British-Indian brewing tycoon Lord Karan Bilimoria has called on international investors to tap into the “tremendous potential” of the Indian state of Bihar, long known as the “basket case” of India but which has enjoyed unprecedented growth rates in recent years.
Speaking at the launch of a new book on the state essays at the London School of Economics, Lord Bilimoria described how he and his company Cobra Beer overcame concerns about the lawlessness and corruption that once plagued Bihar to set up the state’s first, and currently only, brewery.
“When we first set up in Bihar, one of the first things that family and friends asked me was whether I had kidnap insurance”, Lord Bilimoria said.
“But I believe the state is changing. Crime has gone down six times in the past six years. Conditions are very conducive to business. We have tripled capacity since we began operations. We have pioneered waste water management and the use of green technologies and we are encouraging local farmers to supply us raw materials”.
Once world-renowned as the seat of the world’s oldest democracy, the birthplace of Buddhism and of course home of the ancient centres of education at Nalanda and Vikramshila, Bihar had, in recent decades, become a by-word for inept governance, corruption, cast violence and rampant lawlessness.
Since 2005 however the north eastern state has begun coming full circle.
Its new Chief Minister Nitish Kumar has brought about sweeping changes with a dream of bringing back “the old glory days of Bihar”.
Since Mr Kumar’s appointment as CM in 2005, the state has enjoyed double-digit economic growth. The “Nitish Effect” has led to a dramatic reduction in crime and not-insignificant improvements to everything from school attendance to Bihar’s dilapidated road network.
That in turn has led to the state enjoying a remarkable growth spurt, averaging 12% in the past three years even as the rest of India languished below five percent.
It is one of the success stories of recent India. and one which attracted the attention of Bilimoria.
In 2011, Cobra Beer, against all expectations, set up its first India facility in Bihta, some 35 kilometres outside the Bihari capital Patna, with a three-stage plan to invest $35 million dollars in the facility.
Lord Bilimoria also said that the business community had a “responsibility” to ensure Bihar’s continued success.
“Cambridge and Oxford Universities were being established when Nalanda closed down after centuries of spreading knowledge not just across the South Asian sub-continent but beyond.
Bihar has plenty to offer to anyone willing to invest, from tourism to infrastructure. Of course there will always be questions about whether the recent successes can be sustained but I think the business community needs to ensure it does”.
The tycoon was part of a panel of commentators at the launch of ‘The New Bihar: Rekindling Governance and Development’, a collection of essays by authors including Amartya Sen, Meghnad Desai, Shankar Acharya, Arvind Virmani, Kaushik Basu, Tarun Das and edited by Bihari politician and economist N K Singh and British academic Professor Nicholas Stern.
According to Professor Stern, a number of key factors have given rise to Bihar’s economic resurgence, most notably a dramatic reduction in crime and lawlessness in a state which not-so-long ago experienced a staggering 5000 homicides a year, as well as the engagement of women and minorities by the administration of Nitish Kumar in entrepreneurial activity.
The battle though is not yet won.
The authors both argue that in order for Bihar to overcome the crippling neglect the state suffered post-independence, the current growth rate of 13% needs be maintained for at least two decades.
With Mr Kumar dismissing calls to campaign for higher office and pledging his future to Bihar, the state’s short-to-medium term future, at least, looks assured.