Bihar using vast labour force to woo investors at this time of COVID-19

The ruling Nitish Kumar government in Bihar sees a great business opportunity in the return of the migrant labourers coming home in hordes after losing their jobs as a result of a long spell of COVID-19 induced lockdown.

More than a million have already returned while other stranded labourers are expected to reach the state soon.

Although it is not clear how long the labourers will stay at home, Bihar government is assuming that they may not leave their homes anytime soon. Based on this assumption, the state government has now begun appealing to the industrialists to make investments in Bihar and open up new units in the state.

The government’s appeal is based on two things—there is a huge workforce available in the state and secondly, it has brought changes in the existing labour laws, increasing the duty hours from the present eight hours to 12 hours.

“We have planned to hold talks with the manufacturing industries in other states to set up their units in Bihar. The industries are facing manpower crisis in other states as a result of the reverse migration and we would be benefitted if they set up their industries here,” Bihar deputy chief minister Sushil Kumar Modi said.

According to him, the labour resources department has also started conducting skill mapping of the labourers to find out their skills.

So far, the skill mapping of around 88,293 labourers out of three lakh who returned to the state and kept at the government-run quarantine centres has been done and segregated into skilled, semi-skilled and unskilled.

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The labourers can be identified as technicians, data entry operators, banking, e-commerce and textile, IT sector workers, financial advisors and delivery boys. However, according to the data report by authorities, the majority of them are related to the construction sector.

As per the report, 32,335 have been identified as unskilled labourers, around 11,000 construction workers, 3,963 masons while others were working as floor tiles workers, centering workers, electricians, fabrication staffs, factory staffs, food processing sector workers, handcraft and carpet workers, tailors and plumbers.

Based on this skill set, the state government now believes the work experience and the number of the workforce hold huge potential to woo the industrialists who earlier were not interested in investing in Bihar despite all efforts.

Soon after coming to power in November 2005, the Nitish Kumar government had held many global and investment meet to woo the industrialists, NRIs and non-residents Biharis to the state.

Besides them, the state government also rolled out red carpets especially for Reliance chairman Mukesh Ambani, Tata Group chairman Ratan Tata, Mahindra Group chairman Anand Mahindra and Bharti Enterprises chairman Sunil Bharti Mittal. Although they did visit Bihar, however, when it came to investing, they turned their faces away.

With the migrant workers returning in large numbers, the Bihar government is keen on tapping this great opportunity to lure big investors. However, the experts say that it may take more than that to attract investors.

“Labour is one factor but it alone is not enough to attract investments. The government will also have to provide the business environment, infrastructure, lands, and more importantly security to the industrialists. Sadly, law and order situation has deteriorated alarmingly in recent months,” said Navendu Kumar Thakur, senior vice-president of the Bihar Chamber of Commerce and Industries.

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A low clearance of the proposal is another major bottleneck for the investors. Navendu Kumar also added that the State Promotion Investment Board formed to make quick disposal of proposals has diverted from the real objective while the government doesn’t look interested in making lands available to the industrialists to set up industrial units.

“Bodh Gaya can be an ideal place for the industrialists. Besides being the land of Buddha, it shares borders with mineral-rich Jharkhand, has four-lane road, power grid, and more importantly the lands available there is not fertile and could be used for setting up industrial units but the government is not showing interests,” he explained.

Bihar Industry Association president Ram Lal Khetan made similar observations.

“Only the availably of labour force will not serve. The state government will have to focus on infrastructure as well and make availability of lands to the industrialists. Sadly, they are missing here,” Khetan added.

According to Bihar Economic Survey, the contribution of Bihar to the country’s industrial output has been extremely limited at 0.5 per cent of the total Gross Value Added (GVA) of the industrial sector in India in 2016-17.

In the early years, this was even lower at around 0.3 per cent of the total GVA. The report states that the industrial sector in Bihar has been historically suffering from low investment, low capital formation and low return on investment.

Related news: Job scenario not pleasant for returning migrants in Bihar

The Survey, however, says the state has a substantial comparative advantage for agro-based industries. Quoting a report of the Bihar Industrial Area Development Authority (BIADA), the survey says a sum of ₹742.54 crore has been invested in food processing industries in the past two years (2017-18 and 2019-19)—the highest among all the industries classified under the High Priority Sector.