118th Jan. 2008

Dr. Y.V. Reddy

2

Uttar PradeshUttar Pradesh

East Champaran Sitamarhi

MadhubaniSupaul Araria

Darbhanga SaharsaSamastipur

Madhepura

Purnia

Kishanganj

Katihar

BhagalpurMunger

KhagariaBegusarai

BankaJamui

NawadaGaya

Aurangab

ad

PatnaBhojpurBuxar

Bhabhua

Rohtas Jahanabad NalandaSheikhpura

LakhisaraiVaishali

Saran

MuzaffarpurSiwan

Gopalganj

West Champaran

JharkhandJharkhand

West BengalWest Bengal

NepalNepal

3

Total Area 94,163 Sq.Km.

Administrative UnitsDivisions 9Districts 38Sub Divisions 101Blocks 535Panchayats 8,471Population 8.29 (as per 2001 census) croreMale 4.32 croreFemale 3.97 crore

STATE PROFILE

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Literacy RateTotal 47.53Male 60.32Female 33.57

Total Number of Registered SSI Units under Factories ActSec. 2(m)(i) or m(ii) 2474 Under Section 85(i) or 85(ii) 2620

Total Number of un registered Units 4,63,741 Number of Large & Medium Industries 266

STATE PROFILE

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BIHAR'S DEVELOPMENTAL CHALLENGES

3rd most populated state accounting for 1/7 of India's population below poverty line.

In human development indices and also in many sectors, the State lags seriously behind the National trends a contributing factor to the growing income gap across States.

Very poor infrastructure.

6

FOCUS FOR DEVELOPMENT OF BIHAR

Former President Dr. Kalam suggested 10 missions to make Bihar economically prosperous.Strategy to increase the per capita income from the existing Rs.6,700 (05-06) to Rs.35,000 by 2010.To create an investment friendly climate leading to employment avenues.Goal of 100% literacy and employment by the year 2015.Present human development index ranking of Bihar is 15 which should be improved.

7

STRATEGY / KEY CHALLENGES

IMPROVING

Infrastructure

Human Capital Formation

General Public Services

Upgrading Quality of Educational Outcome through institutional reforms.

Reform Initiatives

8

IMPRESSIVE GAINSFemale literacy rate.

Control in the infant mortality rate.

Access to improved water resource.

Increase in rural income.

Reduction in poverty level.

Improved quality of public spending.

More resources to local bodies

9

“RECENT REFORMS GIVE A RAY OF HOPE TO BIHAR”

“A slew of fiscal & legislative reforms implemented.”Silent transformation is taking place.First state to abolish Agriculture Product Marketing Control Act.Urban Land Ceiling Act repealed. Model Municipal Act adopted, 2007.Bihar Apartment Ownership Act, 2006 adopted.FRBM Act, 2006 enacted.Implementing Comprehensive Flood Management Information System to support flood control and management through early warning & emergency response system.

(Source : The World Bank in India, Sept.07)

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Estimated expenditure for the two year period ending March 2008 - Rs. 23,277 crore as against Rs.20,614 crore in the last 10 years.

Fiscal deficit is only 2.3% of the GSDP.

No overdraft and no loan taken from market.

For two successive years, full budget passed before March, 31st.

“Recent Reforms Give a Ray of Hope to Bihar”

11

“Recent reforms Give a Ray of Hope to Bihar”

For the year 2007 - 08, developmental expenditure target of Rs. 10,200 crore is nearly thrice the amount for the year 2004-05

Proposed expenditure for the current year for the road sector is R. 3,532 i.e. more than 46% of the amount for the last year.

Increased expenditure for the Education Sector

Substantial hike up in the expenditure for the Health sector (R. 1,127 Crore from Rs. 760 Crorefor the year 2005-06)

12

DEVELOPMENT BASED GOVERNANCEInitiatives to remove the ‘Inequality Traps’.

Reservation for women.

Establishment of ‘Gram Kachhari’& appointment of ‘Nyay Mitra’.

Constitution of Maha Dalit Commission & Commission for Extremely Backward Classes.

Schemes for Mushahar Development.

Constitution of Land Reforms Commission.

Access to Infrastructure, Electricity, Water to the disadvantaged groups.

Empowerment of Women.

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Concrete action to stimulate private investment–

Single Window Clearance Act, 2006

Creation of State Investment Promotion Board.

Passing of Infrastructure Development (Enabling) Act, 2006.

FRBM Act, 2006 enacted.

The Bihar Sugarcane (Regulation of supply & Purchase) Act, 1981amended is awaiting presidential ascent.

Industrial Promotion Policy, 2006.

RECENT INITIATIVES

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Policy for setting up Higher Technical Institutions.

Initiatives in PSU reforms.

Provision for 50% reservation for women.

Abolition of Agriculture Produce Market Act, 2006.

20 other important legislation enacted during 2006-07

Recent Initiatives

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INITIATIVES FOR BUDHIST CIRCUITThe four-laning of following corridors have been proposed

through the Ministry of Tourism to the JBIC :

Patna – Jehanabad – Gaya – Bodh Gaya – Dobhi (125 Km)

Bakhtiarpur -Biharsharif–Nalanda–Rajgir–Gaya (128 Kms)

Hajipur – Vaishali – Kesharia – Khajuria (113 Km)

Approx. Cost Rs. 2053.71 Crores

Preliminary Project Report has been sent to JBIC.

Patna – Jehanabad – Gaya – Bodh Gaya – Dobhi (NH-83) has also now been included for four-laning under NHDP-III by MOSRT&H.

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Four-Laning Projects

Buddhist Circuit

Kesharia

NHDP-I – nearing completionNHDP-II – East – West Corridor – in progressNHDP-III – One corridor tendered – other DPRs under finalisationBuddhist Circuit – Posed to JBIC – PPRs submitted

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Birthplace of two religions – Buddhism & Jainism and of the 10th Guru of the Sikhs

Vision for exploiting the comparative advantage

Provide world class connectivity – air connectivity, expressways

Construction of 5 Star Hotels, Golf Courses, Yoga and Meditation Centres at Gaya, Bodh Gaya, Rajgir, Pawapuri & Vaishali – market these as centres for peace and rejuvenation

International University at Nalanda

TOURISM

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First Steps ….

Development of Airport of international standard -International airport at Gaya -flights from Thailand etc – land for extension being made available.

International Golf Course (18 Holes) – designed by PGA - Land acquired at Bodh Gaya

Further Steps…

Development of Natural Hot Springs at Rajgir

International Conventional Centre at Nalanda / Rajgir

Consultant from WTO visiting to draw strategic plan

TOURISM

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AREAS OF CONCERNLow Credit Deposit Ratio.

Low branch coverage.

C.D. Ratio.

Poor Credit Plan Achievement for 2007-08.

Low credit plan achievement in Agriculture, Industry, SSI Sector and other priority sectors.

Coverage under education loan scheme still to pick up despite the direction of Hon’ble Finance Minister, Govt. of India.

Poor achievement in flood affected areas despite the RBI circular.

Lack of response for rehabilitation of sick and closed industries.

Lack of Clearing House facility in certain districts.

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LOW BRANCH COVERAGEBihar has one bank branch for a average population of 20,500 as against National average of 15,000, 9,000 in the case of Punjab, 11,000 in the case of Maharastra & 14,000 in the case of West Bengal.

947

316165466

Semi Urban

2594

8012551259

Rural Branches

583412442Total

504464Co-op Banks

4014605RRBs493221833CBs

UrbanNo. of Branches

No. of Banks

Agency

21

Low Branch Coverage

Bihar needs 2,226 new branches to reach National average.

28 blocks in Bihar are having no commercial bank branches yet.

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POOR CREDIT PLAN ACHIEVEMENT IN AGRICULTURE SECTOR

Upto September, the achievement is only 25.90% of the total credit plan.

25.901263.694879.672007-08 (Up to Sept. 07)

80.202985.403722.372006-07

80.592174.032697.482005-06

86.772030.112339.562004-05

83.541587.621900.342003-04

46.85860.171836.092002-03

35.52619.921745.462001-02

%ageAchievementTargetYear

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SSI SECTOR

15.11137.97913.062007-08 (Up to Sept. 07)

56.55376.11665.082006-07

49.92272.15545.212005-06

40.03217.03542.122004-05

30.29155.61513.702003-04

29.96125.34418.382002-03

32.16118.973692001-02

%ageAchievementTargetYear

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POOR TOTAL CREDIT PLAN ACHIEVEMENT DURING 2007-08

27.403588.9113100.002007-08 (Up to Sept. 07)

87.378738.1310000.902006-0782.576055.427333.602005-0683.715040.736021.692004-0588.534287.144842.392003-04%ageAchievementTargetYear

Despite high exploitable potential through credit in Agriculture & Rural Non- Farm Sector not only the coverage is low but the achievement is also far below the expectation.

Only 33% of the farmer household are having access to the credit as against the National Average of 48.6%.

Urgent need to address the issue of financial inclusion, increase the outreach and flow credit.

Potential Linked Credit Plan has to be realistic.

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REHABILITATION OF SICK & CLOSED INDUSTRIES

28.3% of the SSI units (registered) are closed.

The main reasons for sickness were reported as shortage of working capital & marketing problems.

State Government have announced creation of a Corpus Fund and contribution; however, Commercial Banks including State Bank of India and other nationalised banks have not shown any interest.

Bank should play a pro-active role in reviving the sick and closed units.

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LOW CREDIT DEPOSIT RATIOBihar’s core strength lies in Agriculture, Handloom, Silk and Handicrafts.

The immense potential for economic development in these sectors. However, the C.D. Ratio of Bihar is only around 33% against National average of 57%.

32.6117519.8353725.532007-08 (Up to Sept. 07)

33.8119048.4256341.872006-07

32.1014807.8746133.802005-06

29.8612031.2040294.882004-05

27.009603.8635824.002003-04

25.008089.0033815.002002-03

21.006945.5230482.022001-02

23.006396.0027591.002000-01

C.D. RatioCreditDepositYear

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OTHER AREAS OF CONCERNFor the flood affected areas, special credit plan with the following components amounting to Rs.792.42 cr. was prepared.

Consumption loan

Rural Housing

KCC

DIR

Swarojgar Credit Cards, Artisan Credit Cards & SGSY etc.

As against the actual achievement is only Rs.282.4 cr.

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DETAILS OF BLOCKS WITHOUT COMMERCIAL BANK BRANCH

2Sitamarhi, SeoharBank of Baroda4

1SamastipurUnion Bank of India

7

3SheikhpuraCanara Bank6

1BhagalpurUCO Bank5

5Madhepura, Purnia, JamuiState Bank of India

3

7W. Champaran, Saran (Chapra), Gopalganj, Darbhanga

Central Bank of India

2

12Nalanda, Buxar, Rohtas, Bhabhua, Gaya, Nawada, Lakhisarai

Punjab National Bank

1

No. of Blocks

DistrictName of the Lead Bank

Sl.

29