recent agricutura reforms such as setting up of the Land Reforms Commission and Agricuture Commission, and repeaing the Agricutura Produce Market Act. Severa new reforms (protection aboished, poicing priorities estabished, Arms Act impemented to shorten court procedures and reduce prosecution deays, conviction rate increased and court cases proceeding in anti-corruption activities intensified) have meant a marked change in the aw and order scenario improving the eve of confidence and new investment proposas have begun entering the state Cross-Cutting Issues: Meeting the Major Chaenges Infrastructure: For an Improved Investment Cimate and Quaity of Life The task of rebuiding Bihar depends on setting up good infrastructure through investment in new projects and upgradation of existing ones. This is vita for growth in key sectors such as agricuture, for an improvement in the quaity of ife, and to attract much-needed private investment into the state. A major reason why Bihar attracted very itte private investment in the ast decade was the state 14

22 Overview of its infrastructure. Per capita power consumption in Bihar is ony 76 units against the nationa average of 612 units; Nationa Highways per akh of popuation is about 33 percent ess than the nationa average; of akh hectares of net sown area, ony hectares is irrigated (net). This arge-scae requirement of funds wi pace a heavy burden on the pubic sector, and PPPs wi be activey promoted in projects and services in which they are feasibe. The state has aready begun to expore and introduce these options in some sectors, and is panning to expand these initiatives. It wi aso activey encourage direct private investment in arge infrastructure projects in power, road projects, and so on. Major institutiona reforms have been undertaken and more have been proposed to increase transparency and reduce the time taken to cear investment proposas, which have begun to yied good resuts Focus on Agricuture and Aied Sectors: Core Competence Agricuture is the core competence of the state. In the 1980s, Bihar's agricutura growth rate of 4.6 percent was above the nationa average, but this pummeted between and to - 2 percent. Whie growth rates have revived somewhat in recent years, agricutura productivity remains beow its potentia. Given the high proportion of workforce engaged in agricuture, its arge share in the GSDP, and the high incidence of rura poverty, the Eeventh Pan's emphasis wi need to be on agricuture and aied services to effectivey reduce rura poverty and fue growth in the other sectors. Bihar has enough potentia in agricuture to address the short-term concerns over food security of the country. To reaize this potentia, the Eeventh Pan wi pace greater emphasis on agricutura extension, crop diversification, increased yieds from rainfed agricuture (which accounts for 62 percent of cutivabe and), and narrowing the demand-suppy gap in anima products. Sustained agricutura growth wi be based on a rapidy expanding food-processing industry, rejuvenation of irrigation infrastructure, a network of farm roads, better marketing of farm products and fow of agricutura credit. Aso issues that impede agricutura growth ike and reforms and tenancy reations need to be addressed. Therefore the Eeventh Pan wi be based on a hoistic mode for agricutura deveopment, at the end of which the state wi transit from a sef-sufficient state in food grains. 15

23 Acceerated Incusive Growth Pubic Administration and Governance : A Caring Government Pubic and socia services have deteriorated in the past few decades. Bihar used to have a sound administrative structure and the State, though poor, was reasonaby we-governed. However, in recent years, this structure has crumbed under reentess pressures of bad governance, dysfunctiona poitics, massive corruption and the near absence of aw and order. The outcome is that Bihar is agging far behind other states in deveopment. There has been a steep deterioration in the system's capacity and deivery of pubic services, especiay for the poor. This deterioration in capabiity has come at a time when the demands on the system have increased manifod, with greater awareness and the introduction of new concepts and approaches in deveopment which require greater inputs from the fied machinery. The poor service deivery and impementation of programs and projects resut from a variety of issues such as poor human resource management, panning and monitoring (the ack of robust baseines and systems) to underutiization of funds, dupication and poor coordination and convergence between departments and compicated systems of checks and baances that ed to paraysis amongst decision makers. A symptom of the system's decine is the arge number of vacancies in key fied posts, for exampe, 188 out of 534 bocks have no Bock Deveopment Officers. There are arge shortages in Assistant Project Officers in District Rura Deveopment Agencies, Extension Officers in bocks and Panchayat Sevaks and other viage functionaries in the panchayats. Corruption fourished even in rura deveopment and reief schemes for the poor and distressed. Poiticisation of transfers and postings ed to oyaty to poitica power brokers and not to government poicies and programmes. This had its effects on other sectors: private investors were reuctant to invest in infrastructure or industry in Bihar because of the genera perception of a ack of governance and a ethargic and nontransparent administrative machinery. Some institutions and individuas continued to perform outstandingy even in these adverse circumstances. But there was amost compete stagnation in the impementation of programmes and schemes, which are mainy financed through centra schemes. 16

24 Overview However, in the past, a arge share of resources aocated were not being reeased, which had a deeterious effect on poverty and adversey affected the deivery of socia and basic services. President s Rue in the state addressed severa administrative bottenecks, and procedura simpifications initiated at that time have been consoidated over the ast tweve months of the present government. However, changes at the top have yet to fuy permeate down to fied and grass-roots functionaries. The work cuture needs a radica overhau; the increasing pace of deveopment cas for fast communication with fied offices, and technoogica cost-effective soutions need to be impemented. The Eeventh Pan proposes to strengthen service deivery through a mutidimensiona approach. Administrative reforms have been initiated and wi be foowed up to buid capacity and strengthen institutions for ski upgradation, which wi equip projects to avai funds from the Centra Government and other sources. At the same time, the effectiveness of the service deivery systems wi need to be improved by preventing eakages and improving expenditure efficiency. The approach targets an overa improvement in education and heath outcomes through combined inputs from private, pubic and non-governmenta organizations. This is especiay important in rura areas where the quaity and access to services have been weakest and the indicators poorest The Roe of Loca Bodies An important dimension of the approach to improving pubic administration and governance in the Eeventh Pan wi be increased accountabiity both at the eve of the state and within sectora service deivery units. The ack of pubic accountabiity has increased corruption. Incusive growth wi ca for the government to become more accountabe to the peope by strengthening institutions that enforce accountabiity such as oca bodies. Peope s participation in programmes through community-based organizations and Panchayati Raj Institutions is thus extremey necessary for ensuring accountabiity. One way is to devove responsibiities to oca government bodies that can pan and impement programmes with the participation of civi society. PRIs wi pay a definitive roe in formuation and impementation of the Eeventh Pan objectives. The state has aready made 17

25 Acceerated Incusive Growth progress in devoution to the third tier as Panchayati Raj Institutions' (PRI) eections have been hed; against 50 percent reservation for women, 58 percent were actuay eected. Bihar s extensive network of women s sef-hep groups is another avenue for coaboration. Using such resources to further effective service deivery wi aso empower oca peope. Overa: Action Points Focus on improving physica infrastructure especiay in key sectors such as agricuture and industry. Focus on increasing productivity in agricuture and aied sectors through better impementation of schemes, by buiding reated infrastructure, and strengthening marketing and distribution networks. Undertake fisca reforms to mobiise pubic resources and savings vita to finance the state s ambitious deveopment strategy. Undertake administrative reforms, capacity buiding and institutiona strengthening to improve deivery of services to the poor. Improve governance through increased transparency, instituting the Right to Information, and more intensive use of information technoogy to increase the participation of citizens and non-governmenta organisations in deveopmenta programmes. Strengthen programmes and schemes by monitoring outcomes rather than outays. Adopt a muti-dimensiona approach to improving educationa and heath outcomes with participation from private, pubic and non-governmenta organisations. Increase community participation in service deivery by promoting PRIs and women s SHGs. Faciitate an enhanced roe for private investment in key areas such as power, agribusiness, technica training and educationa institutes, anciary heath services, etc. 18

26 Acceerating Growth Acceerating Growth!2.1 Agricuture Agricuture is the mainstay of Bihar s economy, contributing 35 percent to state GDP and empoying 77 percent of the work force. The state has the idea natura resources : fertie fat and, penty of water, both surface and underground, and agrocimatic conditions suitabe for cutivating a variety of crops to make agricuture its core competence Issues and Constraints In Bihar, agricuture has not benefited from the Green Revoution that ushered in a significant increase in productivity in severa states in the country. The growth of food grain production at ess than 1 percent over the ast decade has been far beow potentia; food grain production has increased from an average of akh MT in the mid-1990s ( to ) to akh MT in recent years ( to ). Low crop productivity, poor connectivity between farms and markets, and weak distribution and marketing inks have meant that much of the vast demand from Bihar s oca market is met by produce from outside the state, such as fish from Andhra Pradesh and mik powder from Gujarat. Even the oca feed producers buy their maize from Andhra Pradesh, whie Bihar s maize producers have to resort to distress saes to get rid of their produce. Cereas dominate the cropping pattern. The rice-wheat cropping system occupies more than 70 percent of the gross cropped area, but productivity has remained ow despite very favourabe soi, water and cimatic conditions. Many reasons, technoogica, manageria and situationa are attributabe to the ow productivity of crops in the state (see Box). 19

27 Acceerated Incusive Growth Bihar: Main Reasons for Low Crop Productivity Poor Quaity and Suppy of Inputs Agricutura Practices Technoogy Transfer Weak Marketing and Distribution Chain The ack of an assured, timey suppy of quaity seeds for high-yieding varieties, and hybrid varieties. Seeds of high yieding varieties have been critica in increasing crop production. Dwarf gene of rice and wheat did wonders in the 1960s as these varieties were short-statured and coud respond we to fertiisers, irrigation and other management practices. Deveopment of hybrid varieties in many crops opened yet another opportunity to further increase crop production and productivity. Low and regionay unbaanced fertiiser use : The present eve of fertiiser appication in the state is 98 kg/ha whereas it is more than 175 kg/ha in Punjab. Lack of access to credit (this has hindered, among other things, the adoption of technoogy; as an exampe, for 104 akh farm hodings in the state, there are ony 20 akh kisan credit cards). Lack of mechanisation: Farm techniques remain archaic. For exampe, Bihar has 17 tractors per 1,000 hectares against Punjab s 68 tractors per 1,000 hectares. Sma, fragmented hodings: Sma and margina farmers account for more than 90 percent of a hodings. These sma hodings work against economies of scae and deter the adoption of modern technoogy. Diese-based irrigation: Irrigation is argey dependent on diese-operated tubewes, the cost of running which has risen with recent increases in diese prices. Weak Agricutura Extension System: The system for transfer of technoogy is very weak structuray and in its capacity to absorb and disseminate modem technoogy. In fact, severa extension systems exist simutaneousy, and these need to be rationaised. Food and drought risks: Recurrent foods in North Bihar districts and the paucity of rainfa in the South have hampered technoogy adoption. The ack of procurement has meant that farmers in Bihar often have to resort to distress saes in a season of penty. Inadequate storage and processing capacity: An estimated 25 akh MT storage capacity is required by the state, against an existing capacity of ony 12 akh MT. Proper storage infrastructure is aso acking at the primary eve, and this has ed to osses amounting at times to 50 percent. 20

28 Acceerating Growth Vision for the Eeventh Pan The mantra for the Eeventh Pan for the State can be stated in a few words: To maximise the use of vast untapped potentia and natura endowments of the State, thereby ensuring food and nutritiona security and better farm incomes, through environmentay sustainabe agronomic practices Strategy The above objectives can be achieved through interventions that increase crop productivity, maintain soi heath, enhance produce quaity and strengthen the existing marketing chain Growth Rate Projections On a cautious estimate, the State has projected a 5% rate of growth athough the Panning Commission beieves that 7% rate of growth is feasibe. The average use of fertiizer per hectare sti continues to be ow and aso agricutura prices mechanism needs to be stabiised. Based on both these, it is possibe to achieve the projected growth indicated by the Panning Commission in their State eve disaggregated data. A sew of initiatives taken during the fina year of the Tenth Five Year pan is expected to yied perceptiby good resuts in this sector during the Eeventh Pan. Three major factors that impact agricutura production, viz., prices, fertiizer consumption and rainfa are expected to foow much more favourabe trajectories during the Eeventh Pan. These are briefy discussed beow : v Agricutura Prices : Massive road construction programme, started in , woud continue in fu steam during the next pan too. This woud be opening up huge markets, something that Bihar farmers were aways deprived of. Strengthening of cooperative institutions and other focused actions have yieded impressive resuts in procurement of foodgrains against MSP. v Fertiiser Consumption : The trend of fertiizer consumption in Bihar may apparantey ook good, since the figures are above the nationa averages. But, as per Statewise consumption of fertiizer during and (for these years figures are avaiabe), per hectare consumption of fertiizer in Bihar during (87.15 kg/ha) is much ower than Andhra (128.44), Tami Nadu (114.00) Haryana (152.79), Punjab (174.99), UP (126.51) and West Benga (122.33). 21

29 Acceerated Incusive Growth Strategy for Major Food Grains Rice Propagation of rice intensification (SRI) technoogy, hybrid varieties, boro rice supported by a strong seed programme, and fine and scented varieties to increase incomes Repacement of ong-duration varieties with short and medium duration varieties Upgradation and strengthening of miing faciities, a strong procurement and MSP. In the termina year of the Eeventh Pan, the targets for rice are as foows : Area akh hectares; Production akh M.T.; Productivity q/hectare Maize Popuarisation of hybrid varieties supported by strong seed programme ; Encouraging the cutivation of rabi maize, and baby corn, sweet corn and quaity protein maize varieties for raising income, particuary in diara areas ; Proper storage (incuding drying) and procurement and MSP ; Promotion of a maize-based processing industry (anima feed, corn oi, starch, ethano, etc.) ; Popuarisation of maize as food for peope. In the termina year of the Eeventh Pan, the targets for maize are as foows : Area-7.65 akh hectares; Production akh M.T.; Productivity q/hectare Wheat Timey sowing and harvesting ; Deveopment of short- and medium-duration varieties ; Mechanisation (combine harvesting and zero-tiage sowing) In the termina year of the Eeventh Pan, the targets for wheat are as foows : Area akh hectares; Production akh M.T.; Productivity q/hectare 22

30 Acceerating Growth Puses Expansion of area (particuary of entis, moong, and gram) ; Popuarisation of high-yieding varieties supported by a strong seed programme ; Rehabiitation of gram in agro-cimatic Zone I after the harvest of medium and ate rice ; Use of bio-fertiiser incuding Rhizobium ; Improvement in farm drainage to reduce water ogging. In the termina year of the Eeventh Pan, the targets for puses are as foows : Area-8.50 akh hectares; Production akh M.T.; Productivity q/hectare Oiseeds Area expansion ; Repacing athyrus and ow-yieding wheat with rai, sarson, sunfower ; Popuarisation of high-yieding varieties supported by a strong seed programme ; Popuarisation of paira and intercropping of mustard : Use of suphorous fertiisers. In the termina year of the Eeventh Pan, the targets for oiseeds are as foows : Area-1.77 akh hectares; Production akh M.T.; Productivity q/hectare Fruits and Vegetabes Rejuvenation of od orchards : Area expansion ; Assured suppy of quaity panting materia ; High density panting ; Irrigation with drip and micro-sprinker ; Mechanisation of harvesting, grading and packing ; Processing and cod chain. In the termina year of the Eeventh Pan, the targets for fruits and vegetabes are as foows : Area-6.75 akh hectares; Production akh M.T.; Productivity q/hectare 23

31 Acceerated Incusive Growth However, recent trend in consumption of fertiizer in Bihar shows an upward trend and this woud have a positive impact on growth rate. v Rainfa : Neary 60% of area under cutivation in Bihar is rainfed. Any projections regarding growth rate woud have to take into account this crucia variabe Crop Diversification The cropping pattern in the state is dominated by rice and wheat, which cover more than 70 per cent of the gross cropped area. Efforts wi be made to increase the production of maize from 1.5 MT to 4.5 MT by year-round cutivation, and raise its productivity above the nationa average. Whie cereas wi continue to dominate the cropping pattern, the strategy wi promote crop diversification during the next Pan so as to improve peope s nutritiona baance and generate higher incomes for farmers. Cutivation of fruits and vegetabes has been an age-od practice in the state, but has not been oriented towards the market or expoited the potentia avaiabe in the state. It may be mentioned that whie fruits and vegetabes occupy ony 10 per cent of the gross cropped area, they account for 50 percent of the income from farming. An annua growth rate of 10 per cent for fruits has been targeted for the next decade, which shoud favouraby impact on growers incomes and iveihoods. This wi be done mainy by increasing the area under itchi, mango, banana, guava and makhana cutivation by first identifying appropriate fruits for cutivation for each geographic area. For vegetabes, a moderate annua growth rate of 6 percent has been targeted for the next decade. Vegetabe cutivation wi be promoted in areas with an assured source of irrigation Ag ricutura Prog rammes: Laying the Framework Achieving the Eeventh Pan objectives of increasing productivity and crop diversification wi require the government to take a very pro-active roe in aying the framework which wi incude: strengthening the agricutura extension system, research and education, improving access to inputs such as quaity seeds, fertiiser, and improvements in the marketing chain Inputs: Improving Quaity and Reducing Costs v Appropriate Fertiiser Use Baanced and integrated fertiiser use wi be promoted to achieve higher 24

32 Acceerating Growth production on sustained basis. Soi testing infrastructure wi be extended to the bock eve, and agro-cinics wi be encouraged to bring soi testing services to the farmers. Every farmer wi receive a farm pan card within five years. Efforts wi be made to strengthen and create faciities for fertiiser and micro-nutrient testing, and fertiiser companies wi be encouraged to spread their network to the viage eve. v Integrated Pest Management Approach Chemica pesticides wi be repaced by vigorous promotion of the Integrated Pest Management (IPM) approach, in which chemica pesticides are used ony as the ast resort. IPM technoogy wi be carried to every farmer within the pan period. v Organic Farming Protocos for organic certification wi be standardised and institutiona arrangements for organic certification wi be set up to enabe producers to avai of these. For products with a comparative advantage in marketing and export, quaity consciousness about sanitary and phytosanitary standards wi be strengthened. In areas with high dependence on chemica fertiisers, inputs of these wi be discouraged to reduce cutivation costs, protect the environment, and increase the export market acceptance of farmers produce. Crop straw and other agro-wastes can be substituted; vermicuture has been identified as a thrust activity, and during this pan period, vermicuture technoogy wi reach every farmer, and every farm wi have a vermi-compost. v Mechanisation and Conservasion Given that the timey competion of agronomic practices has enormous benefits for productivity and output, agricutura mechanisation wi be promoted for timey sowing, harvesting and post-harvest handing of crops. Priority wi be given to zero-tiage machines, raised-bed panters, sma combine-harvesters, mobie harvesting units for orchards, graders, winnowers, sma tractors/power tiers and other new and innovative machines. Training and demonstration of these machines wi be encouraged, and incentives provided for their adoption. v Strengthening Education and Research Despite the prominence of agricuture in the state s economy, there has 25

33 Acceerated Incusive Growth been very itte attention given to agricuture education; this wi be rectified as new agricutura coeges wi be set up in agroecoogica Zones II and III. Horticuture research and education wi be given greater impetus with the opening of a state of the art horticuture coege at Naanda. Rajendra Agricuture University wi be deveoped aong word-cass ines to become a hub for agricutura knowedge, spreading information on new technoogies to farmers, extension workers and entrepreneurs. It wi deveop protocos for pre- and post-harvest technoogies, exports and organic certification, and wi introduce courses in agri-business management and biotechnoogy, and on cutting-edge technoogies, such as geneticay modified crops and precision farming Strengthening Technoog y Transfer v Rationaising Extension Systems Agricuture in the state functions under severa co-existing, overapping extension systems resuting in inefficient utiisation of resources. A new integrated system wi be created borrowing from the strengths of prior systems. The Agricuture Department wi be reorganised to better meet the needs of farmers. Greater responsibiity and accountabiity wi be introduced. Infrastructure for training extension functionaries wi be strengthened. Extension functionaries wi receive technica training twice a year, and posttraining performance assessment wi be inked to career advancement. v Wider Roe for Agri-cinics Agri-cinics wi be used to disseminate inputs, and technica information. For this, they wi be given priority in the aocation of seeds, fertiiser shops, outsourcing of bock-eve soi abs, etc. Through the extension system, these cinics wi carry pubic programs to the farmers, and their expertise wi be used in training and demonstration, and they wi be used as a convergence point for a programmes. v Extensive Quaity Seed Suppy Programme The current rice and wheat seed repacement rate of ess than 10 percent cannot sustain higher productivity. Given the criticaity of seeds in modern agricuture, and its paucity in the state, investment in the pubic and private 26

34 Acceerating Growth sectors needs to be increased. The objective of the seed production programme woud incude increasing the seed repacement rate, and promoting hybrid seeds and new crop varieties, adapted to the agro-cimatic conditions of the state. The pubic sector approach wi encourage government farms to revive seed production; the Pusa Seed Society to improve the suppy of quaity seeds and the Bihar Rajya Beej Nigam to undertake seed mutipication and to make recent pubic sector varieties avaiabe on time to farmers at a reasonabe price. However, the cornerstone of the Eeventh Pan strategy wi be seed production through farmers direct participation under the seed-viage programme. The Bihar Rajya Beej Nigam and Pusa Seed Society wi be encouraged to buy back seeds produced under the seedviage programme and to provide processing and marketing support to farmers. Private seed companies wi be encouraged to make the most recent technoogy avaiabe to farmers and by providing competition to the pubic seed companies, benefitting farmers through ower prices. (KVKs) wi continue to receive support; they wi aso be encouraged to cater to the post-harvest handing of the agricutura products and the deveopment of entrepreneuria skis among the rura youth. The KVKs wi focus on five missions: honeybees, seed production incuding seed viages, conservation of agricuture, integrated farming and vermicompost. v Roe of Agricuture Technoogy Management Agencies (ATMAs) Agricuture Technoogy Management Agencies (ATMAs) wi be set up in a districts to support the extension efforts of the government, and to promote convergence of farming systems, the group extension approach and increased use of CT in agricutura extension. The overa aim wi be to bring every farmer into the ambit of agricuture technoogy training within a five-year period. These agencies wi expore sustainabiity and encourage pubic-private partnerships in agricuture extension. v Support for Krishi Vigyan Kendras v Farmers in Extension Given their utiity in spreading agricutura knowedge among the rura popuation, the Krishi Vigyan Kendras Progressive farmers wi be used in extension efforts though a scheme to recognise and reward such farmers. 27

35 Acceerated Incusive Growth Farmers wi receive awards based not ony on productivity, but on their efforts in processing and marketing, and on their success in disseminating methods and technoogies to feow farmers. v Information and Communication Technoogy The focus here wi be on deveoping appication software that wi provide usefu farmer services, and it wi be used to transfer information, technoogy and services to farmers as rapidy as possibe I m p r ove d M a r ke t i n g a n d Processing The state has a genuine comparative advantage in some crops at the farm eve, but oses this advantage at the whoesae eve, for a number of reasons, incuding wastage, transportation costs, and ack of marketing outets. A recent study shows that the quaity and quantity of marketing outets in Bihar is among the worst in the country. Furthermore, a Word Bank anaysis of some commodity suppy chains has shown that up to 40 percent of the margins aong the vaue chains are ost to wastage and transportation costs. Crop diversification, especiay into the reativey more perishabe fruits and vegetabes, wi increase the need for effective marketing inkages supported by modern marketing practices, incuding introduction of grading, post-harvest management, cod chains, etc. Modern agricutura markets wi need to be deveoped, and the state has taken initia steps for this by repeaing the Agricutura Produce Market Act (APMC) which aows the introduction of private and cooperative markets, of contract farming and enabes direct purchases to be made from farmers. Severa initiatives are panned to bring the farmers coser to the markets. Farmers wi be organised aong enterprise-ines to estabish economy of scae and to provide a coective voice to safeguard their interest. This wi incude excursions into processing and marketing centres of exceence in the country, formation of farmers interest groups and federating them at the various eves. Cooperative marketing of fruits and vegetabes wi be encouraged aong the ines of mik and dairy producers. Information on market demand and agricutura prices wi be widey 28

36 Acceerating Growth disseminated to farmers so that crop panning can become more market oriented. Market yards and rura hats wi be rented to farmer groups to make marketing more organised. The private sector wi be encouraged to deveop modern and speciaity markets, and termina market wi be estabished in strategic ocations Private Investment Private investment wi be promoted to hep deveop a marketing infrastructure, as we as in contract farming, export of fresh and processed fruits, processing of ethano, corn oi, in the feed and starch industry, export of baby corn, and to make itchi honey Natura Resource Management In South Bihar, where rainfa is sparse and agricuture is mosty rain-fed, watersheds wi be adopted as deveopmenta units. Activities and programmes wi be converged, so that appropriate technoogy for watershed management can be used to recharge the groundwater tabe. Vegetation wi be the preferred method for conserving the soi, and dry and pantation and horticuture wi be used for soi and water conservation Risk Management Risks from natura disasters wi be minimised through appropriate crop technoogy and the extension of crop insurance to a farmers. Insurance cover wi be extended to horticutura and cash crops, a seed bank wi be deveoped to aow quick suppy of seed materias and human resources wi be deveoped to respond quicky to restore normacy in case of a natura disaster. It is envisaged that after taking the above measures the risk wi be minimized to a great extent and natura disasters can be fought successfuy. 29

37 Acceerated Incusive Growth AGRICULTURE: ACTION POINTS Increase crop productivity Promote crop diversification through increased maize production and the promotion of fruit and vegetabe cutivation Improve technoogy transfer by strengthening the agricutura extension system to improve the quaity and timeiness of inputs suppy Improve education and research into state-specific issues and varieties Strengthen the existing marketing, processing and distribution chain Promote micro-irrigation programmes to enhance water-use efficiency 30

38 Acceerating Growth 2.2 Anima Husbandry and Fisheries Anima husbandry and its aied activities, such as poutry farming, fisheries and so on, if deveoped appropriatey, have the potentia to significanty enhance the rura economy. Even at the present sow pace of deveopment and underutiisation, anima husbandry contributes 16 percent to the GSDP (despite its ow share of 0.75 per cent of tota state budgetary aocation), a situation which is mirrored in the fisheries and dairy sectors. Despite this contribution, the state is sti not sef-sufficient in mik, meat, eggs and fish production. These sectors have the capacity to provide opportunities for iveihood to peope at the pace where and in the situation in which they presenty reside. Bihar has abundant water resources such as ponds and tanks (covering approximatey 65,000 hectares) and major fowing rivers (around 2,700 km in ength), which are fertie breeding grounds for piscicuture. North Bihar aso has captive fisheries resources ike chaurs (ow-ying depressions fied with water) and ox-bow akes. Converting these capture fisheries to cuture fisheries coud make them important sources of income and empoyment for fishing communities, apart from being an exceent source of cheap protein for peope Vision for the Eeventh Pan Given the potentia these sectors have to impact on rura poverty, incomes and iveihoods, anima husbandry, fisheries and the dairy sector wi be promoted so that the state becomes sef sufficient in these products. As major inputs for agro processing, dairy and fisheries produce can become an important source for vaue addition within the state itsef, which in turn opens up income and empoyment opportunities Anima Husbandry : Approach to the Eeventh Pan Anima Heathcare v Upgrading veterinary heathcare services by opening new veterinary hospitas, dispensaries and poycinics, so that the state eventuay meets the norm of one veterinary hospita for every 5,000 ivestock (at present there is one hospita for every 20,000 ivestock). The target is to set up 1,000 new hospitas so as to narrow the gap to at east one hospita for every 10,000 ivestock. 31

39 Acceerated Incusive Growth v Modernising and strengthening the Institute of Anima Heath and Production, Patna to improve the quaity of bacteria and vira vaccines produced, set up faciities for producing new vaccines, impement nationa immunisation programmes and provide comprehensive disease diagnostic, and disease infertiity contro programme support. v Estabishing a veterinary pubic heath service to reguate and monitor the production, processing, storage, transport, marketing and quaity contro of anima protein and anima feed. v Estabishing the newy constituted Bihar Livestock Deveopment Agency. v Deveoping human resources by strengthening faciities in the Bihar Veterinary Coege and upgrading the skis of government veterinarians. v Improving the heath of sma ruminants (sheep and goats). v Promoting sma units in poutry (with 20 birds per famiy), piggery (8 pigets per famiy) and dairy (2 cows per famiy) for rura famiies beow the poverty ine. v Increasing interactions between the Anima Husbandry Department and nationa eve veterinary research institutions ike IVRI, NDRI and other institutions for research on catte, buffao, equines, goat, sheep, wid and zoo animas. v Buiding and deveoping infrastructure for the Anima Husbandry extension network. v Estabishing infrastructure for mastitis contro and training farmers for mik production with a ower somatic ces count and ow residua antibiotics eves in keeping with internationa standards. v Setting up systems for monitoring and evauating anima husbandry programmes. v Impementing the activities of the Assistance for Contro of Anima Diseases (ACAD) scheme; and the Anima Diseases Monitoring and Surveiance (ADMAS) scheme as we as zone-wise surveiance to assess the situation of anima diseases Dairy Production Making dairying a more ucrative and income generating occupation for farmers wi require an increase in the productivity of mich animas and reduction in the cost of production of mik. This wi be done by providing better 32

40 Acceerating Growth breeding, anima heath and feeding inputs to mik producers. The overa strategy wi be to increase the production of cean mik, strengthen the cooperatives, enhance the skis of mik producers for better management of stock, increase the capacity to process mik and set up a marketing chain for the output The Eeventh Pan wi focus on : v Increasing mik production : Through improved breeds, and better heath care and management of mich animas. This wi reduce operating costs for mik producers, thereby increasing income eves. So far, mich animas have been procured from surpus, neighbouring states and distributed to the farmers, but itte effort has been made to become sef-sufficient in good crossbreeds for distribution. The Government wi provide inputs and subsidies to farmers to set up breeding units in mik-sheds. Institutiona finance wi pay a crucia roe in this. v Improving anima feed : Around 80 percent of the cost of mik production depends upon the cost of feeding the animas besides the abour and management costs. The state has three catte-feed pants in the cooperative sector with tota instaed capacity of 260 MTs per day. The pant at Patna is working at amost fu capacity, so woud need to be expanded to meet the growing demand of baanced catte feed and protein-enriched feed. The capacity of this pant is proposed to be augmented from 100 to 200 MTs per day. v Buiding skis of mik producers: To improve feeding and stock management. v Expanding the cooperatives network to cover more farmers :The dairy cooperative societies (DCS) which at present cover 6,750 viages in 28 districts wi be expanded to cover more districts. The dairy sector in the state is presenty being served by 5,123 dairy co-operative societies with 2.54 akh farmer members, the argest among the eastern states. The thrust on dairy deveopment in the state during the Eeventh Pan wi everage the existing co-operative network, as we as focus on expanding and strengthening its coverage in terms of area and processing infrastructure. v Conducting mik production and demand surveys : Data on mik production, oca consumption and marketabe surpus for a viages and districts is not avaiabe. This information is important for dairy deveopment in the 33

41 Acceerated Incusive Growth state. v Promoting cean mik production : At the viage eve, as the quaity of finished products depends on the quaity of raw materias, apart from processing, packing and handing. Quaity with cost contro wi be the key chaenges for the dairy pants in the next pan. Farmers wi be encouraged to produce cean mik by maintaining hygiene at their doorsteps. Incentives wi be given to them through dairy cooperatives for hygienicay better quaity mik. v Creating adequate pant capacity : By expanding the capacities of existing pants and setting up new pants at strategic ocations. Existing pant capacities wi be increased from 650 thousand itres per day (TLPD) to 1,250 (TLPD) to process the increased mik suppy to dairy cooperatives by mik producers. Four new dairy pants with 2 akh itres capacities wi be set up at Biharsharif, Purnia, Chhapra and Mohania. The pant capacities wi finay depend upon the fied survey and DPRs prepared by NDDB. v Additiona processing capacities : Aso proposed are a 30 MT per day powder pant, utra-heat treatment (URT) pant with aseptic packaging faciities to conserve the surpus mik soids during fush seasons for use when mik is ow. The aim is aso to suppy packaged mik to mik deficit areas ike Madhubani and Darbhanga within the state and the north-eastern states. v Marketing : This wi be another thrust area during the coming Pan. With increased production and processing of mik in the state, avenues for evacuation of this output (forward inkages) are needed. Unike other states, towns in Bihar are sma and there is no metro city, so there is itte or very imited infrastructure for marketing. v Private investment : This wi be required to suppement government efforts in achieving the Eeventh Pan goas. Private parties wi be encouraged to invest in dairy equipment and fodder-bock making units, and to set up processing infrastructure (for mik powder, packaging materia), and marketing infrastructure Fisheries : Background Bihar is one of the few states with arge inand fisheries and aquacuture resources. The paradox of fisheries deveopment in Bihar is that whie it has arge, untapped water resources for aquacuture, it depends on states ike 34

42 Acceerating Growth Andhra Pradesh for the suppy of about haf of its annua fish demand. The annua consumption of fish within the state is neary 4.5 akh tonnes, against the present annua production of around akh tonnes. The underutiisation of aquacuture resources, unscientific management of water bodies and ack of entrepreneurship are some of the most obvious reasons for the gap between demand and suppy. The major chaenge, therefore, is to deveop aquacuture resources for productive, sustainabe fisheries to meet the oca demand and enhance the nutritive and iveihood security to farmers as we as consumers Approach in the Eeventh Pan The goa for fisheries deveopment during the Eeventh Pan is for the state to expand production and increase productivity to nationa eves through the deveopment of ponds and adoption of technicay sound piscicuture practices. In addition, the estabishment of hygienic storage conditions, rapid transportation systems and an efficient marketing network for fish wi aso hep to increase socio-economic security in fishing communities. For fish production to reach sef- sufficiency eves, annua production eves woud need to rise from the current 2.8 akh tons to about 6 akh tons. These cacuations are based upon the average annua growth rate of 4 percent in the fishery sector at the nationa eve which coud easiy be increased to 10 per cent and 15 percent in Bihar, because vertica and horizonta expansion of aquacuture is possibe in the state Strategy for the Eeventh Pan Output wi be expanded through the creation of new water areas and renovation of the od ones, by bringing open water areas ike ox-bow akes, chaurs and command area food pains under cuture-based fisheries, and renovating ponds to increase cutivabe water areas. The quaity of output wi be upgraded by providing reguar training to fisher fok, suppying quaity fish seeds, setting up private and government carp-seed hatcheries; gradua and scientific conversion of capture fisheries resources into cuture fisheries resources. Nationa wefare programmes wi be introduced to improve the iveihoods of fishing communities Cuture Fisheries 35

43 Acceerated Incusive Growth The major portion of fish production in Bihar is from ponds and tanks, but the share of cuture fisheries in gross fish production can be increased threefod. Ony 30 percent of the ponds and tanks are scientificay managed, the rest need renovation and deepening. Farmers wi need to be given proper technica training and incentives for composite fish cuture. Private ponds and tanks wi be deveoped through the custer approach through bank financing couped with subsidies. Funding from centray sponsered schemes ike NREGP (Nationa Rura Empiment Guarantee Programme) for renovation of government tanks wi need to be increased Capture Fisheries With improved management, catches from open-water bodies in Bihar can increase many-fod, as can overa sustainabiity and the quaity of output. More than one akh hectares of water area are sti untapped, used ony to catch fish which have entered the waters during foods. If open-water fishery is to remain a major contributor to overa inand fish production, some parae processes to intensify yied have to be instituted. Severa new techniques have been deveoped which coud be appropriate for appication in these areas. With this, output per hectare annuay shoud rise to 600 kg of fish. The proposed Eeventh Pan targets of Fisheries are at Tabe No Timey Suppy of Quaity Seeds The overa quaity seed requirement to stock water-bodies annuay has been estimated at 600 miion. If we incude open-water areas of riverine command into cuture-based fisheries, the additiona annua demand woud be Tabe No. 2.1 Fisheries : Proposed Eeventh Pan Targets Growth Indicators Physica Targets Fish production (akh metric tons) Fish seed production (miion) Farmers' training (no) Housing & other civi amenities for fisher fok (no.) Construction of seed hatcheries (no.)

44 Acceerating Growth around 200 miion fry. For sef-sufficiency in the timey suppy of quaity seeds we have to ensure at east one carp hatchery in each district aong with avaiabiity of seeds, in each bock headquarter. The construction of fish seed hatcheries and renovation of government seed farms are aso necessities. Farmers aso need to be sensitised to avoid the use of weak and unheathy seeds. Other The Centra Government has recenty constituted Nationa Fisheries Deveopment Board (NFDB) which can hep to substantiay increase fish production through effective panning and impementation. The State government sha utiise the schemes of NFDB fuy. In order to fuy expoit the water resources for quaitative and quantitative sustained deveopment of fisheries sector, a substantia increase in outay wi be required. Fish feed production wi be enhanced by private production; private investors wi aso be given incentives to invest in a cod chain and other marketing infrastructure as we as in aqua-tech and amusement parks. Anima Husbandry ANIMAL HUSBANDRY: ACTION POINTS Improve the heath of ivestock by v v v v v Estabishing 1,000 new veterinary hospitas Modernising and strengthening the Institute of Anima Heath and Production in Patna Estabishing a veterinary pubic heath service to reguate and monitor various functions Estabishing the newy constituted Bihar Livestock Deveopment Agency Enhancing the skis of government veterinarians Improve the stock of sma ruminants (sheep and goats) 37

45 Acceerated Incusive Growth Promote backyard poutry, piggery and sma dairy units Estabish infrastructure for mastitis contro and training Dairy Increase mik production v v Through improved breeds, proper heath care and management of mich animas Buiding skis of mik producers in proper feeding methods and better management of stock Strengthen mik co-operatives and increase mopping up of surpus mik Popuarise cean mik production Expand the coverage of mik co-operatives to incude more areas and viages Create additiona processing capacities by expanding existing pants and setting up new ones Promote production with Tota Quaity Management, ISO and HACCP certification and better dairy pant management for cost contro Enhance capacities of enriched feed production pants Fisheries Restore and renovate traditiona water bodies Popuarise fish seed production (the state produces ony haf its fish seed requirement) Bring ox-bow akes under cuture-based fisheries Deveop water-ogged areas into aquacuture estates Optimise fish yied from reservoirs Popuarise integrated fish farming Estabish a network that inks farms to retai outets Provide insurance coverage for houses, drinking water, community centres, heath and famiy wefare faciity for fish farmers 38

46 Acceerating Growth 2.3. Water Management and Irrigation Vision for the Eeventh Pan Irrigation is a key enaber for agricuture-based growth. Through improved technica, financia and economic use of water resources, the sector's contribution to the agricuture deveopment pan woud be crucia. Other objectives wi be to enhance sustainabiity of growth through proper management and upkeep of water resources systems, improve equity through better targeting of deveopment programs to the rura poor, and increased use of IT for rea time-monitoring for food forecasting and in managing overa water resources Strategy Achieving the growth rate proposed for the Eeventh Pan wi require the creation of akh hectares of additiona potentia (see tabe 2.2). There wi be an emphasis on rainwater harvesting and propagating rainfed agricuture, especiay as arge areas in the South Bihar are devoid of assured irrigation due to various factors. There is increasing acceptance that proper maintenance of the conveyance requires management by the beneficiaries. The State Government has made significant progress in this area by transferring the operation, maintenance and upkeep of 32 distributaries aggregating a tota command of 1,10,549 hectares to water users associations (WUAs) (see Tabe 2.3). In keeping with the overa strategy to decentraise deivery systems, the Department proposes to hand over Schemes Creation of Additiona Irrigation Potentia Restoration of Lost Irrigation Potentia On-going schemes ERM schemes New schemes Tota Grand Tota Tabe 2.2 : Irrigation : Additiona Potentia During the Eeventh Pan L Ha. (akh ha.) 39

47 Acceerated Incusive Growth operation, maintenance and upkeep of a the conveyance systems to WUAs by the end of Pan period. Attention wi be given to environmenta sustainabiity through mitigation of and degradation owing to sainity resuting from a rising water tabe especiay in North Bihar. The Government is taking measures to decrease water ogging, and to promote rain-fed agricuture, for which the command area deveopment program may be utiized. However, environmenta cearances and interstate matters remain a major impediment in the timey execution of irrigation projects. Recurring foods damage agricutura production as much as it pays havoc to various infrastructure. An innovative disaster management system which deas with food management needs to be put in pace. This requires concerted action both at nationa and internationa eve. At internationa eve, we need to impress upon the Centra Government to initiate a diaogue with Nepa for reforestation in the upper catchment area as we as creating irrigation structures upstream both for harnessing benefits of irrigation as we as enormous hydroeectric potentia. In addition to this, a strategy needs to be evoved which can anticipate and contain the enormous damage due to periodic foods both to crops as we as the vita infrastructure. This requires an integrated pan to be prepared in cose partnership with the Government of India Interinking of Rivers The scheme of interinking of rivers has been identified as an important initiative for ameiorating the endemic probems of foods in North Bihar and recurrent droughts in South Bihar. An expert Committee formed by the State Tabe 2.3 : Progress on Transfer of Maintenance to WUAs Number of systems transferred to WUA 32 Number of farmers societies registered. 07 Number of societies who have appied for registration 38 Number of societies whose appications are being formaised 15 Number of societies in the process of being formed 518 Tota

48 Acceerating Growth Government has recommended that rather than inter-state inking of rivers, it is important for the State to formuate and impement schemes of intra-state inking of rivers. The Committee has hed that the objective of interinking of rivers shoud not be imited to transferring water from water surpus to water scarce basins but shoud aso address the entire gamut of issues reated to water management. The scheme of interinking of rivers, whie addressing the probems of foods and droughts in different basins, shoud aso provide for augmenting the ever depeting ean season fow of the river Ganges, especiay in the part fowing through Bihar. A genera consensus has emerged among experts, pubic representatives and other interest groups in the State on the requirement of intra-state inking of rivers. In ight of the recommendations of the Expert Committee, 4 schemes have been identified in the Food Sector and 9 schemes in the Irrigation Sector by the State Government and more are in the process of identification. The Sate Government pans to get the Feasibiity Studies for the identified schemes of intra-state inking of rivers competed in the first haf of the Eeventh Pan period and after prioritization, commence impementation of the schemes as an important component of the Eeventh Pan. It is anticipated that these schemes woud spi over into the 12th Pan. Support of the Centra Government woud be soicited and expected for the impementation of these schemes Minor Irrigation Minor irrigation incudes a irrigation schemes, surface and groundwater, covering a cutivabe command area up to 2,000 hectares, and incude minor surface water-fow irrigation schemes, surface water-ift irrigation schemes, and groundwater utiisation schemes through open wes, shaow tube wes and deep tube wes Strategy for the Eeventh Pan To meet the irrigation needs of the state, the strategy during the Eeventh Pan wi be the speedy deveopment of potentia, improving the utiisation of deveoped potentia, expanding irrigation benefits to unirrigated and, increasing the suppy of private eectric-based tube wes, increasing subsidies for tube wes and pumps; and increasing sustainabiity by strengthening water users associations Surface Irrigation: Creating and Restoring Irrigation Potentia About 1,65,000 hectares of additiona potentia wi be created and 41

49 Acceerated Incusive Growth 4,00,000 hectares of ost potentia restored through surface irrigation schemes mainy through restoration and renovation of Ahars and Pynes (Traditiona water bodies). v The State Government wi add minor irrigation potentia of 80,000 hectares by competing surface schemes under RDF Phase XII, through the repair, renovation and restoration of water bodies under the Bharat Nirman Programme for the first two year of the Eeventh Pan. The same rate of creation of additiona minor irrigation potentia wi be maintained for the ast three years of the Pan by creating additiona 85,000 hectares of potentia under these schemes. v The State Government wi aso undertake the repair, renovation and restoration of traditiona water bodies ike Ahars and Pynes. Under the RSVY, about 8,000 Ahars and Pynes wi be repaired and renovated, which wi restore about 4,00,000 hectares of ost potentia. Other schemes under RDF wi incude wier, suice gate and check dams on sma streams and rivers Groundwater Resources The utimate potentia of annuay repenishabe ground water resources reserved for irrigation is akh hectares. Potentia of about 30 akh hectares wi be created by This eaves about akh hectares of unexpoited irrigation potentia from ground water to be deveoped during the Eeventh Pan. There is no immediate threat of over-expoitation of ground water resources as ground water depetion is on average 50 to 55 percent of the annua repenishabe resources. About 14.4 akh hectares of additiona irrigation potentia can be created by expoiting the ground water resources through various schemes: extending the private shaow tube we programme under the RSVY; schemes to buid 3,000 mediumduty deep tube wes under the NABARD s RDF Phase-XI and 6000 medium-dutydeep tubewes under RIDF subsequent phases. About 2.10 akh hectare of ost potentia of state tubewes wi be restored by renovation of 4500 od state tubewes which have competed their usefu ife for which a scheme wi be posed to NABARD under RIDF phase XII. The ife of ground water irrigation structures ike tube wes and pump sets is approximatey 20 years, so on average 5 percent of ground water structures go out of service every year. To maintain the eve of created potentia, about 25,000 shaow private tubewes and 1,000 state deep tubewes need to be repaced every year beyond the Tenth Pan period Groundwater Recharging 42

50 Acceerating Growth Tabe 2.4 : Minor Irrigation Potentia Created and Utiised Minor Irrigation Potentia in Bihar Area (akh hectares) Surface schemes incuding traditiona ahar and pynes Groundwater utiisation schemes of open wes, shaow tube wes, deep tube wes Tota Minor Irrigation Potentia Created Groundwater schemes Surface water schemes 7.27 Tota Irrigation Potentia Utiised in Surface water incuding ift and barge schemes 0.49 Surface water ahar, pynes and traditiona systems 3.32 State Tubewes 0.25 Private tubewes and irrigation wes Tota Groundwater recharge is required in the drought-prone south Bihar districts. Given the current expoitation eves, direct groundwater recharge is not required, and the government encourages indirect recharge through the percoation of water stored in ponds, ahars, chaurs and other water bodies. In some stressed areas, direct ground water recharge wi be resorted to. The State Government is formuating the Bihar State Ground Water (Reguation & Contro for Management) Act, which wi hep in notifying areas where ground water expoitation has become critica Subsidies for Tubewes The State Government does not give free or subsidised power for tube wes, and in fact, tubewes function sub-optimay due to non-avaiabiity of adequate eectric power. Subsidies for private shaow tubewe schemes for genera, sma, margina and SC/ST farmers for private 43

51 Acceerated Incusive Growth shaow tubewe schemes need to be increased from the present 30 percent, 40 percent and 50 percent to percent as the farmers are not in a positon to take the burden of about Rs to Rs as per the present subsidy eve. The average depth of shaow tubewes in the state is 45 M. At current aowed rates, the average cost of instaation of one unit of shaow tubwe with pumpset comes to about Rs 40,000. The subsidy at the present rate of 30 to 50 percent wi be Rs 12,000 to Rs 20,000 and the farmer wi have to bear burden of Rs 20,000 to Rs 30,000 by way of bank oan and his own contribution. The farmers, speciay of weaker SC/ST, sma & margina section are not in a position to take this burden. Hence the scheme is unattractive for weaker categories of farmers who wi be the main beneficiaries of this schemes in future as big and midde farmers are expected to have aready taken benefit of the schemes. In this context, to make the scheme attractive for weaker categories of farmers, the subsidy needs to be increased to 70-80% eve as aowed in earier such programmes before Miion Shaow Tubewe Programme (MSTP). For boosting the agricutura production and productivity of the state, the scheme of private tubewes has to be continued in the Eeventh Pan period and a ibera view is to be taken for increasing the subsidy for achieving the proposed agricutura growth Invovement of Loca Bodies A new schemes wi be executed in a participatory format, after the formation of Water Users Associations (WUAs), which are aowed to coect irrigation revenue at state government rates. WUAs wi deposit 10 percent of the revenue accrued in the government revenue account, and use 90 percent of the coected revenue to meet operation and maintenance costs. These WUAs wi be supported by Panchayat Raj Institutions at viage, bock and district eve. The State Government proposes to hand over operation, maintenance and upkeep of a the conveyance systems to WUAs by the end of the Eeventh Pan period through Panchayats Enhancing Efficiency of Water Use : The Command Area Deveopment Programme wi impement the foowing schemes during the Eeventh Pan to increase efficient water use: v Construction of fied channes: Propery panned, aigned and designed fied channes are to be constructed from the 44

52 Acceerating Growth cana outet to connect every fied through channes. v Construction of fied, intermediate and ink drains : For draining excess water from the fied. v Enforcement of Warabandi (deciding the day and time of deivery of water). Area-wise warabandi schedues wi be drawn up and impemented. v Correction of system deficiencies : The capacity of the canas up to 150 cusec discharge are to be restored by re-sectioning and de-siting which wi increase irrigation efficiency. v Training : Training programme for farmers and CAD personne wi be conducted through the ICAR, Patna, WALMI, Patna and other organisations through continuing education programmes to impart the atest knowedge on and and water management. Operationa and Financia Goas for Irrigation Scheme No. Operationa (akh ha.) Financia (Rs Crore) Execution of new surface & ift minor irrigation schemes under NABAD RIDF Renovation and restoration of ahar and pyne Execution of state eectric-based tubewes Restoration of od state tubewes and ift irrigation schemes Execution of private shaow tubewes incuding repacement of od tubewes Pan estabishment Tota

53 Acceerated Incusive Growth IRRIGATION: ACTION POINTS Create irrigation potentia in akh hectares Restore ahars and pynes Restore state tubewe and ift irrigation schemes Incentivise execution of private shaow tubewe schemes, incuding repacement of od tube wes Monitor project outcomes rather than outays Propagate rain-fed agricuture, giving priority to rain water harvesting; and groundwater recharge Capacity buiding for WUAs (Water Users Associations)-essentia socia factors to be ooked into 46

54 Acceerating Growth 2.4 Industry Industria growth in the state was abysmay ow during the Tenth Pan at ony 0.38 percent against the nationa average of 7.8 percent, mainy because of the ack of any quaity infrastructure, finance and credit faciities, poor avaiabiity of power, and the absence of entrepreneurship. With the bifurcation of the state, most of its industries and reated infrastructure were transferred to Jharkhand. The nationa goa during the Eeventh Pan is to raise the growth rate of the industria sector to 10 percent and manufacturing to 12 per cent. If Bihar is to contribute to achieving these growth rates, it has to aim at a far higher growth in industry: the objective shoud be to raise its industria growth rate to at east 15 percent. If appropriatey deveoped, expansion of Bihar s industria sector can hep stem the high current rate of outmigration of skied and unskied abour by creating oca empoyment opportunities. It coud aso provide a much-needed boost to the rura economy through backward inkages, as we as hep generate additiona resources which can be poughed into poverty aeviation programmes Vision The Eeventh Pan goas wi require intensive efforts to promote industria growth in areas in which the state has a comparative advantage, such agroprocessing, eather, drugs and pharmaceuticas, texties etc. At the same time, the marketing and design interventions for handooms and handicrafts have to be strengthened. Together, these wi promote industria growth that is baanced and integrated, and wi create empoyment opportunities and generate much-needed pubic resources that can be invested in augmenting socia infrastructure Poicy on Pubic Sector Units Pubic Sector Enterprises in Bihar have not performed we and have been consistenty making oss. As per the decision taken in the year 2003, except for the Bihar State Financia Corporation and Bihar State Credit & Investment Corporation, the rest of the 10 PSUs under the Industry Department were asked to fie iquidation appication. Out of these, the Government has decided to revive ony the Bihar State Eectronics Deveopment Corporation and the Bihar State Fim Deveopment & Finance Corporation. 47

55 Acceerated Incusive Growth In the case of Bihar State Financia Corporation and Bihar State Credit & Investment Corporation, the Government has decided to revitaize these two institutions so as to restart financing to sma and medium industries. In the first phase, Government has aready extended financia support to Bihar State Fianancia Corporation to repay the oan dues to SIDBI and IDBI. In order to strengthen these two organizations for starting financing to industria units, Government is considering extension of financia assistance. Aso, under the New Industria Poicy, 2006, a separate 'Corpus' wi be created for extending oans for equity participation by sick and cosed units, under approved reviva package for obtaining working capita from financia institutions. The above two financia institutions woud be participating in the creation of a Corpus Fund. In the Micro, Sma and Medium Enterprises Deveopment Act 2006, the District Industry Centres are being notified as the Authority for fiing memorandum by the medium enterprises. For micro and sma enterprises aso, the District Industry Centres wi be notified as the competent authority. A New Purchase Preference Poicy is being finaised so as to give a boost to domestic production. Under the Growth Poe Scheme for unorganized sector and aso for the deveopment for the backward regions of the State, Custer Deveopment Programme is being designed and the project report is under preparation. In the first phase, the Growth Poe Scheme wi be impemented in the Kishanganj district in Bihar. Pans are on the anvi to take up more custers during the Eeventh pan period Strengths Bihar has many untapped advantages that coud ay the base for a thriving industria sector. Its arge work force comprises a arge poo of scientists and engineers and its vast market shoud enabe it to become a major manufacturing centre. It has a strong agricutura base, which has potentia for vaue addition in agro- processing industries, and its arge number of traditiona centers and skied weavers hod exceent potentia for empoyment potentia in the handoom and sericuture sectors Major impediments to investment Investment has been reuctant to enter the industria sector in Bihar in the 48

56 Acceerating Growth past years. Ony 0.4 per cent (Rs 7,682 crore) of proposed investments in India is panned in Bihar (according to recent IEM Data). v Poor socia and industria infrastructure has been a major constraint to the growth and empoyment-generation capacity of manufacturing. The state has poor roads, communication faciities and power suppy, and no dry port faciities or air cargo compexes. The ack of a functiona road network has ed to high transportation costs which have severey eroded the competitiveness of the units in the state. Teedensity is reativey ow in Bihar at 2.09 per 100 persons against the nationa average of 7 per 100 persons. Stateeve power reforms need to be supported by a reguatory framework to improve access to quaity power. v The reuctance of private investors to invest in Bihar is aso based on the genera perception of ack of governance and a ethargic and non-transparent administrative machinery. This has been compounded by the absence of ong-term poicies, non-impementation or even reversa of poicies and infexibiity in abour aws Eeventh Pan Objectives and Strategy The overa objectives during the Eeventh Pan wi be to provide a westructured, transparent and enabing environment for industria growth by simpifying rues and reguations and procedures, providing industria infrastructure (such as and banks, and industria estates) and improving the skis of industria manpower. To simpify and hasten cearance procedures for setting up industries, the state government wi simpify abour aws, set up a and bank to meet the requirement of and, create basic faciities at par with internationa benchmarks and encourage PPPs. Key to the industria deveopment strategy wi be the deveopment of infrastructure. The pubic sector s roe in raising industria growth wi be primariy faciitative, for which pubic sector outay wi increase substantiay. The poicy ingredients wi incude v An enabing poitica environment and a cear mandated incentive poicy with simpified procedures woud act as cataysts for industriaisation. The government has taken severa steps to begin the process of attracting private investment into industry. It announced a new Industria Poicy 2006 and enacted the Singe Window Cearance 49

57 Acceerated Incusive Growth Act 2006 and the Bihar Infrastructure Deveopment Enabing Act 2006 for this. The singe window cearance system for estabishment of industria units wi ensure that deays in and registration, water and utiity connections, environmenta and other cearances are minimised. v Avaiabiity of and at important growth centers is vita. A and poicy which ceary spes out the accompanying reief and rehabiitation measures whie acquiring and woud have a positive impact on the government s deveopmenta initiatives. v Industria parks are an essentia requirement for industriaization in the state, as they provide integrated infrastructura soutions. The state has 44 industria areas and estates, an export promotion industria park and an agri-export zone. Five megagrowth centers have been sanctioned at Bhagapur, Begusarai, Chapra, Muzaffarpur and Darbhanga, and two mega-industria parks are panned at Bihta and Hazipur, for which the and acquisition process has started. The government aso pans to set up specia economic zones in Bihar. v Technica education and ITI courses need to be revamped to meet the needs of industry and changing technoogy. The state pans to set up technica educationa institutes and upgrade the existing ones, and has recenty announced a poicy for estabishing higher technica institutions in the private sector. These wi incude setting up technica institutions, upgrading ITIs through too rooms, minitoo rooms and setting up nationa-eve institutes such as Pastic Engineering and Technoogy, Nationa Institute of Pharmaceutica Education and Research, Nationa Institute of Fashion Technoogy. The private sector has an important roe to pay in meeting the needs for more trained manpower in different skis and trades, keeping pace with the changing needs of the economy Viage and sma enterprises Promotion of viage and sma enterprises and the activities of khadi societies woud hep generate more direct and indirect empoyment. This is one sector that impinges on the ives of the weaker and unorganised sections of the society with a arge segment of the empoyees being women, minorities and the sociay marginaised. Specia efforts wi be made to market products from these enterprises, with an emphasis on promoting their sefsustainabiity and on ensuring that the benefits of government schemes targeting this segment accrue even to those that are not registered. 50

58 Acceerating Growth Growth Oriented Poicy Initiatives in 2006 Bihar Singe Window Cearance Act, Bihar Infrastructure Deveopment Enabing Act, New Industria Poicy. New Poicy for Sugar, Tea Processing, Sugar Industry & Entertainment. Poicy for estabishing higher Technica Institution in private sector. Simpification fo VAT Regime, Miestones Nationa Institute of Pharmaceutica & Training at Hajipur aready sanctioned. Branch of Nationa Institute of Fashion Technoogy on the anvi. Steps initiated for reviva of RBHM Jute Mi, Katihar and IDPL unit at Muzaffarpur. State Investment Promotion Board approved 66 proposas with investment of approx. Rs 206,000 crore. Out of the approved projects, 4 Mega Projects for production of Ethano from Maize. 10 Mega Projects for production of Ethano from sugarcane juice. 19 new sugar mis with tota capacity of more than 100,000 ton crushing/day and approx KLD of Ethano.. Co-generation of power avaiabiity ikey to be around 1,7000 MW by Harnessing of soar energy for irrigation in sugarcane cutivation. INDUSTRY: ACTION POINTS Short Term Provide a we-structured, transparent and enabing environment for industria growth Simpify rues and reguations and procedures for setting up industria units Create a and bank Encourage and provide incentives for upgradation of skis Medium Term Strengthen existing infrastructure reated to industry Estabish technica institutions for training Create supportive marketing infrastructure Set up new training institutes and upgrade existing ones to meet the technoogica and ski needs of industry 51

59 Acceerated Incusive Growth 2.5 The Sugarcane Industry The sugar industry is the argest agro-based industry in Bihar. It generates considerabe empoyment in the farm sector directy as we as through anciary industries and reated activities. An estimated 5 akh farmers and their dependants are engaged in the cutivation of sugarcane and approximatey another haf a akh unskied and skied peope, incuding highy quaified and trained technoogists, work in the sugar industry in the state (Tabe 2.5). The status of sugar cutivation in the state shows that there is considerabe potentia for increasing the area under cutivation and productivity. Ony 2.3 akh hectares (around 4.5 per cent) of the tota of 54 akh hectares of cutivabe and in the state is under sugarcane cutivation. The productivity of sugar cutivation in Bihar at 56.6 MT per hectare is beow the nationa average of 70 MT per hectare. The industry aso needs rejuvenation and new investment if it is to pay a dynamic roe in the future. Severa sugar mis under the state-run Bihar Sugar Corporation had to be cosed, as they had not modernized their pant and equipment or retrained their personne. Those sugar mis that continue to function have a capacity that is far ower than the nationa average. Bihar has the owest sugar recovery rate in the country at 9 percent against the nationa average percent Vision Given the favourabe agro-cimatic conditions for cutivating sugar in the state, and its potentia for boosting farm incomes, Tabe 2.5 : The Sugar Industry in Bihar ( ) Land under cutivation Tota area under sugarcane Tota sugarcane production Productivity of sugarcane Cane crushed Sugar produced akh hec akh hec MMT MT/hec akh MT 4.22 akh MT Recovery percentage 9.45 % Crushing duration 122 days 52

60 Acceerating Growth as we as non-farm incomes through its inks with agro-processing, the objectives during the Eeventh Pan wi be to enhance sugarcane output by increasing productivity as we as area under cutivation, and to provide incentives to boost the sugar industry. This wi be in keeping with the stated vision of the Eeventh Pan which is incusive growth couped with sustained empoyment generation Strategy During the Eeventh Pan v Expanding Area under Sugar Cutivation: Increased output and productivity wi increase incomes for the 5 akh farmers engaged in its cutivation as we as give a much needed boost to the sugar industry in the state. A onger-term goa is to graduay doube the area under sugarcane cutivation to 4.6 akh hectares. This wi enabe a coherent integration of sugarcane producers and sugar mis eading to higher revenue for farmers. v Research: Increasing productivity of the crop wi ca for dedicated research into appropriate crop varieties, and deveopment of new varieties for different cimatic and soi conditions. Some of this is being done at the Sugarcane Research Institute, Pusa. The state government has aso begun the process of strengthening research on ways to increase sugarcane productivity and improve the quaity and quantity of yied from sugar mis in coaboration with Rajendra Agricuture University, Pusa. v Incentives to Industry : To expand the capacity of the sugar industry, the state government has announced an incentive scheme to encourage the estabishment of new sugar industries and distieries in a time-bound manner. The scheme is based on the requirements of the industry taken as a whoe and incorporates incentives such as rebates for co-generation of power, incentives for the manufacture of ethano from moasses, and waivers on administrative charges on moasses consumption by distieries, as we as streamining the procedure for getting aotments and permits for the sae of acoho in Bihar. Severa investors from across the country have since expressed their interest in setting up greenfied and brownfied projects in the state. Five detaied project reports (DPRs) for setting up sugar compexes, incuding ethano and cogeneration units have been received, two 53

61 Acceerated Incusive Growth with an initia capacity each of 5,000 tons crushed daiy (TCD) (to be expanded to 10,000 TCD) at an investment of around Rs 500 crore, are at the approva stages. Of the nine private sector sugar mis in the state, seven are currenty expanding their production capacity from 36,500 TCD to around 53,000 TCD. The introduction of the Greenfied Projects wi raise production capacity to 63,000 TCD, an increment of 26,500 TCD, which is around 72 percent of existing capacity. This increase in crushing capacity has to have backward inkages with sugar cutivation as the spurt in demand for sugarcane shoud enhance the area under sugar coverage. Sugarcane Poicy Promote private investment in new sugar mis and in expanding capacity in existing sugar units. Encourage the manufacturing of ethano from moassess. Waive administrative charges on moasses consumption. Encourage Co-generation of power and bagasse-based paper. For improving the condition of the Research Institute, the Bihar Government is going to provide the budgetary support. Amended incentive poicy to promote private investment for new Sugar Mis, Sugarcane Based Distieries and Co-generation units Exemption of Administrative Charges on Moasses and reimbursement of VAT. Exemption of eectricity duty on Co-generated Power. Capita Subsidy on pant and machinery for estabishment of Sugar Industry, Distieries and Co-generation. Stamp duty and Registration fees exempted for purchase of and for estabishment of new green fied projects and for expansion of existing units. 54

62 Acceerating Growth SUGARCANE INDUSTRY: ACTION POINTS Increase sugarcane inputs by b b b Increasing the area under sugarcane cutivation progressivey from 2.3 acs to 15.0 acs hectares Increasing the production of sugarcane from MMT to MMT by 2015 Promoting research and deveopment of new varieties of sugarcane through the Sugarcane Research Institute at Pusa Promote private investment in new sugar mis and in expanding capacity in existing sugar units Encourage the manufacture of ethano from moasses Waive administrative charges on moasses consumption Encourage cogeneration of power and bagasse-based paper 55

63 Acceerated Incusive Growth Infrastructure 3.1 Roads and Bridges The state government proposes to upgrade road infrastructure to the best nationa standards in the forthcoming pan period. In the face of the present objectives aid down by the Government, any previous targets for achievement pae into insignificance. The task is gigantic and its success requires consummate panning, effective strategies and ogistic exceence Expanding and Upgrading the Road Network: Initiatives The poor road network in the state has been a major deterrent to private interest in investment, but in recent months this constraint is sowy being tacked: the State Government is pushing for competion of the Goden Quadriatera Project within the state, CPMF personne have been provided to ensure progress in road buiding under the Nationa Highways project, new funds have been sanctioned under the state budget for acceerated road construction; the process for procurement and tenders has been improved and upgraded, and the Chief Minister s programme for the construction of sma bridges and rura roads is being expedited Nationa Highways Upgrading the road network in the state wi invove four-aning of a the major routes in the state. Four-aning of NH 2 (the Goden Quadriatera of km) is nearing competion, the East-West Corridor is in progress (513.3 km) and roads under NHDP-III wi be taken up (890 km). Other major corridors that need to be four-aned are the Bakhtiyarpur-Biharsharif-Rajgir- Bodh Gaya and Patna-Gaya-Dobhi routes which wi be executed under the Buddhist Circuit Deveopment Programme. In addition, three proposas (Biharsharif-Nawada-Rajaui, Munger- Bhagapur, and Aurangabad-Mahabaipur- 56

64 Infrastructure Bihta) wi be deveoped either on a BOT basis or, if unviabe, through an EPC basis as to roads. The tota ength of these routes is 242 km and the ikey cost is Rs 1,452 crore. If deveoped through BOST, the Panning Commission wi provide 20 percent of the funds as grant and 20 percent as oan. The state government may need to bear a maximum of 10 percent of the cost. The newy decared Nationa Highways need urgenty to be upgraded. A project for upgrading 1,782 km of these highways wi be presented to the ADB and the Word Bank for funding (see Annexure 3A) State Highways (3,232 km) The state government sha upgrade a State Highways to at east two anes. v Od State Highways A od State Highways (2,178 Kms) are being upgraded under the Rashtriya Sam Vikas Yojana (RSVY). The Panning Commission has agreed to increase the initia outay of Rs 2,400 crore for a ength of 2,045 kms to Rs 3,000 crore to cover the entire 2,178 km of the od State Highways. DPRs have been prepared by CPWD and 57

65 Acceerated Incusive Growth IRCON at an estimated cost of Rs crore per km for two-aning, and the work is expected to be competed by v Newy Decared State Highways The engths of Nationa Highways and State Highways within the state are 3,629 kms and 2,178 kms, respectivey. To party rectify this imbaance, an additiona 1,054 kms of road connecting two or more districts have recenty been decared State Highways. These roads too are to be upgraded to two anes at a cost of about Rs. 1,800 crore. The project wi be impemented with funding from NABARD. The state s 20 percent share amounting to Rs 360 crore wi be given at the rate of Rs. 180 crore per year over the two-year period, The NABARD oan wi cover the three-year period at the rate of Rs. 480 crore per year. A preiminary financing proposa has been submitted to NABARD and work is ikey to start by January v More State Highways Despite decaration of new State Highways, the ength of NHs and SHs within the state now stands at 3,629 kms and 3,232 kms (2178 kms kms), 58

66 Infrastructure respectivey, with NH ength exceeding the ength of SHs by neary 400 kms. Identifying an additiona 500 kms or more of priority roads for upgradation to State Highway standard wi rectify this imbaance. There are severa roads connecting district headquarters which meet this criterion for upgradation. The state s share of 20 per cent amounting to Rs.170 crore wi be made avaiabe at the rate of Rs 85 crore per year over ; the NABARD oan may be obtained over two years at the rate of Rs.340 crore per year starting (see Annexure 3B) Major District Roads (MDRs) The state government wi upgrade a 7,714 kms of Major District Roads to intermediate-ane standards during the Eeventh Pan period. Funding wi be from the State Pan, NABARD (RIDF) and the Centra Road Fund (CRF). Other sources of funds incude centray sponsored schemes comprising the Centra Road Fund (CRF), Roads of Economic Importance, Inter-State Connectivity, and Border Area Deveopment Project (BADP) aong with grants-in-aid from the Twefth Finance Commission (see Annexure-3C). Strategies to Achieve Targets v Constitution of a fexibe autonomous body for Project Deveopment/Management : The State Government proposes to set up a fexibe autonomous body for project deveopment and project execution / management. This body wi have comprehensive deegated powers and reguations which wi faciitate quick decision making. It wi have the power to hire consutants/experts for preparing DPRs for construction as we as project monitoring. This wi ead to efficiency in the preparation of projects as we as project management. This wi aso be an appropriate body for managing PPP Projects. v Maintenance poicy: The Government is framing a comprehensive poicy for proper maintenance of a roads in the state. The current practice of cycic phased maintenance over a period of 4 years wi be repaced by maintenance that covers the entire road in one go. Upgraded roads wi be maintained by impementing agencies for a period of three years. The draft poicy is evauating the incusion of coecting to on stretches where to revenue wi be poughed back for maintenance v Onine monitoring : An onine monitoring system is being designed with the assistance of the state centre of the Nationa Informatics Centre which wi aow rea-time monitoring of a projects. Computerisation for impementing the monitoring system is in progress. 59

67 Acceerated Incusive Growth v Quaity contro aboratories : The quaity contro aboratories at the headquarter eve as we as mobie quaity assurance units wi be upgraded both quaitativey and capacity- wise to meet the QA needs of the projects under execution. v Specia projects ce : A specia ce has been set up to expedite the process of appraisa and approva of DPRs for PPP projects. v Road Cess and Non-apsabe Fund: Considering the scae of investments required in infrastructure, everaging private and institutiona investment is essentia. The Sate Government is considering a sma road cess. The receipt from the cess as we as aocations received under pan / nonpan, are proposed to be consoidated into a non-apsabe Road Fund which wi be everaged for institutiona funding in order to finance the ambitious road upgradation programme taken up by the State Govt. v Dispute resoution: The current system of arbitration is sadded with procedura deays and are subject to manipuation by vested interests. Since the Department is going in for arge-scae projects and the works are to be executed by nationa-eve agencies, addressing dispute resoutions through a Centra Tribuna is necessary. v Preserving Right of Way : The tendency to encroach on the highways or to make construction aong the right of way or to access the Highway at any point needs to be checked. The State Government is drawing up reguation under an enabing Act for this purpose. The reguation wi empower Highway authorities to take immediate action to stop temporary / permanent encroachments, and reguate construction aong and access to the right of way. v Highway Amenities : It is proposed that a State Highways have Pubic Conveniences and teephone kiosks at every 25 kms Tourism Improvement of modern infrastructure and cean and functiona accommodation in tourist paces are proposed for deveopment of tourism. The road connectivity to Buddhist and Jain Circuits is very fragie and needs to be upgraded to internationa standards. The faciities at the Internationa Airport at 60

68 Infrastructure Bodhgaya have to be improved and the existing ength of the runway has to be increased from 7500 ft. to 9000 ft. for enabing bigger aircrafts to and. Greenfied Airport wi need to be sanctioned at Patna and Rajgir. An Internationa University as a Centre of Exceence has been panned as a regiona initiative with the hep of major Buddhist countries of Far-East and South- East Asia. A Bi entited the Naanda University Bi, 2006 is in an advanced stage and wi be enacted shorty. Land acquisition for the University is in process. This process wi be impemented and managed in partnership with severa countries to ensure educationa exceence both for high research quaity to attract students and sustaining exceence in both students and facuty. A Group entited Vision Naanda has aso been constituted to monitor its progress. 61