Patna: Supporting the state government’s line on the special status issue, the Bihar Industries Association (BIA) has demanded that the Central government must plan ‘something substantial’ like special package to help the state get rid of backward tag. “The Central government shall approve special financial grant and other tax incentive to give fillip to infrastructural development and catalyse industrial growth,” said BIA president Arun Agarwal here on Saturday.
Agarwal and other senior office bearers of the BIA said that this was part of the demands that they have presented in the form of a detailed memorandum to Union finance minister Nirmala Sitharaman ahead of the Union Budget preparation exercise so that they could be considered for inclusion.
Also Read: BIA seeks industry status to tourism, other incentives in state budget
“Even after 75 years of independence, Bihar, with a population of about 13 crores, remained backward on various levels of development. In the era of development, the other provinces of the country kept moving forward, whereas, despite being a prosperous province from the industrial point of view before independence, the state of Bihar continued to slide down due to ill-conceived policies,” said the Bihar Industries Association memoradum.
Bihar remained marginalised in Union Budget
On a large scale, regional imbalance has been established in the country. If the country has to move forward towards development, the policy makers must not ignore the issues plaguing Bihar. The Union Budget for the year 2023-24 is about to be presented. BIA has sent its memorandum to the Union Finance minister in the month of November, regarding the broad perspective of industrial-economic development of the state. With our suggestions and the Union Budget, we expect the industry of Bihar in the following form, said the BIA officials.
Also Read: Bihar’s purchase policy to promote local industries on anvil: Minister
Special package can help Bihar shed backward tag
“In view of the effort to end the regional imbalance on the scale of development, the Central government should announce a special package along with the status of a special state to the state of Bihar. Today the average per capita income of the state of Bihar is about ₹48,000, while the per capita income of the country is ₹1.50 lakh. This means we are one third of the average income of the country. There is definitely a need for a special package to bridge this huge gap,” said former BIA president Ram Lall Khetan.
Tax free loan of ₹50,000-Cr
In the last year’s budget, provision was made to take interest-free loans from the Central government to support capital investment. This loan has to be repaid in the next 50 years. Under this provision, Bihar has received ₹9,000 crore as loan this year. From the point of view of the state’s backwardness and making the infrastructure development-oriented, it is our expectation that the Centre will make a provision in the budget for providing an interest-free loan of ₹50,000crores to Bihar from the budget, read a press communiqué issued by the BIA.
Income tax on MSME shall be capped to 15%
Khetan further said that the micro, small and medium enterprises (MSME) sector has an important contribution in the country’s economy and development. After the agriculture sector, MSME is the only sector where maximum employment opportunities are available. Therefore, there is a need to strengthen the MSME sector. At present, MSME sector industries falling in the corporate category attract income tax of 15% plus cess (for existing industries) and 22% (for new industries). More than 90% of the country’s MSME sector industries are outside the corporate category, on which 30% income tax is being levied. Our demand is that the income tax on all MSME industries, whether they are in the corporate sector or not, should be reduced to 15%.
Also Read: ‘Sustained efforts needed to develop Bihar as an industrial state’
Stressing the need for introducing a customised production linked investment (PLI) scheme, the BIA officials said that scheme has been very successful and it needs to modify in such a way that those investing is Bihar felt incentivised.
Insurance cover to MSME in Bihar
All types of loans taken by MSME sector industries should be given full insurance cover to make sure that the banks did not hesitate to lend. At present, there is a provision to give loans up to ₹2 crores on the spot. But the banks are not satisfied with this. There is a need to increase the limit of ₹2 crores to ₹25 crores prescribed for the MSME sector. Again, there should be an announcement in the budget with a provision for the insurance amount to be borne by the bank, industry and the government.
Incentives for solarisation projects
In view of the future energy needs and the gradual depletion of conventional energy sources, the government is paying attention and encouraging non-conventional energy sources, which is commendable. It is our demand and expectation that from the point of view of promoting and making solar energy universally available, incentives similar to those given on agricultural equipment should be made available.
Income tax exemption shall be raised to ₹5 lakh
The BIA further said that the minimum exemption limit of income tax should be raised to ₹5 lakhs from ₹2.50 lakhs. Again the rate of income tax should be reduced and the maximum tax rate should not exceed 25%. More than increasing the tax rate, there is a need to pay more attention to maximise the tax net. Stricter law shall be enforced to prevent tax evasion.
Pension to industrialists
The BIA officials said that entrepreneurs also contribute to the country’s economy by paying taxes to the government in many ways. Hence the government should consider introducing a pension scheme for them also. “At present, there is a provision to run criminal case as a punishment in case of lack of compliance or non-compliance of any statutory provision under various Acts. The rate fixed for re-penalty is also very high. We believe that industrial trade should be kept out of the category of criminal cases,” said Agrawal, adding that there should the facility for loan portability as well.
Also Read: Let’s Inspire Bihar convenes Startup Summit, 300 investors line up
Penalty shall be on size of industries
The BIA officials suggested that the prescribed penalty should be maximum 5% for micro scale industries, 10% for small scale industries and 25% for medium scale industries in case of default.
Special grant to promote urbanisation
“Special incentive shall be offered to the state to promote urbanisation. If Bihar is seen from the point of view of urbanisation then it is quite pathetic. The national average is around 33% while the state’s urbanization is 11-12%. If the state has to be taken forward in the era of development, then definitely efforts will have to be made towards urbanization.
Tourism sector shall be encouraged
The tourism sector can also play a significant role in economic prosperity of the state, as it has many important places and monuments to pull in tourists from across the country and abroad. If such places are developed and marketed properly, the tourism industry in the state can give a new identity to the state. We expect the central government to bring forward the tourism sector of the state and hope that some provision will be made in the budget.
Also Read: ‘Promote start-ups to help India achieve 500GW non-fossil energy target’
Infrastructure development key to prosperity
The infrastructure related to transport has an important contribution in the development of any country. In recent years, our position in the field of road construction has improved. But we are very backward in terms of air transport and water transport. We do not have an airport for any international flight except Gaya. We need to plan now keeping in mind the transport demand of the next 30-40 years.
There are many small farms within the state, they should also be developed. The state of Bihar has the river Ganga which we can use extensively as a form of transport. The government has also made an announcement for this, but till now this transport system has not been made smooth. We expect the central government to think about strengthening the transport infrastructure of the state. It also needs to be noted that we are a self-employed organization, read the BIA press release.
Bihar needs SEZ to support industries/trade
Urging the central government to rise above the political considerations and help Bihar, former BIA president Ram Lall Khetan demanded creation of special economic zones (SEZs), which, besides offering ease transportation facility for goods and consumables, provides various types of incentives to the industry and trade bodies. “Bihar has no SEZ, even though the Central government has set up more than 100 such zones across the country,” pointed out Khaitan.
Prominent among those who spoke on the occasion were Narendra Kumar, Manish Kumar, GP Singh, AKP Sinha, Ashish Rohatgi, Arvind Kumar and Ashish Agarwal.
