City Business Plan - Hajipur

CITYBUSINESSPLAN
TheSupportProgrammeforUrbanReforminBihar(SPUR)isasixyearspartnershipprojectbetweenthe
Govt. of Bihar and the Department for International development, U.K. Systematic local economic
development is one of the key components of SPUR. As a first step, City Business Plans have been
preparedforthe29projecttowns.
City Business Plan is an operational tool for mapping economic development opportunities of urban
areas, enabling effective interface between government agencies and business communities for
attracting investment and improving business climate of towns. It is aimed to identify skill gaps and
designandimplementmarketbasedskillandenterprisedevelopmentprograms.CBPsalsoprovideroad
maps for enterprise development, promote local business opportunities, and streamline the approval
processes for business start ups as well as to strengthen fiscal and financial capacities of urban local
bodies for improving local infrastructure. CBPs of 14 towns (Patna, Danapur, Phulwarisharif, Khagaul,
Ara, Chhapra, Biharsharif, Siwan, Hajipur, Muzaffarpur, Motihari, Bettiah, Darbhanga and Sitamarhi)
have been prepared and CBPs of 13 towns (Gaya, Bodhgaya, DehrionSone, Aurangabad, Nawada,
Sasaram,Purnea,Katihar,Saharsa,Kishanganj,Bhagalpur,Munger&Jamalpur)areinthefinalstagesof
preparation.
SPUR would like to place the City Business Plans for wider review and consultation. All queries/
suggestions/remarkscanbesenttoasinha.spur@ipeglobal.comwithsubjectlineCityBusinessPlan
for________(town).
City Business Plan - Hajipur
SUPPORT PROGRAMME FOR URBAN REFORMS IN BIHAR
(SPUR)
Final Report for

City Business Plan Hajipur
Submitted by:
FEEDBACK INFRASTRUCTURE SERVICES PRIVATE LIMITED
Final Report
Page 1
DISCLAIMER
The information in this Report has been prepared based on information collected from primary and
secondary sources. Wherever information was not readily available, reasonable assumptions have
been made, in good faith to draw meaningful inferences and these have been mentioned in the
respective sections of the report. All such assumptions are subject to further corroboration based
on availability of information. The information and analysis presented in this Report is not and does
not purport to be comprehensive or to have been independently verified. This report has been
prepared by Feedback Infrastructure Services (P) Ltd for its client, Urban Development and
Housing Department, Govt. of Bihar for its use for furthering the project. No external agency shall
use any part of this report without the prior permission from Urban Development and Housing
Department and Feedback Infrastructure Services (P) Ltd.
The information contained in this Final Report is strictly confidential for the clients use only and is
specific to the particular project under specific circumstances and is not considered replicable or
suitable for other projects. The information and the report are also subject to updating, expansion,
revision and amendment. It does not, and does not purport to, contain all the information that may
be required.
This Report includes certain statements, estimates, projections and forecasts. Such statements,
estimates, projections, targets and forecasts are based on the information provided by the
concerned authorities and reasonable assumptions made by the management and employees of
Feedback Infrastructure Services (P) Ltd. No representation or warranty is given as to the
reasonableness of estimates or the assumptions on which they may be based and nothing in this
Report is, or should be relied on as, a promise, representation or warranty.
Final Report
Page 2
Executive Summary
The City Profile: As per provisional reports of Census 2011 India, the population of Hajipur is
1,47,126, which makes it the 16th most populous city in Bihar. The male and female population is
78,561 (53.4%) and 68,565 (46.4%) respectively. The sex ratio of Hajipur city is 873 per 1000
males, which is lower than that of Bihar state (916) and amongst the lowest among the cities of
Bihar. The total literates in Hajipur city are 100,691 of which 57,537 are males while 43,154 are
females. The average literacy rate of Hajipur city is 79.26%, which is higher than the state literacy
rate of 63.8%, but again on the lower side amongst the cities. The male and female literacy rates are
73.23% (Bihar: 73.39%) and 62.93% (Bihar: 53.33%) respectively.
At present there are 39 wards in the Hajipur Municipal Corporation. Over the years the city has
harnessed the agricultural base to develop its industrial and tertiary sectors. The main working
population of Hajipur is 25% of the total population. There are three industrial areas in Hajipur, the
main one being the Hajipur Industrial Estate established by BIADA. There are 97 agro-based
industries in Hajipur and out of the 127 industries based in the Industrial Estate, a little more than
half are in operation.
The Municipal Corporation covers an area of 19.64 sq. kms. Unlike many cities in Bihar, Hajipur
does not show a corridor kind of development. The city has grown along the Muzaffarpur Road
with the River Gandhak and the Railway track acting as the outer limits of the city on Western side.
In the recent years development in the north eastern and south eastern sides of the city is being
observed. The areas beyond the Railway Line in the northern side of the city have seen growth of
new development nodes towards Vaishali and Muzaffarpur, which are growing at a rate that is
much higher than the city.
The entire Municipal Corporation has 98 employees from a total of 230 sanctioned posts, which
amounts to only 43% of the sanctioned strength. At an overall level, the Corporation had been able
to maintain a positive closing balance each year (2004-05 to 2009-10). Revenue through property
tax contributed 12% to the total revenue income of the Municipality. Both revenue account and
capital account has been accruing a substantial amount of surplus. Hajipur Municipality derived
18.0% (average 2008-09 to 2010-11) of its revenues from taxes and about 12% (average 200809 to 2010-11) from non-tax sources, with grants providing a further 68% (average 2008-09 to
2010-11) of the revenues which reflects higher dependency on the government funds.
Growth of Economic Activities in Vaishali District
Sector
2001-02
2002-03 2003-04
Final Report
2004-05
Primary Sector
50231
80688
52344
75578
Secondary Sector
10117
12354
11964
14171
Tertiary Sector
79205
83909
93727
102082
Total Local Economy
139553
176951
158035
191831
Page 3
Economic Profile of Vaishali-Hajipur Region: Like in other parts of urban Bihar, recent trends
indicate gradual growth of the Tertiary sector, with an ever decreasing agricultural base.
Primary Sector: The share of primary activities in the district domestic product has increased by
50% from 2001-02 to 2004-05, which is largely due to diversification in agriculture and the
increase in agricultural productivity, due to better technological and scientific inputs in the
cropping techniques and management. As per the Economic Survey Report 2010-11, Vaishali
district was ranked second in the production of vegetables, fruits and flowers in 2008-09. Banana,
mango, litchi, guava, wheat and maize are the main agricultural products of the district. A huge
annual loss, amounting to 25 to 40% of the total fruits and vegetables produced, occurs on account
of poor methods of harvesting and transport facilities. This is due to poor pre and post harvest
management practices and lack of availability of appropriate fruit and vegetable processing
industries (FVPI).
The average annual production of fish in the state is nearly 2.61 lakh tonnes against the annual
demand of 4.56 lakh tonnes. Fish farming & development of sweet prawn and shrimp farming
practice, which fetch high value in international markets, have good potential in Hajipur. However,
siltation of ponds, availability of fish seed and adequate, suitable preservation infrastructure and
outdated technology are serious impediments to the development of this sector. The district stands
at 20th position when compared against average milk yield, and at 19th position when compared
average milk density (Lit /per day /sq km) of all districts (National Dairy Development Board, April
2008). The challenges in the dairy sector are very poor coverage of veterinary and artificial
insemination services and paucity of cattle feed and its production.
Secondary Sector: With three industrial areas in Hajipur and its proximity to Patna, industry is one
of the priority sectors in the economy of the Vaishali-Hajipur region. However, it needs to be
regularized and linked to lucrative markets in a sustainable manner.
Growth of Secondary Sector in Vaishali District
Sector
Registered MFG.
Un regd. MFG.
Manufacturing
(Secondary Sector)
2001-02
2572
7545
2002-03
4242
8112
2003-04
2828
9137
2004-05
4397
9774
12354
11964
14171
MFG.
10117
Source: - Planning commission website; State District Domestic Product Bihar 2001 to 2005; Directorate of statistics and
Evaluation, Govt. of Bihar.
The town has some industrial development. A few manufacturing units like a medicine
manufacturing units and sugar mills are present. The industrial sector in Vaishali is dependent on
micro and artisan units. The micro units have almost doubled from 2007-08 to 2008-09. The
artisan units also increased in 2007-08, but growth stopped in 2008-09. There has been no growth
in the tiny industry since 2006 which had 114 units.
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Types of Agro-based Enterprises in Vaishali District (Source: DIC Data)
Spice
Manufacturing
2%
Pulses Mill
1%
Wheat
Production,
Grinding
6%
Dalmot,
Namkeen, Sevai
Manufacturing
6%
Sattu,Besan
production
3%
Chayavan
Production
2%
Rice Mill / Rice

Flake
Manufacturing
23%
Oil Production
21%
Potato
Preservation
10%
Achar
Manufacturing
26%
The two technical institutes set up here are Central Institute of Plastic Engineering Technology
(CIPET) and National Institute of Pharmaceutical Education & Research (NIPER). The location
of these teaching institutions will definitely add to the industrial development of Vaishali-Hajipur
Region and in fact that of the entire state. The type of units here are varied - pharma and plastic,
food processing units like Britannia biscuits, bakeries, juice and soft drinks, fire-fighting vehicles
and accessories, poultry feed, PVC ropes and twine, packing materials, inverter and stabilizer
manufacture and so on. An Agri Export Zone has been established under APEDA, GoI for the export
of litchis in the Muzaffarpur-Vaishali litchi growing region. This is facing some infrastructural issues
which have to be sorted out before it can take off successfully.
Growth of Tertiary Sector in District Vaishali
Sector
Electricity, Gas & W.supply
Construction
Trade, Hotels & Restaurants
Railways
Transport by other means
Storage
Communication
Banking & Insurance
Real, Ownership of Dwel. B.Ser.& Legal
Public Administration
Other Services
Tertiary Sector
Final Report
200102
2887
7894
6135
3720
3089
118
2553
7423
6076
12080
27230
79205
200203
2899
9577
7448
3937
3565
140
2775
7389
6786
10866
28527
83909
200304
3593
9966
8582
4301
3954
123
3114
7842
7874
13040
31338
93727
200405
4307
12359
9453
4784
4873
148
3463
7891
8555
13561
32688
102082
Page 5
Tertiary Sector: The most robust service sectors in Hajipur presently are construction, trade and
hospitality and public administration sectors. This could be attributed to the fact that Hajipur
Industrial Estate and EPIP have several upcoming industries which involve the building up of
industrial sites and housing colonies, which in turn result in the proliferation of other support
services like trade and hospitality.
Issues and Challenges to Economic Growth
Micro Credit practices in Vaishali-Hajipur region are not well established. This is often a
deterring factor for growth of local, small and household industries. So these require deepening
and increased outreach.
Low Crop Yield: Even though the region is rich in soil and water resources, its average yields of
Rice, Wheat, Maize and Sugarcane are only about 32, 44, 40 and 38 percent of the potential
yields, respectively. This is due to the lack of scientific cropping methods throughout the crop
cycle.
Limited support infrastructure for storage/processing
Poor Animal Husbandry practices: The cross bred cattle population is very low, which
impacts the milk production. The present quality and number of cattle are insufficient as
compared to the demand for milk and milk products. Fish & Poultry products are imported
from other districts to cater to the vast & growing demand.
Poor infrastructural facilities in commercial and residential areas, as a support for local
economic developmental activities.
Lack of trained manpower for processing, storage, marketing and branding
Perceived lack of positive governmental response to entrepreneurial ventures
Perceived lack of ease in business approval processes and transactions
Poor policy support for PPPs in Infrastructure development for Agro based Industries,
contract farming etc.
Larger and better developed urban agglomerations near Hajipur like Patna and
Muzaffarpur, tend to dwarf the town and resources are diverted to those centres.
No APMC act: Because the traders activities are now completely unregulated, non-transparent
transactions and price collusions are even more pronounced than they were under the APMC
system. Because of the lack of alternative marketing channels, small-scale farmers have no
choice but to utilize the current trader-dominated marketing system despite the rampant
exploitation.
Government schemes do not seem to have had the desired impact on productivity,
technology and marketability.
Investor confidence has not yet been generated in the region and state.
Negative Attitude of Financial Institutions: Though savings are high in Vaishali, the credit
deposit ratio is only 27% which is extremely poor. The local citizens have been victims of bank
apathy, as far as granting of loans is concerned.
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Potential Sectors for Development in the Vaishali-Hajipur Region

Food Processing Sector: Based on the following linkages, agriculture, food processing and a range
of allied sectors can be assigned as the sector of prime economic significance in Vaishali-Hajipur
Region.
Supply side Linkages:- The rich soil of the region make it ideal for production of vast range of
grains, vegetables and flowers. Presence of water bodies create potential for raising fish
culture. Sizeable bovine population in the region ensures sufficient availability of milk for the
dairy processing industry.
Demand side Linkages:- Hajipur is well connected to the urban centre of Patna on one side
and has strong connectivity through national highways to other regions of economic
importance.
The Processed Food Industry within agriculture and allied sector is divided into the following broad
segments:
Primary Processed Food which includes products such as packaged milk, unbranded edible
grains, milled rice, flour, pulses, spices, and salt sold in packaged or non-packaged forms.
Value-added Processed Food which includes products such as biscuits, bread, pickles, jams,
jellies, chips and other snacks, sauces, crushes, syrups, tinned items, dehydrated food products,
herbal products, processed dairy products (ghee, paneer, cheese, butter), processed poultry,
processed fish products, confectionery, chocolates and alcoholic and non-alcoholic beverages.
Establishment of a Multi-Product Food Park (MPFP): In view of the linkages described above
and the primary and secondary processed foods in demand, the enhanced and varied agricultural
productivity of Vaishali-Hajipur region and its close proximity to large terminal markets, as well as
many other reasons, make it an appropriate location for the development of an MPFP. The GoB, in
their vision for the Food Processing sector in Bihar has already stated their plan to establish a Food
Park in the Muzaffarpur Vaishali region. Though this proposed Food Park may be located in the
Hajipur Industrial Estate, the EPIP or the AEZ or wherever else the State and local administration
can provide land for it in the Vaishali-Hajipur region, it will provide employment to the Hajipur
population, provided they are suitably skilled. The Field Collection and Primary Processing Centres
which will feed such a Facility will be located in the blocks and village areas, whereas the MPFP can
be located in the BIADA Industrial Estate in Hajipur, depending on land availability. A network of
Agri Clinics, Agri Business Centre/s and Preservation Infrastructure will have to be established and
integrated with the MPFP as a support to this complex.
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Stakeholders in Multi-Product Food Park
Source: Mega Food park Scheme, MoFPI, GoI and Feedback Analysis
Agri-Clinics and Agri Business Centres (ABCs): The high agricultural productivity of this region
can be further enhanced to make the farming business more profitable for the cultivators. AgriClinics & ABCs are envisaged to provide expert advice and services to farmers on various
technologies which would enhance productivity of crops/animals and ensure increased income to
farmers. The ATMA centre in Hajipur can be a facilitating agency for the agri-preneurs operating in
this field of business. The prospective agri businesses that have a potential and that can be
promoted in this region are:
Cropping practices, plant protection

Repair and servicing of traditional and modern equipments
Marketing/ Dealership of modern and appropriate technology driven implements like the
Chinese diesel engines and pump sets
Soil Health & Soil testing services
Grading, sorting, primary processing, packing and local marketing
Organic fertilizer and pesticides vermi composting could be linked with SHG clusters
Post harvest technology & treatments to enhance shelf life,
Providing market and weather information
Cold storage and warehousing
Facilitating Market Linkages for local produce and products
Crop and animal insurance,
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Clinical services for animals, feed and fodder management
Promotion of Organic Farming, Floriculture, Nurseries & Ploy/Green Houses: With the
establishment of the MPFP, it becomes essential to promote other livelihoods and support services
which will bolster this industry like Floriculture, Horticulture, Nurseries and Organic Farming.
These activities are already a part of the National Horticulture Missions plans in the state and
therefore funds are available for the same it is just a question of accessing them.
Organic farming has been taken up as one of the priority initiatives by the state government
with a sum of Rs. 255 crore being sanctioned for organic farming promotion within a span of
five years. Organic and vermicompost fertilizers can be made available to farmers this can be
linked to SHG activity. Training on organic farming can be provided to farmers this can be
linked to skill-development providers and NGOs. Seed replacement programs can be organized
to distribute quality seeds among the farmers and marketing can be done through appropriate
channels established in the ABCs. The agri-clinic network and work of ATMA and KVK in
Hajipur can be made largely responsible for promoting the above strategies.
Floriculture: The Vaishali-Hajipur region has the 2nd rank in the state for flower production @
486.29 tns. (2008-09) with the production of marigold, jasmine and tuberoses being on the
higher side as compared to that in other districts. Technology transfer needs to be organsied by
the agri-clinic network, which should educate the producers about suitable techniques to
optimize quality of flower production. In order to ensure an organized floral industry in
Vaishali-Hajipur region, floral vending zones, as a market place for selling the floral produce,
should be established with the help of local private sector.
Nurseries & Ploy/Green Houses: Under the National Horticulture Mission Plan for 2010-11,
there is a plan to establish one nursery in Hajipur at a cost of Rs. 11.68 lakhs. The saplings /
seedlings sold here should be in keeping with the varieties of plants which are agro-climatically
suited for this area i.e. mango, litchi, banana, betel vine, cauliflower, brinjal, marigold, jasmine,
tuberose tubers and so on. Cultivation of vegetables/flowers under controlled conditions can
also be established by constructing Hi-Tech and Normal green houses, polyhouse/plastic
tunnel/ shade nets in Vaishali district to produce vegetable/flowers for sale during the off
season. This has already been implemented by Bharat Seeds and could be promoted as an
economic opportunity in this region. The NHM Plan has targeted to establish 5 such green
houses in 2010-11 with an outlay of Rs. 11.688 lakhs.
Development of Bio-Seed Research and Production Centres: There is already a growing

number of agri-preneurs who are engaged in the seed multiplication business in the VaishaliHajipur region and in Hajipur City 50-60 households engaged in this activity are located in Ward
No. 30. With the boost being given by the state to the seed production business, the main factor to
be addressed is that the entrepreneurs be given timely support in capacity building, finance,
certification and marketing linkages. The ABCs proposed can be accessed for help in this matter. A
bioseed production centre should be established in Hajipur on PPP basis such that improved quality
of fruits and vegetables, suited to the soil and climatic conditions of Vaishali, can be produced.
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Dairy & Animal Husbandry A milk processing plant is being established in Hajipur which will
supply processed milk to COMPFED, which is branding milk products from Bihar by the name of
Sudha. Besides, there is scope for development of milk powder plant and factory for other milk
based products. In order to support dairy processing industry in Hajipur, appropriate and robust
backward and forward linkages have to be forged, an artificial insemination centre should be
established in Hajipur for introducing high quality breeds of cattle in the region and requisite
facilities should be provided to support animal husbandry such as veterinary clinics. Cattle and
poultry feed plants can also be viable business enterprises based on the development of this sector.
Fish waste from the pisciculture and aquaculture units in the region, can supply raw material to
these feed plants. In the District Development Plan of Vaishali (2011-12), the authorities had
planned to invest Rs. 1670.30 lakhs in dairy development.
Pisciculture (Fish Culture) & AquacultureCurrently fish production in the Vaishali-Hajipur
region forms only 3.16% of the total fish production of the state. Fish culture can promote
employment opportunities and become a source of income to small & marginal farmers. The
strategies for this are: augmentation of the production capacity of fish seeds by establishment of a
local seed production centre, brood banks and portable hatcheries on the lines of those being
promoted in Orissa, desiltation and conservation of water bodies like ponds and tanks through the
NREGA scheme, construction of inlet and outlet for easier passage in mauns for culture-based
fisheries, provision of critical infrastructure for post-harvest marketing including common
collection centres, improved cold chains, means of transport and linkages, establishing a proper fish
vending zone for trading and bringing together the bulk buyers and suppliers of fish in the district,
and developing institutional frameworks for establishment and facilitation of marketing linkages
and capacity building.
Apiary & Honey Production - Honey production, especially litchi honey, can become a unique
product of Vaishali district due to its strength of production of good quality litchi. Honey production
could benefit from greater efforts to build an industrial cluster and by using better techniques.
Cluster areas should be demarcated where an integrated honey value chain can be developed, i.e.
right from beekeeping to processing of honey to packaging and transporting facilities. This will lead
to an agglomeration of similar industries in Hajipur creating an organized supply system of honey.
A honey processing plant has been proposed in Hajipur region this will assist in aggregation
facilities and developing uniform standards this can be located within the proposed MPFP. Place
branding is an important component of strategy to establish Hajipur as a premium honey
production centre. Public sector initiatives such as formation of beekeeping associations should be
launched to mobilize beekeepers, process and market branded honey of Vaishali. Adequate
financial support in terms of access to micro finance, formation of self help groups and provision of
subsidies should be provided to the beekeepers. Lease schemes can be set up for the equipment and
significant capacity building needs to be done. Pricing and retained margin is a key element of this
effort.
Promotion of Craft/Artisan Sector: Hajipur has traditional artisans who make products using
sikki grass, banana fiber and wood but do not have a commercially sustainable size of operation.
The strategies for this sectors are: Identification of craft clusters, appointing a private organization
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or an SPV which will act as an apex organization to support this sector in the region, formation and
support of handicraft SHGs, formal and legal registration of handicraft co-operatives/ SHGs/
federations, establishing of marketing linkages, support with training, establishing a cadre of
master trainers to promote the crafts and modern design inputs from market-based and premier
design agencies. Apex agencies like the Export Promotion Council (EPCH) sponsored by the
Ministry of Textiles (GoI), All India Artisans and Craftworkers Welfare Association (Craftmark) and
the State agencies like the Industries Department which houses the Bihar State Handloom,
Powerloom & Handicraft Corporation should promote these handicrafts in a focused and integrated
manner so that finances and incentives also are utilized in the most optimal way. An integrated
approach to developing the sector will ensure that there is vertical integration of the components of
value chain right from supply of raw material to enhancing and managing the processing activity to
the sale of the finished product to end users.
Tourism & Hospitality Sector - Vaishali falls under Buddhist, Ramayana and Sufi tourist circuit
promoted by Bihar State Tourism Development Corporation. As such, it does have potential as a
tourist destination provided it is taken up is a focused manner and PPP opportunities are offered to
entrepreneurs for developing this sector. The recommendations for this sector are: conservation of
historic sites and improvement of on-site facilities, publicizing and promoting it as a tourist
destination, development of some tourist infrastructure like a budget hotel, a tourist shopping
complex including the sale of local arts and crafts, a spa-wellness-spirituality- nature cure centre,
providing water sports, an amusement park and ecological tours on the litchi and banana
plantations, creation of a trained tourist guide cadre and transport linkages. With the boost in
tourism, the hospitality sector will have to be necessarily developed in tandem. Many of the
strategies proposed above could be effected using the PPP route.
Alternative/ Renewable Energy - The crop residue and farm wastes like husk of rice and wheat,
seed coats of oil seeds, stalks and sticks of fibre crops, pulp and wastes of plantation crops, peelings,
pulp and stalks of fruits and vegetables are the raw materials used as input for direct cogeneration
of electricity through this process. There is a wealth of this kind of raw material available in the
Vaishali-Hajipur region, which could be used for this purpose. The SIPB has already approved the
setting up of one solar photo-voltaic battery plant and one 10 MW biomass based power plant in
the region. The strategies for promoting this industry could be as follows;
The value chain will have to be studied in details so that backward and forward Linkages can be
strung seamlessly together to ensure a smooth production process throughout the year. The
power produced by these plants should prove more than adequate to make up the short fall of
power faced by the industries based in Hajipur industrial areas. Therefore, there should be no
marketing problem.
Capacity-building efforts will have to be undertaken by the administration and the EDC to be
established in the city, to train suitable persons in the skills required for such ventures i.e.
installation, manufacturing processes & technology, marketing & sales, operation &
maintenance.
Final Report
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Incentives have already been provided by the Central and State governments for the
development of biomass plants in Bihar. The authorities should try to fastrack the approval
process for projects that come for biomass power generation.
The power buy back option should be given to the players which set up biomass-based power
plants in this region. This will reduce market risk for the players and encourage more number
of players to enter this sector in the town.
Easy credit should be arranged for the new establishments in this sector.
Various methods of communication should be used by the local authorities to increase
awareness of this sector, including information on how to setup a new biomass based power
plant in the area, tax and other benefits, trends of the industry and so on.
Specialty Hospitals Polyclinics, Diagnostic Labs, Telemedicine and Health Insurance Services
through PPP: Hajipur already has a healthcare service sector which is limited, unregulated and
often without standardized health care service delivery. Specialty hospital and diagnostic facilities
by private players like Fortis, Dr Lals Path Labs and other reputed private players will not only
foster quality of internal standards but also create employment opportunities, contribute to the
economy and control unregulated growth of sub standard health facilities. Feasibility studies
should be conducted prior to establishing of such facilities in the region. The 12th Plan may see the
launch of the National Urban Health Mission (NUHM), which will give this sector a much-needed
boost by promoting partnerships and enabling the environment for improving healthcare services
in urban areas.
Vocational Education & Skill Development: There are two ITIs in Hajipur, but they are limited in
their course offerings to electrical and fabrication trades. With the introduction of new avenues of
economic development like biomass energy production, urban agriculture, organic and contract
farming, agri-clinics, agri business centres, food-processing industries, healthcare, hospitality,
tourism and so on, it is of vital importance that the capacity of the local populace be developed in
these businesses, trades and services. This will call for the establishment of vocational education,
skill and entrepreneurial development centres which are market-linked and output-based, in and
around Hajipur. This can be done on a PPP basis in the city. The resources and funds under the
National and State Skill Development Missions, National Rural Livelihood Mission (NRLM), MSME
and the MoLE can be accessed for this purpose, depending on the sector and the target population
involved. However, this will have to be planned in a holistic and integrated manner so that efforts
are not duplicated.
Support Interventions for Unorganized Sector
A Feasibility Study needs to be undertaken to identify the major vending zone, type of industry
and physical area available without interrupting public utility of the urban space. One possible
location for this has been identified by stakeholders as the vacant railway land next to
Chauri Bazaar.
These vendors can be formalized by issuing them license for the space allocated and
providing supporting facilities (Solid Waste Management, Sanitation). If the allocation of a
separate area is not feasible, another manner to support them could be of setting up of weekly
Final Report
Page 12
bazaars in different parts of city in an organized manner with support from the Hajipur
Municipal Corporation.
Under the SJSRY, all towns are supposed to have a cell for Urban Poverty Eradication
functioning under DUDA. The ULB should appoint suitable persons in this cell and strengthen
their capacities to perform the role expected of them.
Strengthening of existing community-based groups like NHGs, NHCs, RCV & CDS through
trainings on rules and regulations for conducting group activities could be done through local
NGOs under the SJSRY.
Under the USEP component of SJSRY, assistance is given to groups of urban poor women for
setting up gainful self-employment ventures under the sub-scheme called" The Scheme for
Development of Women and Children in the Urban Areas (DWCUA)". These can be linked to
micro-enterprises required for providing backward linkages for the industrial estate units and
other established MEs like artisanal activities, food-processing, packaging, vermicomposting,
organic farming, floriculture and so on.
Awareness creation on existing government sponsored programmes should be given to ULB

residents, especially in the slums and poorer areas, so that there is scope for maximum
inclusion of excluded groups in them. This should also cover the details of business processes
for approvals, licenses and permits, which need to be followed by individuals or groups in this
category while starting or running a ME or business.
Skill Development of CDS/TCG/ SHG-s and facilitation for enterprise development and the
MEs/ skills that they require to be trained in. This can be done after the Training Needs
Assessment is done prior to establishing the EDC.
Financial Support in the form of loans and subsidies are required by persons in the
unorganized sector. The Central Bank of India is the lead bank for Hajipur and as such, it is their
duty to see to it that all loan proposals from disadvantaged groups are given due priority and
consideration. It is suggested that the ULB monitors such cases on a regular basis through the
LED Unit to be established. Capacity building and change management workshops or courses
aimed at bringing about attitudinal and behavior change in the staff of financial institutions
should be an essential part of their training curriculum.
Recommendations & Interventions at a Macro Level
Introduction of high value crops In order to promote production of non traditional crops in
the region, agri business centres supported by agri clinics need to be opened which provide
farmers access to new seeds, farming methods of new crops etc. Training and capacity building
of agriculturists in the farming of these new crops should be promoted through KVKs and
ATMAs.
Improving the Agricultural Productivity: Power availability to agriculturists and local

entrepreneurs will have to be enhanced through the establishment of biomass and coal-based
Final Report
Page 13
plants. Improved and more scientific methods of farming and an appropriate level of
mechanization without harming labour interests are also required. Internet-based information
systems like e-chaupal should be established towards this end.
Greater Access to credit to famers and small entrepreneurs: There is urgent need to create
a complete ecosystem for credit on easy terms to marginal farmers and small and micro
entrepreneurs, which will assure them regular and timely working capital, while taking into
account the risks faced by them. The most vital element in this is changing the mind-sets of
bank personnel in the sanction of such loans.
Supporting infrastructure to improve business linkages and prevent produce loss: The
development and strengthening of region-specific supply chain infrastructure and linkage for
prevention of losses in the agricultural sector is essential for better business. The district has
very good potential for food-processing industries. However, storage and preservation systems
are inadequate. Hence, the strengthening of preservation infrastructure and food processing
units would meet the bi-pronged strategy of effective and economic use of local produce on the
one hand and create employment at the urban level on the other.
Alternative to Repealed APMC Act: - The Department of Agriculture, GoB needs to remedy the
exploitative situation that has arisen due to de-regulation of agricultural markets because of the
repeal of the APMC Act. The GoB will have to remedy this situation by giving due consideration
to the proposal of the Committee headed by Shri R.C.A. Jain to upgrade marketing of produce.
The establishment of a terminal market near Patna at Bihta is a step in this direction. A suitable
model of contract farming specific to crops can be adopted to solve the problems of small and
marginal farmers.
Food processing Sector: The Directorate of Food Processing has been formed in Bihar and has
also prepared a Vision Document for this sector. When the Food Processing Policy of Bihar is
formulated and implemented, there should be significant progress in this sector. At present,
there are two schemes under this Directorate - Scheme for integrated development of food
processing sector and Scheme for Food Parks, which have just started receiving some attention.
The Department of Industry and MSME will require to examine the synergies and linkages of
the Food Processing Sector with local business development so that the benefits accrue to the
urban poor also in an equitable manner. This can be especially explored with regard to storage
and maintaining the cold chain, clustering of food processing MEs around products specific to
the area i.e. establishment of the Multi-Product Food Park in the Hajipur-Vaishali Region.
Promotion of Household Industries with supporting infrastructure. Supporting

infrastructure (like warehousing, R&D facilities, Marketing & secondary processing facilities)
remain a deterrent to the growth of Household industries in sectors such as food processing
and craft-artisan activities. These units need to be supported by appropriate infrastructure to
bring growth in these sectors.
Institutional Mechanism for LED at State and ULB Level:

At the outset of the CBP Implementation in the City, it is of imperative importance to constitute a
Local Economic Development Task Force. This Task Force will function as a de facto Steering
Committee for guiding and approving the CBPs and as an effective institutional mechanism for
Final Report
Page 14
improving the business climate. This task Force will bring civil society, business persons and local
public authorities onto a single platform for effective networking and co-ordination of the CBP rollout. The indicative list of members on this Task Force will be as follows:
Commissioner/ Executive Officer, Municipal Corporation

Mayor & selected Members, Hajipur Municipal Corporation
City Manager, Municipal Corporation
General Manager, District Industries Centre
ED/ Rep from Bihar Industrial Area Development Authority
DAO, Department of Agriculture
Rep. from Department of Revenue
Rep. from Relevant Agro-Processing and/ or Industrial Research Centre i.e. ATMA
Manager, NABARD
Manager, SIDBI
President, Chamber of Commerce or any nother Industry Association of the City
Rep from MSME-DI
Manager, Lead Bank
Reps from any Key NGOs engaged in Micro-finance, Micro-enterprise, Street Vendors, Training,
Skill Development and Livelihood Programs
Any leading, prominent business persons in the town
Reps from Vendor, Labour, Trade, Market, Rickshaw Pullers Associations
However, this will be an interim institutional arrangement, until such time as the LED Units at State
and ULB Level are constituted. The Urban Development & Housing Department, Government of
Bihar has recommended the following Institutional Structure for development of local economies
at State and ULB Level:
Source: SPUR Report Developing Local Urban Economies
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Page 15
If for some reason, this recommendation is not feasible, the alternative suggested is to populate
strengthen the Urban Poverty Eradication Cell proposed under the SJSRY Scheme and have a
trained LED Consultant attached to this Cell, who will be able to facilitate the CBP along with the
concerned departments and agencies at ULB, District and State Level.
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Page 16
Table of Contents
DISCLAIMER .............................................................................................................................................................................. 2
Executive Summary ................................................................................................................................................................ 3
Table of Contents ................................................................................................................................................................... 17
List of Tables............................................................................................................................................................................ 22
List of Figures .......................................................................................................................................................................... 24
CHAPTER 1:- BACKGROUND & APPROACH TOWARDS LOCAL ECONOMIC DEVELOPMENT ............... 29
1.1.
Urbanization & Local Economic Development ...................................................................................... 29
1.1.1.
City Business Planning ........................................................................................................................... 29
1.1.2.
Support Programme for Urban Reforms (SPUR) ........................................................................ 30
1.1.3.
Scope of the Assignment ........................................................................................................................ 31
1.2.
Approaches Towards Local Economic Development .......................................................................... 32
1.3.
Principles Governing LED ............................................................................................................................... 32
1.4.
Outline Approach & Methodology ............................................................................................................... 33
1.5.
Tasks Involved..................................................................................................................................................... 36
CHAPTER 2:- THE CITY PROFILE ................................................................................................................................... 38

2.1
The State Framework ....................................................................................................................................... 38
2.2
The District Profile............................................................................................................................................. 40
2.3
The Economic Profile of Vaishali District ................................................................................................. 42
2.4
The Economic Profile of Hajipur Urban Area ......................................................................................... 48
2.5
Spatial Growth of the City ............................................................................................................................... 54
2.6
Institutional Framework ................................................................................................................................. 56
2.6.1
State Level.................................................................................................................................................... 56
2.6.2
Municipal Level ......................................................................................................................................... 56
2.6.2.1 Hajipur Municipal Corporation ............................................................................................................... 58

2.6.3
2.7
Organizational Setup at City level ...................................................................................................... 60
Future Prospects ................................................................................................................................................ 61
CHAPTER 3 - IDENTIFICATION OF CORE ECONOMIC SECTORS ....................................................................... 63

3.1
Sectoral Contribution in the Local Economy .......................................................................................... 63
3.2
Economic Base of Hajipur and its Hinterland......................................................................................... 64
3.2.1
Final Report
Primary Sector ................................................................................................................................................ 64
Page 17
3.2.2
Secondary Sector ........................................................................................................................................... 67
3.2.3
Tertiary Sector ................................................................................................................................................ 68
3.3
Employment Scenario in Hajipur ................................................................................................................ 69
3.4
Core Economic Sectors..................................................................................................................................... 70
3.4.1
Core Economic Activity 1 - Agriculture and Allied Sectors .......................................................... 70
3.4.2
Core Economic Activity 2 - Handicraft Clusters............................................................................... 74
3.4.3
Core Economic Activity 3 Alternative/ Renewable Energy ...................................................... 75
3.4.4
Core Economic Activity 4: Service-based Sectors (Tertiary Sector) ........................................ 75
3.5
SWOT Analysis .................................................................................................................................................... 76
3.6
Recommendations ............................................................................................................................................. 78
CHAPTER 4: BUSINESS COMPETITIVENESS ASSESSMENT OF THE CITY ..................................................... 81

4.1
Investment Competitiveness Analysis....................................................................................................... 81
4.1.1
Investment Attractiveness and Business Concerns ........................................................................ 82
4.1.2
Business Concerns of Private Sector Investments in General for Vaishali (Perception
Analysis)83
4.1.1
4.2
Potentiality Survey of Local Businesses in Hajipur ......................................................................... 85

Demand Assessment & Value Chain Analysis ......................................................................................... 87
Value Chain Analysis: ................................................................................................................................................. 87

4.2.1
Value Chain & Demand Analysis for Food Processing Sector ..................................................... 88
4.2.2
Value Chain & Demand Analysis for Dairy Sector ............................................................................ 89
4.2.3
Value Chain & Demand Analysis for Grain Milling Sector ............................................................ 92
4.2.4
Value Chain & Demand Analysis for Fish Processing Industry .................................................. 93
4.2.5
Value Chain & Demand Analysis for Biomass-based Energy Generation .............................. 95
4.3
Marketing Assessment ..................................................................................................................................... 97
4.4
Business Linkages and Clustering Assessment...................................................................................... 98
4.5
Recommendations .......................................................................................................................................... 103
4.5.1
Development of Food Processing Industry in Hajipur ................................................................ 103
4.5.1.2
Establishment of a Cluster-based Multi-product Food Park in Vaishali-Hajipur Region

.104
4.5.1.3
Tasks for Development of MPFP ......................................................................................................... 107
4.5.2
Promotion of Organic Farming, Floriculture, Nurseries & Poly/Green Houses ............... 109
4.5.3
Development of Bio-Seed Research and Production Centres .................................................. 113
4.5.4
Promotion of the Dairy Industry .......................................................................................................... 113
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4.5.5
Development of Fisheries Sector ......................................................................................................... 114
4.5.6
Development of Apiary Sector (Production of Litchi Honey) .................................................. 116
4.5.7
Promotion of Craft-Artisan Sector....................................................................................................... 117
4.5.7.1
Assessment of Potential of the craft in Vaishali ............................................................................. 117
4.5.7.2
Value Chain Analysis ................................................................................................................................. 118
4.5.7.3
Market Potential ......................................................................................................................................... 118
4.5.7.4
Recommendations for Development of Sikki Grass Weaving .................................................. 118
4.5.8
Development of the Tourism Sector in Vaishali-Hajipur Region............................................ 120
4.5.8.1
Significance as a Tourist Destination ................................................................................................. 120
4.5.8.2
Potential of Tourism Development ..................................................................................................... 121
4.5.8.3
Opportunity in Hajipur............................................................................................................................. 123
4.5.8.4
Present tourism infrastructure............................................................................................................. 123
4.5.8.5
Constraints in the Development of the Tourism Sector ............................................................. 124
4.5.8.6
Recommendations for Development of Hajipur into a Tourist Destination ...................... 124
4.5.9
Development of Biomass Energy Sector ........................................................................................... 125
4.5.10
Promotion of Health, Education & Skill Development through PPP ..................................... 128
4.5.11
Support to the Unorganized Sector..................................................................................................... 128
4.6
Role of SPUR in promotion of proposed City Business Plan ......................................................... 130
CHAPTER 5: SYNERGY THROUGH ALIGNMENT ................................................................................................... 132

5.1
Government Programmes ........................................................................................................................... 132
5.1.1
Swarnajayanti Sahari Rojgar Yojna (SJSRY) .................................................................................... 133
5.1.1.1
Aligning the proposed CBP with SJSRY ............................................................................................. 135
5.1.2
Prime Ministers Employment Generation Programme (PMEGP) ......................................... 137
5.1.3
Backward Region Grants Facility (BRGF)......................................................................................... 139
5.1.4
National Skill Development Corporation (NSDC) ......................................................................... 139
5.1.5
Schemes of Ministry of Food Processing Industries (GOI) ........................................................ 139
5.1.6
Schemes of Directorate of Food Processing, GoB .......................................................................... 140
5.1.7
Schemes of Ministry of MSME (GOI) ................................................................................................... 140
5.1.8
Schemes of Ministry of Textile (GOI).................................................................................................. 141
5.1.9
Schemes of Ministry of Agriculture (GOI) ........................................................................................ 141
5.1.10
Urban infrastructure Development Scheme for Small & Medium Towns (UIDSSMT) .. 143
5.1.11
Bihar Governments Scheme for Organic Farming ....................................................................... 143
5.2
Aligning CBP with Municipal Capital Investment Plan .................................................................... 144
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Page 19
CHAPTER 6: BUSINESS APPROVAL ASSESSMENT ............................................................................................... 147

6.1
Current Business Regulatory Environment ......................................................................................... 147
6.1.1
Formal Business .......................................................................................................................................... 147
6.1.2
Informal Business/ Entrepreneurs ..................................................................................................... 156
6.2
Taxes & other Costs Associated with Business Operations ........................................................... 157
6.2.1
Taxes ................................................................................................................................................................ 157
6.2.2
Registering property/land ..................................................................................................................... 159
6.2.3
Other costs..................................................................................................................................................... 160
6.3
Streamlining the Business Approval systems ..................................................................................... 161
Various Incentives taken up in Bihar................................................................................................................ 161

6.4
Recommendations .......................................................................................................................................... 162
CHAPTER 7: LEVERAGING ASSETS & PROMOTING PARTNERSHIPS........................................................... 164

7.1
Private Sector Participation ........................................................................................................................ 164
7.2
Potential sectors for PPP in Hajipur ........................................................................................................ 165
7.3
Optimum Utilization of vacant ULB lands ............................................................................................. 166
7.3.1
Management Contracts ............................................................................................................................ 168
7.3.2
Turnkey Contract........................................................................................................................................ 169
7.3.3
Affermage/Lease ........................................................................................................................................ 170
7.3.4
Concessions................................................................................................................................................... 171
Build-Operate-Transfer .......................................................................................................................................... 172

Annuity Model ............................................................................................................................................................ 173
7.3.5
Private Ownership of Assets .................................................................................................................. 173
7.4
Summary of Evaluation and Assessment of all Options Considered ......................................... 175
7.5
The WAY FORWARD ...................................................................................................................................... 176
CHAPTER 8: HUMAN RESOURCE DEVELOPMENT ............................................................................................... 177

8.1
Principles of Capacity & Skill Development for LED......................................................................... 177
8.1.1
Market and Demand-driven ................................................................................................................... 177
8.1.2
Commercial Viability................................................................................................................................. 177
8.1.3
Convergence & Multi-stakeholder Partnership ............................................................................. 177
8.1.4
Result and Outcome Focus ..................................................................................................................... 177
8.1.5
Pro-poor and Inclusive Focus ................................................................................................................ 178
8.1.6
Quality, Innovation & Modern Methods ............................................................................................ 178
8.2
LED Stakeholder Groups .............................................................................................................................. 178
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Page 20
8.3
Human Capital Development Interventions for LED in Bihar ...................................................... 179
8.4
Human Capital Development Interventions for LED in Hajipur .................................................. 182
8.5
Capacity Building / Skill Development for State/ ULB Level Functionaries and Elected
Representatives .............................................................................................................................................................. 188
8.6
PPP and Human Capital Development Interventions for LED in Hajipur ................................ 188
8.7
Entrepreneur Development Centre (EDC)............................................................................................ 189
8.7.1
Objectives of EDC........................................................................................................................................ 189
8.7.2
Other Tasks of the EDC............................................................................................................................. 190
8.7.3
Setting up the EDC...................................................................................................................................... 191
CHAPTER 9: STRUCTURING CITY/MUNICIPAL BUSINESS ACTION PLANS ............................................. 192

9.1
Structuring City Business Operational Plans ....................................................................................... 192
CHAPTER 10: CITY INDUSTRY AND BUSINESS CATALOGUE ......................................................................... 199

10.1
Details for Relevant Government Departments/Public Sector Banks ...................................... 199
10.2
Details for Business Enterprises/association/Organizations/Federation ............................. 201
CHAPTER 11: CBP IMPLEMENTATION PROCESS ................................................................................................ 204

11.1
Institutional Framework for Implementation..................................................................................... 204
11.1.1
11.2
LED Department and LED Local Units:.............................................................................................. 205

The Way Forward ........................................................................................................................................... 206
ANNEXURE:........................................................................................................................................................................... 208
Annexure 1: List of Stakeholders ............................................................................................................................ 208
Annexure 2: Stakeholder Workshop Analysis and Suggestions ............................................................. 210
Annexure 3: Investments as per SIPB ................................................................................................................... 213
Annexure 5: Comments on Draft CBP Arrah and the changes made ........................................................ 222
Final Report
Page 21
List of Tables
Table 1 : Scores Adopted for Potentiality Index ....................................................................................................... 35
Table 2: Administrative Profile of Vaishali District ........................................................................................ 41
Table 3: Vaishali District Indicators (Source: Distt Dev Plan & Census 2001)............................................. 41
Table 4: GDDP & NDDP at 1999-2000 Prices............................................................................................................. 42
Table 5: Workforce Participation Rate in Vaishali (in percentages) ..................................................... 43
Table 6: Economic Establishments in Vaishali District.......................................................................................... 43
Table 7: Area and Production of Major Crops (2007-08 & 2008-09 Last estim.) ....................................... 44
Table 8: Productivity of Major Crops (2007-08 & 2008-09 Last estim.) Yield (kg/ha) ........................... 44
Table 9: Livestock Wealth in Bihar (2003) (Figures in '000) ..................................................................... 45
Table 10: Production of fish and fish seeds for the year 2009-10 ........................................................... 45
Table 11: Status of growth of Industrial Units .................................................................................................... 45
Table 12: Status of units in Hajipur Industrial Estate ............................................................................................ 46
Table 13: Types of Industries present in Hajipur Industrial Estate ................................................................. 46
Table 14: Agro-based Enterprises in Vaishali District (Source: DIC Data) .................................................... 46
Table 15: Sector-wise investments approved for Vaishali-Hajipur region by SIPB .................................. 53
Table 16: Existing Land Use Distribution of Hajipur .............................................................................................. 54
Table 17: Summary of Finances of Hajipur Municipal Corporation ................................................................. 60
Table 18 : Growth of Economic Activities in District Vaishali ............................................................................ 63
Table 19 : Growth of Primary Sector in District Vaishali ...................................................................................... 64
Table 20 : Production volumes of Major commodities of Primary Sector in District Vaishali .............. 65
Table 21 : Productivity of Major Crops in Bihar in w.r.t India ................................................................... 66
Table 22 : Growth of Secondary Sector in District Vaishali ................................................................................. 67
Table 23 : Growth of Tertiary Sector in District Vaishali ...................................................................................... 68
Table 24: Category-wise Classification of Workforce in Hajipur ....................................................................... 70
Table 25 : Ranking of various Cities in terms of Business Climate, 2008 ...................................................... 82
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Page 22
Table 26 : Private Sector Industry Investment Concerns in Vaishali, 2000-2011 ..................................... 83

Table 27 : Matrix showing Potentiality of various Businesses in Vaishali-Hajipur Region .................... 85
Table 28: Factor Availability for Potential Businesses in Vaishali .................................................................... 86
Table 29 : Market for Food based Industries in Bihar (in Rs crores) .............................................................. 87
Table 30 : List of Major Water Bodies in Hajipur ..................................................................................................... 94
Table 30 : Major Markets of Vaishali-Hajipur Region and Production Potential of major commodities
in hinterland ............................................................................................................................................................................ 98
Table 31 : Matrix Showing Scale of Business operation of Typical Industrial unit in Vaishali-Hajipur
region and major business linkages with Major Production Center ............................................................. 101
Table 32 : Crop Seasonality in Bihar ..................................................................................................................... 105
Table 34: Basic facilities proposed for the park ............................................................................................. 107
Table 35 : Tentative Project Cost for Food Park .................................................................................................... 107
Table 35: Area and Production of Cut Flowers in Vaishali and Bihar in 2008-09 (in tonnes) ........... 110
Table 36: Average market price for major flower crops .................................................................................... 110
Table 38: Hotels in Hajipur............................................................................................................................................. 123
Table 39 : Power Potential based on 50% Rice Husk Availability ................................................................. 126
Table 40 : Capital subsidy provided to biomass power/cogeneration units.................................. 127
Table 41 : Fiscal Incentives for Biomass Power Generation.................................................................... 127
Table 42 : SJSRY Programme objectives and programmes alignment with CBP of Hajipur ............... 135
Table 43 : Progress Report of PMEGP 2010-11, upto October, 2010 ........................................................... 138
Table 44: Major Steps in setting up a business set up ......................................................................................... 147
Table 45: Steps to Incorporate and register a new firm..................................................................................... 152
Table 46: Steps for Obtaining Construction Permits ........................................................................................... 153
Table 47: Approvals/ certification for Agro based industries ......................................................................... 155
Table 48: Vending Activity in Hajipur City............................................................................................................... 157
Table 49 : Comparative Assessment of Tax Liability ........................................................................................... 157
Table 50: Tax Liability for Business in Bihar .......................................................................................................... 157
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Page 23
Table 51: Major Steps in Registering Property and Land .................................................................................. 159
Table 52: Other Costs associated with Business Operations in Vaishali-Hajipur region ..................... 160
Table 53: Classification of PPP options ............................................................................................................... 175
Table 54: LED Principles and their implications for the HCD activities under the CBP ........................ 179
Table 55: Training / Capacity Building/ Skill Development in different sectors and job competencies
.................................................................................................................................................................................................... 182
Table 56: Operational Plan for Implementation of City/Municipal Business Plan ................................. 192
Table 49: Details for Relevant Government Departments/Public Sector Banks ..................................... 199
Table 50: Details for Business Enterprises/association/Organizations/Federation............................. 201
List of Figures
Figure 1 : Methodology adopted for City Business Planning Process.............................................................. 34
Figure 2: City Business Planning Process Key Stakeholders Interviews ................................................... 37
Figure 3: Types of Agro-based Enterprises in Vaishali District (Source: DIC Data) .................................. 47
Figure 4: Types of Enterprises in Vaishali-Hajipur region ................................................................................... 49
Figure 5: Growth Directions Hajipur .................................................................................................................... 57
Figure 6: Governance Structure - HMC.................................................................................................................... 61
Figure 7 : Growth of Economic Activities in Vaishali District (2001-05) ....................................................... 63
Figure 8 : Growth of Primary Sector in District Vaishali ...................................................................................... 65
Figure 9: Growth of Secondary Sector in District Vaishali ................................................................................... 67
Figure 10: Growth of Tertiary Sector in District Vaishali ..................................................................................... 69
Figure 11: Honey-Producing Districts of Bihar ......................................................................................................... 72
Figure 12: Business Linkage for Agriculture & Allied Sectors ............................................................................ 74
Figure 13: Proposed Investments approved by SIPB in Hajipur, Vaishali ..................................................... 81
Figure 14: Supply Chain for F&V and Agro based Marketing .............................................................................. 88
Figure 15: Value Chain for Fruit & Vegetable and Other Agro based Processing ....................................... 88
Figure 16: Value Chain for Dairy Processing.............................................................................................................. 89
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Page 24
Figure 17: Primary Processing of milk ......................................................................................................................... 90

Figure 18: Secondary Processing of milk..................................................................................................................... 90
Figure 19: Value chain for Grain milling based products ..................................................................................... 93
Figure 20: Value Chain for Fish Processing ............................................................................................................... 94
Figure 21: Growth of installed power capacity in Bihar vs Rest of India ....................................................... 95
Figure 22: Value Chain for Renewable Energy .......................................................................................................... 96
Figure 23: Conversion Technologies for Biomass-based power plant ............................................................ 97
Figure 24: Vegetable Producing Regions in Bihar ................................................................................................... 99
Figure 25: Fruit- Producing Regions in Bihar ........................................................................................................... 99
Figure 26: Stakeholders in Multi-Product Food Park ................................................................................. 106
Figure 27: Regional Context for Hajipur Business Region ................................................................................ 112
Figure 28: Establishment of Market Linkages ........................................................................................................ 119
Figure 29: Tourist Destinations in Bihar .................................................................................................................. 121
Figure 30: Tourist Traffic in Bihar............................................................................................................................... 122
Figure 31: Tourist Traffic in Vaishali.......................................................................................................................... 122
Figure 32: Relevant Central & State Government Schemes for CBP.............................................................. 132
Figure 33: Mechanism for Single window clearance of Business Proposals ............................................. 161
Figure 34: PPP options relevant for Development Projects in India ............................................................ 167
Figure 35: Typical Structure of a Management Contract ................................................................................... 168
Figure 36: Typical Structure of a Turnkey contract ............................................................................................. 169
Figure 37: Typical structure of Affermage/Lease contract ............................................................................... 170
Figure 38: Typical structure of Concession Contract .......................................................................................... 172
Figure 39: Typical structure of Private Ownership of Assets .......................................................................... 174
Figure 40: LED stakeholders Groups for Capacity / Skill development ...................................................... 178
Figure 42: Broad Implementation Structure........................................................................................................... 205
Final Report
Page 25
List of Abbreviations
ACABC
ADB
AHVY
APMC
ATMA
BIADA
BREDA
BSRTC
BSTDC
BSFC
BUDA
CA
CB
CBD
CBP
CDP
CDS
CIFE
CIP
COMPFED
DDP
DGET
DIC
DIT
DoA
DoAHF
DoAHDF
DoFP
DoI
DPR
DUDA
EPIP
FP
FVPI
GDDP
GIS
GoB
GoI
HMC
IEC
IGA
ITDC
Final Report
Agri Clinics & Agri Business Centres

Asian Development Bank
(Baba Saheb) Ambedkar Hastshilp Vikas Yojana
Agricultural Produce Market Committee
Agricultural Technology Management Agency
Bihar Industrial Area Development Authority
Bihar Renewable Energy Development Agency
Bihar State Road Transport Corporation
Bihar State Tourism Development Corporation
Bihar State Financial Corporation
Bihar Urban Development Agency
Constitutional Amendment
Capacity Building
City Business District
City Business Plan
City Development Plan
Community Development Society
Central Institute of Fisheries Ecucation
City Investment Plan
Bihar State Milk Co-operative Federation Limited
District Development Plan
Directorate General of Employment & Training
District Industries Centre
Department of Information Technology
Department of Agriculture
Department of Animal Husbandry & Fisheries
Department of Animal Husbandry, Dairying & Fisheries
Directorate of Food Processing
Department of Industries
Detailed Project Report
District Urban Development Authority
Export Promotion Industrial Park
Food Processing
Fruit and Vegetable Processing Industries
Gross District Domestic Product
Geographical Information System
Government of Bihar
Government of India
Hajipur Municipal Corporation
Information Education Communication
Income Generating Activity
Indian Tourist Development Corporation
Page 26
KVIC
KVK
LAN
LED
LED TF
LQ
ME
MoA
MoFPI
MoMSME
MNRE
MoLE
MPFP
MT
NABARD
NDDP
NGO
NHC
NHG
NHM
NRI
NRLM
NRW
NSDC
O&M
PHED
PMEGP
PPP
PWD
RAU
RKVY
SD
SIPB
SME
SPUR
SPV
SSDM
STEP-UP
SWM
SWOT
SJSRY
T&Cs
TERI
Final Report
Khadi and Village Industries Commission

Krishi Vigyan Kendra
Local Area Network
Local Economic Development
Local Economic Development Task Force
Location Quotient
Micro-enterprise
Ministry of Agriculture
Ministry of Food Processing Industries
Ministry of Micro, Small and Medium Enterprises
Ministry of New and Renewable Energy
Ministry of Labour and Employment
Multi-Product Food Park
Million Tonnes
National Bank for Agriculture and Rural Development
Net District Domestic Product
Non-Governmental Organization
Neighbourhood Community
Neighbourhood Group
National Horticulture Mission
Non-Resident Indian
National Rural Livelihoods Mission
Non-Revenue Water
National Skill Development Corporation
Operation and Maintenance
Public Health & Engineering Department
Prime Minister Employment Generation Programme
Public Private Partnership
Public Works Department
Rajendra Agricultural University
Rashtriya Kisaan Vikas Yojana
Skill Development
State Investment Promotion Board
Small & Medium Enterprise
Support Program for Urban Reforms
Special Purpose Vehicle
State Skill Development Mission
Skill Training for Employment Promotion amongst Urban Poor
Solid Waste Management
Strength, Weakness, Opportunities and Threat
Swarnajayanti Shahari Rojgar Yojna
Thrift & Credit Societies
The Energy & Resources Institute
Page 27
UCDN
UDHD
UDPFI
ULB
USEP
UWEP
WAN
WBM
Final Report
Urban Community Development Network

Urban Development and Housing Department
Urban Development Plan Formulation and Implementation
Urban Local Bodies
Urban Self-Employment Programme
Urban Wage Employment Programme
Wide Area Network
Water Bound Macadam
Page 28
CHAPTER 1:- BACKGROUND & APPROACH TOWARDS LOCAL ECONOMIC

DEVELOPMENT
1.1.Urbanization & Local Economic Development
Urbanization is both a driver and a consequence of economic growth. Expansion of economic
activities and industrialization lead to evolution of cities as growth centers. These urban centers
facilitate sustained economic growth in three major ways through the real sector, by raising the
productivity of output and employment, through the financial sector, by mobilizing and channeling
savings and allowing accumulation of wealth in the form of urban real estate, and through fiscal
flows, providing major share of governments tax revenue (World Bank, 2000). The development of
an urban area is also closely linked with the rural economy through exchanges of goods, services,
labor, capital, information - technology and social transactions. If properly managed, the process of
urban development provides the key to overall national and regional development.
The Urban Local Economic Development process would entail a comprehensive strategy that would
promote the core competence of urban areas through integrated and coordinated interventions
from government, private sector and local communities. The poor conditions of physical and
economic infrastructure in the State of Bihar and its urban areas have been cited an important
impediment for investments, besides the institutional and operational constraints emerging from
poor governance and lack of investment orientations of local bodies.
1.1.1.
City Business Planning
The vision to create prosperous urban communities by improving the private sector investment
attractiveness and economic growth of poor communities requires multipronged strategies. These
strategies are implemented through policy innovations and investment projects at various levels of
State Government and Local Government through sustainable partnerships with business
communities, non government organizations and local communities.
Due to the institutional limitations of urban local bodies to engage private sector investments to
cities, the main operational strategy to promote economic development of urban local economies is
to align the Bihar urban local economic development vision and strategies formulated under the
Support Program for Urban Reforms (SPUR) in Bihar with the national urban development
programs primarily for creating enabling environments for the private sector to invest in cities in
areas of their core economic sectors, leverage municipal lands for economic development, promote
pro poor businesses, enterprise development, and rehabilitate and promote informal sector growth.
An important aspect of improving the business climate of cities is to establish the comparative
advantages of the various urban centers and economic clusters through market analyses of
investment potentials and identification of value chains for establishing where public and private
sector interventions can unlock unexploited opportunities.
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The City (Municipal) Business Plan (CBP) is recommended as an operational tool to conceptualize
and guide the private sector and business community to identify the core economic
competitiveness of cities and facilitate a productive investment dialogue with local governments
and communities. The CBPs prepared on the basis of the comparative advantages of the cities
would provide the required baseline information and investment perspectives of the economic
development potentials and guide potential investors to direct their resources to realize maximum
economic returns. Business consultations and interface with various investor groups constitute an
important part of designing and structuring the City Business Plans as to attract businesses and
investments to cities. An important part of this business dialogue would be to identify the
procedural reforms needed at municipal and district levels to reduce the investment transaction
costs to prospective private investors.
The urban economic vision and local economic development strategies formulated for cities in
Bihar are aimed to identify and promote competitive core economic sectors based on detailed
competitiveness analyses and market assessments. The SWOT analysis conducted for the 28 project
towns identify core economic sectors in which these cities have comparative advantages. The LED
strategies formulated for project cities would be implemented through the CBPs being prepared for
them.
The City Business Plan is a medium and long term road map to guide the growth of core business
and economic sectors in the city towards achieving the economic vision of cities and to
enable/facilitate private sector investments in competitive and potential business opportunities.
The CBP also examines the supply and value chain linkages in the existing economic activities and
discusses the necessary market interventions required to enhance the profitability quotients of city
businesses.
Besides, the CBP helps in the assessment of the institutional and economic issues involved in
creating enabling business climate as well as financial and market viabilities of new investment
opportunities. It also helps to identify the future economic growth trajectory of cities, and ways by
which cities could leverage local resources such as developable lands and human resources of cities
and their regions for sustained development of local economies.
1.1.2.
Support Programme for Urban Reforms (SPUR)
The Support Program for Urban Reforms in Bihar (SPUR) is based on the premise that effective
urban centers play a significant role in economic growth and poverty reduction by providing the
nuclei for greater economic activity and services that can contribute to propoor development.
SPURs goal is economic growth and poverty reduction significantly accelerated in Bihar by 2014.
Its purpose is identified ULBs ability to provide urban services and attract private investment
significantly enhanced.
SPUR covers 28 urban centres in which it aims to directly improve the quality of services received
by 6.36 million urban citizens, of whom 2.83 million are poor. SPUR will also benefit large numbers
of people from nearby rural areas who depend on these cities. SPUR will promote state level
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institutions and improve financial and managerial capacities, as well as accountability, of Urban
Local Bodies (ULBs).
Interventions under SPUR are designed across five mutually reinforcing outputs:
1. Effective policies and stronger institutions to promote and manage urban development in
place;
2. State and ULBs mobilize significantly increased resources for urban development and
manage them more effectively;
3. Identified ULBs plan, implement and manage urban infrastructure and services more
effectively;
4. Increased municipal capacity to attract private investment in urban areas;
5. Empowered poor communities and socially excluded groups access increased urban
resources and livelihood opportunities.
For administration and management purposes, the SPUR program proposes to prepare CBP for the
project towns in phases.
1.1.3.
Scope of the Assignment
The purpose of this consultancy assignment is to prepare City Business Plans (CBP) for the five
towns of Bihar (namely Arrah, Biharsharif, Chapra, Hajipur and Siwan) within the framework of
the Bihar Economic Development Planning and Urban Development Strategic Frameworks and
Guidelines.
The City Business Plan would be a medium and long term road map to guide the growth of core
business and economic sectors in the city towards achieving the economic vision of cities and to
enable/facilitate private sector investments in competitive and potential business opportunities.
The CBP would also examine the supply and value chain linkages in the existing industries/ local
economic enterprises and strategize necessary market interventions required to enhance
profitability of city businesses.
An important outcome of the City Business Plan would be to identify viable physical and economic
action plans and structure them for implementation within the functional responsibilities of urban
local bodies. Broadly, the CBPs would entail the following sections:
Overview of the city economy
Core economic sectors of the city and its region
Investment climate and business competitiveness analysis
Business Linkages of Existing SME and Micro Enterprise Sectors
Aligning CBPs with Ongoing State and Central Programs
Aligning CBPs with City Development and City Investment Plans
Municipal Approval Systems: Recommendations for Streamlining/ Single Window Clearance
Municipal Land Auditing and Action Plans for Leveraging for Private Investments
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Page 31
Identification of Market Need Based Skill and Entrepreneur Training Programs
Identify potential PPP investment opportunities
Identify viable pilot street vendor zone development action plans based on the Bihar Vendor
Survey Report prepared by the Project,
Organizational framework of Micro Business/ Entrepreneur Development Centers
City Business Catalogue
Besides identifying and structuring implementable action plans, the CBP would also identify
institutional and administrative policy and procedural reforms required to exploit the development
potentials of the urban local body and its region.
After completing the CBP exercise, Workshops will be conducted in each of the identified ULBs and
the comments and observations arising out of these workshops will be incorporated while
finalizing the CBP.
1.2. Approaches Towards Local Economic Development

Local Economic Development (LED) is an outcome based local initiative, driven by local
stakeholders. It involves identifying the local resources, local skill sets and seeks to generate ideas
so as to initiate and identify activities involving full utilization of the available skills so as to
stimulate economic growth and development. The process of LED aims to create employment
opportunities, improve the living standard of the residents, especially the poor, and redistribute
resources and opportunities to the benefit of all local residents.
LED is area-specific and dynamic in nature. It therefore involves a series of activities and
interventions tailored according to the local problems and prospects rather than any single onetime generic intervention catering to a particular section of the population. Moreover, the process
of LED at the Municipal level needs to complement wider State and National level policies and
initiatives so as to be comprehensive and sustainable.
1.3.Principles Governing LED

Economic development and specially LED is guided by the principle of spread effect. Thus the
present study is governed by spreading of local focus to the regional focus and converging the two
where other aspects come into play.
Local focus: The strategy would look for interventions and investments that encourages local
enterprise, Serves the needs of local residents, workers, and businesses, promotes stable
employment and revenues by building on local competitive advantages within the district frame
Cluster approach: This approach would be to bring enterprises of the same nature under the
same ambit to ensure economies of scale and access higher order markets and also to develop
specialized industry clusters drawing on local advantages to serve domestic and international
markets.
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Regional Integration: Industries and enterprises have to be identified which have regional
linkages with the State and Nation. It should be aligned with the State policies and investment
direction to boost up the State achievements on one hand and also create a positive linkage for
growth.
Promoting partnerships: Since industries, transportation, land uses, natural resources, and
other key elements of a healthy economy are regional in scope, the private sector should
therefore, need to be motivated for creating regional structures.
Poverty Reduction through Empowerment: Local economic development efforts should be
targeted at reducing poverty by integrating local economic development with government
schemes earmarked for poverty alleviation.
Human Investment: Human resources are the building blocks of local communities and
therefore efforts should be made to provide life-long skills and learning opportunities by
investing in excellent schools, post-secondary institutions, and opportunities for continuous
education and training available to all.
1.4.Outline Approach & Methodology

The approach for this assignment would be to formulate a practical and implementable City
Business Plan (CBP), which should be used as a guideline for the ULBs to understand the ways and
means to enhance the business climate of their respective cities through appropriate management
of resources within a well defined institutional framework. The proposed approach is shown in
Fig. 1 below.
The Local Economic development initiative as described in the City Business Plan is the outcome of
primary and secondary level survey of the enterprises as well as stakeholders at all levels.
Enterprise survey was conducted and Information was collected by applying quantitative and
qualitative methods. Interviews and focus group discussions were held with different stakeholders
on the type of enterprise activity, input situation and customers, and employment patterns to gain
insight into the spatial economic linkages as well as potentials and constraints.
The stakeholders for interactive sessions included list provided in Annexure - I
The functionaries at the ULB-s,
District Industries Centre,
Agriculture Department,
Lead Bank,
Chambers of Commerce
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Figure 1 : Methodology adopted for City Business Planning Process
Semi-structured interviews were conducted with key informants in the government sectors for
adding further insight into issues such as credit, taxation, regulations, services, infrastructure and
opportunities. Structured interviews were conducted with enterprise owners and managers
particularly to understand industry specific issues related to inputs and raw material, market,
technology, competitiveness, and about the factors which have enabled and constrained business
development, as well as their business support service needs. Enterprises were randomly selected,
but there was an explicit attempt to cover all the major sector activities found in the study
locations.
The data collection was followed by a potentiality analysis of the surveyed industries. The industry
potentiality analysis is based on an approach of Model based analysis. This model identified seven
factors- availability or existence of which makes a sector potential. These were:
Factor Conditions (F), which can be grouped into human resources, material resources,
knowledge resources, credit availability, capital resources, and infrastructure
Demand Conditions (D), which describes the state of market & demand for products and
services
Related and supporting Industries (R) which signifies competitiveness of supplying

industries in terms of multiple suppliers
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Firm Rivalry which indicates the extent of competition.(S)
Employment generating potential of an industry (E) ,
Women employment generating potential (W)
Supportive government policy & procedures (G),
Each factor in each industry associates a score based on the following considerations. The scoring
has been done through stakeholder discussions.
The total score for potentiality (coined as the Potentiality Index) is calculated through a cumulative
average of the seven factors, weights (F, D, R, S, E, W, G respectively) being decided through an
objective approach consistent with the objective of the study and the vision of the Municipality.
Table 1 : Scores Adopted for Potentiality Index
Score
Factor Availability
Demand condition
Competitiveness of
raw material supply
All
Factors
Available
within
the
Region
Very good
2
Some available
within
the
region
Good
Multiple
source
Competition
Single or two
sources
Competition
exists
(Competition
leads
to
improvement)
Women
employment
generating
potential
Government
Policy
Highly
Women
oriented
Majority
obtained from
outside
the
region
Moderate
or
fluctuating
No Competition
Moderately
women
oriented
No scope for
women
employment
Favourable
Nothing
particular
in
POTENTIALITY INDEX (P) = F + D + R + S + E + W+ G

The surveyed industries have been mapped to this model to determine the potentiality. Please see
Table 22 in Section 4.1.3 of Chapter 4 for the Potentiality Analysis of businesses in Hajipur.
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1.5.Tasks Involved
The aim of the assignment is to prepare consensus-based city business plan indicating strategies
and mechanisms to meet the development requirements. The business plan would be formed as
shared vision for the city involving various stakeholders with a long-term development perspective.
The assignment is split into a number of following defined tasks:
1. Mobilization & Project Conceptualization

2. Framing the Inception Report
3. Analytical Framework for Preparing CBP
4. Assessment of Business Competitiveness
5. Aligning CBPs with State / Central Schemes
6. Developing Business Capacities
7. Operational Plan & Implementation Framework
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Figure 2: City Business Planning Process Key Stakeholders Interviews
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Page 37
CHAPTER 2:- THE CITY PROFILE

2.1 The State Framework
Hajipur is the administrative headquarters
of Vaishali district since its separation from
Muzaffarpur on 12-10-1972 and is
governed by a Municipal Corporation in
the state of Bihar. It is imperative to
understand the regional setting before
going into the CB planning of the City.
Hajipur has a population of 147,126 as per
the 2011 census. It is situated 10 kms from
Patna, the capital city of Bihar and is spread
over an area of 19.64 sq. km. It is bound by
the Narayani Gandak river in the west and
holy Ganga in the south.
SIWAN
CHHAPRA
ARRAH
HAJIPUR
BIHARSHARIFF
Bihar can be divided into North and South divisions for the purpose of economic analysis. This
division is naturally supported by the River Ganga, which draws a fine line between the two
divisions. North Bihar is largely agrarian, with most of the cities supporting primary activities.
South Bihar is comparatively better developed with sizeable employment in trade and commerce
and services. The analysis for North Bihar shows that in Class I cities, primary activities such as
agriculture, mining, quarrying etc. are main resource absorbers, with cities such as Hajipur, still
having primary activities as their basic sector.1 South Bihar also has a strong presence of primary
activities in almost all the cities and towns. However, the situation is slightly better here for other
sectors as compared to North Bihar. However, Class I cities in South Bihar indulge largely in
Primary activities.
However, across all the districts, the industrial sector is quite underdeveloped in Bihar. The
industrial sector in Bihar as a whole, remains in a poor state, with its growth rate much below the
national average. The size of the industrial sector in Bihar in terms of income is hardly 3.2% of net
domestic product of the State, whereas, the national average works out to 20.1%. Small industries,
dominated by tiny enterprises and artisan based industries, play a significant role in the industrial
sector of the state. Generally, their contribution to employment generation is substantial, even
when the levels of productivity and total production remain low in this sector. The share of tiny
Urban Development Strategy for Bihar: A Management Perspective by Prem Pangotra and Astha Govil W.P. No. 2008-04-02
April 2008
Final Report
Page 38
industrial units among all the SSI units (both registered and unregistered) is as high as 99.9
percent2.
Agro-based industries occupy a prominent place in the industrial scenario of present Bihar as they
account for nearly half of the net value added. Food, tobacco, leather and non metallic products
occupy prominent constituents of the industrial base in Bihar, though the group of industries,
comprising of cotton, jute, wool, paper, rubber, plastic and chemicals, also have their presence in
smaller ways. During the last two decades, agro-based industries viz; tea, dairy sector through
cooperatives and makhana industries have shown an increasing trend. Yet, these still account for a
small proportion of the State's Domestic Product.
The growth rate of both the credit and deposits in Bihar is lower than the national average.
Investment is a must for productive economic activities and the low institutional credit rates
indicate that credit needs are even now met by private moneylenders at higher rates of interest,
which adversely affect the profitability of enterprises. Naturally, this brings a serious bottleneck in
the industrial development of the State.
The overall position of physical infrastructure in the state is far from satisfactory and the general
level of development is low because of inadequate power. However, over the years the road
infrastructure has experienced a positive change and massive construction of roads are in the
process, which will take some time to show its impact on the process of economic development.
Absence of rural extension programme both in agriculture and industry and low nexus of these two
sectors to establish backward linkages for modern agro and food processing industry, are some
critical issues that need to be addressed on a priority basis.
Chamber of Commerce and Industry Associations in the state are yet to play their active role to
influence the policies and provide the proper linkages to the market outlets. However, the
industrial area authority and the huge number of sick industries in the state project a serious
concern due to pathetic role of private players in the state economy.
All said and done, the buoyancy in the agriculture sector provides ample opportunities towards
setting the pace for industrialization. Hence, it is only through this mode Bihar could bring in
economic development and resolve the issues of unemployment and poverty.
Towns are an integral part of the local economic landscape. A significant and increasing proportion
of the rural population lives in these locations, which also host a very large share of local non-farm
activity. The employment opportunities available in such locations and the standard of living of its
population are therefore important dimensions of local economic development. In addition, much
economic activity in small and medium-sized towns is closely interrelated to the surrounding
village economy through consumption, production, employment and financial linkages and various
Roadmap for Rural industrialization in Bihar, A report of the Special Task force in Bihar,Govt of India , New Delhi, 2008
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types of economic and social service provision. Hence, whilst an expansion of the small town
economy is intimately dependent on development dynamics at the rural level, the reverse is also
true. In other words, the nature and extent of economic linkages between towns and their
hinterland, and between the former and the wider economy, constitute key factors shaping local
development dynamics and potential. Hence, policies and interventions aimed at developing
the local economy must account for existing patterns of interaction between the village and
town economies, and seek to reinforce synergistic links and mitigate adverse impacts
arising from resource flows and exchanges between both types of locations. Clearly, a
neglect of the urban aspects of the local economy undermines its development potential.
The marketing function of rural towns is particularly noteworthy. These locations not only serve as
consumption outlets and local distribution points for farm and non- farm village production, but
(perhaps more importantly) also act as intermediary centres linking their hinterland to the wider
economy through the supply of imported inputs and consumption goods and the export of village
surplus production. Often, access to wider markets requires value addition at town level, for
example through grading, packaging, and processing activities. The major thrust of
industrialization should be to provide farm products and market linkages, based on product
cluster formation.
Urbanization associated other critical developmental functions of small and medium towns include
the provision of financial, information, employment, health, education, and training services to rural
dwellers.
The LED of towns needs to be assessed and designed within this state context.
2.2 The District Profile

District towns are an integral part of the local
economic landscape as well as the broader regional
backdrop. A significant and increasing proportion of
the rural population live in these locations, which also
host a very large share of local non-farm activity. On
the other hand a large section of the economy and
populace are linked to the regional economy through
informal and formal linkages. Hence, regional or
district analyses are of key relevance when drawing
out the LED Plan for any city.
Vaishali
One of the thirty eight districts of Bihar, Vaishali

district, is a part of Tirhut Division. Muzaffarpur is the
administrative headquarters of the Tirhut Division and
Hajipur is the Headquarter of the Vaishali District. The
district is bound by the district Muzaffarpur in the
north, district Samastipur in the east and by river
Ganga in south and river Gandak in west.
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Table 2: Administrative Profile of Vaishali District
Particulars
Number of Sub-Division
Number of Blocks
Number of Municipalities
Number of Gram Panchayats
Number of Police Stations
Number of Inhabited Villages
Number
3
16
1
290
22
1414
(Source: Distt. Dev Plan, Vaishali 2011-12)
The total population of Vaishali district is 34,95,249 which pegs it as the 10th most populous district
in the state, with a decadal growth rate of 28.58% which is more than the state average (25.07%). It
has an area of 2,036 sq. km., the population density is 1,717 persons per square km., and this
district accounts for 3.37% of the states population. The rural population amounts to 93.35% of the
total population of the district. The sex ratio is 892, which is lower than the state sex ratio (916),
and has further decreased from the 2001 ratio of 920. This is not a favourable human development
indicator.
The literacy rate of Vaishali is 68.56% (17.07% higher than 2001) which is the 12th highest in the
state. The female literacy rate stands at 59.10% (22.52% higher than 2001) and the male literacy
rate is 77% (13.77% higher than 2001). It may be seen that the increase in the female literacy rate
is much higher than the increase in the male literacy rate. This could be attributed to the
Mukhyamantri Balika Cycle Yojana launched in 2007 which entitles girls in class IX and X to a free
cycle from the state or Rs. 2,000 to buy one and also Mukhyamantri Balika Poshak Yojana (MBPY)
which entitles female students from Class VI to VIII to Rs.700 every year for purchasing two pairs
of uniforms.
Table 3: Vaishali District Indicators (Source: Distt Dev Plan & Census 2001)
Indicator
Percentage of cultivable land to total geographical area 2006-07
Percentage of net area sown to geographical area 2006-07
Percentage of gross irrigated area to gross area sown 2006-07
Percentage of net irrigated area to net area sown 2006 07
Consumption of fertilizer in kg/hectare of gross area sown 2006-07
Average yield of food grains 2006-07 (kg/ha)
Length of highways and major district roads per lakh population (km)
31st march 2005
Length of highways and major district roads per thousand sq km in
area (km) 31st march 2005
Length of rural roads per lakh population (km) 2004-05
Length of rural roads per thousand sq km in area (km) 2004 05
Number of branches of scheduled commercial banks 2008 09
Credit deposit ratio 2008
Density of livestock per sq km 2003
Final Report
Number/ Amt./Qty.
64.69
63.09
47.14
56.66
0.38
1636
186.81
13.99
42.74
430.23
128
28.45
160
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Indicator
Density of poultry per sq km 2003
District wise fish production 2007 08 (MT)
Share of districts in total milk production 2007 08
Total workers (number)
Main workers (number)
Marginal workers (number)
Non workers (number)
Total workers to total population (%)
Cultivators to total workers (%)
Agriculture laborers to total workers (%)
Workers in HH industries to total workers (%)
Main workers to total population (%)
Marginal workers to total population (%)
Non workers to total population (%)
Percentage of villages having safe drinking water facilities (%)
Percentage of electrified villages (%)
Percentage of villages having a primary school (%)
Percentage of villages having a middle school (%)
Percentage of villages having a secondary /sr. secondary school (%)
Percentage of villages having any health care facilities (%)
Number/ Amt./Qty.
202
10800
1.86
782717
624452
158165
1935704
28.80
26.87
29.71
3.02
22.98
5.82
71.20
81
38
67.4
27.5
5.72
69.4
In 2001, the Workforce Participation Rate in Vaishali was 28.8% (Bihar: 32.9%). Only 45.3% of the
male population and a mere 10.9% of the female population work in Vaishali district. The fact that
71.2% of the population is non-working shows that there are a lot of untapped potential workers
who could be skilled and made employable, especially in the sectors which have potential to grow
in Vaishali.
The power scenario is of considerable concern and it is with the improvement of this indicator in
mind that the GoB is laying so much stress on alternative sources of power. Hence the CBP also
gives considerable emphasis to the development of this sector.
2.3 The Economic Profile of Vaishali District

The economy of Vaishali district is mainly based on agricultural and trading activities. The soil of
Vaishali is extremely fertile which makes it ideal for agriculture. This district has the 2nd rank in the
state for vegetable, fruit and flower production. Production of banana, litchi, makhana, mango,
vegetables, and aromatic rice are also the key features of Vaishali.
Table 4: GDDP & NDDP at 1999-2000 Prices
Per Capita (Rs.)

District
GDDP
2005-06
Vaishali
Bihar
5982.0
7428.8
NDDP
2006-07
2005-06
2006-07
7333.0
8918.0
5366.6
6718.9
6671.9
8166.6
Source: Directorate of Statistics and Evaluation, GOB
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As per the latest available estimates for 2006-07 the GDDP at constant prices (1999-2000) is Rs
2181.3 crore yielding a per capita income of Rs. 7333 which ranks 14th in the state (Bihar Rs.
8918) and the NDDP at constant prices (1999-2000) is Rs 1984.7 crore yielding a per capita income
of Rs 6671.9
As per the census 2001, the work force participation rate of Vaishali district was 28.8% (29.2%Rural, 25.05% -urban). 56.58% of the total workers were engaged in cultivation and agricultural
labour, 23.2% in other activities (services) and only 3.02% in household industries. In rural
Vaishali, a major proportion of workforce was engaged in agriculture and allied activities (75.5%)
while in urban areas a major proportion of workforce was engaged in other activities (64.4%).
Manufacturing industries remained low in both rural and urban area at 3.9% and 6.2%
respectively, and this is despite the fact that there is an industrial estate in Hajipur. Due to the fact
that women form a significant part of the agricultural labour force, the female WPR is higher in the
rural areas as opposed to that in urban areas.
Table 5: Workforce Participation Rate in Vaishali (in percentages)
Place
Year
1981
1991
2001
1981
1991
2001
1981
1991
2001
City
District Urban
District
Total
26.1
23.9
25.0
25.9
24.0
25.0
26.2
25.5
28.8
Males
45.7
41.5
41.5
46.1
42.3
41.9
46.6
45.0
45.3
Females
3.1
3.5
6.0
3.4
3.3
6.0
5.8
4.4
10.9
According to the Economic Survey conducted in 2005, the number of economic establishments in
Vaishali district was 46,565, which is 3.8% of the state share. The comparison of the number of
economic establishments in the 5 districts involved in Patna Cluster II is shown in the table below:
Table 6: Economic Establishments in Vaishali District
S.
No.
Name
(ULB)
of
District
RURAL
1.
2.
3.
4.
5.
Chapra (Saran)
Nalanda (Biharsharif)
Vaishali (Hajipur)
Siwan (Siwan)
Bhojpur (Arrah)
38326
25907
38783
32659
18388
Total Number of Establishments

(Agricultural& Non-Agricultural)
URBAN
TOTAL
PERCENTAGE
(State share)
11355
49681
4.06
19058
46965
3.67
7782
46565
3.80
9420
42079
3.43
11284
29672
2.42
Source: Economic Survey, Bihar 2005
Vaishali district has the 8th highest amount of saving deposits in the state in 2011, which is Rs. 77 cr.
However, this has not translated into a good CD ratio which stands only at 28.45. This is a clear
indication of the banks reluctance to lend to local entrepreneurs and agriculturists.
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Agriculture and Allied Activities

Agro Climatically Vaishali falls in the north-west zone which
receives an annual rainfall of 1040-1450 mm. As per the
land utilization pattern of 2007-08, the total geographical
area of the district is 201450 hectare 95.3% of the total
geographical area of the district is under gross sown area
and 62.1 % of the total geographical area of the district is
under net sown area.
Vaishali contributes 6.3 % of the

total production of vegetables in
the state
It is the 5th largest producer of
mango in the district and 2nd
largest producer of Litchi and
Banana.
Some of the major crops in Vaishali district are wheat, rice and maize. All three major crops have
shown a steady increase in production. Though not among the highest producer of vegetables, it is
the highest producer of cauliflowers and brinjal also is being grown extensively in the district.
The productivity of major crops like rice wheat and maize has shown increase during 2007-08 to
2008-09. Especially in case of rice, the productivity has more than doubled in the one year. The
maize production and productivity is high in the district.
Table 7: Area and Production of Major Crops (2007-08 & 2008-09 Last estim.)
Major Crops
Cereals
/pulses
Rice
Wheat
Maize
Vegetables
Potato
Onion
Cauliflower
Brinjal
Others
Fruits
Mango
Guava
Banana
Others
2007-08
Area(Ha)
Prod.(Tons)
2008-09
Area(Ha)
Prod.(Tons)
57367
44156
22296
27828
123213
29838
57459
48191
22436
90765
150493
50490
13312
1672
4853
3018
20703
258590
33945
90089
67603
319870
12654
1689
4872
3054
21091
212897
32475
89234
68881
339684
8172
1265
3513
3084
56204
12144
26498
150499
8238
1289
3546
3168
77977
11316
26916
145863
Source: Department of Agriculture, GOB
Table 8: Productivity of Major Crops (2007-08 & 2008-09 Last estim.) Yield (kg/ha)
Major Crops
Rice
Wheat
Maize
Pulses
2007-08
485
2790
1338
515
2008-09
1580
3123
2250
559
Source: Department of Agriculture, GOB
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Animal Husbandry: In Livestock wealth Vaishali district does not hold any prominent position in
the district.
Table 9: Livestock Wealth in Bihar (2003) (Figures in '000)
Vaishali
Bihar
Cow
181.1 (1.7)
10470.2
Buffalo
145.0 (2.5)
5765.7
Pig
2.1 (0.3)
627.0
Sheep
4.5 (1.3)
346.3
Goat
235.9 (2.5)
9605.7
Poultry
411.4 (2.9)
13967.8
Note: Figures in bracket show district share

Source: Department of Animal Husbandry, GOB
Fisheries: Fish cultivation or pisciculture in Vaishali is also not significant as it produces only
3.16% of the total state production. However, it is considered as one of the districts which has good
potential for developing its fisheries because of other locational and resource advantages.
Table 10: Production of fish and fish seeds for the year 2009-10
2009-10
Fish Production
(000 tonne)
9.40
297.40
Vaishali
Bihar
Fish Seeds
(Lakh)
0.00
3307.85
Source: Department of Animal Husbandry, GOB
Industry: The town has some industrial development. A few manufacturing units like a medicine
manufacturing unit and sugar mills are present. This district has potential for agro-based
industries, specifically bananas. The industrial sector in Vaishali is dependent on micro and artisan
units. The micro units have almost doubled from 2007-08 to 2008-09. The artisan units also
increased in 2007-08, but growth stopped in 2008-09. There has been no growth in the tiny
industry since 2006 which had 114 units.
Table 11: Status of growth of Industrial Units
Units
Tiny
Artisan
Micro
Small
Investment ( in
crores)
Employment
2006-07
114
115
2
2007-08
122
75
4
2008-09
130
-
148.35
563
703.39
367
102.42
367
Source: Department of Industries , GOB
However, in the district as a whole, a very small size of the working population 3.02% -is engaged
in household industries, indicating that this sector has low priority in the district as a source of
occupation/livelihood.
Outside the periphery of the Hajipur city, there is a BIADA industrial estate with 127 industrial
units out of which 72 are presently working. Others have either closed down or not working. Some
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are still under construction. The type of units which are working include mainly general fabrication
and engineering works, repair and servicing, handmade paper industry, agricultural implements
among other.
Table 12: Status of units in Hajipur Industrial Estate
S.
No.
1
2
3
4
5
Status of Unit
Number
Working
Construction not started
New allotment
Under Construction/ Constructed
but possession pending
Closed Units
Total
Percentage
72
2
5
11
56.7
1.6
3.9
8.7
37
127
29.1
Table 13: Types of Industries present in Hajipur Industrial Estate
Plastics & acrylic sheets

Pesticides
Pharma Units
Bread
Poultry feed
Packaging materials
Food processing units
o Ice-cream
o Pulp & Juices
o Masala
Saw mill
Plywood
Seed Production
PET Bottles
Surgical Cotton
Mineral Water
Cold Storage
Paints
PVC/ Hume Pipes
Flour Mills
Mosquito Coil
COMFED Sudha Dairy
Manufacture of Water Tanks
Hatchery
Marble Works
According to the District Industries Centre data, the table below shows how many Micro and tiny
enterprises in the agro-based industry sector were set up in the district from 2005-2011:
Table 14: Agro-based Enterprises in Vaishali District (Source: DIC Data)
Name of Industry
Dalmot, Namkeen, Sevai Manufacturing (Snacks)
Sattu,Besan production
Chyavanprash Production
Oil Production
Aachar (Pickles) Manufacturing
Potato Preservation
Rice Mill / Rice Flake Manufacturing
Pulses Mill
Spice Manufacturing
Wheat Production, Grinding
Final Report
No. of Units
6
3
2
20
25
10
22
1
2
6
Present Status
Operational
Operational
Operational
Operational
Operational
Operational
Operational
Operational
Operational
Operational
Page 46
Figure 3: Types of Agro-based Enterprises in Vaishali District (Source: DIC Data)

Spice
Manufacturing
2%
Pulses Mill
1%
Wheat
Production,
Grinding
6%
Sattu,Besan
production
3%
Dalmot,
Namkeen, Sevai
Manufacturing
6%
Chayavan
Production
2%
Rice Mill / Rice

Flake
Manufacturing
23%
Potato
Preservation
10%
Oil Production
21%
Achar
Manufacturing
26%
Owing to its surplus agricultural produce, the district has immense potential for setting up of the
agro - based cottage industries. Therefore, the region has the potential for setting up of
production catchments/ consumption pattern based food processing units. The growth of these
units will be complemented with the fact that the district has close proximity and good connectivity
with the state capital by road. It is also the headquarters of the Eastern Central Railways and as
such has excellent rail connectivity. Air connections also are very good with the Patna airport only
21.2 Kms away.
In addition to the BIADA Industrial
Estate, there is also an Export
Promotion Industrial Park (EPIP)
which has been started in Hajipur. As
of December 2011, there are 25
manufacturing units and educational
institutions housed in this estate. Out
of these, 10 are working, 9 are under
construction, 5 are new allotments
and 1 is closed. The two technical
institutes set up here are Central
Institute of Plastic Engineering
Technology (CIPET) and National
Institute
of
Pharmaceutical
Education & Research (NIPER).
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The location of these teaching institutions will definitely add to the industrial development of
Vaishali-Hajipur Region and in fact that of the entire state. The type of units here are varied pharma and plastic, food processing units like Britannia biscuits, bakeries, juice and soft drinks,
fire-fighting vehicles and accessories, poultry feed, PVC ropes and twine, packing materials, inverter
and stabilizer manufacture and so on. The employment of skilled persons in these units will provide
a steady source of income to Hajipur citizens.
An Agri Export Zone has been established under APEDA, GoI for the export of litchis in the
Muzaffarpur-Vaishali litchi growing region. This is facing some infrastructural issues which have to
be sorted out before it can take off successfully.
2.4 The Economic Profile of Hajipur Urban Area

As per provisional reports of Census 2011 India, the population of Hajipur is 1,47,126, which makes
it the 16th most populous city in Bihar. The male and female population is 78,561 (53.4%) and
68,565 (46.4%) respectively. The sex ratio of Hajipur city is 873 per 1000 males, which is lower
than that of Bihar state (916) and amongst the lowest among the cities of Bihar. The total literates
in Hajipur city are 100,691 of which 57,537 are males while 43,154 are females. The average
literacy rate of Hajipur city is 79.26%, which is higher than the state literacy rate of 63.8%, but
again on the lower side amongst the cities. The male and female literacy rates are 73.23% (Bihar:
73.39%) and 62.93% (Bihar: 53.33%) respectively. A higher literacy rate is always more conducive
to the economic development of the area.
The predominance of a sector is implied through the Location Quotient technique. The Location
Quotient technique compares the local economy to a reference economy, and thereby identifies
specializations in the local economy. Location quotient (LQ) is the ratio of share of an industry in
the employment in the local economy, to the share of same in the national economy. A value of
location quotient greater than one (LQ>1) for any industry indicates that the local economy is a net
exporter of the goods and services provided by the particular industry. On the other hand, if the
value of the location quotient is less than one (LQ<1), it indicates that employment in the respective
industry is lesser in the local economy as compared to the reference economy, and therefore, the
local economy is a net importer.
Hajipur located at a distance of 10 km from Patna, the capital city of Bihar and is regionally well
connected by rail and road with the other districts of the State. Mahatma Gandhi Setu, one of the
longest bridges in India connects it to Patna with NH -19 passing through the city. Resource
availability and accessibility has made Hajipur an economically attractive avenue for business
ventures. The Location Quotient Analysis indicates in general that Class I towns in Bihar still have a
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strong presence of primary activities. The location quotient of Hajipur depicts the dependence on
agriculture and allied with an LQ>13 for primary activities.
The commercial activities in the town are concentrated in the central region, along the National
Highway and major roads within the town. Key commercial areas in the town include:
Gudri Bazaar
Thakur Pokhar Sabzi Mandi
Paswan Chowk Chota Bazaar
Anjanpeer Sabji Mandi
Sonarpatti in Gudri Bazaar area
A significant part of the population of the town is engaged in the services sector or is self employed.
Thus, commercial activities are providing employment to a large section of the population. To
complement the economys dependence on agriculture, and the movement of goods through the
town, Hajipur has potential to develop warehousing facilities in the region. The commercial
activities along the highways include wholesale, retail, auto repair and transport services,
restaurants, hotels, etc. Most of the informal sector in the town occupies the foot paths and the road
sides. On a broader assessment, the employment in the town is mainly the service sector followed
by the self employed.
Agriculture: The towns hinterland lies in the rich agricultural belt of the State. The region is a
major fruits and vegetable producing area, especially banana, litchis and mangoes. Ward nos. 1, 13,
32 have urban horticultural activities of growing banana and vegetable particularly cauliflower
cultivations over large stretches of land.
Figure 4: Types of Enterprises in Vaishali-Hajipur region
Urban Development Strategy of Bihar- A Management Perspective April 2008, Prem Pangotra and Astha Govil, IIM Ahmedabad
April 2008
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Page 49
The improved level of agricultural development in its rural hinterland has enhanced business
opportunities linked to the agricultural sector (e.g. input supply, machinery repair services,
marketing/processing of agricultural produce), whilst at the same time leading to a larger local
market. Hence, agri-based services and small businesses are by far the main area of enterprise
activity. Commonly found private service activities include wholesale trading of agricultural
produce and manufactured items, agricultural equipment dealer, agro-chemical dealer, grain
trading, motorized and non-motorized transport and mechanical repairs.
The enterprise landscape in Hajipur city is dominated by small/micro units. In Hajipur there are
around 647 commercial units which are in the ULB records while there are several more hundreds
which not recorded and thus unregularized. The typical enterprise is formed with less than Rs 2
Lakhs engaging around two to five workers. The type of enterprises in the city can be seen in the
table above.
Cottage Industry
Cottage scale manufacturing also entails low investment costs, thereby attracting a significant
number of entrepreneurs, with skills often being passed on within the family from one generation
to the other. Such activities include pottery, wooden furniture making, wedding accessories making.
Ward 38 has a concentration of household units producing jam, jelly, chutney and similar food
products.
Small and Medium-scale Industry
The industries present in the Hajipur Industrial Estate and EPIP have already been described
earlier. These industries have a direct linkage with the urban area in terms of employment and
allied services. With urbanization and the growth of the urban construction sector, traditional
enterprises like steel works and grill-gate making also have had a boost. New entrants to the
industry sector are bottled water production, computer assembly and E-services. Although still a
primary sector dominant economy, the emergence of the BIADA Hajipur Industrial Estate, the
Export Promotion Industrial Park and establishment of the Agri Export Zone has created an
industrial environment in the region, with the ULB geared to promote industries.
Agro-based Industry: Agro-based industries in the Vaishali-Hajipur region have also been
discussed earlier. The primary nature of the economy has had its manifestation in the emergence of
the seed production activity. Seed production is a very promising activity within the ULB in Ward
No. 30 in which around 50 to 60 households are involved in vegetable seed production. The early
cauliflower seed production is very conducive in Hajipur because of climatic and geo morphological
features. However, lack of certification is limiting farmers and local seed producers in fetching
comparable prices with large industries. In Hajipur there are a few producers who market such
produce to different states Punjab, Haryana, UP, Orissa, MP, Rajasthan and even Andhra Pradesh.
But the potential could be tapped to develop some wards as Seed Wards following the Seed Village
concept. The concept of green-house based agriculture under controlled conditions has also been
introduced so that vegetables and flowers are produced in Hajipur off-season also.
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Case Study Bharat Seed Stores

Bharat Seed Stores is a traditional enterprise which came into operation as early as 1885. The present set
up, being handled by Mr. Abhimanyu Sinha, engages 10 people and has an annual turnover of 1.09 crores.
The employees are local from the adjoining wards and panchayats and have been trained in production
and post production processes. 3 out of 10 are women. Raw material or untreated seeds are procured
locally from farmers as well as generated in their own seed nurseries or Green House. Raw seeds are then
processed through the different stages of production including seed treatment, grading, drying etc before
the seeds are tetra packed. Automated and semi automated machines are used in seed treatment, drying,
grading, packaging. Packaging wrappers and brand stickers are however imported from Delhi.
Annual production figures for the current year is 3 tons of cauliflower, 50 tons of Spinach and 2,5 tons of
carrot along with other vegetable seeds. The annual production has registered a 10-15% growth rate over
the last several years. However, there is stiff competition. The competitive edge of Bharat Seed Stores lies
in the vegetative coating and fungicide treatment of the seeds which creates a specialized clientele. The
entrepreneur has plans of further expansion of the unit to cater to the growing market. Technology
upgradation has been planned through introduction of Gravity Separator for grading and Digital Printing
of MRP on packages.
Mr Sinha wants more farmers to come under the fold of the business cluster or farmers cooperatives
need to be developed. However he mentions that doing business or setting up an enterprise is a time
taking exercise and getting sanctions are not only related to meeting procedural formalities . Although
there is a subsidy of 35% in this sector, 20-30% is spent on repetitive visits and meeting associated
expenses. According to him, decentralised single window operations can serve the purpose to some extent
this is something which GoB intends to implement in any case.
Another agriculture linked activity which has very recently emerged in Hajipur is Banana Fibre
making. Vaishali-Hajipur Region produces more than 2.5 Lac MT of Mothia and Chinia varieties.
Another agriculture linked activity which has very recently emerged in Hajipur is Banana Fibre
making. Vaishali-Hajipur Region produces more than 2.5 Lac MT of Mothia and Chinia varieties.
TheBihar government is promoting new varieties of Banana and is offering subsidies to the farmers
to encourage them to grow these varieties which offer significant advantage over the present
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varieties being grown. This has

led to an increase in the in the
area under banana cultivation in
Bihar which in turn provides
adequate raw material for banana
fibre extraction and processing. In
fact it is an environmentally
friendly industry as it utilizes the
waste material of the banana tree
after it has finished its productive
phase and is being disposed off to
make way for new plants. The
scope for banana fibre is
significant around the world
because of the increasing demand of eco-friendly products, including fabric which wins over
synthetic fabric in hot and humid tropical and sub tropical climates. Further, provisions under the
multi-fibre agreement in the new WTO regime, is likely to boost the use of natural fibres in global
textile industries for various applications. A banana based fibre extraction and processing unit is
located in Panapur Dharampur
between Hajipur and Patna. The
project also aims to strengthen the
backward linkages relating to the
procurement of raw material from
the farmers and production and
marketing of the banana fibre
based products in the market. The
products that have been identified
for marketing are Banana fibre
handmade paper and paper based
products, banana fibre based
articles like handbags, utensils and
other decorative items.
Apiary-Honey Producing Business: Honey producing is also an income generating activity in
Vaishali. It is one of the major honey producing districts in Bihar.
Nursery: There are numerous nurseries in Hajipur. Training can be imparted to them to explore
the rare varieties of plants and also to develop hybrid plants.
Medicinal Herbs: Vaishali-Hajipur region is suitable for the production of the following herbs
Kalmegh, shatawar and shwet musli. The Annual Plan of the Horticulture Mission is to form clusters
for the commercial production of these herbs.
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Cold Chain and Preservation Business: Varieties of fruits, such as banana, litchi, makhana, lemon,
jack fruit, bael mango, and vegetables like potato, onion, tomato, cauliflower, garlic, bottle and
sponge gourd, chillies, peas, turmeric, betelvine etc. are grown in Hajipur in large quantities. But
neither the farmers are able to harness due benefits because of poor pre and post harvest
management and lack of availability of appropriate fruit and vegetable processing industries
(FVPI). There is a huge annual loss, amounting to 25 to 40% of the total fruits and vegetables
produced. There are already 22 cold storages in the Hajipur region which provide a storage
capacity of 81743 MT. Some are exclusively for potatoes and many are of the multi-purpose variety.
Five more cold storages have been sanctioned by the SIPB for the Vaishali-Hajipur region. These,
together with the existing ones, will serve the dual purpose of arresting wastage on one hand and
lead to effective employment generation on the other. Agri Business Centres have significant
potential in marketing the agri produce.
Animal Husbandry and Dairy
The agro climatic condition of the district is quite suitable for diary development, livestock and
poultry farming activities. It is one among the cattle concentrated area and also has a milk
processing plant. This gives lucrative income and employment to the people of Hajipur. However,
the district stands at 20th position when compared to the average milk yield, and at 19th position
when compared to the average milk density (Lit /per day /sq km) of all districts (National Dairy
Development Board, April 2008). There is some amount of secondary processing of milk into dairy
products in the Hajipur Industrial Estate, but there is ample scope to develop this further.
Table 15: Sector-wise investments approved for Vaishali-Hajipur region by SIPB
S.No Sector
1
Healthcare
3
Agro & Dairy-based
Industry (Steel units, sheet making, bottle
units, package drinking units, plastic
4
moulds, pipe making)
5
Industry - Bakery/Biscuits
Cold Storage/Warehousing Industrial
6
Units
7
Education
8
Biomass Powerplant
Investments (in crores)

275
593
500
141
76.5
1.7
191.25
Many large and small companies are focusing on Hajipur as a potential destination for
industrial activities such as Britannia which is planning to set up its bakery unit in Hajipur. Bihar
provides a big market opportunity for various industries and therefore, these industries are
targeting Hajipur as their potential units destination. The State Investment Promotion Board
(SIPB) has approved a number of proposals for setting up of industrial units in the Hajipur
Industrial Area and the Export Promotion Industrial Park. Integration with the local economy of
Hajipur town will come in the form of supply of labour and setting up retail marketing outlets. The
forward and backward linkage will create employment, income and revenue. The industrial units
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sanctioned by SIPB includes medical facilities and research centre units, cattle & poultry feed units,
banana/bamboo fibre yarns, food processing units, packaging units, detergent powder production
plants, warehousing/cold storage units, ice cream/dairy production units, biscuit production units,
bakery production units, packaged drinking water, plastic mould units, cycle parts manufacturing
units. The sector-wise break-up of proposed investments is below:
2.5 Spatial Growth of the City

In Hajipur, originally, the NH-19 was the major axis along which the city was settled. The Gandhak
river forms a natural boundary for the city of Hajipur. A few developmental activities take
place on the western side of the River Gandhak. However, this does not affect the overall growth of
the city. Unlike many cities in Bihar, Hajipur does not show a corridor kind of development. The
city however, shows a probable growth towards the northern side (mainly on the Muzaffarpur
Road) and towards Vaishali SH-74. In the recent past, the city witnessed growth on the eastern side
as well. The land use of Hajipur city is not yet assessed and no master plan has been prepared for
the city. By visual inspection it has been assessed that the city has about 3.2% of its area under
transportation compared to 12% to 14% as per UDPFI Guidelines.
Table 16: Existing Land Use Distribution of Hajipur
S. No.
1
2
3
4
5
6
7
8
Type of Land Use

Residential
Commercial
Industrial
Public-semi public
Recreational
Transport
Agriculture & Water Bodies
Special Area
Area (Ha)
Land Use (%)
1027.2
13.5
105.0
35.4
2.0
62.9
478.3
240.0
52.3%
0.7%
5.3%
1.8%
0.1%
3.2%
24.4%
12.2%
1964.3
100.0
Municipal Limits and Peri Urban Areas

The surrounding villages of Hajipur (Peri urban areas) of the city would not have impact on the
future growth of the city. However, Dighi Kalan, Bishunpur Basant urf Suhai, Yusufpur
Dighikhurd and Jagdishpur Gram Panchayats can be selected for the urban extension. The
natural growth of the population and settlement is increasing towards these villages and these
villages along Hajipur have formed an integral region. According to the consultations with the local
body, the urban extension zone has been identified and care has been taken to integrate the entire
administrative unit (of the villages) to enable easy incorporation. According to 2001 census the
combined population of these four Gram Panchayats was about 25,034.
The day to day activities of the city have direct impact on the development of the city. The past
plans and schemes have a major role in development of the city. The major activities that are
prevailing in the city are identified as:
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Commercial
Household and other industries
Regional rail transport and Freight Transport
Educational, Health and other Social Infrastructure
Administrative center
No Master Plan has been prepared for the city of Hajipur.

Future Growth Direction
Principally the City of Hajipur has grown along the Muzaffarpur Road with the River Gandhak
and the Railway track acting as the outer limits of the city on Western side. In the recent years the
development in the north eastern and south eastern sides of the city is being observed. The areas
beyond the Railway Line in the northern side of the city have seen growth of new development
nodes towards Vaishali and Muzaffarpur which are growing at a rate that is much higher than the
city.
The key issues highlighted by the draft CDP and which also have a bearing on the City Business Plan
are as follows:
The inner city reflects a mixed landuse pattern with a congregation of residential, and
commercial, in a single locality. This is not conducive to business or economic development
or good quality of life for the citys residents.
The open spaces are vacant and very often inaccessible. Therefore, if there are any plans for
establishing any business enterprises in these areas either by the government or by private
parties, they would not be commercially useful.
Several slums have come up in the recent past and based on rough estimate about one-third
of citys population resides in slums. Provision of basic infrastructure for these non-serviced
areas of the ULB would have to be a priority.
The road network and further developmental activities are not properly planned. It would
be beneficial if business and public concerns go hand in hand for effective development to
take place.
The traffic and transportation system is inadequate and requires significant strengthening
and improvement. Feasibility studies and integrated planning should be undertaken for this
so that it is turned into a business opportunity for the local entrepreneurs or atleast provide
adequate infrastructural support for the same.
Parking zones are not provided and thus it is leading to congestion on main roads and
haphazard parking. This is a major deterrent to commercial activity and economically viable
solutions need to be found for this problem.
The draft CDP recommends specific city level strategies for growth management, which include:
Regularization of illegal colonies by providing basic services and amenities in these areas
To clearly earmark the areas in the planning area for the industrial development
Regulating growth in the peri urban areas
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Illegal and unauthorized construction activities in the various water bodies

Providing opportunities for the growth of economy
Drafting of building bye laws and building control regulations
These above-mentioned strategies can benefit the growth of service-sector based enterprises in the
new proposed residential areas in the surrounding villages, as well as provide employment for
construction-related skilled and unskilled workers during the construction phase.
2.6 Institutional Framework

2.6.1 State Level
The Urban Development and Housing Department (UDHD) of the State Government has the overall
responsibility for urban development and guiding ULBs in the local economic development process
in Bihar. Currently the Department has very limited personnel and expertise to guide and monitor
the performance of municipal authorities and to implement the various administrative reforms
required under the 74CA, national urban development strategy and the Bihar Municipal Act of
2007.
The internal structure and staffing of UDHD is very lean and there is a critical lack of technical
capacity. There is a Director Local Bodies but this post has only a limited role in guiding and
strengthening municipalities, and is not involved in infrastructure development. Instead, the Bihar
Urban Development Agency (BUDA), operating under the Directorate for Poverty Alleviation is the
designated nodal agency for JNNURM, UIDSSMT and SJSRY and is the District Urban Development
Agency (DUDA). The establishment of BUDA and DUDA was a mandatory requirement under earlier
poverty alleviation schemes, but in practice neither has become fully functional and had limited
impacts on urban development process in the State.
2.6.2 Municipal Level
The expectations of the 74th CA are still unmet in Bihar. Of 18 functions that should be performed
by municipal authorities, only ten are mandated under the Bihar Municipal Act 2007, and in
practice only two are being performed fully by most municipalities, with another five partially
performed. The State Government imposed restrictions on municipal recruitment many years ago,
and these are still in place despite population growth and the decentralisation of functions. The
situation has turned critical, with the level of unfilled posts ranging from 21 percent and 67 percent
in ULBs. Not only is there a shortage of personnel, but there is no municipal cadre and many of the
staff in place lack relevant qualifications, neither do they have hands-on experience nor exposure to
best practices followed elsewhere. Motivation levels are also low, with deferred salary payments,
attracting and retaining competent staff is extremely difficult and turnover in some key posts is
very high. Many Executive Officers do not stay in post long enough to develop a detailed knowledge
of, and commitment to, the towns in which they are posted. In-service training for municipal staff is
conspicuous by its absence and the State has no designated training institution for the urban sector.
Generally, human resource management is weak, with no comprehensive personnel database and a
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Figure 5: Growth Directions Hajipur
Source : CDP Hajipur
Final Report
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lack of job descriptions. Whatever training is provided is limited, sporadic and supply-driven. The
inability of municipal staff to prepare DPRs is just one indicator of the limited skills base.
Municipalities depend largely on allocations from State or Central governments for infrastructure
development. The 74th CA mandates the formation of a Wards Committee in each municipality with
a population above 3 lacs, and the Bihar Municipal Act 2007 goes further, envisaging one committee
in each ward. These arrangements have not been operationalized, hence there is no formal
involvement of citizens in urban planning. Any infrastructure funds held by the municipality tend to
be spent on the basis of political considerations rather than a systematic assessment of local needs
and priorities.
There are many NGOs in Bihar but their participation in the process of infrastructure development
and service delivery is minimal, being confined to a few centrally sponsored schemes for the poor.
The public grievance redressal system is very rudimentary, with no established mechanism for
responding to complainants, and apathy on the part of the administration to address concerns of
business communities regarding the project approvals and necessary environmental clearances.
The financial condition of ULBs in Bihar is characterized by poor revenue generation, inadequate
expenditure on development, operation and maintenance and high dependency on loans and grants
from the State Government for both development and establishment costs. Lack of a human
resource development strategy is a key factor in the limited ability of ULBs to utilize effectively the
funds available under various government schemes.
Holding Tax is the principal source of municipal revenue in Bihar, but revenue collection efficiency
is extremely low: from 4 percent to 37 percent in ULBs. Revenue flows from other sources are
irregular, unpredictable and insignificant. Establishment costs amount to 85 to 93 percent of total
revenue expenditure and are as high as 1.94 to 4.9 time self-generated revenue.
ULBs are often debt-ridden and unable to repay loans from financial institutions and the State. No
inventory of assets, liabilities and loans is kept and updated regularly; double entry accrual-based
accounting is yet to be introduced; and there is no internal audit function at present, though it is
stipulated in the Municipal Act, 2007. Budgets and other financial information are not used as tools
for planning, control and management, neither are they guided by an urban policy or ground
realities. None of the ULBs have any planning system for liquidation of monthly fixed expenses and
other liabilities against expected receipts; they simply concentrate on meeting essential monthly
expenditure. However, as can be seen in the next section, Hajipurs municipal finances are not in
such a poor state, which is a positive situation as far as City Business Development is concerned. .
2.6.2.1 Hajipur Municipal Corporation
The Hajipur Municipality was set up in the Year 1857. At present, the city is run by a Chairman,
Deputy Chairman and 37 Councillors on the legislative front and one Executive Officer to oversee
the executive works.
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The Bihar Municipal Corporation Act, 2007 governs all the Urban Local Bodies in the state. The Acts
specify governance framework, the spatial jurisdiction and the functional domain of the local
bodies. As per the Bihar Municipal Draft City Development Plan for Hajipur Corporation (HMC) Act
2007 all the seats in the Urban Local Bodies (ULBs) shall be filled by persons chosen (councilors)
by direct election from the territorial constituencies i.e. wards in the municipal area. It is
mandatory to reserve in every ULB not more than 50% of the total seats of the councilors for (i)
Scheduled Castes; (ii) Scheduled Tribes; and (iii) Backward Classes.
Hajipur Municipality takes care of the services of sanitation, streetlight, general public health, parks
and gardens, poverty alleviation, etc. Apart from the local bodies, a number of government
institutions are associated with the governance of Hajipur City. They include:
State Government Agencies:
Municipal Administration and Urban Development Department

Directorate of Municipal Administration (DMA)
Directorate of Town and Country Planning (DTCP)
Public Health Engineering Department (PHED)
District Urban Development Agency (DUDA)
Revenue Department
Medical and Health Department
Social Welfare Department
R&B Department
Home Department
Slum Upgradation Department
It has been observed that in the absence of a coordinating agency, there are several constraints in
the integrated and comprehensive planning and delivery of services. Interdepartmental
coordination is one of the prominent issues and conflict that is becoming difficult to address or
resolve even at the level of heads of the service delivery agencies. It is observed that the citizen is
often concerned with the quality of service rather than who is delivering the service. The service
delivery often suffers because more than one agency is involved and there is no mechanism for
ensuring inters agency coordination. Some of the critical issues that emerge from the existence of
multiple agencies include:
Spatial and functional fragmentation

Overlapping functions
Multiple accountability lines
High service delivery gaps, and
Increasing urban poverty
Lack of Clarity in Local Functions
Hajipur Municipality derived 18.0% (average 2008-09 to 2010-11) of its revenues from taxes
and about 12% (average 2008-09 to 2010-11) from non-tax sources, with grants providing a
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further 68% (average 2008-09 to 2010-11) of the revenues which reflects higher dependency
on the government funds.
Hajipur Municipality has performed well as far as revenue account is concerned. It may be noted
that operating ratio has been below unity (on an average) during the assessment period.
Revenue through property tax contributed 12% to the total revenue income of the Municipality.
Both revenue account and capital account has been accruing a substantial amount of surplus except
in few years showing a fluctuating trend. Substantial amounts from capital surplus had also been
diverted to Revenue accounts. At an overall level, the Municipality had been able to maintain a
positive closing balance during the assessment period. This is an advantage as far as City Business
Planning is concerned, as the ULB will have the financial band-width to handle larger volumes of
business in the long run.
Hajipur Municipal Financial Status
Table 17: Summary of Finances of Hajipur Municipal Corporation
Source: Draft City Development Plan, Hajipur
2.6.3
Organizational Setup at City level
Elected Wing: Hajipur has an elected body headed by the Mayor. Each ward elects one member
who collectively elects their Mayor. There are 39 election wards and accordingly 39 elected
representatives in Hajipur Municipal Corporation (HMC). The HMC with the help of administrative
and technical personnel, carries out the decisions of the Municipal Council.
Administrative Wing: The Executive Officer heads the Hajipur Municipality. The EO, belonging to
the cadre of state, is assisted by the City Manager in all his activities. He is also assisted by a group
of officials in administration.
Out of the total sanctioned staff of 230, the Municipality has only 98 existing staff indicating that the
local body is functioning with 43% of strength.
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Figure 6: Governance Structure - HMC
Source: Hajipur Municipal Corporation
The institutional structure of Municipalities is not adequate to explore and ramp up the economic
potential of the city and work towards it. Interactions with the Municipal functionaries revealed
that the institutional set up is only geared towards property tax collection, undoubtedly the most
important function of the ULB. Hence, the constitution of an LED Cell at ULB level is extremely
important for the purpose of business / entrepreneurial development of the ULB. The LED Cell will
work in close tandem with the UPE Cell designated for the implementation of the UPE Cell. The LED
Cell should be headed by Town Planning Officer (TPO) or the City Manager. Ideally, a Task Force
should be constituted at the District level, with representatives from the ULB. This LED TF, should
coordinate the with the district departments for the effective and timely implementation of the CBP.
This could be followed by the appointment of a Consultant individual or firm to who could be
entrusted with the task of implementing the CBP along with the existing, but strengthened (through
adequate capacity building) District and ULB administration and other key stakeholder groups like
NGOs and civil society organizations.
2.7 Future Prospects

The competitive advantages of Hajipur city are that it is the Headquarters of the Eastern central
Railway, and serves as a transportation hub so that is it is very well-connected to the rest of the
country, it is very close to the large markets in the state capital of Patna, it has a rich agricultural
hinterland with high productivity rates of fruits and vegetables and has three economic/industrial
areas/zones in the close vicinity of the city area in which several industrial units are already
established and operational and many more are being constructed. The agro climatic condition of
the district is quite suitable for diary development, livestock and poultry farming activities. It is one
among the cattle concentrated areas and also has a milk processing plant. There are also handicraft
and artisanal activities like sikki grass-weaving, appliqu and embroidery traditionally being
undertaken in the region. The vision for Hajipur is To establish a vibrant economy by
developing industry and support infrastructure along with responsive & accountable
management of resources. Based on this vision, the initial analysis and perceptions of
stakeholders, the following sectors have been identified as having potential in the Vaishali-Hajipur
region. This will be further elaborated on in subsequent chapters based on further analysis.
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Agriculture, Horticulture & Allied Sectors

The towns hinterland lies in a very rich agricultural belt of the State with the district being a
significant producer of brinjals, cauliflowers, bananas, litchis and mangoes, sugarcane, rice,
wheat, maize and potatoes. In the light of this, the growth prospects of the food processing
industry, especially with regard to bananas and litchis and other related agri-businesses like a
food park, cold storage and preservation infrastructure, agri-clinics and agri business centres
are bright. The peri-urban villages of Dighi Kalan, Bishunpur Basant urf Suhai, Yusufpur
Dighikhurd and Jagdishpur Gram Panchayats would be a suitable catchment for the promotion
of seed farms, nurseries, floriculture and urban agriculture geared towards specialized
horticultural produce.
Allied sectors like apiaries, dairy and fisheries also have potential in Hajipur as there is
adequate demand for the same in this region and surrounding areas.
Sector Development to support MSME Industries

There are three industrial areas in the city and as such, there are a number of micro, small and
medium scale enterprises both agro-based and non-agro-based already present in the
region. To enable further development of industry and entrepreneurship in this region,
especially in the food-processing and allied sectors, feasible and specific sector development
initiatives as already envisaged, need to be implemented at the administrative and local level,
such that the marketing and support infrastructure, incentives and capacity building can be
provided in a planned, demand-driven, targeted and integrated manner. The political and
bureaucractic will has to be supported and partnered by private sector involvement and
initiative towards economic development in the region.
Renewable and Bio-mass based Energy

As Vaishali is a major grain, sugar, fruit and vegetable production centre, there is a potential for
harnessing the energy which could be generated from the biomass waste generated from these
crops.
Service Sector
The tourism, education, health, agro-based services like agri-clinics, agri-business centre-cumfood park, agricultural implement and tool-based services and commercial and retail outlets
have potential to grow in the Vaishali-Hajipur region.
These prospects will be taken up in a detailed manner in later Chapters.
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CHAPTER 3 - IDENTIFICATION OF CORE ECONOMIC SECTORS

3.1 Sectoral Contribution in the Local Economy
Hajipur is coming up as a suburban town to the capital city of Bihar with notable commercial and
industrial development taking place in the town. Hajipur also falls within an agriculturally rich belt
which is why there is also significant contribution of primary sector in the regions productivity.
Trade and services in the region revolve around the agriculture and horticulture to a large extent. A
significant and increasing proportion of the rural population lives in Hajpur, which also hosts a very
large share of local non-farm activity. As Hajipur is the location of the three industrial zones and the
headquarters of the Eastern Central railway, opportunities for employment and support services
are reflected by the growth in the tertiary sector.
Table 18 : Growth of Economic Activities in District Vaishali
Sector
2001-02
2002-03
2003-04
2004-05
Primary Sector
50231
80688
52344
75578
Secondary Sector
10117
12354
11964
14171
Tertiary Sector
79205
83909
93727
102082
Total Local Economy
139553
176951
158035
191831
Figure 7 : Growth of Economic Activities in Vaishali District (2001-05)

250000
200000
150000
Tertiary
Sector
Secondary
Sector
100000
Primary
Sector
50000
0
2001-02
2002-03
2003-04
2004-05
Source: Feedback Analysis
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3.2 Economic Base of Hajipur and its Hinterland

Both in terms of size and number of people involved, agriculture traditionally has been the largest
sector of the local economy of Hajipur and its hinterland (administratively Vaishali district). Local
handicrafts like sikki grass products, wood crafts and banana fiber products are also have also
been. Agriculture is the main source of occupation for a majority of people. Thus, the economy is
mainly agrarian in character. However, the state government is giving a great deal of emphasis to
the development of the industrial sector also in Hajipur especially to units engaged in foodprocessing industries. The promotion of this region as an industrial hub has given rise to new
dimensions of the economy with secondary and tertiary sector also gaining importance. The sector
specific analysis of Vaishali-Hajipur region and its hinterland undertaken in the following sections
will help in identifying the potential business sectors and sub-sectors for LED.
3.2.1
Primary Sector
Since Bihar is a part of the Gangetic plains, the state has rich soil and abundant water resources.
With the bifurcation of state in November 2000, the newly created Jharkhand state took away the
mineral rich part of the state and the present Bihar was left with its agro-based economy.
Table 19 : Growth of Primary Sector in District Vaishali
Sector
2001-02
2002-03
2003-04
2004-05
Agriculture
Forestry & Logging
Fishing
Mining & Quarrying
Primary Sector
43512
3602
3112
5
50231
72533
3838
4317
0
80688
44085
4151
4108
0
52344
67743
4502
3333
0
75578
Source: - Planning Commission website; State District Domestic Product Bihar 2001 to 2005; Directorate
of Statistics and Evaluation, Govt. of Bihar
As is evident from the table above, the primary sector activities in the district has registered a 50%
growth rate, which is largely due to diversification in agriculture and the increase in agricultural
productivity, due to better technological and scientific inputs in the cropping techniques and
management. As per the Economic Survey Report 2010-11, Vaishali district was ranked second in
the production of vegetables, fruits and flowers in 2008-09. Banana, mango, litchi, guava, wheat and
maize are the main agricultural products of the district. The services of the Agricultural Technical
Management Agency (ATMA) are available in this district, which should help in further enhancing
its productivity, thereby also providing further potential to agro-based industry and services to
develop in the region.
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Figure 8 : Growth of Primary Sector in District Vaishali

90000
80000
70000
60000
50000
40000
30000
20000
10000
0
2001-02
2002-03
Agriculture
2003-04
Forestry
& Logging
Fishing
2004-05
Mining &
Quarrying
Table 20 : Production volumes of Major commodities of Primary Sector in District Vaishali
Major Crops
Cereals /pulses
Rice
Wheat
Maize
Vegetables
Potato
Onion
Cauliflower
Brinjal
Others
Fruits
Mango
Guava
Banana
Litchi
2007-08
Area(Ha)
Prod.(Tonne)
57367
27828
44156
123213
22296
29838
2008-09
Area(Ha)
Prod.(Tonne)
57459
90765
48191
150493
22436
50490
13312
1672
4853
3018
20703
258590
33945
90089
67603
319870
12654
1689
4872
3054
21091
212897
32475
89234
68881
339684
8172
1265
3513
3084
56204
12144
150499
26498
8238
1289
3546
3168
77977
11316
145863
26916
Source: Economic Survey Report, Bihar, 2011
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Table 21 : Productivity of Major Crops in Bihar in w.r.t India
Issues and Challenges: The district has very good potential for vegetable and fruit processing.
However, adequate and appropriate storage capacities for fruits and vegetables are absent. The
entire produce after harvest is immediately transported to the markets within and outside state
and some to the processing units mainly for fruits. This factor deprives farmers from reaping the
benefit of their produce on one hand and also does not help in generation of employment. Hence,
cold storages and food processing units would meet the bi-pronged strategy of effective and
economic disposal of vegetables on the one hand and create employment at the urban level on the
other.
Fruit Processing
Fruit processing industries grow from the situation of production surplus. Varieties of vegetables
particularly brinjals, potato, cauliflower and onions are grown in a very large quantity in the
Vaishali-Hajipur region. However, a huge annual loss, amounting to 25 to 40% of the total fruits and
vegetables produced, occurs on account of poor methods of harvesting and transport facilities.
Pisciculture & Aqua Culture
The average annual production of fish in the state is nearly 2.61 lakh tonnes against the annual
demand of 4.56 lakh tonnes. Thus it seems necessary to double the production to bridge the vast
gap between demand and supply. Fish farming & development of sweet prawn and shrimp farming
practice, which fetch high value in international markets, have good potential in Hajipur. However,
siltation of ponds, availability of fish seed and adequate, suitable preservation infrastructure and
outdated technology are serious impediments to the development of this sector.
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Dairy Processing
The agro climatic condition of the district is quite suitable for diary development, livestock and
poultry farming activities. The traditional occupation in this area has been the rearing of milch
cattle. Animals are used in agricultural work even today. In urban areas rearing of cows of hybrid
quality has increased. It is a cattle concentrated area. The district stands at 20th position when
compared against average milk yield, and at 19th position when compared average milk density
(Lit /per day /sq km) of all districts (National Dairy Development Board, April 2008). The
challenges in the dairy sector are very poor coverage of veterinary and artificial insemination
services and paucity of cattle feed and its production.
3.2.2
Secondary Sector
This region is better covered when it comes to the industrial or secondary sector. Due to locational
advantages and resource strengths of the region, there are two almost full industrial areas in
Hajipur with several industries are already functioning and many more proposed ones. As a result,
industry is one of the priority sectors in the economy of the Vaishali-Hajipur region. However, it
needs to be regularized and linked to lucrative markets in a sustainable manner.
Table 22 : Growth of Secondary Sector in District Vaishali
Sector
Registered MFG.
Un regd. MFG.
Manufacturing
(Secondary Sector)
2001-02
2572
7545
2002-03
4242
8112
2003-04
2828
9137
2004-05
4397
9774
12354
11964
14171
MFG.
10117
Source: - Planning commission website; State District Domestic Product Bihar 2001 to
2005; Directorate of Statistics and Evaluation, Govt. of Bihar.
Figure 9: Growth of Secondary Sector in District Vaishali

16000
14000
12000
Rs lakhs
10000
Unregd Mfg
8000
Regd Mfg
6000
4000
2000
0
2001-02
2002-03
2003-04
2004-05
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The details of the economic activities and industrial status of the Vaishali-Hajipur region have been
discussed in points 2.3 and 2.4 in the earlier Chapter. Suffice it to say that there is ample
opportunity for both entrepreneurs and for employment in this region due to the concentrated
focus being given by the State Government on the area.
3.2.3 Tertiary Sector

Tourism, including trade and transport, along with service in education and health constitute an
important area of enterprise activity in Hajipur due to the rapid industrialisation and economic
development in the region. Retailing of food and other consumables is particularly widespread.
Other commonly found service activities include wholesale trading of agricultural produce and
manufactured items, restaurants, food stalls, hotels, motorised and non-motorised transport,
mechanical repairs. The dominance of services has become even more pronounced once public
services in areas such as administration, policing, health, and education are accounted for.
Educational and health services form a substantial part of other services and are an essential
support to the economic base of the region.
Table 23 : Growth of Tertiary Sector in District Vaishali
Sector
Electricity, Gas & W.supply
Construction
Trade, Hotels & Restaurants
Railways
Transport by other means
Storage
Communication
Banking & Insurance
Real, Ownership of Dwel. B.Ser.&
Legal
Other Services
Tertiary Sector
200102
2887
7894
6135
3720
3089
118
2553
7423
200203
2899
9577
7448
3937
3565
140
2775
7389
200304
3593
9966
8582
4301
3954
123
3114
7842
200405
4307
12359
9453
4784
4873
148
3463
7891
6076
6786
7874
8555
12080
27230
79205
10866
28527
83909
13040
31338
93727
13561
32688
102082
Source: - Planning commission website; State District Domestic Product Bihar 2001 to 2005; Directorate of
statistics and Evaluation, Govt. of Bihar.
As can be seen from the table above and figure below, the most robust service sectors presently are
construction, trade and hospitality and public administration sectors. This could be attributed to
the fact that Hajipur Industrial Estate and EPIP have several upcoming industries which involve the
building up of industrial sites and housing colonies, which in turn result in the proliferation of other
support services like trade and hospitality.
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Figure 10: Growth of Tertiary Sector in District Vaishali

120000
Other Services
100000
Real, Ownership of Dwel.

B.Ser.& Legal
Rs Lakhs
80000
Banking & Insurance

Communication
60000
Storage
Transport (other means)
40000
Railways
20000
Trade, Hotels &

Restaurants
Construction
0
2001-02
2002-03
2003-04
2004-05
Elec, Gas & W.supply
3.3 Employment Scenario in Hajipur

The workforce participation of Hajipur City was 25% in 2001. Only 11.8% of the work force
comprised females. 74.7% workers were engaged in the tertiary sector and only 5.7% workers
were involved in the secondary sector. 19.6% workers were engaged in agriculture and allied
activities. After the formation of Eastern Central Railway, when Hajipur was designated as the
headquarters in 1 October 2002, hundreds of railway staff members and those employed in its
supporting agencies have their temporary home at Hajipur and many from outside the region also
have settled here. Thus, the low WPR is despite the fact that there are relatively more industries in
the Vaishali-Hajipur region, it is located close to Patna and it is the ECR headquarters. Therefore,
there is ample scope of increasing work avenues in Hajipur in order to provide the unemployed
with jobs. This will need an integrated and market and demand-driven approach, in which viable
sectors are targeted for development and skill development efforts are directed towards enhancing
capacity in these sectors.
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Table 24: Category-wise Classification of Workforce in Hajipur
Urban Street vending is not only a source of employment for the poor masses, but it also provides
affordable goods and services to the considerable fraction of urban population. As per the recent
SPUR survey in 2010, there are about 4,086 Street Vendors in the city of Hajipur, out of which,
about 61% of the vendors are fixed in location and 39% are mobile. Usually these vendors occupy
the right of way of the roads and the unattended areas on the busy commercial areas of the city. The
rest of the vendors are the mobile variety who move in various areas of the city. Around 39% sell
fruits and vegetable, 10% sell fish etc, 17.3% sell processed food, 6.3% clothes and 28% fall under
Others category.
3.4 Core Economic Sectors

The economic base in Hajipur town and its hinterland is largely primary in nature, with agricultural
activities contributing most to the local economy. Over the years Vaishali-Hajipur Region has
evolved into a region rich in agricultural produce, milk production and fisheries. As is evident from
ground surveys and stakeholders workshops, a large number of Agro Based Marketing and
processing units have come up in this region, which need to be further supported to enhance the
productivity of this region. Second to agro based industries, handicraft and artisanal activities, the
biomass energy and tourism sectors can also be established as other economic activities. After a
series of discussions and consultations with various stakeholders during the process of City
Business Planning, the following were identified as major economic sectors of the region, which
should be supported and strengthened further to accelerate the growth of local economy of
Vaishali-Hajipur Region.
3.4.1
Core Economic Activity 1 - Agriculture and Allied Sectors
Farming Economic development does not necessarily entail industrialization. An agrarian

economy can be cash-rich provided the agriculture is carried out in planned way, such as maximum
utilization of the soils potential by growing crops which are in high demand, ensuring productivity
maximization by cropping of complementary seasonal crops, application of high quality seeds and
selective application of scientific methods of farming. The soil in Vaishali-Hajipur region is very rich
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and has potential to grow a variety of crops. However, the productivity has to be enhanced by
better farming methods and the post harvest management practices have to be improved for
minimizing losses. The cultivation of high value crops and diversification would also benefit this
sector in a manner which would be financially sound and developmentally sustainable. In the
recently drafted Roadmap of Agriculture Development, the Agriculture Department of Bihar has
classified these interventions into four categories:
Inputs, access, supply and quality

Transfer of technology and extension
Income generation schemes and
Marketing
Urban Agriculture, Horticulture, Floriculture, Seed Production, Nurseries and Organic

Farming Hajipur city area has five villages being which could be added to its Municipal area. The
vacant arable lands in and around the peri-urban region of Hajipur could be utilized for urban
agriculture of new vegetables like broccoli, baby corn and mushroom. Medicinal plants like
Kalmegh, shatawar and shwet musli can be promoted which can cater to the more urbanised
regional market especially Patna. Other urban agriculture that has potential is the development of
seed multiplication farms, nurseries, organic farming and floriculture of jasmine (bela) and
tuberose, which can be established by both private and public sector parties. The GoB has recently
been putting a lot of emphasis on organic farming in the state. The availability of organic fertilizer
in the region and the proximity of terminal markets proposed in Bihta can be adequate impetus for
the development of organic farming. These sub-sectors are being intensively promoted and
incentivized by the state in order to encourage producers to shift their focus to them.
Dairy & Animal Husbandry The milk processing industry is of enormous significance to Bihars
development because of the vital linkages and synergies that it can bring about in the states
industrial and allied sectors of agriculture. Given the wealth of cattle population in the district,
Vaishali-Hajipur region has potential to develop the dairy and milk processing industry. The
industry outlook for milk processing is strong including production of milk tetra packs, milk
powder, ice cream etc. This is especially relevant considering Hajipurs close proximity to the urban
agglomeration of Patna. Cattle and poultry feed plants can also be viable business enterprises based
on the development of this sector. Fish waste from the pisciculture and aquaculture units in the
region, can supply raw material to these feed plants.
Pisciculture (Fish Culture) & Aquaculture The presence of water bodies in the district can be
utilized to develop fishing industry in the district. Currently fish production in the Vaishali-Hajipur
region forms only 3.16% of the total fish production of the state. Fish culture can promote
employment opportunities and become a source of income to small & marginal farmers. The high
demand, available water resources and climatic conditions are capable of making the sector a
potential growth engine for the economic development of the district. The roadmap for fisheries
drawn up by the Bihar Agriculture Department has the following strategies in mind for this sector:
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conservation of water bodies like ponds and tanks

intensive and semi intensive fish culture in ponds
construction of inlet and outlet for easier passage in mauns for culture-based fisheries
culture up to an optimum size
raising annual production of fry up to 65 crores from the present level of 35 crores
developing the market system to support farmers for different price
The efforts made to develop this sector in the Vaishali-Hajipur region also will have to work on the
basis of these strategies.
Apiary & Honey Production
The data from the Horticulture Department of GoB indicates that Vaishali lies in the honeyproducing region of Bihar and as such, there is scope for this agro-business to develop here.
Figure 11: Honey-Producing Districts of Bihar
There are four to five honey flows in Bihar, of which one lies in the Vaishali-Hajipur region.
Approximately 3,900 MT of honey was produced in the state out of the total countrys production of
8,400 MT in 2002. Bihar is the only state producing litchi honey on commercial scale, and it should
rank at par with some of the premium honey in world market, in terms of its uniqueness and
quality. Honey yield of the Italian honeybee species is the highest in Bihar as compared to other
states with a production rate of 40 and 60 kg honey/hive/year under stationary and migratory bee
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keeping respectively. Bihar has potential to produce about 40,000 MT (Rajendra Agricultural
University estimate). The processing industry has not kept pace with the increase in beekeeping in
the state, which has no large processing unit and 80% of the honey is being processed outside the
state. There are a handful of processing units in the organised sector with most of the processing
happening in the unorganised sector with the main being the processing plant run by Mirzanagar
Gramodyog Samiti. With the tremendous emphasis being laid on natural and healthy foods, the
demand for honey has increased manifold both in India and abroad. Therefore, if adequate focus
and support is given to the bee-keeping and apiary sub-sector and quality control and certification
is made mandatory, it abounds with ample opportunities.
Agri Ventures include various input-based enterprises and services including seeds, fertilisers,
repair and servicing of implements like power tiller, zero till machine, rotavator, combine
harvester, paddy transplanter, cono weeder, reaper, sugarcane cutter planter, land leveller and
other modern and improved implements. The prospective agri businesses that have a potential and
that can be promoted in this region are:
Repair and servicing of traditional and modern equipments

Marketing/ Dealership of modern and appropriate technology driven implements like the
Chinese diesel engines and pump sets
Organic fertilizer and pesticides vermi composting could be linked with SHG clusters
Promotion and establishment of Agri-clinics
Post harvest treatments to enhance shelf life,
Grading, sorting, primary processing, packing and local marketing
Providing market and weather information
Soil testing services
Cold storage and warehousing
The DoA, GoB intends setting up 40 ABCs in different parts of the state depending on the locational
strengths. Some of these could be located in the Vaishali-Hajipur area, after a feasibility study is
conducted. These ABCs can house the above services depending on the local needs of the region.
Based on the following linkages, agriculture, food processing and a range of allied sectors can be
assigned as the sector of prime economic significance in the Vaishali-Hajipur region.
Supply side Linkages:- The rich soil of the region makes it ideal for production of a vast range of
grains, fruits, vegetables and flowers. Presence of water bodies create potential for raising fish
culture. The bovine population in the region ensures sufficient availability of milk for the dairy
processing industry.
Demand side Linkages:- Hajipur is well connected to the urban centre of Patna on one side and
has strong connectivity through national highways to other regions of economic importance.
The Processed Food Industry within agriculture and allied sector is divided into the following broad
segments:
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Primary Processed Food which includes products such as packaged milk, unbranded edible
grains, milled rice, flour, pulses, spices, and salt sold in packaged or non-packaged forms.
Value-added Processed Food which includes products such as biscuits, bread, pickles, jams,
jellies, chips and other snacks, sauces, crushes, syrups, tinned items, dehydrated food products,
herbal products, processed dairy products (ghee, paneer, cheese, butter), processed poultry,
processed fish products, confectionery, chocolates and alcoholic and non-alcoholic beverages.
Figure 12: Business Linkage for Agriculture & Allied Sectors
Proximity to Patna,
Road connectivity
Agriculture & Allied Sectors
Rich soil with potential

for cultivation of high
value crops
3.4.2
Core Economic Activity 2 - Handicraft Clusters
Hajipur has traditional artisans who make products using sikki grass, banana fiber and wood but do
not have a commercially sustainable size of operation. There is a necessity to federate the artisans
and bring their operations to a viable scale. The solution may lie in the development of cluster of
handicraft artisans with training, modern design and skillful marketing strategies in place for
backward and forward linkages and actual production. Apex agencies like the Export Promotion
Council (EPCH) sponsored by the Ministry of Textiles (GoI), All India Artisans and Craftworkers
Welfare Association (Craftmark) and the State agencies like the Industries Department which
houses the Bihar State Handloom, Powerloom & Handicraft Corporation should promote these
handicrafts in a focused and integrated manner so that finances and incentives also are utilized in
the most optimal way. The cluster development concept is viable for promotion of handicrafts
peculiar to a region and was one of the thrust areas of the Ministry of Micro Small & Medium
Enterprises for the 11th Five Year Plan.
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A cluster is defined as a concentration of enterprises producing same or similar products or

strategic services and is situated within a contiguous geographical area spanning over a few
villages, a town or a city and its surrounding areas in a district and face common opportunities and
threats.
3.4.3
Core Economic Activity 3 Alternative/ Renewable Energy
There is a huge shortfall of power in Bihar and industrial and indeed overall development of the
state is adversely affected by this factor. Hence, the GoB is now forced to look into every possible
mode of power generation. The crop residue and farm wastes like husk of rice and wheat, straw,
corn cobs, seed coats of oil seeds, stalks and sticks of fibre crops, pulp and wastes of plantation
crops, peelings, pulp and stalks of fruits and vegetables are the raw materials used as input for
direct cogeneration of electricity through this process. There is a wealth of this kind of raw material
available in the Vaishali-Hajipur region, which could be used for this purpose. The SIPB has already
approved the setting up of one solar photo-voltaic battery plant and one 10 MW biomass based
power plant in the region.
3.4.4
Core Economic Activity 4: Service-based Sectors (Tertiary Sector)
Earlier in the chapter, district-level analysis has shown that in the Vaishali-Hajipur region, the
sectors of construction, trade and hospitality industry, communications, pubic administration,
banking and insurance and the category termed as other services had the most number of
employees. Presently, the following sectors, will have to be focused on as far as the service-sector
based economy is concerned:
Tourism & Hospitality Sector
Vaishali has historical, archaeological and religious importance which makes it an attractive tourist
destination. Vaishali falls under Buddhist, Ramayana and Sufi tourist circuit promoted by Bihar
State Tourism Development Corporation. As such, it does have potential as a tourist destination
provided it is taken up is a focused manner and PPP opportunities are offered to entrepreneurs for
developing this sector. Transport and other linkages like the provision of sight-seeing tourist guides
and local arts and crafts shops should form an integral part of the tourist package.
With the boost in tourism, the hospitality sector will have to be necessarily developed in tandem. As
Hajipur is close to Patna, it may be feasible to promote Ayurvedic and wellness spas and
amusement parks, along with the hotel complexes, in order to attract the domestic as well as
foreign tourists which visit these centres. These could be PPP ventures also.
Agri-Clinics and Agri Business Centres
The high agricultural productivity of this region can be further enhanced to make the farming
business more profitable for the cultivators. Agri-Clinics are envisaged to provide expert advice
and services to farmers on various technologies including soil health, cropping practices, plant
protection, crop insurance, post harvest technology and clinical services for animals, feed and
fodder management, prices of various crops in the market etc. which would enhance productivity of
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crops/animals and ensure increased income to farmers. The ATMA centre in Hajipur can be a
facilitating agency for the agri-preneurs operating in this field of business.
Specialty Hospitals Polyclinics, Diagnostic Labs, Telemedicine and Health Insurance Services
through PPP
Hajipur already has a healthcare service sector which is limited, unregulated and often without
standardized health care service delivery. Specialty hospital and diagnostic facilities by private
players like Fortis, Dr Lals Path Labs and other reputed private players will not only foster quality
of internal standards but also create employment opportunities, contribute to the economy and
control unregulated growth of sub standard health facilities. Feasibility studies should be
conducted prior to establishing of such facilities in the region. The 12th Plan may see the launch of
the National Urban Health Mission (NUHM), which will give this sector a much-needed boost by
promoting partnerships and enabling the environment for improving healthcare services in urban
areas.
Vocational Education & Skill Development
There are two ITIs in Hajipur, but they are limited in their course offerings to electrical and
fabrication trades. With the introduction of new avenues of economic development like biomass
energy production, urban agriculture, organic and contract farming, agri-clinics, agri business
centres, food-processing industries and so on, it is of vital importance that the capacity of the local
populace be developed in these businesses, trades and services. This will call for the establishment
of vocational education, skill and entrepreneurial development centres which are market-linked
and output-based, in and around Hajipur. This can be done on a PPP basis in the city.
Industrial (MSME) Workforce
With the establishment of three industrial zones in the Vaishali-Hajipur region and the SIPB
approval of 46 MSME units in the area, the prospective employment of skilled labour in the area
will go up to nearly 6000 persons (see Annexure 3 for list of SIPB approvals). These workers will
mainly have to be in the food-processing, mineral water, preservation, storage and packaging
industry, plastics and chemicals and energy plants based on alternative sources. The skill
development business should be dove-tailed with these particular skills which will be in demand.
3.5 SWOT Analysis

Strengths
1. Large Consumer Market: Population of about 83 million Bihar accounts for 8.07 % of
Indias population and thereby making it one of the biggest consumer markets in India.
2. Tourism potential: Vaishali falls under Buddhist tourist circuits. As per Bihar Development
Report 2006, it attracted 18.57 percent of total foreign tourist and 2.95 percent of total
domestic tourist in the district.
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3. Industrial Area: There are two Industrial estates and one agri export zone in the VaishaliHajipur region, which can be exploited for backward and forward linkages and the
possibility of supporting ancillary micro-enterprises like spare parts, packaging,
transportation and so on.
4. Education seeking society: Per capita spending at Rs 484 on education in Bihar evinces a
knowledge seeking economy. The concerted and successful efforts of the present State
Government to promote the education of the girl child will also provide a boost to efforts in
this sector. Skill development and capacity building are dire needs of these cities which can
be developed into profitable business ventures if they are supported by market-based
realities.
5. Fertile Agricultural Land: Good quality agricultural land has positioned Vaishali as one of
the districts with high agricultural productivity. 62.1% of the land is under net sown area. It
is especially known for its high levels of productivity in cash-rich crops like banana, litchi
and mango. The large produce base is a huge advantage, provided storage, primary and
secondary processing and marketing facilities are supported by effective linkaging and
networks.
6. Location: Proximity to the largest urban agglomeration of Patna Capital Region and the
proposed terminal market at Bihta for sale of produce.
Weaknesses
1. Micro Credit practices in Vaishali-Hajipur region are not well established. This is often
a deterring factor for growth of local, small and household industries. So these require
deepening and increased outreach.
2. Low Crop Yield: Even though the region is rich in soil and water resources, its average
yields of Rice, Wheat, Maize and Sugarcane are only about 32, 44, 40 and 38 percent of the
potential yields, respectively. This is due to the lack of scientific cropping methods
throughout the crop cycle.
3. Poor infrastructural facilities in commercial and residential areas, as a support for
local economic developmental activities.
4. Perceived lack of positive governmental response to entrepreneurial ventures.
5. Perceived lack of ease in business approval processes and transactions.
Opportunities
1. Amusement & Wellness Destination: There is an opportunity to develop Hajipur area as
an amusement and wellness destination along with tourism, due to its advantage of being a
Buddhist tourist destination for pilgrims and devotees.
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2. Biomass Waste Availability: The crop residue and farm wastes like husk of rice and
wheat, straw, corn cobs, seed coats of oil seeds, stalks and sticks of fibre crops, pulp and
wastes of plantation crops, peelings, pulp and stalks of fruits and vegetables are the raw
materials used as input for direct cogeneration of electricity in biomass energy plants.
Vaishali-Hajipur region, being one of the agriculturally rich and productive areas in the
state, can cash in on this opportunity as there is bound to be adequate bio waste available
for such a venture.
3. Relatively lower land cost as compared to Patna, with single window clearance to enable
local entrepreneurs to form start-ups with lower initial CAPEX requirement.
4. Presently, there is a lot of focus on Hajipur as it is well-located, well-connected and has a
large amount of agricultural produce. Hence, development of the region is being promoted
in an aggressive manner.
5. There are several prestigious teaching & research institutions in the region like CIPET
and NIPER, available for technical training in relevant industries for entrepreneurs, staff
and skilled labourers.
Threats
1. Migration of skilled work force towards other states and other big production centres.
2. Poor policy support for PPPs in Infrastructure development for Agro based Industries,
contract farming etc.
3. No APMC act: Because the traders activities are now completely unregulated, nontransparent transactions and price collusions are even more pronounced than they were
under the APMC system. Because of the lack of alternative marketing channels, small-scale
farmers have no choice but to utilize the current trader-dominated marketing system
despite the rampant exploitation.
4. Inability to induce investor confidence in Bihar and especially in its provincial towns.
5. Inability of governmental schemes to have the desired impact on productivity,
technology towards enhancing productivity both in agriculture and industries.
Source: Stakeholder Consultations in Hajipur and Feedback Analysis
3.6 Recommendations
1. Introduction of high value crops In order to promote production of non traditional
crops in the region, agri business centres supported by agri clinics need to be opened which
provide farmers access to new seeds, farming methods of new crops etc. Training and
capacity building of agriculturists in the farming of these new crops should be promoted
through KVKs and ATMAs.
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2. Organic Farming in Bihar is being adopted since last few years, but due to lack of
certification facilities and lack of knowledge among the people, the farmers are not getting
the proper market and right prices for their organic produce. The farmers need to be made
aware about certification and to reduce the extra burden being incurred towards cost of
certification. Further, cost of production can be reduced by use of organic manure which is
of good quality and rich in nutrients by the production from various sources like vermicompost and green manure. SHGs can be involved in this activity in the peri-urban areas in
Hajipur.
3. Improving the Agricultural Productivity: - Power availability to agriculturists and local
entrepreneurs will have to be enhanced through the establishment of biomass and coalbased plants. Improved and more scientific methods of farming and an appropriate level of
mechanization without harming labour interests are also required. Impetus to agri-clinics
and the formation of a district network of them is suggested, along with focussed inputs
from ATM and KVK on a regular and sustained basis through communication campaigns
and capacity-building events. Internet-based information systems like e-chaupal should be
established towards this end.
4. Agro/food processing is receiving intense and focused attention at the national level,
the time is appropriate for Bihar to evolve strategies, which will ensure an accelerated
growth of the food processing industry which, in turn, would exert the demand pull for the
agriculture sector to grow, increase processing, reduce wastage and ensure value addition
in perishables like fruits, vegetables, meat, fish and poultry. Vision 2015 for Bihar specially
sets target for reducing wastages to about 15 per cent and increase the level of processing
from the present negligible levels to at least 10 per cent.
5. Promotion of Dairy-based Industries: There is a tremendous demand for milk and its
products in the whole of Bihar. It is with the development of the dairy sector in mind that a
milk processing centre of 1.00 llpd is being set up in Hajipur, as well as a 100MT cattle feed
plant. The secondary processing of milk into different dairy-based products has potential in
this city, which is supported by COMFED. SHGs can be involved in the secondary processing
enterprises. However, this will have to be supported by improved veterinary services in the
area.
6. Greater Access to credit to famers and small entrepreneurs: - There is urgent need to
create a complete ecosystem for credit on easy terms to marginal farmers and small and
micro entrepreneurs, which will assure them regular and timely working capital, while
taking into account the risks faced by them. The most vital element in this is changing the
mind-sets of bank personnel in the sanction of such loans.
7. Supporting infrastructure to improve business linkages and prevent produce loss: The development and strengthening of region-specific supply chain infrastructure and
linkage for prevention of losses in the agricultural sector is essential for better business.
The district has very good potential for vegetable & Fruit production. However, storage
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systems for fruits and vegetables are very inadequate. Most of the produce after harvest is
immediately transported to the markets within and outside state and some to the
processing units mainly for fruits. This factor deprives farmers from reaping benefits for
their produce on the one hand and also does not help generation of employment. Hence, the
strengthening of preservation infrastructure and food processing units would meet the bipronged strategy of effective and economic use of local produce on the one hand and create
employment at the urban level on the other.
8. Alternative to Repealed APMC Act: In 2006, the government of Bihar repealed the
Agricultural Produce Marketing Committee (APMC) Act. However, private sector
investment in agriculture has been minimal, with the lack of development primarily caused
by poor governance. Consequently, many of the mandi facilities are still being utilized by the
traders. Because the traders activities are now completely unregulated, non-transparent
transactions and price collusions are even more pronounced than they were under the
APMC system. Because of the lack of alternative marketing channels, small-scale farmers
have no choice but to utilize the current trader-dominated marketing system despite the
rampant exploitation. The Department of Agriculture, GoB needs to remedy this situation by
giving due consideration to the proposal of the Committee headed by Shri R.C.A. Jain to
upgrade marketing of produce. The establishment of a terminal market near Patna at Bihta
is a step in this direction. A suitable model of contract farming specific to crops can be
adopted to solve the problems of small and marginal farmers.
9. Development of tourism potential of Vaishali district. Although Vaishali district has
many tourist destinations, but they are not popular due to lack of promotion of these tourist
spots. There is a need to identify and develop these tourist destinations and upgrading them
with world class facilities, in order to attract a higher footfall.
10. Identification of Craft Cluster Under the MSME-AHVY scheme, craft clusters have been
identified all over India which are facilitated with support from the government for
activities to develop the sector in the region. In 2010, 29 handicraft clusters have been
identified in Bihar. In Hajipur a wooden craft cluster has already been identified. A similar
cluster for sikki grass weaving should be identified and established in the Vaishali-Hajipur
region to promote this craft also.
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CHAPTER 4: BUSINESS COMPETITIVENESS ASSESSMENT OF THE CITY

4.1
Investment Competitiveness Analysis
According to the World Bank Report4 on development in Bihar, the below average Investment
climate in Bihar can be attributed to the institutional, economic, political and infrastructural
environment that shapes the manufacturing sectors operations and expectations.
In terms of physical and institutional environment, Bihar ranks the lowest among the states of
India. For most of the other IC indicators such as penetration of infrastructure, financial systems
and workforce quality, Bihar is ranked at the bottom or close to it. This can be attributed mainly to
following reasons.
Inadequate Infrastructure to support industries and commercial services.

Weakness of local factor markets
Governance
However, in recent times substantial improvement has been made to improve the investment
competitiveness of the state and create an enabling environment for local business to grow. Owing
to these positive developments Vaishali-Hajipur region has been sanctioned with the following
investments in various sectors of economic development.
Figure 13: Proposed Investments approved by SIPB in Hajipur, Vaishali

Biomass & Solar Energy
Education
102
1.7
Cold Storage, Warehousing
76.5
Micro & Small Industry
500
734
Healthcare
275
0
200
400
600
800
Source: - Proposals Approved by State Investment Promotion Board (SIPB) for details see Annexure 3
4Comparative
Final Report
analysis done for Draft Interim Report: Local Economic Development Assessment for Bihar
Page 81
Efforts should be made by the district and city administration to establish linkages with these units
in terms of employment and promotion of forward linked units like sack stitching, manufacture of
packaging material, transportation and so on.
4.1.1 Investment Attractiveness and Business Concerns

Investment Attractiveness: Investment attractiveness of Hajpur region was examined through a
comprehensive list of 56 indicators grouped in broad categories such as: (a) quality of physical and
social infrastructure, (b) simplicity of rules and procedures, (c) Orientation and capacity of
government, (d) responsiveness of government, (e) property rights and ease of transactions, (f)
corruption, and (g) city competitiveness for attracting private investments. Each of these broad
criteria of industry competitiveness has been evaluated through a set of detailed indicators ranked
into five categories of responses: ranging from simple/very good to complex and very poor.
Besides, the industry specific survey has also attempted to capture the main advantages and
disadvantages of the project cities for attracting industries and other private sector investments.
Due to the small number of responses / sample used in this survey (nearly 16 cases), these
indicators could not be weighted while ranking business concerns or ranking project cities in terms
of business climate.
According to comparative analysis5 of the business climates of the various cities suggests that Patna
became the most desirable place for investments followed by Hajipur after 2005. Hajipur with its
close proximity to Patna region intends to capitalize on the investment attractiveness of this region.
As shown below Hajipur scores fairly well in most of the indicators listed above. Some of the main
business concerns for attracting investments and doing business in Vaishali are corruption and
responsiveness to grievances. Main attractiveness of Vaishali is the availability of cheap skilled
labor, orientation of government to promote the destination and a rich agriculture resource base.
Table 25 : Ranking of various Cities in terms of Business Climate, 2008
Project Cities
Patna
Munger
Hajipur
Gaya
5Comparative
Final Report
Ranking of Project Cities based on Business

Climate
Before 2005
After 2005
2
1
1
3
3
2
4
4
analysis done for Draft Interim Report: Local Economic Development Assessment for Bihar
Page 82
4.1.2 Business Concerns of Private Sector Investments in General for Vaishali

(Perception Analysis)
The industrial attractiveness survey supports the view that the industrial climate has improved
noticeably in Bihar after 2005. However, infrastructure deficit is the main area of concern among
the investors. On most counts of business concerns there are perceptible changes, except in the case
of rules and regulations related to labor. Areas of major concerns are poor responsiveness and
support systems at local government level, corruption at state and local levels and delays in
property transactions.
Table 26 : Private Sector Industry Investment Concerns in Vaishali, 2000-2011
Broad Industry Attractiveness Criteria/ Business

Concerns
Availability of Basic Physical Infrastructure and Skilled

labor
Rules and Procedures related to setting up industry
Percentage of Responses
stated as serious concern (non
weighted)
2000-2005
2005-2011
59
51
57
52
Rules and Procedures related to labor
60
56
Regulatory approvals from State Bodies
55
45
Rules and regulations related to taxation/excise duties
49
52
Orientation of State Government functionaries for

promoting new investments
Orientation of City Government functionaries for
promoting new investments
Responsiveness of State Government functionaries to
resolve grievances
Responsiveness of City Government functionaries to
resolve grievances
Corruption at State Level
55
43
59
51
70
68
87
80
74
61
Corruption at Local Government Level
83
75
Protection of property rights and ease of transactions
82
72
LEGEND
Not
Serious
<
50%
Serious
50608059% Acute 79% Deterring 100%
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The following points are put forward regarding each of the above indicators of the Business
perception of Investment climate in the Vaishali-Hajipur Region.
a) Investment Climate: With regard to quality of inputs & infrastructure, the business perception
regarding internet connectivity, adequate water availability and smooth roads have improved,
while the perceptions regarding quality of stable power supply, availability of credit/ loans
from banks and having a disciplined and well-trained work force, have deteriorated in the
period 2005 2011, as compared to the period 2000 - 2005. This implies that the Draft CDP
recommendations on improvement of the citys infrastructural facilities should be implemented
with seriousness by the State/ ULB and other stakeholders and skill development activities in
line with GoIs National Skill Development Mission and SJSRY are to be promoted on a large
scale. Also, banks need to be sensitized about the lack of availability of finance and their
reluctance to lend to entrepreneurs.
b) Simplicity of Rules and Procedures: With regard to simplicity of rules and procedures, the
perception in terms of environment regulations and setting up of new ventures is positive,
whereas their views about payment of taxes have deteriorated from the 2001-05 period. This
could be simplified through the implementation of the proposed single window system. The
MSME and the Industries department could also run a communication initiative to make these
systems intelligible for the layman.
c) Orientation of the Government: Orientation of the Government towards reforming for a
better future and political leadership is improved during period 2005 2011, while business
perceptions about senior bureaucracy and politicians have also improved marginally. Measures
for promoting transparency and approachability through E-governance and communication, as
well as promoting the use of RTI and other similar instruments and capacity building of political
and bureaucratic functionaries as suggested in this and other reports, would further improve
the situation.
d) Responsiveness of the government: Interestingly, the business perception regarding ease of
meeting and speed of decision making by the State Government has improved over the period
of time. However, the same is not the case with the local government the perception towards
their responsiveness to the requests and needs of entrepreneurs to resolve grievances has
taken a fall, especially that of the ULB functionaries. On a broad level, the institutionalization of
a performance management system within the local government, which would make the
officials accountable for their actions, would be the appropriate instrument to deal with apathy
and inertia among public functionaries to some extent. Appropriate capacity building initiatives
as suggested in this report, the single window clearance system and proper implementation of
RTI would also make a positive difference to this aspect. Frequent transfers are not the panacea
for these ills.
e) Corruption: Corruption level in local government is perceived as quite a bit higher than that at
the State government level. Some of the measures already suggested above would help improve
this aspect.
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f) Property rights and ease in transactions: The perception about the safety of immovable
property has become slightly better. However, the situation with regard to intellectual property
rights has worsened.
4.1.1 Potentiality Survey of Local Businesses in Hajipur

A Business Potentiality Survey was conducted and information was collected by applying
quantitative and qualitative methods. Interviews and focus group discussions were held with
different stakeholders on the type of enterprise activity, input situation and customers, and
employment patterns to gain insight into the spatial economic linkages as well as potentials and
constraints. (Please see Section 1.4 in Chapter 1 for rating parameters)
Employment
Generating
Potential
Women
Employment
11
2.5
13.5
3
4
5
Gate and Grill Making

Ice Cream Making
Detergent Production
2
3
3
2
3
2
2
2
2
1
1
1
1
1
1
0
1
1
0
0
0
8
12
11
2.5
11.5
2.5
2.5
11
Fruit Processing Unit

(Mango, Litchi)
Vegetable Processing
Unit (Tomato,
Makhana)
Honey Processing Unit
2.5
11.5
Handicraft Items
10
10
Bakery
2.5
2.5
12
11
Carton Manufacture
2.5
9.5
12
Milk Processing Unit
2.5
2.5
11
13
Rice Mill
2.5
2.5
2.5
10.5
Potentiality
Index
Demand
Condition
3
Competition
* Factor
Availability
2
Sector/Main
Production
Seed Production and

Processing
Banana Fibre
Sl No
Raw material
availability
Government
Policy &
Procedure
(Environmental
friendliness)
Score or
Total
Table 27 : Matrix showing Potentiality of various Businesses in Vaishali-Hajipur Region
* Factor Availability rating on a scale of 1-3 has been assigned on the basis of factors in the following table.
On the basis of the above analysis it may be seen that the agri-based and food processing industries,
are the ones which have the best potential. While the handicrafts business has potential, the
forward and backward linkages, is a deterrent to its promotion. However, the existing artisans may
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be encouraged and strengthened with appropriate marketing systems to perform more effectively,
especially under the cluster development based system being promoted by the Central and State
Governments.
Table 28: Factor Availability for Potential Businesses in Vaishali
Infrastructure
Knowledge Resource
Credit Availability
Capital Resource
Human Resource
Material Resource
Sector/Main Production
Sl No
* Factor Availability
Seed Production and

Processing
Banana Fibre
Gate and Grill Making
Ice Cream Making
Detergent Production
Fruit Processing Unit (Mango,

Litchi)
Vegetable Processing Unit
(Tomato, Makhana)
Honey Processing Unit
Handicraft Items
10
Bakery
11
Carton Manufacture
12
Milk Processing Unit
13
Rice Mill
Legend: Y Yes, N No, P Partial
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4.2
Demand Assessment & Value Chain Analysis
As suggested in Chapter 3, agro-based food processing industries are identified as a core economic
activity of Hajipur and its hinterland. According to a conservative estimate6, the current market for
food in Bihar is a huge Rs 40,000 crore. At the estimated national growth rate of consumption of 7
per cent, the food consumption market in Bihar is estimated at Rs 56,000 crore in 2010 and Rs
83,000 crore in 2015.
Table 29 : Market for Food based Industries in Bihar (in Rs crores)
Value Chain Analysis: The following is an attempt at mapping out the broad demand and supply
chains for the goods and services based on consultations with the industry and market players.
Respective value chains have been identified based on discussions with local retail and whole sale
dealers, industry and business associations and local officials.
Food Processing in Bihar; The Road Ahead, PG 39, Prepared by ILFS and NSSO 60 th round data
Final Report
Page 87
4.2.1 Value Chain & Demand Analysis for Food Processing Sector
India is the second largest producer of Fruits and Vegetables (F&V), accounting for 82 million tones
and 10.9% of global fruit production, and 47 million tonnes and 8.4% of vegetables production. The
prominent processed items are fruit pulps and juices, fruit-based ready-to serve beverages, canned
F&V, jams, squashes, pickles, chutneys, and dehydrated vegetables. The major products processed
and exported are dried and preserved vegetables, mango pulp, pickle, and chutney.
Vegetable and food grain processing has been done in Vaishali-Hajipur region in scattered units.
Although the region is blessed with ample production of a variety of vegetables and lentils (Vaishali
district is one of the leaders in brinjal, cauliflower, mango and litchi production), lack of
modernization in processing (mainly secondary processing) and lack of know-how towards value
addition prevents the entrepreneurs from fetching higher profits.
Figure 14: Supply Chain for F&V and Agro based Marketing
Figure 15: Value Chain for Fruit & Vegetable and Other Agro based Processing
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Currently, vegetables and fruits produced from farms are picked by the village commission agent at
very low prices to producers. These are then transported to local mandis and weekly haats and a
larger portion is exported to neighbor states like UP, MP and region of Bihar and Jharkhand, where
it is sold to retail consumers on further commission basis. This process is disadvantageous both to
farmers (who are typically paid around 40%-50% of retail price) and consumers (who are paying
more for commission than for product itself). Lastly, this system leads to wastage as high as 2025%.
Demand Potential: This sector is poised to grow at the rate of 8-10% annually and demand is
expected to come both from domestic markets as well as for Exports. Efforts should be made to
develop this sector with more emphasis laid on organized industries for secondary processing
(making potato wafers, squashes, preserves, vermicelli, atta, besan, sattu, frozen and dehydrated
products). Currently, most farm produce is directly exported to other states for further value
addition, hence contributing to economic prosperity of those states (Maharashtra, UP, AP etc.).
4.2.2 Value Chain & Demand Analysis for Dairy Sector

India ranks first in the world in terms of milk production in excess of 100 million tonnes growing at
a rate of over 4% annually. A large number of households and small and marginal farmers are
engaged in milk production. About 35% of the milk is processed. The rapid growth of the dairyprocessing industry is likely to lead to a greater demand for value-added, milk-based products, such
as processed cheese, table butter, sour milk, yoghurt and ice cream. A higher demand for branded
and probiotic milk has also led to a rise in investment for milk processing.
Figure 16: Value Chain for Dairy Processing
The Vaishali-Hajipur region is one of the cattle concentrated areas and there is distinct scope for
Dairy based activities, due to the huge demand for milk and milk-based products in the region.
Presently, owing to limited technological inputs most of the milk is just given primary treatment
and consumed in the local market.
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Primary Processing of milk is explained in diagram below. The milk processing plant proposed in
Hajipur, with the capacity of processing 1 llpd, will prove to be of great help to the dairy farmers
and co-operatives in this region. However, several other steps as enumerated later below, need to
be taken to manage the value chain in a way that will maximize benefits for the producers.
Figure 17: Primary Processing of milk
Secondary Processing of milk is explained in diagram below:

Figure 18: Secondary Processing of milk
During the discussions with local entrepreneurs and stakeholders, it emerged that there are no
small or medium scale secondary processing facilities in the city or district. (See Figure 18 above
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for secondary processing of milk). The milk processing industry was identified as one of the most
suitable agro based industries for this region. Since the basic ecosystem for milk based processing
is already being put in place in the Vaishali-Hajipur region, there is greater likelihood of such
industries flourishing i.e. ice-cream factory, Butter & Ghee processing units and Milk Culturing
units.
Demand Potential: Milk processing capacity in India has grown at a CAGR of 4% with almost
negligible growth in Bihar. Bihar produces about 2.9 million MT of milk out of which only 9-10% is
produced by COMPFED (Sudha Dairy). However, technology being used is obsolete with no primary
processing and cooling facility at the farm/village level. Private investment needs to be attracted to
bring latest technology into primary processing as well as create industries for secondary
processing with Hajipur itself instead for exporting milk for such value addition.
Promotion of the Dairy Industry in Hajipur:
The reasons for promotion of the dairy industry in Hajipur are as follows:
Per capita availability of milk in Bihar during 2005-06 was 154 gms per day against a
national average of 241 gms per day. The Indian Council of Medical Research has
recommended the minimum requirement of 220 gms of milk per person per day indicating
a shortage of around 66 gms per capita. Shortage of milk is chronic in Hajipur.
COMPFED is already operating in Vaishali district. Under this programme, the following
activities are proposed and some are already being implemented in Hajipur:
Working strength performing for outdoor & indoor treatment

Management of running pathological veterinary laboratories
District and dispensary/hospital level veterinary Medicine/feed supplement storage
and distribution
Improved stock procurement and distribution programme
Animal Census, Prevention of cruelty to Animal Progammes and allied animal
welfare programmes,
Infertility problem management, fodder seed distribution and demonstration
loan application processing and forwarding of commercial Banks against Animal
Husbandry schemes,
The above measures will facilitate the growth and success of the Dairy Development in Hajipur. Sale
of milk value-added products manufactured through secondary processing MEs can be done
through Sudha booths / kiosks at which local vegetables can also be stocked based on Delhi Safal
pattern. SHGs can be involved in the secondary processing and marketing activities. They could be
financed through the SJSRY for this activity.
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Dairy Sector and PPP in Hajipur:

PPP opportunities exist for the dairy sector in Hajipur. Some suggestive activities are as follows:
Infrastructure and Logistics Development:
- Build Own and Operate and transfer laboratories and milk testing facilities to grade and
ensure remunerative prices to the producers.
- Design, Build and operate Animal feed processing plants
Operations Management:
- Maintenance and upkeep of Infrastructure.
- Quality testing and nutrient estimation at processing plant end.
- Regular maintenance of cleaning in place systems and conformation to quality standards like
ISO, HACCP etc.
- Transportation
Capacity Building through Training & Extension
- Corporate entities could set up special vocational training institutes for dairy processing
technology
- Private sector can also arrange workshops for the training of all the stakeholders involved
the supply chain to educate and sensitize the masses towards clean and hygienic milk production.
These activities can be taken up by the State Department and incorporated in their Annual Action
Plan.
4.2.3 Value Chain & Demand Analysis for Grain Milling Sector
Grain-based products are the largest contributors to the Food Processing Industry, accounting for
over 28% to 30% of revenues. The total rice milling capacity in the country is about 200 million
tonnes per annum. Over 90% of the produce falls under the segment of Primary Processed Food.
Demand Potential: Currently there are 58 roller flour mills (about half of which are closed), 4872
rice mills (out of this only 51 modern cum modernized mills). The food processing in Bihar today is
mainly in the unorganized sector with more than 1000 bakeries & confectionaries and small-scale
grain processing continuing in the unorganized sector. The estimated growth rate of food
processing sector in Bihar during past two to three years has been 3.46% as compared to all India
figure of about 7%.
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Figure 19: Value chain for Grain milling based products
There is need for scientific milling and processing of food grains like rice, wheat, maize and pulses.
In case of rice and wheat, old technologies like hullers or shellers are used for milling resulting in
lower recovery and consequently lower value. Most of the units are very small in their scale of
operation and using very primitive technology. Most of value addition (like de-husking, polishing,
packaging etc.) is done outside the Vaishali-Hajipur Region, which is a loss to the local economy.
These value addition activities need to be brought within the city economy through the creation of
such a facility in the region.
There is a proposal to convert Kisan Bazaar Samitis located in the towns of Bihar into Rural
Business Hubs. The local traders have stated that the godown and warehousing space provided
here is very limited for private individuals. Infrastructural facilities are sadly lacking. Under the
Rural Business Hub Initiative proposed, this area could be refurbished with the injection of funds so
that primary producers and traders could have access to proper marketing and processing
facilities in one area. This could also be extended to secondary processing with the adoption of the
Food Park scheme proposed by the Central Govt. and GoB, under which all the activities of the value
chain of primary produce are located in one large complex, thus cutting down transportation costs
and wastage, which are resulting in poor returns for producers.
4.2.4 Value Chain & Demand Analysis for Fish Processing Industry
Fisheries in the Vaishali-Hajipur region are very limited in their scale of operation and largely done
for local consumption. However, the availability of large number of water bodies and the large
number of cold storages in the area, makes a strong case for Fish processing industries in this
region. No fish processing industries are located in the state and further there are no proper
marketing facilities are available for fish produce. However, this sub-sector is poised to grow at the
rate of 3.9 % and hence presents a huge opportunity for the state to cash into, with appropriate
strategies and market linkages.
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Figure 20: Value Chain for Fish Processing
As per the ULB administration, the area which comes under agriculture and water bodies in Hajipur
is approximately 24.4% of the land cover. The major water bodies in city are listed below:
Table 30 : List of Major Water Bodies in Hajipur
The Fisheries Department contracts out some of the ponds for pisciculture. The prospect of
developing the fish processing micro-enterprises and industry in this region may be a feasible
proposition. In addition, from among the existing fishing entrepreneurs and traditional fisherfolk,
there are wastes from cutting/ processing fish and trash fish unsuitable for human consumption,
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which can be processed to produce dried fish meal which is used as protein supplements in
compound poultry feeds as well as a fertilizer. The linkages between the existing and proposed
poultry feed plants in the region and the fish processing entrepreneurs and co-operative societies
will have to be created with the help of the Department of Animal and Fish Resources, GoB and the
DIC.
4.2.5 Value Chain & Demand Analysis for Biomass-based Energy Generation
Energy is a critical input to the development process. Where on the one side, industrial
development is not possible without growth in power availability, on the other side, agriculture
productivity is impacted by extent of irrigational facilities which cannot be increased unless power
is available. The state of Bihar has historically lagged behind other states in terms of growth in
power sector, but the recent thrust given to the sector and new power projects launched have
improved outlook for power sector in the state.
Market
India as well as Bihar has had negative energy balance making it a net importer of energy. Bihar
imports power from Jharkhand. Even though several power projects have been launched by the
state government, it still falls short from the demand. This creates market for development of
lateral projects including renewable energy projects. Currently, the power spectrum of Bihar
consists of only hydel and thermal power.
Figure 21: Growth of installed power capacity in Bihar vs Rest of India
Source: Energy Department, Government of Bihar
Value Chain Analysis: Biomass based electric power generation technologies succeeded in niche
applications such as supplying electricity in decentralized location and industries generating
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biomass waste. Biomass energy cost is highly variable, depending upon the source, location etc. The
base price of coal in India is Rs. 48 per Giga Joule (GJ) and biomass is Rs. 72 per GJ.
Figure 22: Value Chain for Renewable Energy
Raw Material The crop residue and farm wastes like husk of rice and wheat, straw, seed coats of
oil seeds, stalks and sticks of fibre crops, pulp and wastes of plantation crops, peelings, pulp and
stalks of fruits and vegetables are the raw materials used as input for direct cogeneration of
electricity through this process.
Investment Potential - Typical plant sizes at present range from 0.1 to 50 MW. Co-generation
applications are very efficient and economical.
Capacity
Rice
husk
10 MW
power Plant
Investment
Rs 50.8 Cr
Employment
20
Tentative IRR
25%
Biomass-based power plant in at Giddha Industrial Growth Centre, Bhojpur Distict, Bihar
The first biomass-based multi-fuel captive power plant in Bihar is being constructed at Giddha
Industrial Growth Centre. The plant is due to come online in December 2011. The plant will use
rice husk as fuel. When rice husk is not available, it will burn coal. The plant is being established
by a paper mill which would manufacture paper for cardboard and craft paper. The power plant
is being set up with a 60% subsidy from the state government, payable on purchase of plant and
machinery for captive power plants of 1-3 MW capacity, and using biomass as the fuel in
accordance with the states Industrial Incentive Policy 2011. This policy also provides for a 50%
subsidy on the purchase of plant and machinery for setting up captive power plants using coal.
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Figure 23: Conversion Technologies for Biomass-based power plant
4.3
Marketing Assessment
There are more that 7,000 rural markets and Haats in addition to 95 APMC mandis and 32
principal market yards7. Less than 13% of these rural markets have their own buildings and
premises for basic grading and sorting facility. Marketing channels for food grains and fruits and
vegetable is largely governed and supported by chain of intermediates (village agents, arahatiya,
wholesaler agent) from farm to end user.
Most of the agricultural produce is marketed through weekly/ periodic markets (haats) as and
when the produce is ready. Due to lack of storage and transportation facilities, most of the produce
is flooded into the market for shorter span, thereby creating low profit margins for farmers. In
terms of the various marketing costs borne by different players, retailers and farmers typically
bear the cost of sorting and cleaning, farmer and village intermediary bear the cost of packing and
bagging, intermediaries bear the cost of weighing, loading and unloading and wholesalers mainly
bear the cost of storage. If any, transport charges are shared between all the players in varying
proportion, physical handling/losses are borne by farmer, wholesaler and retailer and market
charges by the intermediaries.
Food Processing in Bihar; The Road Ahead, pg 44, Government of Bihar
Final Report
Page 97
Table 31 : Major Markets of Vaishali-Hajipur Region and Production Potential of major commodities
in hinterland
Commodity
Size of Agri. Market
Market Center
Modal Price
Production in Vaishali (as
(daily arrivals)
for commodity
Rs/Quintal
on 2008-09)
Food Grains
Rice 4.6 tonnes
Hajipur market
1200 - 1295
90765 MT (Rice)
(wheat, rice,
Wheat 5.3 tonnes
and
Patna
900-1000
150493 MT (wheat)
pulses, oil
Maize
market
50490 MT (maize)
seeds)
Cash Crop
and Allied
Sectors
Fruits
Vegetables
Source
Fish 2.2 tonnes
Hajipur market
Mango
Guava
Banana Ripe 3 tonnes
Banana Green 9.9
tonnes
Litchi
Onion 62.8 tonnes
Potato 3.5 tonnes
Other vegetables
Hajipur market
3600
600
9400 MT
77977 MT (Mango)
11316 MT (Guava)
26916 MT (Litchi)
145683 MT (Banana)
650
Hajipur
and
Market
market
Patna
450 - 595
585 - 600
1000
32475 MT (Onion)
212897 MT (Potato)
89234 MT (Caulifower)
68881 (Brinjal )
http://agmarknet.nic.in and Field Survey (August 2006) Bihar

Agricultural Management and Training Institute, Patna
From the above table it may be seen that wheat, potato and banana volumes are high and that
trading and primary and secondary processing of these commodities offer valuable scope for local
economic development on a regional basis, through processing and agri-marketing initiatives.
4.4
Business Linkages and Clustering Assessment
As suggested in Chapter 2, agro based food industries are the core economic competitive sector of
the local economy. Locationally, Vaishali-Hajipur region is blessed with rich agricultural belt of the
state and strong connectivity to large urban center like Patna, thereby also providing it a good
market in vicinity. The local produce from Vaishali-Hajipur region is either channelized into the sale
of fresh produce through the Hajipur Bazaar Samiti. Some portion of produce is also channeled
towards nearby mandis like Patna Mandi from where it is directed towards major wholesale
mandis of Naya Bazaar, Delhi and Postha, Kolkata. Quantity and state of (after processing, if any)
goods varies from product to product. Although Vaishali-Hajipur region is situated at the very heart
of the vegetable producing regions of Bihar, the paucity of food processing industries for secondary
level treatment results in transfer of most of the local produce to other areas.
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Figure 24: Vegetable Producing Regions in Bihar
An integrated and efficient supply chain mechanism is non-existent in Bihar. The problem in supply
chain starts with limited and bad linkages of production areas with storage areas and processing
plants. Secondly, storage capacity is very limited and cost of storage is almost three times as
compared to other parts of the country due to use of gensets during frequent power outages.
Processing of agricultural produce (grading & sorting) is largely done in open through labor in
Mandis, with almost nil pre-cooling facilities, appropriate packaging and packaging facilities.
Figure 25: Fruit- Producing Regions in Bihar
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Therefore, to address the need of better supply chain mechanism and increase better business
linkages a cluster based approach is proposed, which involves creation of requisite infrastructure
across the value chain with involvement of stakeholders. This will focus on a zone which will
provide economies of scale and deal with multi-products.
A number of food processing units including bakeries, juice, cream, namkeen production units are
present in Hajipur. While several food-processing industries are already in operation, many other
proposed ones are due to start, which includes the activities in the proposed Agricultural Export
Zone including the activities of the proposed in this region. While there is hardly any availability of
vacant land (0.5 acres) in the first Industrial Area of BIADA, around 6.26 acres is available in the
EPIP Hajipur.
Hajipur can be transformed into the food processing hub of Bihar. Given the growth potential of
Hajipur along with the district productivity and connectivity to Patna, there is enough market for
more food processing units to come up in the region. Following are the core agricultural products of
the Vaishali-Hajipur region, along with scale of the business operations proposed to boost local
economy.
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Table 32 : Matrix Showing Scale of Business operation of Typical Industrial unit in Vaishali-Hajipur region and major business linkages with Major Production
Center
Business Linkages
Food Processing
Production capacity
of Vaishali-Hajipur
Region (2008-09)
123213 MT (wheat)
Primary
Processing
90765 MT (Rice)
Food
grains,
Cereals &
Pulses
(Wheat,
Lentil,
Maize,
Grams,
etc.)
Resource
Base Cluster
Vaishali
District and
neighboring
regions
Potential
Markets
Domestic
markets &
regional
Exports
1933 MT (Mustard)
Type of
Industry
Land
require
ment (in
sqm)
Spice grinding
150
Mustard Oil
Milling
100
Scale of Business operations of a Typical unit in region

Total
Capital cost
Water
Manpo
Power
Production
(excluding
Requiremen
wer
Requireme
(@ 100%
land + civil
t (in lts per
require
nt (in HP)
utilization)
cost) in
day)
ment
Lakhs
60 tonnes
2.2
10
Negligible
5
per annum
2.25
25
Negligible
Secondary
Processing
Domestic
markets &
regional
Exports
72 tonnes
per annum
34%
17%
Vegetable oil
Refinery
800
60
75
3000
16
1200
tonnes per
annum
Texturised
Soya Protein
150
14.15
60
2000
12
600 tonnes
per annum
24%
Maize flakes
150
1.9
25
1200-1300
250 tonnes
per annum
36%
Macaroni
manufacture
250
2.5
25
2000
120 tonnes
per annum
28%
Bakery
100
2.75
20
500
72 tonnes
per annum
30%
Biscuit
Making
75
3.15
20
500
50 tonnes
per annum
22%
144 lakh
cones per
annum
Ice cream
cone
manufacture
Final Report
28%
50490 MT(Maize)
Vaishali
District and
neighboring
regions
Tentati
ve IRR
50
Page 101
700-750
40%
Scale of Business operations of a Typical unit in region
Food Processing
Production
capacity of
Vaishali-Hajipur
Region (2008-09)
Resource
Base
Cluster
Type of
Industry
Land
require
ment
(in
sqm)
Total
Capital
cost
(excluding
land + civil
cost) in
Lakhs
Power
Requirem
ent (in
HP)
Water
Requireme
nt (in lts
per day)
Manpo
wer
requir
ement
Production
(@ 100%
utilization)
Cold Storage F &V
150
12
60
700-750
100 tonnes
18%
Tomato
Ketch-up
250
2.12
25
2000
16
250 tonnes
per annum
34%
Potato &
Banana Chips
250
2.05
10
1500
50 tonnes
per annum
31%
Potato
Products
70-75
5.0
35
1000-1200
200 tonnes
per annum
18%
Potato
Processing
100
2.5
10
2000
40 tonnes
per annum
35%
Mango
Processing
100
1.72
800-900
72 tonnes
per annum
17%
Dehydrated
Vegetables
500
21.85
50
2000
22
400 tonnes
per annum
18%
Chilli Pickles
45-50
0.6
Negligible
600
20 tonnes
per annum
22%
Potential
Markets
Primary
Processing
Tentati
ve IRR
32475 MT (Onion)
212897 MT (Potato)
3799 MT (Tomato)
Vegetable
s
& Fruits
11316 MT (Guava)
77977 MT (Mango)
( Potato,
Tomato,
Mango,
Banana)
145863 MT
(Banana)
Vaishali
District and
neighboring
regions
Secondary
Processing
Fish
Milk
Primary
Processing
Vaishali District
Domestic
markets &
regional
Exports
200 tonnes
per annum
Vaishali District
2.5 lakh
400
17.5
75
2000
10
litres
Primary
Processing
72 tonnes
Milk Toffee
60-65
1.13
Negligible
Negligible
6
per annum
Source: - Primary and Secondary Survey of Industries (June 2011) and Project feasibility models for Agro based Food Processing units by Ministry of Food Processing.
Final Report
Fish
Processing
Coffee
Flavored Milk
250
6.2
Page 102
60
5000
13
23%
17%
25%
4.5
Recommendations
Through a Cluster based approach under PPP mode and linking various components (training,
capital inflows, processing technology, storage, marketing etc) of supply chain management for core
sectors, the Vaishali-Hajipur region economy can be revived. This can help in reviving much-needed
handholding for small and medium enterprises critical to ensure employment generation, social
security and economies of scale. Various economic clusters could be identified in and around
Hajipur and subsequently the following steps need to be taken:
i)
Initialize the investment process by channelization of public funds for development of core
infrastructure in potential clusters to begin with
ii)
Provide liberal financial support to private investment in basic infrastructure in the food
processing sector like farm level pre-cooling facilities, cold chain, packaging, etc.
iii)
Identify (assigning responsibility & funds) institutional support to develop these economic
clusters and provide a policy environment which stimulates growth.
However, on the basis of the Demand and Market Analysis conducted, the scale of business
operations of typical industrial units in Vaishali-Hajipur region and the business linkages between
resource bases, production centers and markets, for the purpose of this report, the following
economic sectors and prospective entrepreneurial ventures are recommended for promotion,
development and strengthening.
4.5.1 Development of Food Processing Industry in Hajipur

The cluster approach envisaged in the establishment of Food Parks (FPs) is one of the most
essential aspects of such a venture. A food park Cluster may be defined as a geographic region
where identified crops are sourced, processed and transformed into finished product for marketing.
From sourcing to finished product, a region without any physical boundary would be required,
which would consist of several Collection Centers (CCs) for sourcing of raw produce, a number of
Primary Processing Centers (PPCs) and a Central Processing Unit (CPU) where produce is not only
transformed into the finished product but is also stored for marketing during off season. The entire
zone can be termed as the Zone of Influence (ZoI).
The clusters would typically include similar business units operating in a similar industrial sector.
They will be located near each other and will compete among themselves only if catering to the
same end-product category, in similar markets, and they will also share common inputs such as raw
materials and labor with specific skill sets. Thus it can be said that clusters can encompass the
entire value chain of a broadly defined sector from raw produce to end products.
This cluster should produce significant quantities of vegetables, fruits, and food grains, which are
necessary raw material required to undertake various food processing activities in the Food Park.
The cluster should also enjoy relatively better infrastructure in terms of connectivity, power supply
etc, which will enable the Food Park in attracting prospective entrepreneurs for setting up of their
units in the proposed Food Park. Based on the availability of produce within the Zone of Influence
and the processing opportunities, a number of focus crops should be identified for the Food Park.
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The following criteria should be adopted for identifying focus crops in the cluster:
Availability of sufficient quantities of raw material

Processability of the produce
Seasonality
Proposed product mix
Marketability of end products
The geographical limit of the identified cluster may be suitably delineated based on the diversity
and quantity of raw material available and contiguity of the potential area for future expansion.
Also, comparative advantage of crops in terms of processability, marketing opportunities, seasonal
advantage, local consumption, export/import substitution, scope for intensification and
productivity improvement should be duly taken into consideration. Since the Food Park would
require continuous supply of large volumes of raw material, this would necessitate investment in
food processing infrastructure, strengthening of supply chain to reduce wastage, prevent quality
deterioration and timely availability of various focus crops. An appropriate product mix should also
be chosen based on raw material available in the cluster and their scope for processing and value
addition.
The development of a FP needs a diverse and sustainable agricultural raw material supply region
serving as a catchment area for sourcing of agricultural produce. In addition to identification of
focus crops in the cluster, it is also important to analyze the existing marketing system and value
chains to identify the flow of agricultural produce and identify critical gaps so as to identify key
interventions that would be taken up by the Food Park so as to build an efficient supply chain for
various units in the food park. Based on the supply strengths of the cluster, it would then be
important to identify location of primary processing centers and collection centers within the
catchment area so as to secure smooth flow of raw material to the processing units in the FP.
4.5.1.2 Establishment of a Cluster-based Multi-product Food Park in Vaishali-Hajipur Region
There is sufficient justification and reason for the establishment of a Multi-product Food Park
(MPFP) in the Vaishali-Hajipur Region one that is both grain and pulses-based and fruit and
vegetable-based. The reasons are as follows:
Vaishali is a major wheat producing district of Bihar @ 150493 MTs (2008-09) and also
produces maize in large quantities @ 50940 MTs (2008-09)
There are already 97 rice, wheat and pulse-milling and other food-processing units in
Vaishali-Hajipur region.
There is more than sufficient production of vegetables and fruits in the region, especially
potato, brinjal and cauliflower.
This region is in very close proximity (10 Kms.) to proposed and existing terminal markets
in Patna and Bihta (proposed)
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The productivity of the land and the seasonality of the crop cycles of all the crop groups in
this region is such that there will be almost year-round availability of crops / raw material
for milling and / or processing. The harvesting seasons for various crops in Bihar is shown
below:
Table 33 : Crop Seasonality in Bihar
Crop
Season
From
To
Pulses
Kharif
November (Beg)
December (End)
Rabi
March (Beg)
March (End)
June
August
Mango
Rice/Paddy
Kharif
November (End)
December (End)
Wheat
Rabi
March (Mid)
April (End)
Potato
Autumn/Early
Mid November-December
Winter/Main
February-Early March
Spring/Late
Late March
Guava
Almost throughout the year
With sound post-harvest management techniques in place, there should be a steady supply
of crop produce the whole year round for the Food Park processing and production to be
sustained in a planned manner.
A large number of trained SHGs and women-based micro-enterprises for purposes of

employment and sub-contracting i.e. sack-stitching, cleaning, grading, packaging etc. are
present in the same region.
The product-mix from the Multi-product Food Park should be such that all possible regional
produce of the area can be absorbed, processed by the units located in their area itself, and
marketing linkages built in order to reduce distance and transaction costs. There is already
evidence of a supply-driven product mix in the region these should be expanded and
upscaled with appropriate planning, management and technical inputs from government
and non-government institutions put in place for this purpose i.e. KVKs, Rajendranagar
Agricultural University, Agri Clinics and ATMA.
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A Food Park requires a mix of complementary stakeholders such as:

Figure 26: Stakeholders in Multi-Product Food Park
Source: Mega Food park Scheme, MoFPI, GoI and Feedback Analysis
These stakeholder groups are already present in this region at village, block and district level, and
a few at state, inter-state and national levels. One of the main roles of the SPV, to be created for the
project management of the proposed MPFP, will be the integration of these stakeholder agencies to
function seamlessly across the value chain of the MPFP venture.
The Ministry of Food Processing can provide financial assistance in form of grant-in-aid @ 50% of
project cost excluding land component in general areas, subject to a maximum of Rs. 50.00 crore for
setting up of Mega Food Parks. Many states are also taking up these projects on Public Private
Partnership mode. The GoB, in their vision for the Food Processing sector in Bihar has already
stated their plan to establish a Food Park in the Muzaffarpur Vaishali region. Though this
proposed Food Park may be located in the Hajipur Industrial Estate, the EPIP or the AEZ or
wherever else the State and local administration can provide land for it in the Vaishali-Hajipur
region, it will provide employment to the Hajipur population, provided they are suitably skilled.
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Table 34: Basic facilities proposed for the park
Common Infrastructure such as roads

and water supply (bore well, over
head tank, distribution lines, water
treatment plant)
Administrative building, conference
room, guest house, bank, post office,
shopping complex
Internet
Electric sub-station, DG Sets
Technical Infrastructure
Basic refrigeration plant with puff
insulated panels18,000 MT
Weigh bridge
CA chamber
Pressure ventilation
Incubation chambers
IQF facility
Variable humidity store (Additional
Equipment) 6,000 MT
Pre-cooling units
Effluent treatment plant
Packaging R&D & quality control lab
Training facility
Table 35 : Tentative Project Cost for Food Park
Source: - Food Processing in Bihar: The Road Ahead, Government of Bihar
4.5.1.3 Tasks for Development of MPFP

The following tasks are required for development of the proposed MPFP in Vaishali-Hajipur Region:
i)
Feasibility Study and identification of FP cluster and entrepreneurs followed by DPR

preparation, procurement process by Department of Industries, assisted by LED Task Force,
Hajipur, and creation of the SPV for administration and management of the
ii)
At Production Area and Cluster level (cluster of 10-15 villages): Field Collection
Centres (FCCs) will need to be created at farm level to facilitate for pre-cooling, sorting,
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grading, cleaning, washing, packing and minimal processing along with provision of mobile
pre-cooling vans and reefer vans for transport of the produce from farm to the Primary
Processing Centres (Cluster 5-15 FCCs) and from PPC to retail/processing units to Food
Park at District level. This Supply chain mechanism would reduce wastage, improve quality,
provide sorted material for table and processing purposes and result in increased income to
farmers. Approximate area for PPC should be around 2-5 acres, which can be developed on
PPP basis.
iii)
At District level: The Multi-Product Food Park is envisaged with centralized

infrastructure to take care of the processing activities (more of secondary processing in
nature), which require cutting edge technology like testing laboratories, effluent treatment,
packaging, etc., which are capital and technology intensive. These would also function as a
place for setting up of various food processing industries/breweries/rice mills/oil mils etc.
This can be developed by BIADA on industrial land identified as per master plan of Hajipur.
iv)
Agri-Clinic Network: A well-established network of agri-clinics will be of vital importance

for the development and efficient functioning of the MPFP. These should be developed to
promote and increase crop diversification, organic farming, medicinal plants, floriculture
and horticulture. There are number of nontraditional crops which can fetch much higher
revenue to farmers than the staple production being done by them currently. Agri clinics
should focus on spreading variety of other crops in the district, depending upon the local
soil and climatic conditions. Along with agri clinics, privately managed nurseries should be
promoted on PPP basis where new varieties of plants and crops are made available. The
ATMA centre in Hajipur district can be roped in to spearhead and support this Agri-clinic
network. The clinics may be undertaken by private entrepreneurs with self-finance. They
can be subsidized through the Agri Clinic Scheme of the Ministry of Agriculture, GoI.
National Institute of Agricultural Extension Management (MANAGE) will be responsible for
providing training to eligible candidates, through Nodal Training Institutes (NTIs) and
motivating them for setting up of Agri-Clinics and Agri-Business Centres. The details of this
scheme regarding eligibility, finance and operationalization can be found at the following
link:
http://indg.in/agriculture/rural-employment-schemes/revised-guidelines-ofagriclinincs-and-agribusiness-centres-scheme.pdf
v)
Promotion of Agri-Business Centre (ABC): The establishment of an Agri-Business

Centre/s in Hajipur will be of great help to the sustainable development of the agro-based
economy of the area. ABCs are commercial units of agriventures established by trained
agriculture professionals. Such ventures may include maintenance and custom hiring of
farm equipment, sale of inputs and other services in agriculture and allied areas, including
post harvest management and market linkages for income generation and entrepreneurship
development. The scheme covers full financial support for training and handholding,
provision of loan and credit linked back ended composite subsidy to the entrepreneur.
There is scope for ABCs to be established in the Vaishali-Hajipur region. The agri-preneurs
in the ABCs should be linked with Agricultural Technology Management Agencies (ATMAs)
in Hajipur. In order to provide support to them for making their business more viable, Govt.
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of India Institutions such as National Seeds Corporation (NSC), State Farms Corporation of
India (SFCI), Indian Farmers Fertilizers Cooperative Ltd (IFFCO), Krishak Bharati
Cooperative Ltd. (KRIBHCO), Small Farmers Agri Business Consortium (SFAC), State Agro
Industries Corporations etc. will be approached by the DoA, GoB to engage the Agripreneurs as their authorized dealers on preferential basis without affecting their existing
network. The ABC will necessarily have to be located near the MPFP in Hajipur and it should
be seen to that there is no duplication of services provided by the two. The guidelines of the
Revised Agri-Clinics and Agri-Business Centres (Acabc) Scheme 2010 are available at the
following link: http://www.agriclinics.net/guidelines2010.pdf
vi)
4.5.2
Development of Preservation Infrastructure: Though preservation infrastructure should

necessarily be part of the MPFP complex itself, the demand for cold storages and
warehouses is such that they could be taken up by individual entrepreneurs and private
companies also. Cold chains may be developed to preserve and store potatoes and
processed products before transporting them to other nodes of the supply chain system.
Modernized warehouses may be developed which have adequate temperature controlling
facility and proper preservation facilities to store every item under recommended
controlled atmospheric conditions. This infrastructure can be developed on private
partnership and the private player can be given part funding support from government if
required. The scheme of Development of Integrated Cold Chain, Value Addition and
Preservation Infrastructure from Ministry of Food Processing Industries, GOI can be
used to draw funds to support development of such facilities. The guidelines of this scheme
can be seen at the following link:
http://mofpi.nic.in/guidelines/oper_guidelines_coldchain.pdf
Promotion of Organic Farming, Floriculture, Nurseries & Poly/Green Houses
With the establishment of the MPFP, it becomes essential to promote other livelihoods and support
services which will bolster this industry like Floriculture, Horticulture, Nurseries and Organic
Farming. These activities are already a part of the National Horticulture Missions plans in the state
and therefore funds are available for the same it is just a question of accessing them.
4.5.2.1 Organic farming increases the long term agricultural productivity by the use of advanced
techniques of farming, planting methods, quality seeds, bio-fertilisers etc. There is adequate
quantity of animal dung, compost, rotten crops and fodder for use in organic farming. Organic
farming has been taken up as one of the priority initiatives by the state government with a sum of
Rs. 255 crore being sanctioned organic farming promotion within a span of five years. Government
is developing organic grams (organic villages) for cultivation of organic crops. Steps should be
taken to promote agricultural productivity in Vaishali district, where in:
Organic and vermicompost fertilizers (produced by MEs and SHGs) can be made available to
farmers this can be linked to SHG activity
Training on organic farming can be provided to farmers this can be linked to skilldevelopment providers and NGOs
Seed replacement programs can be organized to distribute quality seeds among the farmers
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Marketing can be done through appropriate channels established by the ABCs and MPFP
The agri-clinic network and work of ATMA and KVK in Hajipur can be made largely responsible for
the above strategies.
4.5.2.2 Floriculture: The Vaishali-Hajipur region has the 2nd rank in the state for flower production
@ 486.29 tns. (2008-09) with the production of marigold, jasmine and tuberoses being on the
higher side as compared to that in other districts. The table below shows the current production
figures for major flowers produced in Siwan:
Table 36: Area and Production of Cut Flowers in Vaishali and Bihar in 2008-09 (in tonnes)
Region
Rose
Marigold
Vaishali
Bihar
4.83
66.54
332.51
4429.59
Jasmine
(Bela)
16.9
270.37
Tube Rose
Others
Total
36.18
364.75
121.6
982.50
486.29
5949.81
Source: - Economic Survey of Bihar (2011)
Market Assessment: Cut flowers produced in India are used within the country as well as
exported. The flowers that are traded within the country are usually rose, marigold, jasmine,
gladiolus, carnation, orchids etc. Currently roses account for 90% of total flower exports in India.
However, there is global demand for a number of other flowers such as carnation, gladiolus, liliums,
Anthurium, gerbera etc. The USA, Japan, Western Europe are the major markets for the flowers.
Besides, Eastern Europe, South Korea, Thailand and Indonesia are also coming up as large
consuming countries.
Value Chain Analysis: The supply chain of cut flowers in Bihar is still unorganised. Flowers are
brought to open yard wholesale markets in major cities where they are sold to large flower chains
or merchants which are numbered. The flower merchants distribute them to local retail outlets
after significant mark up in prices. More than 90% of the flower retailing in the cities happens on
open road sides, with different flowers arranged in large buckets. Not more than 10% of flower sale
comes from the good florist show rooms, where flowers are kept in controlled temperature
conditions, with considerable attention to value added service.
Table 37: Average market price for major flower crops
Flowers
Marigold
Jasmine
Crossandra
Chrysanthemum
Tuberose
Rose
Gladiolus
Carnation
Gerbera
Orchids
Liliums
Final Report
Unit
kg.
kg.
kg.
kg.
kg.
kg.
doz.
doz.
doz.
each stem
each stem
Price (Rs./kg or doz or each stem)

3-60
15-150
20-120
5-25
5-30
6-60
20-75
30-75
36-75
10-45
10-45
Page 110
Anthuriums
each stem
15-45
Source: Division of Floriculture, Indian Agricultural Research Institute, New Delhi
Supply Scenario: The cut flower industry is still not well established either in Bihar or India as a
whole, and has gained importance only in recent years. The production of flower for commercial
purposes in Bihar is very low as compared to other states like Karnataka, Tamil Nadu and West
Bengal. Moreover the flowers that are produced are mostly the traditional flowers like marigold,
jasmine, tuberose etc. The cut flower industry which caters to the growing market of decoration
and bouquet involves production of rose, gladiolus, tuberose, carnation, orchids and more recently
liliums, gerbera, chrysanthemum, gypsophila etc. There is vast potential for export of these flowers
which fetch high value in the international markets.
Recommendations:
i)
Support through Agri-Clinic Network: Even though there is a market for cut flowers and
the soil condition of Vaishali is suitable for floriculture, the flowers are under protected
from the environmental conditions and biotic and abiotic stress. Hence, technology transfer
needs to be organsied by the agri-clinic network, which should educate the producers about
suitable techniques to optimize quality of flower production.
ii)
Identification of a Flower Vending Zone in Hajipur: In order to ensure an organized

floral industry in Vaishali-Hajipur region, floral vending zones, as a market place for selling
the floral produce, should be established with the help of local private sector. This will
balance bargaining power between traders and farmers due to availability of a number of
traders in the same location and will help the farmers achieve better rates for their flower
produce.
iii)
Establishment of Co-operative Florist Organization: There is a need for development of

Cut Flower Growers' Association and co-operative societies for traditional flower growers.
This will help for minimum support price.
4.5.2.3 Nurseries & Poly/Green Houses: The proximity of Hajipur to Patna is very conducive to
developing a thriving nursery industry in the region, especially if land is procured on the national
and state highways running through the district, on which travelers can stop and purchase saplings.
Under the National Horticulture Mission Plan for 2010-11, there is a plan to establish one nursery
at a cost of Rs. 11.68 lakhs. The saplings / seedlings sold here should be in keeping with the
varieties of plants which are agro-climatically suited for this area i.e. mango, litchi, banana,
betelvine, cauliflower, brinjal, marigold, jasmine, tuberose tubers and so on.
Cultivation of vegetables/flowers under controlled conditions can also be established by
constructing Hi-Tech and Normal green houses, polyhouse/plastic tunnel/ shade nets in Vaishali
district to produce vegetable/flowers for sale during the off season. This has already been
implemented by Bharat Seeds and could be promoted as an economic opportunity in this region.
The NHM Plan has targeted to establish 5 such green houses in 2010-11 with an outlay of Rs.
11.688 lakhs.
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--- Zone (A) Hinterland of Vaishali

--- Zone (B) of Local Influence
--- Zone of Regional Influence
Source: Base Map Adopted from SPUR report - Bihar Strengthening Urban Management Programme
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4.5.3
Development of Bio-Seed Research and Production Centres
Since seed is the delivery system through which almost all scientific advancements get transferred
to the crop production, availability of quality seed, is undisputedly a major factor for improvement
of this sector. It is proposed to achieve 33 percent seed replacement rate in four years for the self
pollinated crops. Strengthening of the seed production and distribution infrastructure has therefore
been stressed in the Annual Plan for 2011-12. During 2011-12, the major focus would be on
ensuring production and supply of recently evolved and high-yielding varieties. The Bihar Rajya
Beej Nigam has an important role in achieving the seed replacement rate targets envisaged in the
road map for agriculture. The Nigam requires assistance for seed procurement, its processing,
storage etc. Bihar Rajya Beej Nigam has an instrumental role in implementation of the Chief
Ministers Crash Seed programme wherein its responsibility lies in timely supply of foundation seed
to farmers. As seed certification is a big issue due to which farmers are unable to sell their products
the Bihar State Seed Certification Agency is to be assisted and strengthened to ensure production
protocol for quality seed production in the state.
There is already a growing number of agri-preneurs who are engaged in the seed multiplication
business in the Vaishali-Hajipur region and in Hajipur City 50-60 households engaged in this
activity are located in Ward No. 30. With the boost being given by the state to the seed production
business, the main factor to be addressed is that the entrepreneurs be given timely support in
capacity building, finance, certification and marketing linkages. The ABCs proposed can be accessed
for help in this matter.
Research and development initiatives are becoming increasingly common to improve the variety of
production of a crop. Hybrid seeds production centres have been established by various public
sector and private sector units in India which produce hybrid seeds of rice, corn, bajra, cotton,
vegetables, sunflower seeds etc. Similarly, a bioseed production centre should be established in
Hajipur on PPP basis such that improved quality of fruits and vegetables, suited to the soil and
climatic conditions of Vaishali, can be produced.
4.5.4 Promotion of the Dairy Industry

A milk processing plant is being established in Hajipur which will supply processed milk to
COMPFED, which is branding milk products from Bihar by the name of Sudha. Besides, there is
scope for development of milk powder plant and factory for other milk based products. In order to
support dairy processing industry in Hajipur, the following steps can be taken:
i)
Establishment of backward and forward linkages Milk collection centres should be

established in the remote points in the district such that milk transportation to the
processing plant can be done on economical basis. Forward linkages should be established
for transporting processed milk products like tetra pak of milk, milk powder etc. to other
districts and states.
ii)
Artificial Insemination Centre Since, the quality and quantity of input for dairy industry
is dependent on the quality of cattle population in the region, techniques should be used to
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improve on the cattle quality of the region. Artificial insemination centre should be
established in Hajipur for introducing high quality breeds of cattle in the region.
iii)
Veterinary Hospital With the focus on dairy processing industry, requisite facilities
should be provided to support animal husbandry such as veterinary clinics to aid on
medical issues of cattle population in the district.
iv)
Development of Cattle Feed Plant Expansion of the dairy processing industry will
increase demand for cattle feed in the district. Towards this end, there is already a proposal
by COMPFED to establish a cattle feed plant of 100 MTs in Vaishali district. In addition to
this, SIPB has also approved the establishment of two cattle and poultry feed plants in the
EPIP. The cattle feed produced in these plants can be used within this region and the
surplus exported to neighboring districts and further as well.
In the District Development Plan of Vaishali (2011-12), the authorities had planned to invest Rs.
1670.30 lakhs in dairy development. However, there seems to have been no scope of accessing GoI
funds towards dairy development in 2011-12. The scenario may be different in the next financial
year.
4.5.5
Development of Fisheries Sector
The local topographical conditions, high demand position and stakeholder consultations have
indicated that the fisheries sector has much potential in this region. However, there are different
issues which are causing a decline in fish production and need to be addressed for this to happen.
The issues are as follows:
i)
Paucity of good quality fish seed

Degradation in natural eco-system like rivers and lakes loss of breeding grounds
Siltation of tanks and ponds
Greater colonization of saprophytes leading to a derelict state of water bodies
Lack of knowledge regarding fishery cultivation among local farmers
Development of Fish Seed production centres in Hajipur: Fish seed production in the
district is currently as low as 100 lakh seeds as compared to 3,307 lakhs in the state. In
order to promote fishing and fish production, for which the geographical conditions of the
district are extremely favorable, first and foremost fish seeds need to be spread in the
district. The production capacity of fish seeds can be augmented by establishment of a local
seed production centre. The Department of Animal Husbandry and Fisheries, GoB, intends
setting up 100 fish seed production centres all over the State. To support fish seed
production Brood Banks would be established in adequate numbers be facilitated.
Portable hatcheries would be assisted by brood banks as and when there is demand of
brooders. Some of these could be located in this region, as per the space available and the
demand. The State of Orissa has started a system of having portable hatcheries which could
be replicated in Bihar too.
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Development of Portable Hatchery for Fish Seed in Orissa

The Central Institute of Freshwater Aquaculture, Bhubaneswar (CIFA), a premier
Institute for research and transfer of technology in freshwater aquaculture has
developed a portable carp hatchery, which started operations in July 2006. It has
proved to be a very effective tool in providing quality seed to the farmers. The FRP
hatchery is suitable for fish breeding in field conditions for 10-12 kg of carps in one
operation and can be used as a tool for bio-diversity conservation.
Since a major hurdle in aquaculture development is the timely availability of fish seed of
desired size, quantity and at desired time, the portable hatchery has provided great
boost to fish production. Portable FRP carp hatchery can be transported, installed and
operated in remote places to ensure easy and timely availability of seeds. He added that
this innovation is fast becoming popular and during the previous year CIFA has installed
this hatchery in 16 different places.
CIFA also organizes training sessions to provide hands on training on different aspects
of carp seed production, operation and management of FRP carp hatchery and nursery
management. The portable hatchery is a boon to farmers and will go a long way in
changing the aquaculture scenario.
ii)
Establishment of an organized market for fish trade: Cities like Kolkata which have a
well established fish trade have fish trading zones for wholesale trade of fish. In case the
fishing industry is developed in the region, there needs to be a proper fish vending zone for
trading and bringing together the bulk buyers and suppliers of fish in the district. Hence, as
a planning initiative and to provide support infrastructure to the fish processing industry,
an organized and equipped market for fish trade zone should be established in the region.
iii)
Desiltation of Water Bodies: The Renovation of Govt. ponds can be planned to be done by
the local authorities through the National Rural Employment Guarantee Scheme. This
aspect has found mention in the District Development Plan of Vaishali (2011-12) also.
iv)
Providing support infrastructure: Since agriculture is dependent on a number of

geographical factors which are uncontrollable, aquaculture including production of fish,
sweet prawn and shrimps can generate a regular revenue stream to support the district
domestic productivity. There is huge domestic demand for fish and shrimps and sweet
prawn are exported in large quantities from the country. Fish industry requires some
critical infrastructure including improved cold chains, transport linkages etc. Development
plans should be made to provide such support infrastructure.
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v)
Post-Harvest Marketing: A Scheme is being proposed by GoB to build market linkages and
infrastructure for safe, fast and hygienic transport, in order to develop cold chains to reach
fish to different parts of State and beyond. Common collection centres, small four wheelers,
pickup vans and insulated rickshaw are proposed in this scheme along with ice plants at
some places. As per the norms of the Centrally sponsored scheme on Development of
Infrastructure Post Harvest Marketing, fisheries co-operative societies/NGOs would get
75% assistance from GOI and the rest 25% would be provided by the State Govt. as a special
package. Federations would get 100% assistance from GOI. The 2012-13 District
Development Plan of Vaishali may require to include this component in their plan for
developing the fisheries sector.
vi)
Capacity Building: Skill sets of local farmers and other relevant government and nongovernment personnel in fisheries and aqua culture will need to be developed and
refreshed, especially in more scientific methods of production. This can be done through the
main institutions of CIFE, Mumbai and College of Fisheries of RAU and then further through
extension workers at the district level. In the Road Map outlined for the Fisheries Sector by
the GoB, a Training Centre has been proposed at Patna also. Funds for training to the tune of
approximately Rs. 185 lakhs p.a. are available through the State Department, RKVY and the
National Fisheries Development Board (NFDB).
vii)
Appointment of a nodal agency for establishment of market linkages and capacity

building: A nodal institution may be developed which shall train and educate farmers about
seed sowing treatments, provide market information and most importantly establish and
maintain linkages with the organized sections of the fish industry. The agency can be
appointed by the government on PPP basis, where in the government provides targets to be
achieved by the agency and provides funds to some extent for implementation of the
program. The agency can have the option to derive revenue from the buyers.
4.5.6
Development of Apiary Sector (Production of Litchi Honey)
i)
Identification of Industrial Cluster for Honey Production in Hajipur: Honey production,

especially litchi honey, can become a unique product of Vaishali district due to its strength
of production of good quality litchi. Honey production could benefit from greater efforts to
build an industrial cluster and by using better techniques. In order to achieve the same,
cluster areas should be demarcated where an integrated honey value chain can be
developed, i.e. right from beekeeping to processing of honey to packaging and transporting
facilities. This will lead to an agglomeration of similar industries in Hajipur creating an
organized supply system of honey. A honey processing plant has been proposed in Hajipur
region this will assist in aggregation facilities and developing uniform standards. The
proposed MPFP can be used to house this plant. A honey production cluster has recently
been proposed by the industry association Assocham in Orissa.
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ii)
Development of a brand for honey produced from Hajipur: Place branding is an

important component of strategy to establish Hajipur as a premium honey production
centre. Public sector initiatives such as formation of beekeeping associations should be
launched to mobilize beekeepers, process and market branded honey of Vaishali. The same
shall be operated and maintained by the strong local private companies dealing in honey
production in the region. The association shall contribute to branding, links to global
distribution networks, international standards and traceability. It can also act as a catalyst
for productivity and yield improvements through specific training programmes.
Punjab State Beekeepers Federation

Punjab State Beekeepers Federation (PSBF) is a unit of khadi & village industries
commission, managed and run by the bee keepers on no profit no loss basis. All
activities are related to and for the welfare of the bee keepers. Regular camps are
held for upgradation of beekeepers knowledge. PSBF provides all equipments and
material for bee keeping on no profit no loss basis. It also organises camps to train
and provide bee keepers with latest technical innovations. There are around 15 field
stations of PSBF which helps it to market finished bee products.
iii)
Financial Support and Access to Credit: Adequate financial support in terms of access to
micro finance, formation of self help groups and provision of subsidies should be provided
to the beekeepers. Lease schemes can be set up for the equipment and significant capacity
building needs to be done. Pricing and retained margin is a key element of this effort.
Cooperatives and self help groups should be promoted to develop critical mass and
bargaining power. This will remove reliance on loan providers and agents.
4.5.7 Promotion of Craft-Artisan Sector

Sikki grass craft products are handicrafts made from a special kind of grass known as sikki found in
Bihar, Orissa and Uttar Pradesh. Sikki grass weaving is especially done by women. The art of
making items from sikki grass is an ancient one in the province of Bihar and is passed onto
generations in families.
4.5.7.1
Assessment of Potential of the craft in Vaishali
Sikki grass weaving is practiced mainly in Madhubani, Darbhanga, Vaishali and Sitarmahi districts
in Bihar and some districts in Orissa and Uttar Pradesh. Sikki grass weaving has not flourished as
well as many other art and craft forms due to the lack of connectivity with the market and
customisation of product design to modern needs.
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Major
Grass
Products
of
Sikki
Utilitarian - pots, bowls,

platters,
boxes,
cases,
baskets, mats, coasters,
hats, lampshades, bags and
hand fans
Decorative - mobile cases,

bangles, toys and animal
figurines and Ritualistic
objects such as figures of
deities and masks
4.5.7.2
Value Chain Analysis
Sikki grass is grown on the banks of river Gandak in Hajipur. It is collected by Harijans in the rainy
season from the banks. The collectors sell sikki grass in the local market or weekly haat to
independent weavers or master weaver of a cottage industry. The weavers process the raw
material and convert them into woven handicraft products with the use of hardly 2-3 tools. The
finished product is sold in the local weekly haat in the market to traders who take the products to
major trading centres of West Bengal, Uttar Pradesh etc.
Wild Sikki Grass is a virtual riverside weed which is cut in bundles and left in sunlight till it turns
supple. Then the golden strands are tied together into lengths of rope. It is further embellished with
dyed strands, woven into patterns of geometrical intricacy, which add elegance to the simple craft.
Major products of Sikki Grass are colorful decorative products, baskets, pouches, folders, table
mats, jewellery boxes, bangles etc.
4.5.7.3
Market Potential
Sikki craft has a variable price range from Rs.15 to 500 depending on the intricacy and the size of
the product. Sikki grass products can fetch a good premium if the link is established with the
handicraft buyer market. In cases where the sikki grass products are showcased in trade fairs and
exhibitions, a comparatively higher premium is fetched by the products.
4.5.7.4
Recommendations for Development of Sikki Grass Weaving
i) Identification of Craft Cluster Under the AHVY scheme, craft clusters have been identified all
over India which facilitates support from the government for activities to develop the sector in
the region. There are 6 craft clusters identified in Bihar. Hajipur already contains an identified
wooden craft cluster. Similar cluster for sikki grass weaving should be identified in Hajipur to
promote the craft.
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ii) Institutional Development There should be a formal and legal registration of the handicraft
co-operatives or federations, organization or special purpose vehicle with private partnership
which acts as an apex organization for promotion and support of handicraft sector in the region.
iii) Mobilisation of Artisans into Self Help Groups The sikki weaving community should be
empowered by formation of self help groups. The self help group will have increased bargaining
power over an individual artisan, as well as it will have capacity to jointly execute bigger orders
which will enable them to handle corporate requests.
iv) Registration of sikki grass artisans The sikki grass artisans should be registered by the
nodal department and identity cards should be provided to them. This serves as a tool for
empowerment and organization of sikki grass weaving artisan community in the region. A list
of registered weavers can be made available on the website of the authority for traders and
buyers so that they can directly connect to the self help groups, weavers. If any subsidy of
government support is announced, the same can be easily disbursed amongst registered
weavers. A study can be conducted of the sikki grass based business in the region, in order to
research ways of promoting it.
v) Establishment of Market Linkages One way of establishing linkages with the market is to
organise specialised trade fairs and exhibitions. A local NGO with the requisite skills can be
appointed to take initiative towards establishing marketing linkages for sikki grass products.
Figure 28: Establishment of Market Linkages
vi) Enhancing weaving capacity of the region Currently the training on the weaving technique
is passed down in the family lineage by women in families of Vaishali. In order to maintain and
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further the growth of sikki grass products in Vaishali, an organized cadre of master trainers in
Sikki grass weaving should be established in the region. This can be done through the AHVY
Scheme.
vii) Integrated Sector Development An organized approach for development of the sikki grass
craft sector can be implemented which will involve development of sikki grass farming, quality
upgradation, design inputs, training of artisans and marketing of the products. Hence, it will
constitute vertical integration of the components of value chain right from supply of raw
material to enhancing and managing the processing activity to the sale of the finished product
to end users.
4.5.8 Development of the Tourism Sector in Vaishali-Hajipur Region

Vaishali district gains tourist importance due to its history and places of religious significance. The
district derives its name from the ancient city Vaishali. It finds mention in the Hindu epic
Ramayana. History records that around the time Pataliputra was the centre of political activity in
the Gangetic plains, Vaishali came into existence as centre of the Ganga, it was the seat of the
Republic of Vajji. The Lord Buddha visited Vaishali more than once during his lifetime. According to
one belief, the Jain Tirthankar, Lord Mahavir was born at Vaishali. The Chinese travelers Fa-Hien
and Hieun Tsang also visited this place in early 5th and 7th centuries respectively and wrote about
Vaishali. Due to the various historic and religious linkages of the district, there are number of places
of tourist interest.
4.5.8.1
Significance as a Tourist Destination
The town of Vaishali is located at about 35 kms from Hajipur. The following are major attractions in
Vaishali:
i) Ashokan Pillar - Emperor Ashoka built The Lion Pillar at Kolhua. It is made of a highly polished
single piece of red sandstone, surmounted by a bell shaped capital, 18.3 m high. A life-sized
figure of a lion is placed on top of the pillar. There is a small tank here known as Ramkund. This
pillar beside a brick stupa at Kolhua commemorates Buddha's last sermon.
ii) Bawan Pokhar Temple - An old temple built in the Pala period stands on the northern bank of
Bawan Pokhar and enshrines beautiful images of several Hindu gods.
iii) Budha Stupa-I: The exterior of this stupa which is now in a dilapidated condition has a plain
surface. One eighth of the sacred ashes of the lord Buddha were enshrined here in a stone
casket.
iv) Budha Stupa-II: Excavation at this site in 1958 led to the discovery of another casket
containing the ashes of the Lord Buddha
v) Abhishek Pushkarn (Coronation tank): It contains water that was believed to be sacred in
the old days. All of Vaishali's elected representatives were anointed here before their swearing
in. The Lichchavi stupa was located near here.
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vi) Kundalpur: Birth place of Lord Mahavira. 4Km.It is believed that the Jain Tirthankar, Lord
Mahavir was born over 2550 years ago. Mahavir is said to have spent the first 22 years of his
life here.
vii) Raja Vishal ka Garh: A huge mound with a circumference about one Kilometer and walls
nearly 2 m high with a 43m wide moat around them, is said to be the ancient parliament house.
Over seven thousand representatives of the federal assembly gathered here to legislate and
discuss the problems of the day.
viii) Shanti Stupa: On the south bank of the coronation tank, built by Buddha Vihar Society.
Prominence in tourist circuits of Bihar
Bihar State Tourism Development Corporation has identified six tourist circuits in the state, of
which Vaishali district forms a part of three circuits Buddhist circuit, Ramayana circuit and Sufi
circuit.
Figure 29: Tourist Destinations in Bihar
4.5.8.2
Potential of Tourism Development
The tourism industry is gradually developing into a sizeable industry in Bihar. The traffic of tourists
has been growing in Bihar at a CAGR of 16.7% from 2005. With a fresh thrust of the state
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government on tourism, the inflow of foreign tourists has grown exponentially, where the volume
of domestic tourists has witnessed a sizeable increase as well.
Possible share of Vaishali District: Though Vaishali is a part of the Buddhist, Ramayan and Sufi
circuit of tourism in the state, the share of tourism of the distrist has varied from 0.34% in 2009 to
3.5% in 2005 of the total tourist traffic of Bihar. Evidently, Vaishali falls behind other districts in
terms of current tourism traffic, although there is sufficient tourism potential in the region. This
indicates that there is scope to enhance and develop the tourism activity in Vaishali.
Hajipur being the district headquarters, the support infrastructure and tourist facilities for tourists
visiting Vaishali should be provided in Hajipur. The tourist traffic figures for Vaishali indicate that
the tourism in Vaishali is fluctuating every year to the extent that it follows a cyclical pattern,
peaking every 5th year. However, this trend is visible only in domestic tourists. Foreign tourists in
Vaishali still form a very small proportion of the total foreign tourist traffic of the state. This implies
that there is more potential for domestic tourism rather than foreign tourism in Vaishali.
Figure 30: Tourist Traffic in Bihar
Tourist traffic in Bihar (2005 - 2009)
158
16.7
107
119
104
87
1
2005
2006
Foreign
2007
2008
Domestic
4
2009
Total
in
Figure 31: Tourist Traffic in Vaishali
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Tourist traffic - Vaishali (1999 - 2009)
2.5
2
1.5
1
0.5
0
2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999
Vaishali Domestic
Vaishali Foreign
Source: Department of Tourism, Bihar
4.5.8.3
Opportunity in Hajipur
Vaishali can grow into a tourist destination of great importance and Hajipur being the biggest town
in Vaishali district, it can be developed to serve as node for tourism in the district. These
monuments/sites in Vaishali district are subject to poor maintenance and lack preservation. If these
sites are conserved, preserved and maintained by way of structural repairs on need basis, as per
archaeological norms, the tourism potential in the district can be increased.
The tourism infrastructure in Hajipur is required not only to support religious tourists, but also to
support business tourism in the place. With the increase in business activities, commercialization
and industrialization of Hajipur, there will be need for increase in hospitality infrastructure
including hotels, budget service apartments and other support facilities for business tourists.
4.5.8.4
Present tourism infrastructure
Hajipur lacks in terms of adequate tourist infrastructure with no lodging facility for medium and
high income groups to stay and very few options for the low income group. The existing facilities
are in a poor state.
Table 38: Hotels in Hajipur
Hotels in Hajipur
(approved by Dept. of Tourism, GoB)
1
2
3
4
5
6
Final Report
Royal Anamika
Hotel Vaishali
Hotel Lichhvi
Hotel Urvashi
Hotel Gitanjali
Hotel Mayur
Range of Room
Rent
Low
Low
Low
Low
Low
Low
Page 123
Hotels in Hajipur
(approved by Dept. of Tourism, GoB)
7
Hotel Shyam
Low Range Hotels where rent is below Rs 300
4.5.8.5
Range of Room
Rent
Low
Constraints in the Development of the Tourism Sector
A number of factors make Hajipur tourism in Bihar undersized:
Due to the proximity of Patna, maximum tourists who visit Hajipur opt for staying at Patna,
which provides better tourist facilities.
Tourism in Vaishali lacks planned development in terms of creating facilities to aid tourists
visiting the region.
Vaishali has not been widely publicized as a tourist destination.
Though there are a number of tourist destinations in Vaishali, Hajipur itself does not
contain many places of tourist interest. Hence, the city can at most fulfill accommodation
needs for people who are travelling from far off to visit locations in the district.
4.5.8.6
Recommendations for Development of Hajipur into a Tourist Destination
i) Improvement in condition of tourist sites and wider recognition of Vaishali as tourist

spot
Conservation of historical sites: Even though the sites of Vaishali have potential to gather
religious tourists, many sites are in need of conservation, preservation, maintenance and
development of amenities, which will increase tourist traffic. More sites in Bihar should be
tried for declaration as centrally protected monuments.
Improvement in facilities at the site: The condition of the sites should be improved with
better lighting, landscaping and development of surroundings.
Increase awareness of Hajipur as a tourist destination Promotional advertisements,

films and other methods should be used to promote Hajipur as a tourist destination in
Bihar.
ii) Development of basic tourist infrastructure

A budget hotel with basic facilities should be developed in Hajipur for people who prefer to
stay in Vaishali.
A tourist shopping complex should be developed in Hajipur where tourists can do
souvenir shopping of local art, craft, Sikki grass products.
Visitor Centre - For disseminating information about the tourist attractions, lodgings, maps
and other items, a Visitor Centre should be created in the city, as a one stop information
centre.
Spa-Wellness-Spirituality-Nature Cure Centre If a Spa-cum-wellness is established in

this region which is located close to Patna, tourists can come for nature cures, rejuvenation
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and relaxation therapy, along with fulfilling their touristic aspirations. However, a project
feasibility study will have to be instituted for all such ventures.
iii)
4.5.9
Water Sports, Amusement Park and Ecological Tours Hajipur could also be an ideal
water-sports and amusement Park destination as it just across the Ganges and again, the
proximity of Patna will prove beneficial for tourists who want to indulge in their favourite
water sports. This can also be combined with ecological tours of the banana and litchi
plantations (especially in season time) located all around this region. Here again, feasibility
studies would be required before such ventures are established, as sustainability seems to
be an issue and also the power situation in Bihar is still a deterrent.
Creation of a Tourist Guide Cadre and Transportation Linkages - Tourists need
adequate and reasonably-priced transportation from one venue to another in tourist
locations. Entrepreneurs in Hajipur City can operate these transport services for the
convenience of these customers. The development of Tourist Guide Cadre to provide
services to tourists at reasonable rates is a must. This will have to form a part skill
development menu of the proposed EDC.
Development of Biomass Energy Sector
The value chain and demand analysis for the biomass energy sector has already been done earlier.
The SIPB also has approved some projects in this sector in the Vaishali-Hajipur region. In order to
promote biomass power in this region, the following steps can be taken:
i) Establishment of Biomass based renewable energy plant in Hajipur on PPP: The medium
of partnership between private sector and local authorities can be explored to launch a large
scale power plant based on biomass. Under PPP mode, land for the project along with
clearances can be made available by local authority, whereas the installation, operation and
maintenance of the plant shall have to be done by the private player for a specified number of
years. The authority can subsidize production by paying partial cost per unit being sold in the
local market. The SIPB has already approved the setting up of one solar photo-voltaic battery
plant and one 10 MW biomass-based power plant in the region. This plant will be in addition to
these as it will be on a larger scale.
ii) Backward and Forward Linkages will have to be strung seamlessly together to ensure a
smooth production process throughout the year. This will include the procurement of raw
material from the local millers and farmers, procurement of suitable machinery, appropriate
and adequate operation and maintenance services. In Bihar, presently nearly 1000 tonnes of
husk/day is transported to other states. Since there is no market for sale of rice husk therefore,
it is available free of cost from the rice millers. In some of the areas, rice mill owners are even
paying money for the disposal of rice husk. The potential power generation of rice husk-based
plants even if 50% of the rice husk in the region is made available is given below:
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Table 39 : Power Potential based on 50% Rice Husk Availability
Source: Report on Renewable Energy Potential Assessment and Action Plan for Bihar(May 2011)
Though rice husk can also be used as raw material for biomass plants in Hajipur, in this region
the main basis will be wheat straw, maize cobs and sugarcane waste. The power produced by
these plants should prove more than adequate to make up the short fall of power faced by the
industries based in three industrial/economic zones located in the district. Therefore, there
should be no marketing problem.
iii) Capacity-building efforts will have to be undertaken by the administration and the EDC to be
established in the city, to train suitable persons in the skills required for such ventures i.e.
installation, manufacturing processes & technology, marketing & sales, operation &
maintenance. Strategic alliances with apex training institutions reputed in this sector will have
to be entered to. More on this can be found in Chapter 8.
iv) Providing incentives and exemptions for biomass power generation: The Co-operative
Dept, Govt of Bihar under Rashtriya Krishi Vikas Yojana (RKVY) is giving 50% of the project cost
for rice husk based gasifiers being installed in rice mills. The Central capital subsidy for biomass
gasifiers for thermal and electrical applications are as follows:
1. Rs. 2.0 lakh / 300 KWth for thermal applications.
2. Rs. 2.5 lakh / 100 KWe for electrical applications through dual fuel engines.
3. Rs. 8.0 lakh / 100 KWe for 100% producer gas engines with gasifier system.
4. Rs. 6.0 lakh / 100 KWe for 100% producer gas engine alone.
v) Power purchase option: The power buy back option should be given to the players which set
up biomass-based power plants in Vaishali-Hajipur region. This will reduce market risk for the
players and encourage more number of players to enter this sector.
vi) Facilitating credit access for new set ups: Easy credit should be arranged for the new
establishments in this sector.
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Table 40 : Capital subsidy provided to biomass power/cogeneration units
Table 41 : Fiscal Incentives for Biomass Power Generation
vii) Strategy to increase awareness about benefits available to this sector: The local
authorities should try to increase awareness of this sector by placing information about this
business ion the website of local administration including information on how to setup a new
biomass based power plant in Hajipur, tax and other benefits, trends of the industry etc.
Besides, information dissemination should be done by arranging conferences on renewable
energy in the town, organizing workshops to educate people on the subject and promote the
business in Hajipur. This can be done through local NGOs.
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4.5.10 Promotion of Health, Education & Skill Development through PPP

i)
Specialty Hospitals Polyclinics, Diagnostic Labs, Telemedicine and Health Insurance

Services through PPP: Hajipur already has a healthcare service sector which is limited,
unregulated and often without standardized health care service delivery. Specialty hospital
and diagnostic facilities by private players like Fortis, Dr Lals Path Labs and other reputed
private players will not only foster quality of internal standards but also create employment
opportunities, contribute to the economy and control unregulated growth of sub standard
health facilities. Feasibility studies should be conducted prior to establishing of such facilities
in the region. The 12th Plan may see the launch of the National Urban Health Mission (NUHM),
which will give this sector a much-needed boost by promoting partnerships and enabling the
environment for improving healthcare services in urban areas.
ii)
Vocational Education & Skill Development: There are two ITIs in Hajipur, but they are
limited in their course offerings to electrical and fabrication trades. With the introduction of
new avenues of economic development like biomass energy production, urban agriculture,
organic and contract farming, agri-clinics, agri business centres, food-processing industries,
healthcare, hospitality, tourism and so on, it is of vital importance that the capacity of the
local populace be developed in these businesses, trades and services. This will call for the
establishment of vocational education, skill and entrepreneurial development centres which
are market-linked and output-based, in and around Hajipur. This can be done on a PPP basis
in the city. The resources and funds under the National and State Skill Development Missions,
National Rural Livelihood Mission (NRLM), MSME and the MoLE can be accessed for this
purpose, depending on the sector and the target population involved. However, this will have
to be planned in a holistic and integrated manner so that efforts are not duplicated.
4.5.11 Support to the Unorganized Sector

Urban poor covered by the Govt. schemes constitute a meager potion of the population. In Hajipur
such informal excluded sector population constitutes a significant portion of the urban economy,
comprising rickshaw and cart (thela) pullers, persons engaged in loading and unloading cargo in
business centres, household domestic help, street vendors (mobile and immobile) and so on. This
section of society faces a lot of challenges which are as follows:
Street Vendors
Uncertainty of business
Limitation of Capital investment
Lack of awareness about the Govt. schemes and training programmes
No accessibility in formal funding institutions
No social security
Rickshaw/Cart Pullers
Confusion of rates due to absence of Rate Charts at rickshaw parking zones
Bank loan not available
No fixed parking place
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Construction Workers
Uncertainty of work
Capital shortage
Absence of social security
Shop Workers
Absence of any insurance coverage
Bank loan not available for opening a new shop
Support Interventions for Unorganized Sector
A Feasibility Study needs to be undertaken to identify the major vending zone, type of
industry and physical area available without interrupting public utility of the urban space.
One possible location for this has been identified by stakeholders as the vacant railway
land next to Chauri Bazaar.
A feasibility study of relocating the vendors to any of these areas will be required. Once the area
has been identified and all necessary facilities are provided, the vendors will have to be
educated on the advantages of moving there as there is usually always resistance to such a
proposal.
Formalization for Informal Businesses: These vendors can be formalized by issuing them a
license for the space allocated and providing supporting facilities (Solid Waste Management,
Sanitation). If the allocation of a separate area is not feasible, another manner to support them
could be of setting up of weekly bazaars in different parts of city in an organized manner with
support from the Hajipur Municipal Corporation.
Establishment /Strengthening the UPE cell of the ULB: Under the SJSRY, all towns are
supposed to have a cell for Urban Poverty Eradication functioning under DUDA. In most ULBs in
Bihar, this cell has not yet been established. The ULB should appoint suitable persons in this cell
and strengthen their capacities to perform the role expected of them.
Strengthening of existing community-based groups like NHGs, NHCs, RCV & CDS through
trainings on rules and regulations for conducting group activities. This could be done through
local NGOs under the SJSRY.
Promotion of DWCUAs: Under the USEP component of SJSRY, assistance is given to groups of
urban poor women for setting up gainful self-employment ventures. This sub-scheme is called"
The Scheme for Development of Women and Children in the Urban Areas (DWCUA)". These can
be linked to micro-enterprises required for providing backward linkages for the industrial
enterprises and other established MEs like artisanal activities, food-processing and so on.
Awareness creation on existing government sponsored programmes should be given to ULB

residents, especially in the slums and poorer areas, so that there is scope for maximum
inclusion of excluded groups in them. This should also cover the details of business processes
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for approvals, licenses and permits, which need to be followed by individuals or groups in this
category while starting or running a ME or business.
Skill Development of CDS/TCG/ SHG-s and facilitation for enterprise development and the
MEs/ skills that they require to be trained in. This can be done after the Training Needs
Assessment is done prior to establishing the EDC.
Financial Support in the form of loans and subsidies are required by persons in the
unorganized sector. But because of their ostensible lack of creditworthiness and the endemic
reluctance of financial institutions to lend to such individuals/groups, they are unable to get the
required funds to start their ventures. The Central Bank of India is the lead bank for Vaishali
and as such, it is their duty to see to it that all loan proposals from disadvantaged groups are
given due priority and consideration. It is suggested that the ULB monitors such cases on a
regular basis through the LED Unit to be established. Capacity building and change
management workshops or courses aimed at bringing about attitudinal and behavior change in
the staff of financial institutions should be an essential part of their training curriculum.
4.6
Role of SPUR in promotion of proposed City Business Plan
Some of the activities / tasks suggested to be undertaken by SPUR in the implementation of the City
Business Plan of Hajipur are as follows:
In co-operation with the DIC and the MSME Department, SPUR will facilitate the creation of LED
Unit (See Chapter 11) in Hajipur for the purpose of furthering LED in the region.
Assistance to DUDA in establishment and strengthening of the UPE Cell in the ULB. This cell
should necessarily work in close co-ordination with the proposed LED Unit.
Facilitation in establishment and funding of Entrepreneurial Development Centres in selected

towns of Bihar, which will function as Training, Skill Development and Business Incubation
institutions especially in the sectors that have been recommended for local economic
development in the CBP.
Study of the Industrial Incentive Policy of Bihar and its implementation on the ground, with the
objective of identifying bottlenecks and problematic issues in the smooth functioning of
business processes in the ULBs, especially with regard to the sanctions and approvals of
business enterprises by concerned authorities.
Assisting the state in harnessing the resources of industry and commerce associations located
in the ULBs and the state for the effective implementation of the CBP, especially with the aim of
improving investor confidence in the state in the sectors proposed for each ULB.
Facilitate the ULBs in promoting PPP for specific projects as identified by the CBP especially
with regard to robust models, frameworks and contract documents.
Engage with financial institutions for facilitating better access to funds for entrepreneurs,
especially from disadvantaged and excluded groups.
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Facilitation of integrated service approach and convergence of government schemes for

promotion of city businesses, so that there is better understanding of how to harness funds and
resources in a smarter manner, by which priority growth sectors can be targeted for investment
coordination.
Facilitation in leveraging municipal lands for physical and economic infrastructure

development in line with the sectors and activities recommended for development by the CBP.
Technical inputs for improving the credit and market access of local enterprises.
Support in knowledge management and monitoring of city business by including City Business
Plans and other relevant data and processes on the ULB web-portal and integrating this with EGovernance and MIS systems.
The above-mentioned tasks will all be done with the specific sectors and business activities
recommended for promotion in the Hajipur-Vaishali region. Chapter 9 in which there is a City
Business Action Plan shown in a tabular format will also be helpful in determining the role of SPUR
and other agencies in implementation of the CBP.
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CHAPTER 5: SYNERGY THROUGH ALIGNMENT

5.1 Government Programmes
Local economic development efforts should be targeted at reducing poverty by integrating local
economic development with government schemes earmarked for poverty alleviation and enterprise
development. Poverty alleviation is one of the important objectives of the City Business Plan. It is a
multi dimensional issue which needs innovative and coordinated action at macro, sectoral and
micro levels. An effort is underway to provide greater opportunity for the poor to participate in the
growth process by focusing on specific sectors, which offer such opportunities. A large number of
poverty alleviation and social sector programmes and schemes are in operation both at National
and State level which aim to strengthen and improve the quality and standard of living of weaker
and deprived sections of the society.
The main Central Government programmes geared towards LED are:
Figure 32: Relevant Central & State Government Schemes for CBP
Schemes of
Ministry of
Agriculture
Backward
Region Grants
programme
(Mininstry of
Panchayati Raj)
Schemes of
Ministry of
MSME
Central/ Sate
Govt
Programmes
Relevant for City
Business Plan of
Chhapra
National Skill
Development
Mission (NSDC)
Swarn Jayanti
Rozgaar Yojana
(SJSRY)
Bihar Govt
Schemes for
Economic
Development
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5.1.1
Swarnajayanti Sahari Rojgar Yojna (SJSRY)
Swarnajayanti Sahari Rojgar Yojna (SJSRY) is a GoI sponsored poverty alleviation scheme in
operation since Ist December 1997. It is primarily an employment programme. The basic objective
of SJSRY is to cause improvement in the quality of life of urban people living below the poverty line
(BPL). Delivery of inputs under this scheme is required to be organized through ULBs and
community structures. The SJSRY programme is funded by GoI and the State Government on 75:25
basis. It has 3 sections:
1. Self-employment Programme
2. Thrift and Credit Groups
3. Wage and Employment Programme
a) Self-employment Programme
The Swarna Jayanti Shahari Rozgar Yojana (SJSRY) have been revised in 2009
to overcome the difficulties faced by the States and to address certain
drawbacks in its implementation. The revised guidelines is in force from
01.04.09.It has five sections:
1) Urban Self Employment Programme (USEP)
2) Urban Women Self-Help Programme (UWSP)
3) Skill Training for Employment Promotion amongst Urban Poor (STEP-UP)
4) Urban Wage Employment Programme (UWEP)
5) Urban Community Development Network (UCDN)
This Component of SJSRY has three distinct parts:

1. Assistance to individual urban poor beneficiaries for setting up gainful self-employment
ventures.
2. Assistance to groups of urban poor women for setting up gainful self-employment ventures.
This sub-scheme has been titled as The Scheme for Development of Women and Children in the
Urban Areas (DWCUA)".
3. Training of beneficiaries, potential beneficiaries and other persons associated with the urban
employment programme for upgradation and acquisition of vocational and entrepreneurial
skills.
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b) Thrift and Credit Groups

One of the successful areas of SJSRY has been observed to be in establishment of TCGs comprising
women of families below poverty line. The members of the groups take loan from the revolving
fund and are engaged in various micro-enterprises resulting in additional income to them.
1. Neighbourhood Group (NHG)
2. Neighbourhood Community (NHC)
3. Community Development Society (CDS) (Registered)
c) Wage and Employment Programme
This component seeks to provide wage employment to prospective beneficiaries living below the
poverty line within the jurisdiction of urban local bodies by utilizing their labour for construction of
socially and economically useful public assets.
Being operational from 1997, SJSRY programmme in Bihar has not reached a desired level where it
can impact the life of the poor to the largest possible extent. Much of the components of the
programme remain non operational even after so many years as can be seen in the following data.
No physical progress of work has been reported under SJSRY in Hajipur. However, as per
SPURs SJSRY report, out of 81.38 lacs received for the period 1997-2009, the expenditure
reported by the ULB is 67.42 lacs i.e. 82.85%.
In the year 2010-11, according to the DDP, an amount of Rs. 10.5 crs was to have been made
available to the district under the SGSY programme.
Training Details
The only task that seems to have been accomplished in Hajipur under SJSRY is that 505 persons
have been trained in computer handling, tailoring, beautician and operations under SJSRY.
SJSRY: Major issues
DWACUA, SHG/T&C society, the major components of SJSRY have not been formed yet after
so many years of implementation of the programme which indicates the role of UPE cell of
ULB is not satisfactory. UPE cell have failed to facilitate the community organizer to run the
programme successfully.
The capacity building training for all levels is not sufficient.
Coverage of Self Employment as well as Wage Employment is very low
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5.1.1.1 Aligning the proposed CBP with SJSRY

The SJSRY Programme objectives and programmes can be dovetailed with the Hajipur CBP in the
following manner:
Table 42 : SJSRY Programme objectives and programmes alignment with CBP of Hajipur
S.
No.
1
SJSRY Weaknesses
Relevant Action for CBP Hajipur
Urban
Self-Employment
Program
(USEP) has not taken off due to lack of
easy credit assistance to individual
urban poor beneficiaries for setting up
gainful self-employment ventures micro-enterprises.
Inadequate
support
for
Technology/marketing/infrastructure
/ knowledge & other support provided
to the urban poor in setting up their
enterprises as well as marketing their
products
Loan and subsidy assistance to BPL

individuals from Lead Bank Central Bank
of India for starting MEs for:
Food
Processing,
secondary
dairy
processing, fisheries-related enterprises,
agri clinic, cold storages, ancillary units,
organic farming, apiary, seed business etc.
One Micro-Business Centre (MBC)
S. No. to be
set up for Technology/ marketing/
infrastructure/knowledge & other support
for the food and dairy processing MEs in
Hajipur. These can be also used as
Common Facility Centres (CFCs).
Urban Women Self-Help Programme

(UWSP) has not taken shape .
Thrift & Credit Societies (T&CSs) have
not been formed
Assistance to groups of urban poor
women for setting up gainful selfemployment ventures in the form of
revolving fund, loan and subsidy have
not been institutionalised.
Final Report
SHGs formed by NGOs to be identified by

NN/ UPE and assisted for loans/subsidy
for:
- Seed business
- Apiary and Honey business
- Hospitality and Catering
- Mobile vending units/ kiosks for fruit /
vegetable selling
- Organic farming and Urban Agriculture
- Handicraft business like sikki or any
other suitable ones
- Banana fibre products
- Nurseries
- Food processing especially bakeries
- Packaging business
Page 135
S.
No.
4
SJSRY Weaknesses
Skill
Training
for
Employment
Promotion amongst Urban Poor(STEPUP) has not been well designed and
hence the trainings conducted have not
led to gainful employment
Urban Wage Employment Programme

(UWEP) which seeks to provide wage
employment to BPL beneficiaries
within the jurisdiction of ULBs by
utilising their labour for construction of
socially and economically useful public
assets i.e. Community Centres, Stormwater Drains, Roads, Night Shelters,
Kitchen Sheds in Primary Schools
under Mid-day Meal Scheme and other
community requirements like Parks,
Solid Waste Management facilities, as
decided by the community structures
themselves have not been aligned with
other programmes operating in the
towns/cities upto 5 lakh population.
Urban Resource Centre (URC) may be set

up in PPP mode, as a one-stop service
resource for the urban poor for
employment-related information, market
assessment data, life skills development
training, placement, career counseling,
credit linkage, marketing support. ATMA
could take on the role of the URC which
could double up as the Lead Skills Training
Implementation Agency
Training/ Skill Development to be
outcome-based
and
employment/
business-linked
Some identified skills required in Hajipur
are
healthcare,
food-processing,
entrepreneurship development, organic
farming, tourism, agro based economic
activities, biomass energy etc.
To be utilized for socially and
economically
useful
public
assets
proposed under Hajipur CDP and other
industrial
and
entrepreneurial
infrastructure:
Sewerage & Sanitation:
Public toilets
Storm-water Drainage
Drains to be laid and de-silted
Water bodies to be de-silted/
landscaped
Roads: Construction / Upgradation
Construction of Parking Facilities,
Flyovers, pavements, tempo and
rickshaw stands
Redevelopment of bus stand
Community Room
Recreational Club
New parks and upgradation of old
parks
Night Shelters
Low-cost Housing
Fire Station
Agri Business Centre-cum-Food Park
Final Report
Page 136
S.
No.
6
5.1.2
SJSRY Weaknesses
Urban
Community
Development
Network (UCDN) to support the
organization of the urban poor into
self-managed community structures to
enhance participation in the effective
implementation of urban poverty
alleviation programmes According to
the SJSRY Report prepared by SPUR,
there are no NHGs, NHCs or SHGs, T&C
Groups formed
The UPE Cell will have to be strengthened

with adequate staff for mobilization and
formation of such groups based on the
demand for them after required surveys
are conducted.
Prime Ministers Employment Generation Programme (PMEGP)
PMEGP is to be administered by the Ministry of Micro, Small and Medium Enterprises (MoMSME)
and implemented solely by Khadi and Village Industries Commission (KVIC), a statutory
organization under the administrative control of the Ministry of MSME. It is a central government
scheme for generation of employment opportunities through establishment of micro enterprises in
rural as well as urban areas. District Industries Centre (DIC) is the implementing agency for Prime
Minister Employment Generation Programme (PMEGP) in urban areas.
Objectives:
1. To generate employment opportunities in rural as well as urban areas of the country through
setting up of new self employment ventures/projects/micro enterprises.
2. To bring together widely dispersed traditional artisans/ rural and urban unemployed youth
and give them self-employment opportunities to the extent possible, at their place.
3. To provide continuous and sustainable employment to a large segment of traditional and
prospective artisans and rural and urban unemployed youth in the country, so as to help arrest
migration of rural youth to urban areas.
4. To increase the wage earning capacity of artisans and contribute to increase in the growth rate
of rural and urban employment.
Performance under MSME & PMEGP in Vaishali District
Hajipur town has some industrial development. Few of the manufacturing units like medicine
manufacturing units and food processing units are present. The industrial sector in Vaishali is
dependent on micro and artisan units. The micro units has almost doubled from 2007-08 to 200809. The artisan unit also increased in 2007-08 but stopped its growth in 2008-09. There has been
no growth in the tiny industry since 2006 which had 114 units. The PMEGP status of industrial
development in the Vaishali-Hajipur region has already been discussed in Chapter 2.
Final Report
Page 137
Table 43 : Progress Report of PMEGP 2010-11, upto October, 2010
District
Target
Applications Recommended
No. of
Projects
Margin
Money
(Rs. In
lakh)
No.
82
114.6
203
Vaishali
Project
Amount
(Rs. In
Lakh)
Margin
Money
involve
d
(Rs. In
Lakh)
Emp.
(No.)
1339.8
461.7
1284
Applications Sanctioned
No.
Project
Amount
(Rs. In
Lakh)
Margin
Money
Involved
(Rs. In
Lakh)
Emp.
(No.)
36.45
12.75
46
Source: Economic Survey 2010-11
From the above table, it may be seen that the performance of PMEGP in Vaishali is less than
satisfactory. One of the reasons cited for this was the reluctance of banks to sanction loans to
entrepreneurs financing their ventures. This was reported by stakeholders during study. The kind
of enterprises which have been sanctioned under this scheme by the DIC in Vaishali-Hajipur region
are as follows:
Plastics & acrylic sheets

Pesticides
Pharma Units
Bread
Poultry feed
Packaging materials
Food processing units
o Ice-cream
o Pulp & Juices
o Masala
Saw mill
Plywood
Seed Production
PET Bottles
Surgical Cotton
Mineral Water
Cold Storage
Paints
PVC/ Hume Pipes
Flour Mills
Mosquito Coil
COMFED Sudha Dairy
Water Tanks
Hatchery
Marble Works
The main issues with regard to the successful establishment and sustainability of these microenterprises in Hajipur are as follows:
1. lack of working capital,
2. poor backward-forward linkages,
3. poor infrastructure,
4. inadequate communication facilities and
5. delay in granting loans by banks and financial institutions
Final Report
Page 138
5.1.3
Backward Region Grants Facility (BRGF)
BRGF is the programme undertaken by central government to reduce the income disparities among
the States. Under this scheme fund is provided to States for undertaking various developmental
schemes. Municipalities also come under the purview of this programme. The effectiveness of this
programme lies in the fact that the fund is not earmarked for a specific purpose and can be used for
any project where there is a dearth of fund. In the year 2010-11, GoB received Rs. 595.16 cr under
this scheme of which Rs. 493.21 cr was spent which amounts to 82.87% utilization of the grant for
the year. In 2010-11, the DDP has stated that the resources available under BRGF are Rs. 17.5
crs. With regard to the City Business Plan of Hajipur, the grant could be utilized as a Viability
Gap Funding (VGF) measure by the LED Task Force to support the CBP implementation. It is
recommended that this fund be utilized for developing marketing sources and linkages for
the products of the district food, craft and others. This will be subject to the conditions of its
scope, availability and applicability.
5.1.4
National Skill Development Corporation (NSDC)
The National Skill Development Corporation India (NSDC) aims to promote skill development by
catalyzing creation of large, quality, for-profit vocational institutions. It provides viability gap
funding to build scalable, for-profit vocational training initiatives. The skill development scheme by
NSDC will help in creating pool of trained human resources, which are required for the economic
development activities envisaged under City Business Plan. NSDC may be approached by the city
administration or the concerned stakeholder to initiate skill development projects in the VaishaliHajipur region focusing on the sectors identified in Chapter 4 and the HRD initiatives outlined in
Chapter 8.
5.1.5
Schemes of Ministry of Food Processing Industries (GOI)
The following schemes of Ministry of Food Processing Industries may be helpful in development of
infrastructure required for new food processing industries in the Vaishali-Hajipur region.
Mega Food Park and Food Park Schemes provide financial assistance is provided in the form
of grant-in-aid @ 50% of project cost excluding land component.
Scheme for cold chain, value addition and preservation infrastructure gives assistance for
creation of food processing infrastructure. All implementing agencies such as Government
organizations, Private sector organizations etc can avail financial assistance (grant-in-aid)
of 50% the total cost of plant and machinery and technical civil works under this
scheme.
Ministry of Food Processing Industries may be approached by the city administration or the
concerned stakeholders for developing projects in the Vaishali-Hajipur region.
Final Report
Page 139
5.1.6
Schemes of Directorate of Food Processing, GoB
The Directorate of Food Processing which is functioning under the Department of Industries, GoB
has the following two main schemes on offer since 2008:
i)
Scheme for integrated development of food processing sector: A scheme for the
integrated development of Food Processing Sector has been planned where the objective
would be to overcome the constraints related to infrastructure, technology, skills and
marketing faced by Rice, Maize, Pulses, Honey, Makhana, Fruits and Vegetables and other
food processing units in the state.
Eligibility & Funding: All projects in the food/agro sector, promoted either by Special
Purpose Vehicle (SPV) or by individual investors are eligible for assistance under this
scheme. The assistance is a grant of upto 40% of the project cost, subject to a maximum of
10 crores for SPV in case of common cluster infrastructure and upto 35% of the project cost
subject to a maximum of 5 crores in case of an individual investor.
Scope & Coverage: The project cost for the purpose of this scheme will include land,
factory building, plant & machinery, R & D, quality control centre, warehousing facility,
water supply, and electricity supply including captive power plant, effluent treatment, and
telecommunication lines tec. For expansion and capacity increase, the benefits of the
scheme will be available only if the expansion project leads to a capacity addition of atleast
50%.
ii)
5.1.7
Scheme for Food parks: The details of this scheme are similar to the GoI scheme for Mega
Food Parks which has already been described above in Chapter 4.
Schemes of Ministry of MSME (GOI)
The following schemes of Ministry of MSME may be helpful in development of setting up medium,
small and micro enterprises in Hajipur.
Scheme of Fund for Regeneration of Traditional Industries (SFURTI) through KVIC and Coir
Board
Activities under the scheme include Technology Up-gradation, Setting up of Common Facility
Centres (CFCs), Development of new products & designs, New/improved packaging, etc, Market
promotion activities, Capacity building activities etc. This fund is for khadi, coir and village
industries, including leather and pottery. In Hajipur, it could be used for handicraft items industry
to be promoted for the sikki grass handicraft artisans.
Credit Guarantee Cover Fund Scheme for Small Industries
Government of India launched the Credit Guarantee Fund Scheme for Small Industries on 30th
August, 2000 with a view to alleviating the problem of collateral security and impediment to flow of
credit to Small Scale Industries (SSI) sector. This would be very useful for those entrepreneurs in
Hajipur, who are having chronic problems with accessing credit and loan facilities from banks.
Final Report
Page 140
Management Training Programmes

The basic objective of the Management Development Programme is to improve the
productivity/profitability of existing entrepreneurs by upgrading their managerial decision making
capabilities and providing them an insight in the latest developments in the area of industrial
management, marketing management, financial management, inventory control, human resource
development, information technology, and e- commerce, etc.
Marketing Assistance Scheme
Marketing Assistance Scheme aims at providing marketing support to Micro & Small Enterprises
(MSEs) through National Small Industries Corporation (NSIC) and enhances capabilities,
competitiveness and marketability of their products.
5.1.8
Schemes of Ministry of Textile (GOI)
Following are some of the schemes of Ministry of Textiles, which should be synergized with the CBP
proposals for development of economic activities in Hajipur.
Baba Saheb Ambedkar Hastshilp Vikas Yojana (AHVY)
Activities envisaged under the scheme include Organization of artisans clusters into SHGs/
Cooperatives, Skill upgradation through design and technology intervention, Infrastructure support
for improved quality and productivity, Credit facilitation and Marketing support etc.
5.1.9
Schemes of Ministry of Agriculture (GOI)
Ministry of Agriculture is running various schemes, which may contribute to economic

development of Vaishali-Hajipur region, envisaged under this CBP. The following are the key
ongoing schemes of MOA, which are relevant to the Hajipur CBP:
Rashtriya Kisan Vikas Yojana (RKVY) Basic Features
It is a State Plan scheme

The eligibility of a state for the RKVY is contingent upon the state maintaining or increasing
the State Plan expenditure for Agricultural and Allied sectors
The base line expenditure is determined based on the average expenditure incurred by the
State Government during the three years prior to the previous year.
The preparation of the district and State Agriculture Plans is mandatory
The scheme encourages convergence with other programmes such as NREGS.
The pattern of funding is 100% Central Government Grant.
If the state lowers its investment in the subsequent years, and goes out of the RKVY basket,
then the balance resources for completing the projects already commenced would have to
be committed by the states.
It is an incentive scheme, hence allocations are not automatic
It will integrate agriculture and allied sectors comprehensively
It will give high levels of flexibility to the states
Final Report
Page 141
Projects with definite time-lines are highly encouraged
RKVY Areas of Focus
Integrated Development of Food crops, including coarse cereals, minor millets and pulses
Agriculture Mechanization
Soil Health and Productivity
Development of Rainfed Farming Systems
Integrated Pest Management
Market Infrastructure
Horticulture
Animal Husbandry, Dairying & Fisheries
Concept to Completion Projects that have definite time-lines
Support to Institutions that promote Agriculture and Horticulture, etc.
Organic and Bio-fertilizers
Innovative Schemes
Revised Agri-Clinics and Agri-Business Centres (ACABC) Scheme 2010

In order to supplement efforts of public extension by necessarily providing extension and other
services to the farmers on payment basis or free of cost as per business model of agri-preneur, local
needs and affordability of target group of farmers, to support agricultural development and to
create gainful self-employment opportunities to unemployed agricultural graduates and diplomaholders, the Ministry of Agriculture has envisaged a scheme of establishing Agri-Clinics and Agri
Business Centres.
Agri-Clinics are envisaged to provide expert advice and services to farmers on various
technologies including soil health, cropping practices, plant protection, crop insurance, post harvest
technology and clinical services for animals, feed and fodder management, prices of various crops
in the market etc. which would enhance productivity of crops/animals and ensure increased
income to farmers.
Agri-Business Centres (ABCs) are commercial units of agriventures established by trained
agriculture professionals. Such ventures may include maintenance and custom hiring of farm
equipment, sale of inputs and other services in agriculture and allied areas, including post harvest
management and market linkages for income generation and entrepreneurship development.
Capacity Building to enhance Competitiveness of Indian Agriculture and Registration of
Organic Products Abroad
Activities covered under this scheme include Research studies/consultancy on various aspects of
the international competitiveness of Indian agriculture, Support for awareness, creation and
training programmes, Support to Farmers/Agri Related Organizations for creation of computerized
commodity specific market information system, Creation of product specific/country specific
database on Quality Standards affecting trade in agriculture products, Creation/improvement of
Final Report
Page 142
infrastructure in Laboratories engaged in examining standards for agricultural products including

the work relating to MRL testing, Use of ICT and development/purchase of software on WTO
matters by Department of Agriculture and Cooperation (Trade Division) etc.
Scheme for Assistance to Co-operatives
Objective of the Scheme is to revitalize the sick dairy co-operative unions at the district level and
co-operative federations at the State level. The scheme is being implemented by the concerned
District Co-operative Milk Unions/State Dairy Federation. The Central grants under the Scheme are
to be provided to the Milk Unions/Federations through NDDB. In Vaishali district, out of 431
cooperative societies, 312 were functional till June 2008. The sick ones could be revived
with the use of this scheme.
5.1.10 Urban infrastructure Development Scheme for Small & Medium Towns (UIDSSMT)
UIDSSMT provides assistance to the all towns as per the 2001 census, which are not covered under
JNNURM for core infrastructure projects. Funds from this scheme may be utilized to develop new
infrastructure requirements required for industrial development project envisaged under CBP.
Funds from this scheme may be utilized to develop and upgrade infrastructure required for
development of new economic activity zones/ areas. Hajipur has been selected as one of the cities
eligible for funding under UIDSSMT. In the Draft CDP of Hajipur, the following optional reforms
have been proposed to be implemented under UIDSSMT:
Introduction of building bye-laws to streamline the approval process for construction of

buildings: The procedure envisages providing plan permission in a decentralised manner by
allowing processing of applications. This process shall be computerised; however, with the
full implementation of e-governance initiatives, the procedure is expected to facilitate faster
processing of building plan applications.
Earmarking at least 20-25 % of developed land in all housing projects for EWS and LIG
category with a system of cross-subsidisation: This has been partially achieved under
ULCRA where there is a provision for land development to provide housing for EWS and LIG
category.
Adherence to the rebate in property tax for the buildings with rainwater harvesting
facilities and making Rain water harvesting mandatory in all buildings
Bye-laws on reuse of wastewater
5.1.11 Bihar Governments Scheme for Organic Farming

Bihar government has launched an 'organic farming promotion programme' early this year for the
cultivation of organic crops in all the districts. The government has decided to develop organic
grams (organic villages) for which a sum of Rs.255 crore has been sanctioned for five years. There
is adequate quantity of animal dung, compost, rotten crops and fodder for use in organic farming.
The State Horticulture Mission or the relevant authority may be approached by the city
administration or the concerned stakeholder to initiate organic farming projects in the VaishaliHajipur region.
Final Report
Page 143
5.2 Aligning CBP with Municipal Capital Investment Plan

The CDP initiatives suggested in terms of infrastructural development will improve the investment
attractiveness of the city in the following manner:
Development of internal roads, footpaths will lead to decongestion and improved

functioning of commercial activities. This is especially important for all the commercial and
market areas of Hajipur like:
Gudri Bazaar
Thakur Pokhar Sabzi Mandi
Paswan Chowk Chota Bazaar
Anjanpeer Sabji Mandi
Sonarpatti in Gudri Bazaar area
Delineation of parking areas in the above commercial areas will further lead to
decongestion and provide a cleaner outlook.
Development of greenery and parks will lead to land use compliance on the one hand but
can be made into a profitable venture through private partnership. This will take care of
maintenance issues.
There are several water bodies in and around Hajipur desilting activities of these to help
storage and conservation of water could be undertaken under the UWEP component or
UIDSSMT. It could also be undertaken as part of the MNREGA activities in the district. In
2011-12, Vaishali district was allocated an amount of Rs. 137.38 crs. under this scheme.
O & M functions of public areas and facilities could be linked with CBO-s and CDS or
Community Development Societies to take up community level monitoring and
maintenance. This will foster to a community-centred and demand-led approach to O & M
and will also lead to some employment generation.
Solid Waste management can be outsourced to NGO leading to productive institutionalized

systems.
Entrepreneurial activities can emerge for organic farming
Private partnership initiatives can be designed for systemic waste management including
segregation, disposal, composting and marketing.
Development of hawkers zones and vending areas will lead to formalization of the informal
sector operators. This will lead to a synergistic relationship where institutional inclusion
will create opportunities for financial inclusion and the ULB-s will be in a position to levy
and collect taxes, however small.
Final Report
Page 144
Health, Education and Training will be revamped through PPP initiatives and by developing
suitable linkages with Specialised Training Institutes. This can be done with the help of
Ministry of Labour and Employment and the National Skill Development Mission.
The alignment of CBP with CDP is evident in pro poor initiatives where the CBP to a large
extent relies on livelihood generation of the poor through tiny and micro enterprise
development and efficient running of the SJSRY programme. Strengthening of SJSRY
programme is an important component of CBP
Introduction of Intra City & Tourism Transport Services: Tempos / by contract with
existing service providers (To start with tempos to be regularised along the major
corridors. With the improvement of the road infrastructure and efficiency of the services,
the improvement options have to be worked out). Since Hajipur is being developed as a
tourism and wellness destination, the transportation to these sites will also have to be
improved. This will also encourage transport and auto mechanic entrepreneurs.
The Capital Investment Plan of Hajipur in the draft CDP submitted to SPUR in June 2011
comprises of sectoral plans for the identified sectors for a time horizon of 20 years outlining
policy framework and investment interventions to achieve the vision for the urban
agglomeration of Hajipur. The focus sectors for CDP are water supply, sewerage
&sanitation, storm water drainage, solid waste management, roads, traffic & transportation,
street lighting, urban poverty & housing, urban heritage & tourism, urban environment &
social amenities. CDP addresses the infrastructure requirements based on population
projections which are done considering a medium to long term view of citys development.
On the other hand, CBP tries to identify core economic initiatives and projects, which can be
taken up for economic development of the city and the region and may be located outside
the limits of urban agglomeration area, In the Draft CDP the following tasks have been
outlined for implementation upto 2015:
Water Supply: Strengthening of Existing network, Rising mains, Water Treatment
Plant, Distribution Network, Metering Mechanism, Storage facilities at various locations,
Public Taps, New Pump sets at the intake wells and Bulk Meters at Treatment Plant,
Reuse of treated sewerage water from the proposed STP, Leak Detection Study,
Redistribution of Community Taps
Sewerage & Sanitation: Collection Network, Sewage Treatment Plant , Renovation and
construction of toilet blocks, Comprehensive Sewerage Sector Master Plan
Storm Water Drainage: New Closed Drains to be Constructed, Cleaning of all major &
minor drains
Solid Waste Management: Primary Collection System, Integrated Treatment and

disposal site at Dighi Kala, New Vehicles for waste transportation, Container Bins,
Awareness Campaigns
Final Report
Page 145
Roads, Traffic & Transportation: Primary Collection System, Integrated Treatment

and disposal site at Dighi Kala, New Vehicles for waste transportation, Container Bins,
Awareness Campaigns
Environment and Social Amenities: Conservation of water bodies and infrastructure
projects including development of parks and gardens; slaughter house, town hall,
theatre, auditorium and library, Community Room, Recreational Club, Music, Dance
Drama center, Meditation and Spiritual Center, Night Shelters
Construction of one fire station and purchase of 4 fire engines
Removal of Encroachments on roads and nalas
Mandatory implementation of Rain water harvesting
If these works are implemented, they will contribute greatly to the overall investment
attractiveness and livability of Hajipur, which will in turn help the economy to grow, by
providing employment to labour in the development and construction phase and operation
and maintenance personnel in the implementation phase
The following mandatory urban reforms have been suggested for Hajipur:
Introduction of a system of e-governance the LED Task Force and the UPE can use this
as an information, communication, monitoring and decision-making tool for the City
Business Plan implementation.
Reform of property tax with GIS, so that it becomes a major source of revenue, and
arrangement for its implementation so that collection efficiency reaches 85 % within
the next five years
Levy of reasonable user charges with the objective that full cost of operation and
maintenance is collected within the next five years
Internal earmarking within local body, budgets for basic services to the urban poor
Provision of basic services to urban poor
If these reforms are implemented, the investor confidence of entrepreneurs who are hesitant to
invest money in Hajipur, will be boosted and they might want to take up small ventures which they
find viable after further research and study of the project/s on hand.
Final Report
Page 146
CHAPTER 6: BUSINESS APPROVAL ASSESSMENT

As part of City Business Planning exercise, attempt is made to assess the systems/procedures/steps
involved in approval for starting business. Business Approvals Assessment ends with
recommendations suggesting streamlining the processes at municipal level for reducing traction
cost involved in starting business as well as O&M of Industrial/Business asserts.
6.1 Current Business Regulatory Environment
Regulatory environment can be categorized based on legal recognition as a business entity.
Following table explains the major steps in setting up business along with necessary procedure and
associated cost and transaction time.
6.1.1
Formal Business
Table 44: Major Steps in setting up a business set up
Major Steps in
setting up a
business set
up
Authorities
/Jurisdiction
Task/ Activities
Tentative Time
Associated cost
Obtaining
Land
necessary
Approvals
Within
industrial
area(s)
under
the
jurisdiction of Bihar
Industrial
Area
Development Authority
(BIADA)
Land allotment/Transfer of land :
an application form
(present cost Rs.100)
for
allotment
of
industrial plot/shed
Final Report
&
Applications to be supported with

following info.
Details of item to be produced
Land required for production. (in

sq. ft.)
Land required for raw material.(in

sq. ft.)
Land required for finished product

(in sq. ft.)
Details of
required.
Quantity of total water required.
Total Electricity required.
Source of procurement of raw

materials.
Marketing position.
Details of procurement of plant

and machinery
N.O.C.
board
Details of finance for the Project.
Details
drainage
from
of
of
pollution
number
water
control
of
&
1)
Application fee
of Rs. 500/- in the form
of a Demand Draft for
small scale industrial
units (SSI)
2)
Application
and processing fee of
Rs. 1000/- in the form
of a Demand draft for
medium
&
large
industries, Note: Both
the above are nonrefundable/non
transferable
3)
Land allotment
money in the form of a
Demand draft @Rs.
2000/- per acre of land
Page 147
Skilled/unskilled
requirements.
labour
Working Capital requirement.
Documents Required
applied for. (This will

be returned without
interest within 30 days,
in
case
of
nonallotment).
1) Project report (two copies)

prepared
by
an
accredited/approved consultant
2) Proposed
memorandum
of
Association form (Two copies)
3) Personal profile/
entrepreneur
bio-data
of
4) Layout plan duly certified by

consultant registered with Govt. of
Bihar, for medium scale industries
5) IMO/Acceptance in case
medium scale industries.
of
Allotment is effected
only after 20% of the
land price is deposited
by the businessman.
The average time taken
for
approval
is
estimated between 1015 days.
6) Registration and Memorandum of

Articles of Association from the
Registrar of Companies in case of
limited companies.
7) Copy of the Partnership Deed
registered by the Registrar of
Companies, duly attested by a
gazetted officer- in case of a
Private company
8) Letters of recommendation from
two reputed persons.
9) Two photographs of applicant
duly attested by a gazetted
officer/MP/MLA
Obtaining
Land
necessary
Approvals
Final Report
&
Establishing industries
within Municipal limits
In order to establish an industrial unit

within the municipal area a no
objection certificate (NOC) from the
Municipal Corporation would be
required to ensure that the use of the
designated plot of land is in
accordance with the citys master plan.
Establishing industries
outside
Municipal
Limits
The establishment of an industry

outside the municipal limits similarly
requires all the above steps to be
followed except for the requirement to
obtain a trade license from the
The letter of allotment

contains the terms and
conditions regarding
payments
and
subsequently
final
lease agreement will be
signed between the
entrepreneur and the
respondent
BIADA
ranging from 33 years
to 99 years.
For
details
(Procedures, time &
cost)
see
table
DEALING
WITH
CONSTRUCTION
PERMITS
Page 148
municipality.
However
the
industrialist would have to obtain a
NOC from the Panchayat by submitting
the Land possession certificate and
attested
copies
of
the
sale
deed/Khatihaan.
Obtaining
Land
necessary
Approvals
&
Registration
with
District
Industries
Centre (DIC)
Initial registration: The industrialist

can apply for various infrastructural
facilities like electricity, water, etc.
only after DIC registration is done and
pollution control board approval is
received.
Documents required: Submit three
copies of a memorandum for micro
and small enterprises and four copies
for medium enterprises
The
DIC
also
facilitates
the
entrepreneur to avail of bank loan and
the subsidies and incentives as
applicable
through
various
government schemes for setting up
agro-based industries.
Other
governmental
Approvals /
certification
Other
governmental
Approvals /
certification
Obtain a trade license

from the municipality
An application is to be submitted to
the
Municipality for
obtaining a Trade License, after
registration
with
the
District
Industries Centre (DIC).
Municipality issues a
Trade license levying
some nominal fees and
the average time taken
for issuance of Trade
license is between 2030 days.
Registration under the

Labour act from the
Labour
and
Employment
Department
Registration
with
the
Labour
Department is mandatory for any type
of non-residential activity, within 90
days of establishment of the Unit.
From 2 days up to a
week.
Registration under the

Factory act from the
Chief Factory Inspector
Chief Factory Inspector issues the

certificate to the entrepreneur after
ensuring that the following documents
have been submitted and that they are
in order:
Time
taken
for
processing
and
issuance
Factory
inspection certificate is
not less than a week.
i) Certified architectural design and

civil design/building plan of the
industrial unit
ii) Land registration certificate
Final Report
Page 149
iii) Registration certificate from

Labour Department
iv) Health and Safety certificate of
labourers working in the Unit
v) Clearance certificate for Fire
Fighting arrangement
vi) Details of security guards posted
at industrial site
vii) Copy of Memorandum of
Association
viii) Copy of Articles of Association
ix) Copy of Board of Directors
Resolution
x) Copy of Memorandum of
entrepreneur
xi) Certificate from Pollution Control
Board.
The certificate issued by Chief Factory
Inspector is normally valid for one
year.
Approval
from
Pollution
Control
Board for non-Agro
based industries and
/or polluting industries
An application has to be submitted in

duplicate to the Member Secretary,
Bihar State Pollution Control Board,
Patna along with the requisite fees, for
obtaining Consent to Establish (NOC)
U/S-25&26 of the Water (Prevention &
control of pollution) Act,1974 and U/S
21 of the Air (Prevention & control of
pollution) Act, 1981. The following
documents are required to be
submitted for pollution clearance:
i.
Detailed Project Report
ii.
Location
project location
iii.
map
indicating
Land registration papers
iv.
Basic details of industrial unit
being set up
NOC Fee shall be

payable
in
the
following manner :Cost of scheme,2500
crores or above =
Rs10,000.00
Cost of scheme,1 crore
and above but less than
25 crores = Rs.5000.00
Cost of scheme,1 Lakh
and above but less than
1 crore = Rs.1000.00
Cost of scheme,less
than 1 lakh
= Rs.100.00
v. Industrial Process employed in

production
vi Waster, energy usage
vi. Waste water, solid waste and air
pollution production.
Environmental clearance certificate is
Final Report
Page 150
given by the Pollution Control Board

after the officials visit and carry out an
inspection of the site and are satisfied
with all the arrangements. Here again,
time taken varies from 10-30 days, but
there is no definite upper time limit
for issuing the clearance.
Certificate
from
Department of Food
Processing in case of
production of Fruit &
Vegetable
based
products
This certificate is required for

production of fruit and vegetable
based products. In this department all
certificates as required to be
submitted to Drug controller, are to be
submitted
For Details fee table :Approvals for food

processing industries
Certificate from State

Drug Controller for
production
of
Drugs/Pharmaceuticals
& cosmetics
Certificate is required only for

production of drugs/ pharmaceuticals
and cosmetics. Basic Documents
required :
within 2-3 days
Registration with Sales

Tax Department
Other
governmental
Approvals /
certification
Final Report
A detailed report about the

industry
b. nature of its products
c. the units registration certificate
from BIADA and DIC
d. certificates from Weight and
Measure department, Labour
department
An application has to be filed for
registration under the State Value
Added Tax (VAT) rules.
a certificate is issued
within 2-3 days.
a.
For details be table on

Incorporation of Firm
Power Sanction &

connection from the
Electricity Department
An application has to be filed with the

Bihar State Electricity Board (BSEB)
stating the requirement of power
Almost a month
Weight
and
Measurement division
documents along with proof of identity

of the applicant
certificate is normally
issued within a week
after inspection visit
Firefighting
department
Firefighting department generally

issues its clearance after ensuring that
the Unit has been provided with all
recommended Firefighting measures.
between 7-15 days
Trade mark and ISI

mark
Not mandatory for entrepreneur
Page 151
Boiler
Machine
Inspection department
In case the industrialist wishes to

establish a Rice mill, approval has to
be taken from the Boiler Machine
Inspection department.
between 7-10 days
Source: - Various departmental literatures & website. Interview with ULB officials.
Listed below is a detailed summary of the bureaucratic and legal hurdles an entrepreneur must
overcome in order to incorporate and register a new firm, along with their associated time and setup costs. It examines the procedures, time and cost involved in launching a commercial or
industrial firm with up to 50 employees and start-up capital of 10 times the economy's per-capita
gross national income (GNI).
Steps to Incorporate and register a new firm: Shown below are the procedures, time, and costs
to Incorporate and register a new firm
Table 45: Steps to Incorporate and register a new firm
No. Procedure
Min Time
to
Associated Costs
Complete
Obtain director identification number (DIN) online

1 from the Ministry of Corporate Affairs portal 1 day
(National)
Obtain digital signature certificate online from
2 private agency authorized by the Ministry of 3 days
Corporate Affairs (National)
Reserve the company name online with the
3
2 days
Registrar of Companies (ROC) (National)
Stamp the company documents at the State
Treasury
(State)
4
1 day
Get the Certificate of Incorporation from the

Registrar of Companies, Ministry of Corporate
5
6 days
Affairs
(National)
6 Make a seal (Private)
1 day
Obtain a Permanent Account Number (PAN) from

an authorized franchise or agent appointed by the
National Securities Depository Ltd. (NSDL) or the
7 Unit Trust of India (UTI) Investors Services Ltd., as 15 days
outsourced by the Income Tax Department
(National)
*8
Obtain a Tax Account Number (TAN) for income

14 days
taxes deducted at the source from an authorized
Final Report
INR 100
INR 1,500
INR 500
INR 180 (INR 65 for MOA + INR 105 for
AOA + INR 10 for stamp paper for
declaration in Form 1)
INR 13,250 (filing fee on MOA: INR
12,400 + filing fee on AOA: INR 200 +
filing fee on Form 1: INR 200 + filing fee
on Form 18: INR 200 + filing fee on Form
32: INR 200 + POA from 5 subscribers:
INR 50)
INR 350 (costs starts at INR 350 for seal,
depending on number of words to be
engraved)
INR 67 (INR 60 application fee + 12.36%

service tax + INR 5 for application form, if
not downloaded)
INR 57 (INR 50 application fee + 12.36%

service tax)
Page 152
No. Procedure
*9
*
10
*
11
Min Time
to
Associated Costs
Complete
franchise or agent appointed by the National

Securities Depository Ltd. (NSDL), as outsourced
by the Income Tax Department (National)
Register for Value-Added Tax (VAT) at the
1 day
Commercial Tax Office (State)
Register with Employees' Provident Fund
20 days
Organization (National)
Register for medical insurance at the regional
office of the Employees State Insurance 14 days
Corporation (National)
INR 100
No cost
No cost
* Takes place simultaneously with another procedure. Source: - World Bank Database Doing
Business in south Asia in 2007 Country Profile - India
Dealing with Construction Permits: Shown below are the procedures, time, and costs to build a
warehouse, including obtaining necessary licenses and permits, completing required notifications
and inspections, and obtaining utility connections.
Table 46: Steps for Obtaining Construction Permits
No. Procedure
Min Time
to
Associated Costs
Complete
Obtain "planning report" (land-use permit) from the Patna Municipal

1 Corporation (Municipal)
2 days
No cost
Apply for drawing-plan approval/building permit from the Patna

Municipal
Corporation
(Municipal)
According to the Bihar Municipal Act (2007) the building company
must submit an application along with the following documents to the
Chief Municipal Officer, Patna Nagar Nigam, to obtain approval of the
2
1 day
building construction plan: a. Copies of the building plans approved by
a certified architect; b. MOA, AOA, and Certificate of Incorporation; c.
Certificate from a structural architect or engineer. PMC sends a copy of
the plans to the Fire Department internally to ensure that they adhere
to the safety norms. A separate fire NOC is only required for hazardous
and industrial storage.
Receive site inspection from the Patna Municipal Corporation
(Municipal)
3
The Municipal Corporation scrutinizes the plans and visits the site. The
plans are also internally reviewed by the Drainage Department to
obtain their approval.
Obtain building permit from the Patna Municipal Corporation
(Municipal)
1 day
No cost
105 days
No cost
Receive inspection by the executive/assistant engineer by the Patna

1 day
Municipal
Corporation
(Municipal)
Final Report
INR
7,432
(commercial
building permit fee
of INR 8 per square
meter of plot area)
No cost
Page 153
No. Procedure
Min Time
to
Associated Costs
Complete
Inspections are made on average twice during construction to ensure

that the building is being erected in accordance with the sanctioned
plans and there are no deviations.
Receive inspection during construction of the ground level by the

Patna
Municipal
Corporation
(Municipal)
No cost
1 day
Apply for electricity connection to the Bihar State Electricity Board

(BSEB)
(State)
To get a new connection from the BSES, the building company must
7 first get the requisition form from the nearest supply sub-division 1 day
BSES office. The form must be submitted in duplicate to the assistant
electrical engineer along with ownership documents and payment of
the application fee of INR 200 as specified in the BSEB Patna tariff
effective from 1 September 2008.
Apply for permanent water and sewerage connection to the Patna
Water
Board
(Municipal)
*8
1 day
The building company applies for a water connection by filing the
application form available at the Patna Water Board office.
Apply for permanent phone connection at Bharat Sanchar Nigam
Limited
(National)
The building company must apply for the telephone connection at the
local BSNL office. To obtain a commercial connection, the building
company must submit the application along with a proof of ownership
*9
1 day
of the business and the Permanent Account Number (PAN) card. The
same tariff applies across the country, with minor differences due to
local demand. The following charges must be paid: INR 500, in case
there is a waiting list for registration charges; INR 300 in installation
charges (if fewer than 500 lines) or INR 500 (if more than 500 lines);
and a refundable security deposit of INR 2,000.
Hire a licensed electrical contractor to certify the wiring (Private)
*
1 day
10 BSES requires a test report on the wiring at the site along with details
of load by an independent licensed electrical contractor.
Receive
on-site
inspection
by
the
BSES
(Municipal)
*
1 day
11 BSES inspects the site to grant approval for a specific load and to
determine the final connection fees.
Receive on-site inspection by the Patna Water Board (Municipal)
*
1 day
12 Patna Water Board undertakes inspection of the premises to establish
a cost estimate.
Obtain permanent electricity connection upon payment of final fees
*
(Municipal)
45 days
13
Final Report
INR
200
(flat
application fee)
No cost
INR
500
(flat
installation charge)
No cost
No cost
No cost
INR 75,000
Page 154
Min Time
to
Associated Costs
Complete
No. Procedure
The building company must pay the final fees to obtain the connection.
Obtain permanent water and sewerage connections from the Patna
*
Water Board (Municipal)
15 days
14
* Obtain phone connection (with inspection) from the BSNL (National)
7 days
15
File completion certificate and apply for occupancy permit at the Patna
Municipal
Corporation
(Municipal)
16
The occupancy permit is required in Patna under the Bihar Municipal

1 day
Act of 2007. Upon completion of the construction, a completion
application is prepared by the architect or the owner stating that the
construction has been completed in accordance with the regulations,
and an occupancy certificate is issued.
Obtain "no objection certificate" NOC (with inspection) from the Fire
Service
Directorate
(State)
17
1 day
All buildings higher than 15 meters or larger than 500 square meters
of built-up area require inspection and NOC by the Fire Service
Directorate.
Receive final inspection of the construction by the Patna Municipal
*
Corporation (Municipal)
1 day
18
19
Obtain approval of completion certificate (occupancy permit) from the

Patna
Municipal
Corporation
(Municipal)
20 days
INR
2,275
(flat
connection fee)
No cost
No cost
No cost
No cost
No cost
The occupancy permit shall be issued within 30 days.
* Takes place simultaneously with another procedure.

Source: - World Bank Database Doing Business in south Asia in 2007 Country Profile India. Interview with ULB officials.
Table 47: Approvals/ certification for Agro based industries

S.no
Type of Agro Industry
Rice Milling
2
Mustard oil milling
3
Spice grinding
Vegetable oil Refinery
Gram dal Milling (Besan )
Final Report
Type of Approval/Certification required
Expected Time/
Cost
Compliance with PFA Act is compulsory
NA
1) Compliance with PFA Act is compulsory

2) Registration under AGMARK is advisable
3) Had to meet Quality standard of BIS vide
546 IS 546:1975
Registration under AGMARK is advisable
Certification under PFA Act is compulsory
Page 155
S.no
Type of Agro Industry
6
Papad making
Type of Approval/Certification required

546 IS 546:1975
Sattu Manufacturing
Texturised Soya Protein
Maize flakes
10
Macaroni manufacture
11
Bakery
12
Biscuit Making
13
Ice cream cone manufacture
14
Cold Storage - F &V
15
Tomato Ketch-up
16
Potato & Banana Chips
17
Jam & jelly
18
Fruit Squash
19
Chilli Pickles
20
Fish Processing
Expected Time/
Cost

IS 1483:1979
3)
IS 1011:1992
Compliance with FPO is compulsory
NA
IS 3882:1966
1) Compliance with PFA Act & FPO is
compulsory
IS 2397:1988
compulsory
IS 5861:1970
1)
compulsory
Compliance with FPO is compulsory
Compliance with PFA is compulsory
Source: - Feasibility model of Agro Based Industries by Ministry of Food Processing.
6.1.2
Informal Business/ Entrepreneurs
These are generally the businesses, which are individual or family driven and have a very limited
scale of operation. Most activities like local vending, petty shops, and food stalls etc. fall under this
category. Urban Vendors are by far the largest group as far as informal business/entrepreneurship
Final Report
Page 156
is concerned. In Hajipur, Vendors do not require any license (or permit) for vending business on the
footpath and other public places.
As per Bihar Urban vendor sector assessment, nearly 68% of street vendors pay rent to local goons
or unidentified elements. Majority of the vendors who pay a monthly rent have been found to pay a
sum of Rs. 300-400 per month whereas the most commonly paid rent on daily basis is Rs. 5-9/-.
Most of the rent payment goes to unidentified elements, which indicates that rent seeking is going
on through illegal channels. Proportion of street vendors paying rent to these elements is around
68%. Approximately, 29% of street vendors have been found to pay to designated channels such as
municipality (10.86%), landlord (10.59%) and contractors (7.56%).
Table 48: Vending Activity in Hajipur City
Name
ULB
of
Hajipur
Vegs
Fruit
Non Veg
Cloth
Food
Others
Total
659
921
491
192
649
1174
4086
Source:- Bihar Street Vendors Survey Report 2010 ,Pub :- Chandra Gupta Institute of Management Patna (CIMP).
6.2 Taxes & other Costs Associated with Business Operations
6.2.1
Taxes
Table 49 : Comparative Assessment of Tax Liability
Indicator
Payments (number per year)
Time (hours per year)
Profit tax (%)
Labor tax and contributions (%)
Other taxes (%)
Total tax rate (% profit)
Patna
64
405
22.8
18.2
27.4
68.4
South Asia
31.1
282.9
17.8
7.8
14.2
39.9
OECD
14.2
199.3
16.8
23.3
3.0
43.0
Source: - World Bank Database Doing Business in south Asia in 2007 Country Profile India.
Table 50: Tax Liability for Business in Bihar

Tax or
mandatory
contribution
Central sales tax
Corporate
income tax
Social security
contributions
Final Report
Payments Notes on Time

(number) Payments (hours)
12
1
12
online
filing
Total
tax rate Notes on
(%
TTR
profit)
Statutory tax
rate
Tax base
262
4%, as of Apr
2007: 3%
purchase price
23
47
30.00%
taxable profits
19.5
96
12.00%
gross salaries
13.5
Page 157
Tax or
mandatory
contribution
Payments Notes on Time

(number) Payments (hours)
Statutory tax
rate
Stamp duty
10.00%
Employee's state
insurance
contribution
12
4.75%
Dividend tax
14.00%
Property tax
9.00%
Income
surcharge
paid jointly
10.00%
Total
tax rate Notes on
Tax base
(%
TTR
profit)
transaction value
6.1
not
included
gross salaries
dividend
distributions
assessed value
on all federal
taxes
INR 21,500
quarterly tax, INR per vehicle in use
150 for fitness,
and distance
INR 300 for
covered
registration
6% + INR 3.25 per
fuel consumption
liter
4.6
3.4
2.6
0.9
Vehicle tax
(pollution tax)
Fuel tax
State employee
tax
gross salaries
0.3
Fringe benefit
tax
30.00%
value of specified
corporate
expenses (usually
20%)
0.3
Tax on
insurance
contracts
12.00%
insurance
premium
0.3
online
filing
Environment tax
Education fees
paid jointly
Secondary &
Higher
education fees
paid jointly
State VAT
12
CENVAT (excise
duty)
Municipal
business tax
Tax on interest
Totals:
64
INR 1,000 for air

pollution and INR hazardous waste
2,000 for water
produced
pollution
all federal taxes
2.00%
including the
surcharge
all federal taxes
1.00%
including the
surcharge
online
filing
included
in other
taxes
0.7
0.5
not
included
0.2
12.50%
value added
16.48%
value added
included
in other
taxes
included
in other
taxes
not
included
included
in other
taxes
0
withheld
20.00%
405
interest income
not
included
68.4
Source: - World Bank Database Doing Business in south Asia in 2007 Country Profile India. Interview with ULB officials.
Final Report
Page 158
6.2.2
Registering property/land
Listed below is a detailed summary of the steps, time and cost involved in registering property,
assuming a standardized case of an entrepreneur who wants to purchase land and a building that is
already registered and free of title dispute.
The information appearing on this page was collected as part of the Doing Business sub national
project, which measures and compares regulations relevant to the life cycle of a small to mediumsized domestic business in cities and regions.
Table 51: Major Steps in Registering Property and Land
No. Procedure
Time
to
Associated Costs
Complete
Check for encumbrances at the office of the Sub registrar of

7 days
Assurances (State)
INR 500
Pay the stamp duty at the State Treasury and obtain stamp paper
3 days
(State)
INR 167,102 (8% of the

property value for stamp
duty)
The final sale deed is prepared by the buyer or his lawyer

(Private)
*3
3 days
INR 5,500 (lawyer fees)
Though not mandatory, it is common practice for a lawyer to draft

the final sale deed.
Execute and register the final sale deed at the Sub registrars
61 days
Office (State)
INR 84,551 (2% of the

property value for court
fees + 2% of the property
value for municipal fees +
INR 1,000 for statutory
fees)
Apply to the Circle Revenue Office for mutation of the property

title
(State)
The authorized signatory must submit the duly signed application
along with an affidavit, indemnity bond, and a certified/notarized
5
15 days
copy of the registered title deed. After assessment of the request
for mutation, the Circle Revenue Office settles the value of the
property tax to be levied and issues a letter of mutation in favor of
the buyer certifying that the property has been mutated under the
buyers name.
INR 2,020 (INR 20 for

official fees + INR 2,000 for
lawyer fees)
* Takes place simultaneously with another procedure.

Source: - World Bank Database Doing Business in south Asia in 2007 Country Profile India. Interviews with ULB officials.
Final Report
Page 159
6.2.3
Other costs
Table 52: Other Costs associated with Business Operations in Vaishali-Hajipur region
Within
Estate
Industrial Within city limits
Crores
Other parts of District
Cost of Land
Rs 1.37
acres#
per Urban Resi and 10,000commercial (1 lakh 3 decimal*

lakhs/decimal*
Cost of Labor
Unskilled labor Rs Unskilled labor Rs Unskilled labor Rs

2000-3000 per month
2000-3000 per month 2000-3000 per month
Skilled Labor Rs 2500 Skilled Labor Rs
4500 per month
2500 4500 per
month
Graduate Rs 10,000
25000 per month
Graduate Rs 10,000
25000 per month
PG & Professional Rs
20000 40000 per PG & Professional Rs
month
20000 40000 per
month
Cost of Power
50,000
per
Skilled Labor Rs 2500

4500 per month
Graduate Rs 10,000
25000 per month
PG & Professional Rs
20000 40000 per month
Industrial use: 1) LT Ind.- (a) Up to 25 HP Rs 4.5 per kWh

(b) 26 to 99 HP Rs 4.8 per kWh
2) HT Ind.- (a) Up to 33KVA Rs 4.5 per kWh
(b) 34 to 132 KVA Rs 4.6 per kWh
(c) 75 to 1500 KVA Rs 4.7 per kWh.
Commercial use:
(a) 1 to 100 KW Rs 4.6 per kWh

(b) 101 to 200 KW Rs 4.9 per kWh
(c) More than 200 KW Rs 5.3 per kWh
Cost of Water
Commercial & Industrial: Not Regulated. Industries are allowed to set up their
own water pump to draw ground water.
Source: - Field Survey (June 2011), Investment Climate in Bihar, India Brand Equity Foundation, May 2008.
* * Minimum value of land as per govt
Final Report
Page 160
6.3 Streamlining the Business Approval systems

The post-liberalisation era has ushered in new investment challenges and opportunities for various
Indian states. The Bihar government has announced various investment-friendly policies and
initiatives to create an attractive investment climate in the state.
Various Incentives taken up in Bihar
The Industries Department acts as the single point contact for all investment proposal applications.
Within the Industries Department, Udyog Mitra is the main information dissemination division. As a
part of its facilitation process, Udyog Mitra provides a Step by Step approach to open a business,
and provides guidance and assistance to the investor.
a.
Bihar Single Window Clearance Act, 2006
Realizing the need for speeding up the process of giving clearances and issuing certificates required
for setting up industrial undertakings in the State, Government of Bihar has in 2006 enacted the
Bihar Single Window Clearance Act, 2006.
Figure 33: Mechanism for Single window clearance of Business Proposals
Source:- Investment Climate in Bihar, India Brand Equity Foundation, May 2008.
This Act, which extends to the whole of State of Bihar was enacted with the following major
objectives in mind:
Speedy processing of clearances and certificates required for setting up an industrial

undertaking
Promotion of all round development of the State including industrial development and
To provide for investor friendly environment in the State of Bihar
The enactment of such a law was to bring about a paradigm shift in the ways and means of doing
business in the State by providing single point clearances to promoters and thereby ensuring early
commercial production from such units.
Final Report
Page 161
Under this law, the State Government has the powers to constitute by notification, a District Single
Window Clearance Committee for each district, under the chairmanship of the District Collector
b.
Industrial Incentive Policy 2006

1. Bihar Single Window Clearance Act 2006, for rapid clearance procedures for new
industries
2. Bihar Infrastructure Development Enabling Act 2006, to provide for development
of physical and social infrastructure in the state and to attract private sector
participation
3. Provision of self-certication to simplify the inspection of factories
4. Establishment of Land Banks to meet the requirements of industries and
development schemes
5. To develop handicraft, handloom, khadi, silk and village industries
6. Granting of incentives (pre-production incentives of subsidy, exemption from stamp
duty and registration fee and post production incentive of grant/exemption for
preparation of project reports, purchase of land/shed, technical know-how, captive
power generation/diesel generating set, quality certicate,
7. VAT, luxury tax, electricity duty, conversion fee, market fee etc)
8. Special incentives announced for investment in education include subsidy on land
and its registration, subsidised infrastructure support (water, power, approach
roads) along with assistance in seeking approvals from the All India Council of
Technical Education (AICTE)
6.4 Recommendations
1. Streamlining of Business Approvals systems: This needs to be addressed at two levels:
1.1
For approvals from departments other than ULB: Deployment of District Single
Window Clearance Committee under single window clearance scheme.
1.2 For Approvals from ULB: Urban governance reforms at ULBs level and Implementation
of e-governance for better approval systems. Reforms in land registration and building
construction approval procedures to ensure speedy approvals for construction of
supporting infrastructure like industry sheds, warehouses etc.
2. Providing institutional support and regulatory framework for development of agro
industry based economic development in Vaishali-Hajipur region.
2.1
Institutional support for Promotion of PPPs for Development of support Mechanism for
Agro-based Local Economy at Vaishali-Hajipur.
2.2
Providing required regulatory framework for alternative to APMC act.
2.3
Providing required regulatory framework for contract farming.
Final Report
Page 162
3. Convergence of various government schemes and Budgets to meet objectives of CBP.

4. Identification and formalization of vending activity in Vaishali-Hajipur city. This has
three components.
4.1 Identification and development of appropriate street vending zones in VaishaliHajipur region. Vendor zones have yet to be identified and these areas have to be well
supported by infrastructure & institutional support under vendor rehabilitation zone.
4.2 Allotting proper space to vendor by issuing license. Monthly/quarterly license fee
could be taken for vending activity in specified zones.
4.3 Establishing vendor zone fund: This can be developed through license fee received and
should be used for development of supporting infrastructure.
5. Development of Monitoring & Review frameworks for all major development
activities & Projects as per performance Benchmarks.
5.1
Tracking the performance of Development activity is necessary for proper

implementation and improving the approval systems based on feedback from
entrepreneurs, officials involved and the local public.
5.2
Setting of parameters and region to be brought under monitoring & review. These
parameters should cover issues like 1) how many of industries applications are processed
and approved, 2) What are areas (offices/approval agencies/produces) of major blockage
for materialization of business proposals 3) How adequate and what quality of supporting
infrastructure (power supply, Water supply, raw material etc.) are provided to local
industries. The above-mentioned Benchmark should be developed after thorough study of
each industry type and comparing it best practices in India/abroad.
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CHAPTER 7: LEVERAGING ASSETS & PROMOTING PARTNERSHIPS

7.1 Private Sector Participation
The term publicprivate partnership describes a range of possible relationships among public and
private entities in the context of infrastructure and other services. PPPs present a framework
thatwhile engaging the private sectoracknowledge and structure the role for government in
ensuring that social obligations are met and successful sector reforms and public investments are
achieved.
A strong PPP allocates the tasks, obligations, and risks among the public and private partners in an
optimal way. The public partners in a PPP are government entities, including
ministries,
departments, municipalities, or state-owned enterprises. The private partners can be local or
international and may include businesses or investors with technical or financial expertise
relevant to the project. Increasingly, PPPs may also include nongovernment organizations (NGOs)
and/or community-based organizations (CBOs) who represent stakeholders directly affected by the
project.
Effective PPPs recognize that the public and the private sectors each have certain advantages,
relative to the other, in performing specific tasks. The governments contribution to a PPP may
take the form of capital for investment (available through tax revenue), a transfer of assets, or other
commitments or in-kind contributions that support the partnership. The government also provides
social responsibility, environmental awareness, local knowledge, and an ability to mobilize political
support. The private sectors role in the partnership is to make use of its expertise in commerce,
management, operations, and innovation to run the business efficiently. The private partner may
also contribute investment capital depending on the form of contract. The structure of the
partnership is designed to allocate risks to the partners who are best able to manage those risks
and thus minimize costs while improving performance.
Sectors in which PPPs have been completed worldwide include:
Final Report
Power generation and distribution

Water and sanitation
Hospitals
School buildings and teaching facilities
Stadiums
Air traffic control
Prisons
Railways and Roads
Billing and other information technology systems and
Housing
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7.2 Potential sectors for PPP in Hajipur

In the recent development agenda, PPP emerges as a prospective roadmap to regional development
A few sectors which have potential for private investment are agro-based industries, retail,
hospitality and health.
7.2.1
Health: Hajipur has a thriving health business sector. However, most of it is unregulated
and often without standardized health care delivery. Specialty hospital and diagnostic
facility by private players like Fortis, Dr Lals Path Labs will not only bring forth quality of
internal standards but also create employment opportunities, contribute to the economy
and control unregulated growth of sub standard health facilities.
7.2.2
Tourism & Hospitality Development Hajipur is an important tourist centre in the

district as well. There is provision in the Bihar Tourism policy for some ventures to be
promoted on a PPP basis, such as:
i)
Way side facility (Hospitality Resource Creation on Highways): Way side facility is
an important part of tourism. In this vein, comfortable rest houses fitted with basic
amenities on highways flanks, alongside the fuel filling stations (petrol pumps), would
be created with public and private investments.
ii)
Tourist Information Centres: Tourist information centres of the state government

would be modernized well equipped with the modern information and
communication technology (ICT)- computer, fax, internet, email etc. This would
provide abundance of information to the tourists regarding tourist places, hotel
bookings, transport facilities and the likes.
iii)
Aqua Tourism and Water Sports: With a vast expanse of natural water originating
in form of rivers coming down from Nepal and the sacred Ganga river and a wide Son
river, Bihar has a wide scope for developing aqua tourism and river sports.
Arrangements of floating restaurants and river cruises through motor launches and
motor boats are the highlights of developing tourism in Bihar where in ancient times
the "Viharas" played this crucial role of tourism. In the state capital, Patna, aqua
tourism is on the anvil.
iv)
Weekend Tourism: Developing tourist spots with an aim of attracting tourists from
the neighbouring urban centres and states would require a good amount of
investment for creating shopping malls, eating outlets, theme parks and
entertainment centres.
v)
Heritage Hotels: The state government would encourage establishment of Heritage

Hotel movement in Bihar by identifying heritage buildings and mansions to convert
them to Heritage Hotels in order to provide quality accommodation to tourists. This
would save the precious heritage buildings and mansions from getting dilapidated
with their quality face uplift and strengthening during conversion to Heritage Hotels.
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7.2.3
Food Park/ Agri Business Centres Food Park/ Agri Business Centres (ABCs) will be
promoted in important production belts in the region, which are expected to become a
central point for forward and backward linkages in the value chains and will be equipped
with infrastructure according to the requirements of target produce. It will act as a link
between cluster and terminal market sites and improve physical connectivity throughout
the value chain with a view to enhancing connectivity, marketing efficiency, and value
addition in the State. This has to be developed in PPP mode as it will require specialized
facilities and skill.
7.2.4
Skill Development Activities: The 11th Five Year Plan has mandated the setting up of the
National Skill Development Mission, under which skill development and vocational training
has been taken up in a massive way in the PPP mode. The human resources of the VaishaliHajipur Region will have to be trained in the various skills required for the ongoing and
proposed economic activities in the City Business Plan. For this to be implemented in an
effective and industry-linked manner, it would be better to bring in private entities to
undertake skill development programmes. It is especially important to focus on trades like
the food-processing, hospitality and tourism industries. More about this aspect can be seen
in the next Chapter on Human Resource Development.
7.3 Optimum Utilization of vacant ULB lands

Broadly three land uses can be identified for vacant and unutilized ULB lands urban
infrastructure, residential, commercial and industrial, in Hajipur. These lands will have to be
identified by the local administration with the proposed projects in mind. Keeping in view of the
local needs, future potential and available land chunks, the following PPP projects can be conceived
which shall not only serve the general public and boost the local economy, but can also generate the
revenues for ULB:
Specialty Hospital: Healthcare Sector private players may be invited to set up a specialty hospital
in the city on pre defined user charges.
Diagnostic Centres: The increasing demand for diagnostic tests/ services is one of the major
challenges for providing quality health services. In most of the cases, the diagnostics is the first step
towards diagnosing and establishing the medical condition of the patient. While government
institutions provide basic pathology / laboratory diagnostics facilities, the turnaround time for
these tests as well as quantum of requests served (capacity of the system) is a concern. Most
government institutions would not offer intermediate or advanced diagnostics facilities owing to
lack of equipment, trained manpower and viable volumes for such tests in addition to the large
subsidy involved in providing these services at affordable costs.
Hotels: Hajipur, being a tourist destination, there is demand for hotels in the city. Presently, most
visitors prefer to stay in hotels in Patna. However, if the tourism sector is well-developed and when
the Patna hotels get over-booked, the overflow may be accommodated in hotels in Hajipur,
provided they maintain a certain standard in services and maintenance.
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Food Park / Agri Business Centre (ABCs): This centre will be promoted in Hajipur and is
expected to become a central point for forward and backward linkages in the value chains and will
be equipped with infrastructure according to the requirements of target produce. The Food Park/
ABCs will undertake various post harvest treatments to enhance shelf life, segregation of various
grades, primary processing, packing and local marketing to get better realization for the growers.
The focus of the marketing interventions would be the development of organisational capabilities
and infrastructure facilities (such as roads, power supply, water supply and tele-communication) to
raise farm incomes which will in due course raise the economy of the urban area. The main crops to
be cashed in on in Hajipur for this kind of venture are potato, wheat, mango and banana and some
other urban agriculture and organic crops proposed like mushrooms, baby corn and such like. SHGs
and micro-entrepreneurs of the area may be linked to this centre for backward and forward
linkages to utilize the skills already available in the area.
There are five broad categories of PPP prevalent worldwide and the basic features of these five
broad categories of PPP models are shown in Figure. Each model has its own pros and cons and can
be suitable to achieve some of the objectives of private participation. Special characteristics of some
sectors and their technological development, legal and regulatory regimes, and public and political
perception about the services in a sector may also be factors in deciding the suitability of a
particular form of private participation. For example, management contracts are common for
existing assets in the water and transport sectors, affermage/lease in the transport sector,
concessions in the transport and telecommunication sectors, and turnkey and private ownership of
assets in the power sector. A detailed discussion on each option follows.
Figure 34: PPP options relevant for Development Projects in India
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7.3.1 Management Contracts

A management contract is a contractual arrangement for the management of a part or whole of a
public enterprise (for example, a specialized port terminal for container handling at a port or a
utility) by the private sector. Management contracts allow private sector skills to be brought into
service design and delivery, operational control, labour management and equipment procurement.
However, the public sector retains the ownership of facility and equipment. The private sector is
provided specified responsibilities concerning a service and is generally not asked to assume
commercial risk. The private contractor is paid a fee to manage and operate services. Normally,
payment of such fees is performance-based. Usually, the contract period is short, typically two to
five years. But longer period may be used for large and complex operational facilities such as a port
or airport. The figure below shows typical structure of a management contract.
Figure 35: Typical Structure of a Management Contract
The main pros and cons of this model include the following:
Pros:
1. Can be implemented in a short time
2. Least complex of all the broad categories of PPPs
3. In some countries, politically and socially more acceptable for certain projects (such as water
and strategic projects like ports and airports)
Cons:
1. Efficiency gains may be limited and little incentive for the private sector to invest
2. Almost all risks are borne by the public sector
3. Applicable mainly to existing infrastructure assets
4. There are several variants under the management contract including:
5. Supply or service contract
6. Maintenance management
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7. Operational management
7.3.2 Turnkey Contract

Turnkey is a traditional public sector procurement model for infrastructure facilities. Generally, a
private contractor is selected through a bidding process. The private contractor designs and builds
a facility for a fixed fee, rate or total cost, which is one of the key criteria in selecting the winning
bid. The contractor assumes risks involved in the design and construction phases. The scale of
investment by the private sector is generally low and for a short-term. Typically, in this type of
arrangement there is no strong incentive for early completion of a project. This type of private
sector participation is also known as Design-Build. The figure below the typical structure of a
turnkey contract.
Figure 36: Typical Structure of a Turnkey contract
Pros:
Cons:
Well understood traditional model

Contract agreement is not complex
Generally contract enforcement is not a major issue
The private sector has no strong incentive for early completion
All risks except those in the construction and installation phases are borne by the public
sector
Low private investment for a limited period
Only limited innovation may be possible
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7.3.3 Affermage/Lease
In this category of arrangement an operator (the leaseholder) is responsible for operating and
maintaining the infrastructure facility and services, but generally the operator is not required to
make any large investment. However, often this model is applied in combination with other models
such as build-rehabilitate-operate-transfer. In such a case, the contract period is generally much
longer and the private sector is required to make a significant level of investment.
The arrangements in an affermage and a lease are very similar. The difference between them is
technical. Under a lease, the operator retains revenue collected from customers/users of the facility
and makes a specified lease fee payment to the contracting authority. Under an affermage, the
operator and the contracting authority share revenue from customers/users. The figure below
shows the typical structure of an affermage/lease contract.
Figure 37: Typical structure of Affermage/Lease contract
In the affermage / lease types of arrangements, the operator takes lease of both infrastructure and
equipment from the government for an agreed period of time. Generally, the government maintains
the responsibility for investment and thus bears investment risks. The operational risks are
transferred to the operator. However, as part of lease, some assets may be transferred on a
permanent basis for a period which extends over the economic life of assets. Fixed facilities and
land are leased out for a longer period than for mobile assets. Land to be developed by the
leaseholder is usually transferred for a period of 15-30 years.
It may be noted here that if the assets transferred to the private sector under a lease agreement are
constrained in their use to a specific function or service, the value of assets is dependent upon the
revenue potential of that function or service. If assets are transferred to the private sector without
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restrictions of use, the asset value is associated with the optimum use of the assets and the
revenues that they can generate.
Examples of leasing in the transport sector include Rajiv Gandhi Container Terminal, India, Laem
Chabang Port Terminals B2, B3 and B4 in Thailand, and Guangzhou Baiyan Airport in China.
Pros:
Can be implemented in a short time
Significant private investment possible under longer term agreements
In some countries, legally and politically more acceptable for strategic projects like ports
and airports
Cons:
Has little incentive for the private sector to invest
Almost all risks are borne by the public sector
Generally used for existing infrastructure assets
Considerable regulatory oversight may be required
7.3.4 Concessions
In this form of PPP, the Government defines and grants specific rights to an entity (usually a private
company) to build and operate a facility for a fixed period of time. The Government may retain the
ultimate ownership of the facility and/or right to supply the services. In concessions, payments can
take place both ways: concessionaire pays to government for the concession rights and the
government may also pay the concessionaire, which it provides under the agreement to meet
certain specific conditions. Usually such payments by government may be necessary to make
projects commercially viable and/or reduce the level of commercial risk taken by the private sector,
particularly in the initial years of a PPP programme in a country when the private sector may not
have enough confidence in undertaking such a commercial venture. Typical concession periods
range between 5 to 50 years.
The figure below shows the typical structure of a concession contract. It may be noted that in a
concession model of PPP, an SPV may not always be necessary. An SPV may be necessary for a BOT
type of concession however.
Pros:
Private sector bears a significant share of the risks
High level of private investment
Potential for efficiency gains in all phases of project development and implementation and
technological innovation is high
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Figure 38: Typical structure of Concession Contract
Cons:
Highly complex to implement and administer
May have underlying fiscal costs to the government
Negotiation between parties and finally making a project deal may require long time
May require close regulatory oversight
Contingent liabilities to the government in the medium and long term
We further discuss here the most popular type of concession structure for roads and highways
in India, i.e., the BOT (Build Operate Transfer) Structure.
Build-Operate-Transfer
In a Build-Operate-Transfer or BOT (and its other variants namely Build-Transfer-Operate (BTO),
Build-Rehabilitate-Operate-Transfer (BROT), Build-Lease-Transfer (BLT) type of arrangement, the
concessionaire undertakes investments and operates the facility for a fixed period of time after
which the ownership reverts back to the public sector. In this type of arrangement, operating and
investment risks can be substantially transferred to the concessionaire. However, in a BOT type of
model the government has explicit and implicit contingent liabilities that may arise due to loan
guarantees provided and default of a sub-sovereign government and public or private entity on
non-guaranteed loans. By retaining ultimate ownership, the government controls policy and can
allocate risks to those parties best suited to bear them or remove them.
In a BOT concession, often the concessionaire may be required to establish a special purpose
vehicle (SPV) for implementing and operating the project. The SPV may be formed as a joint
venture company with equity participation from multiple private sector parties and the public
sector. In addition to equity participation, the government may also provide capital grants or other
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financial incentives to a BOT project. BOT is a common form of PPP in the highway sector in India,
having been popularized by NHAI in its National Highway Development Program (NHDP).
Annuity Model
The Annuity Model is a variant of the PPP Concessions. This model is similar to the BOT Model
except that the commercial risk is assumed by the public sector, thus shielding the private sector
from any variations in Traffic.
Annuity Contacts were used initially by the NHAI for the development of National Highways largely
because the Private sector was risk-averse and was not willing to take up the commercial risk.
Under this arrangement a selected private bidder is awarded a contract to develop a section of the
highway and to maintain it over the whole contract period. The private bidder is compensated with
fixed semi-annual payments for his investments in the project. In this approach the concessionaire
does not need to bear the commercial risks involved with project operation. However, over time, as
the sector has matured, the private sector has shown greater risk appetite and is now willing to
assume commercial (traffic) risk. Therefore, the annuity road contract has lost its popularity with
Governments because significant risk transfer to the Private Sector was not taking place.
7.3.5 Private Ownership of Assets

In this form of participation, the private sector remains responsible for design, construction and
operation of an infrastructure facility and in some cases the public sector may relinquish the right
of ownership of assets to the private sector.
It is argued that by aggregating design, construction and operation of infrastructure services into
one contract, important benefits could be achieved through creation of synergies. As the same
entity builds and operates the services, and is only paid for the successful supply of services at a
pre-defined standard, it has no incentive to reduce the quality or quantity of services. Compared
with the traditional public sector procurement model, where design, construction and operation
aspects are usually separated, this form of contractual agreement reduces the risks of cost overruns
during the design and construction phases or of choosing an inefficient technology, since the
operators future earnings depend on controlling costs. The public sectors main advantages lie in
the relief from bearing the costs of design and construction, the transfer of certain risks to the
private sector and the promise of better project design, construction and operation.
The main pros and cons of this model are summarized as follows:
Pros:
Private sector may bear a significant share of the risks
High level of private investment
Potential for efficiency gains and innovation is very high
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Figure 39: Typical structure of Private Ownership of Assets
Cons:
Complex to implement and manage the contractual regimes
May have underlying fiscal costs to the government
Negotiation between parties and finally making a project deal may require long time
Regulatory efficiency is very important
There may be contingent liabilities to the government in the medium and long term
There can be three main types under this form:
Build-Own-Operate type of arrangement
Private Finance Initiative (a more recent innovation)
Divestiture by license or sale
Private ownership of assets has not been tried in the Highways sector in India, largely because of
the regulatory implications.
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7.4 Summary of Evaluation and Assessment of all Options Considered

A categorization of the PPP/PSP models is shown in the table below. While the spectrum of models
shown in the table are possible as individual options, combinations are also possible such as a lease
or (partial) privatization contract for existing facilities which incorporates provisions for expansion
through Build-Operate-Transfer.
Table 53: Classification of PPP options
Broad Category
Supply and
Management
Contract
Main Variants
Ownership of
Capital Assets
Responsibility
of Investment
Assumption of
Risk
Duration
of
Contract
(years)
Suitability
for Project
Highway
Outsourcing
Public
Public
Public
1-3
Low
Maintenance
Management
Public
Public/Private
Public/Private
3-5
Operational
Management
Public
Public
Public
3-5
Public
Public
Public/Private
1-3
Low
Affermage
Public
Public
Public/Private
3-20
Medium
Lease
Public
Public
Public/Private
3-20
Medium
Annuity
Public/Private
Public/Private
Public
10-15
Low
BOT
Public/Private
Public/Private
Public/Private
15-30
High
BOO/DBFO
Private
Private
Private
Indefinite
Low
PFI
Public/Private
Private
Public/Private
10-30
High
Divestiture
Private
Private
Private
Indefinite
Low
Turnkey
Low
Low
Affermage/Lease
Concessions
Private
Ownership of
Assets (PFI)
The suitability of the PPP models for the various projects of ULB Hajipur can be judged based on the
evaluation and assessment carried out in this chapter and also the following factors:
Prevalence of the models in ULBs

Strategic Objectives of ULB, Hajipur
Budgetary Constraints of ULB, Hajipur
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7.5 The WAY FORWARD

The vacant / unutilized Government lands may be put in the best use by inviting private sector
participation through various PPP options. These options can be further explored by preparing the
detailed feasibility of the projects suggested above in social as well as physical infrastructure.
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CHAPTER 8: HUMAN RESOURCE DEVELOPMENT

Knowledge, skills, attitudes and practices of human resources are fundamental building blocks and
drivers of local economic development. The quality and capacity of human resources available in a
city together with its investment are important criteria which influence external investors when
deciding where to locate an investment. These factors can also encourage internal investors to stay
and develop their business in the city.
8.1 Principles of Capacity & Skill Development for LED

Globally, the recent thinking on development of capacity and skills, in general, is firmly veering
towards practical, hands-on, market-based and sustainable programmes, whci are result and
outcome-based, rather than theoretical and academic. With this in mind, the following four
principles are suggested as a basis of all capaciy and skill dvelopment for LED for the cities/ urban
areas in Bihar:
8.1.1 Market and Demand-driven

Demand driven system guided by labour market signals thereby reducing skills mismatch. The help
of the Labour Market Information and Human Resource Planning systems which are to be set up by
the National skill Development Mission can be utilized for this, once it is set up. Skill demand and
training needs assessments and their analyses, will lead to a focused and results-based skill
development programme. The recommendations of the CDP/CBP and other such studies will be
used as a basis for deciding what type of training/ courses need to be offered in the city
8.1.2 Commercial Viability

The EDPs/ SDPs will be structured and designed in a manner that will ensure commercial viability,
which will in turn attract good capacity building talent and result in quality outcomes. This may
entail PPP ventures.
8.1.3 Convergence & Multi-stakeholder Partnership

There are a number of public and private programmes, schemes, agencies and institutions which
are engaged in training and skill development at all levels. The idea will be to leverage their
strength and scope in a manner that will benefit the skill development programme to the maximum.
Different types of partnerships and training frameworks will be structured in order to forge the
varied strengths and capabilities of different training entities towards achievement of the skill
development outcomes specified in the procurement documents.
8.1.4 Result and Outcome Focus

As far as possible, especially with regard to the skill development programmes, the payment to
training/ CB institutions and agencies will be linked to outcomes like employment/ placement in
the industry / sector in which SD is being given.
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8.1.5 Pro-poor and Inclusive Focus

There will be a clear emphasis on equity by ensuring adequate participation of women, disabled
persons and disadvantaged groups including economically backward & minorities- enhancing
their access to training; improving employability and increasing employment opportunities.
8.1.6 Quality, Innovation & Modern Methods

Depending on the target groups, the CB & SDPs will promote the use of modern training
technologies including distance learning, e-learning and web-based learning. It will be incumbent
on the training agencies employed to ensure that all the courses are certfied by some recognised
and credible certification body like NCVT or a suitable equivalent depending on the course.
Flexibility and innovation will be encouraged and incentivized so that the courses are responsive to
trainee feedback and market forces.
8.2 LED Stakeholder Groups

The actors and groups involved in LED and who may need capacity / skill development are of
different categories and levels as depicted below:
Figure 40: LED stakeholders Groups for Capacity / Skill development
Urban local bodies /

Municipalities with the
mandate for economic
and social development,
and who plan for and
coordinate development
at local level;
Central, state and
district-level
government
departments
responsible for
establishing the policy
and regulatory
environment.
LED
Stakeholder
Groups
Public sector
providers of business
support eg extension
providers, including
government, NGOs
and private sector;
Final Report
Communities
including poor
producers and
consumers, and
CBOs at local
level;
Pvt. sector operators

including inputs and
marketing services - local,
national, regional and
international; financial
service providers,
financing production,
providing facilities to
access grant payments
Page 178
It is imperative that all these groups work in a synergistic, integrated and convergent manner
towards the LED in their region or city. Less than required capacity and skill in any one of these
groups will drag down the momentum of the CBP and render the implementation less than
satisfactory. The varied nature, composition, literacy and skill levels of these stakeholder groups
make capacity and skill development a complex and challenging task and it is no wonder that this
often presents the weakest link in successful LED implementation. The capacity/ skill development
activities suggested below will be based on the principles and target stakeholder groups mentioned
above.
8.3 Human Capital Development Interventions for LED in Bihar

The guiding principles of the Bihar Urban Development framework as envisaged by SPUR in their
document entitled Bihar Urban Economic Vision and LED Framework Policy Paper forms the
basis on which the HCD activities for the above-mentioned LED stakeholder groups will be
undertaken. However, it is strongly recommended that a Capacity Building & Skill
Development Strategy and Implementation Plan for LED at State and ULB Levels be prepared
by the State Skill Development Mission (yet to be formed in Bihar) or in the interim by SPUR/
UDHD in co-operation with MSME and Industries Department, GoB. The principles and their
implications for the HCD activities under the CBP are enumerated in the table below:
Table 54: LED Principles and their implications for the HCD activities under the CBP
S. No.
LED Principles
Broad HCD intervention
Governments at all levels, Local, State and

Central,
have
an
unavoidable
responsibility and leadership role in
shaping the economic future of our urban
local economies.
Building technical capacity and institutional

orientation for creating an enabling
environment for LED, efficient management
of local resources and building efficient
investment partnerships with private sector
and local communities.
Urban local economic development is an

outcome of actions and interventions
resulting from good governance, alignment
and interaction of local programs with
State and Central policies and programs.
Create an enabling environment for coordination and convergence at the local level
for LED and build capacities of the relevant
institutions
and
personnel
towards
leveraging resources from different sources
for achievement of LED goals.
Creating an enabling environment, so that

overall economic and social conditions of
urban areas which are conducive for
private sector investments & employment
generation are responsibilities of both
Local & State Governments.
Build capacities in efficient, transparent and

accountable urban governance and creation/
upgradation/
maintenance
of
urban
infrastructure
for
improving
living
conditions and overall quality of life in the
ULBs.
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S. No.
LED Principles
The flow of private sector investments into

cities and towns will be determined by the
business
climate
and
competitive
advantages of urban regions to exploit
local resources more efficiently.
Build
capacity
for
better
financial
management of public and private funds and
leveraging of financial resources from
different sources towards attainment of LED
goals and objectives on both a collective and
individual basis.
Promoting economic development of small

and medium towns with greater regional
dependency may follow an Economic
Clustering Approach and the
UIDSSMT Guidelines: The Central and State

Governments will make continuous efforts
for training and up-gradation of the skills of
the personnel responsible for the project and
the
elected
representatives.
State
Government may organize suitable training
as well as capacity building programmes
through reputed institutions in the field. The
same will form part of DPR to be submitted
by implementing agency.
State Government should enable greater

investment coordination and integration
between local, district and State agencies
through
appropriate
policy
and
institutional frameworks.
6
Promoting inclusive local economic

development requires the concerted and
coordinated action of all agencies to
empower local communities through
innovative initiatives on land access, skill
development, access to finance and
markets
and
developing
local
entrepreneurs through efficient enterprise
development and business linkage
strategies.
Strengthen the UPA Cell at State and district

levels and build capacity for promotion of
pro-poor and inclusive approaches to LED
and effective implementation of urban
poverty
reduction
programmes
as
envisioned by the GoI in SJSRY, RAY and
PMEGP and so on.
Effective implementation of LED vision

requires a reorientation of local and State
agencies to redefine the roles of urban
local governments to engage private sector
and local communities to become partners
in local economic development processes.
Build
capacity
for
leveraging
PPP
partnerships for LED and forging strong
relationships for sustainability of LED
projects and interventions
Locally relevant solutions and strategies

must emerge to support the national urban
development strategy and national habitat
and housing policy for promoting
sustainable development and human
settlements.
Information-sharing and capacity building of

State, District and ULB staff in National
Programmes and Policy which have a bearing
on LED
Final Report
Page 180
S. No.
LED Principles
Bihar being the poorest and least Build capacity in handling investment risks
advantaged State in the Country to attract especially for poor and disadvantaged groups
private
investments,
the
Central
Government should support the State and
Local Governments to minimize the
investment risks perceived by the
investors
through
appropriate
institutional and financial assistance.
10
Private sector, including social enterprises,

cooperatives, pro poor businesses, and
informal sector, particularly the vending
sector, form the heart of the local economy
in Bihar and they have vital role in
promoting local economic development.
11
Promoting pro poor business, micro Build capacity for knowledge economy and
enterprises and vending sector requires innovation,
MSME
development
and
political and administrative commitments inclusive LED strategies and implementation.
from the State and Local Governments, and
these actions should be supported by
formulating Pro Poor Business/ Micro
Enterprise Development Strategy and the
Bihar Vending Policy.
12
People are the main resource of local

economies and the development of local
human resources through relevant
technical skill development, promoting
public health and quality of sanitation, etc,
are essential for improving the human
capital for stimulating local economies.
Invest in training of trainers and building up

mother training institutions for HRD in LED
and adapt the National Skill Development
Missions vision, mission and objectives at
the State and local levels for effective LED
13
Realizing the urban economic vision would

warrant
establishment
of
suitable
organizational set ups at State and the
Local levels with adequate functional and
financial authorities to enable investment
coordination and partnerships and
supporting local entrepreneurs.
Build capacity of proposed LED Units at State

and ULB levels to prepare LED strategies,
City/Municipal Business Plans, economic
surveys and prepare a data base of local
industries and establishments.
Final Report
Build capacity in pro-poor SME strategies

and enterprise development and especially
in leveraging of different funding sources
towards LED for them
Page 181
8.4 Human Capital Development Interventions for LED in Hajipur

In Chapter 2 it has been shown that Hajipur has a non-working population of 75% - this group
offers a huge potential for training and skill development in the sectors and sub-sectors which have
been projected as potentially strong business sectors for this city. Besides the unemployed citizens,
those who do have a permanent or temporary (casual) job in any of the three main core sectors can
also attempt upgrading their skills towards increasing their wages by managing their business or
job in a more effective manner. The table below shows suggestions for training / capacity building/
skill development in different sectors and job competencies based on the needs that have emerged
in the City Business Plan. This is only for LED at City and Cluster level.
Table 55: Training / Capacity Building/ Skill Development in different sectors and job competencies
S.
No.
Existing/
Potential
Business
Sector /
Industry
Proposed
Flour Mills
Name of Training /
Skill Development
required
Target Group
Possible Training/
Skill Dev Institution
Flour Mill
Modernization
Flour Mill
Entrepreneurs/
Managers
Flour Mill
Entrepreneurs/
Managers
Regional Extension
Service Centres, MoFPI
Flour Milling
Technology (1 year)
Cold Storages &

Packaging
houses
Final Report
Apprenticeship
Training in Cold
storage, Ice Plant
Cold Storage
Mechanics &
Shop floor
workers
Central Food
Technological Research
Institute (CFTRI),
Mysore
- ITI, Hajipur could start
this course, if
sanctioned by DGET
- Under Apprenticeship
Scheme of DGET
Page 182
S.
No.
Existing/
Potential
Business Sector
/ Industry /
Skill
Food processing
Fruits and
Vegetables
Name of Training /
Skill Development
required
Target Group
Possible Training/
Food processing
(vegetables
especially brinjal,
potato and onion)
SHGs, SJSRY
Entrepreneurial
Groups, FP ME
Entrepreneurs
and workers
Food park, Agri

Ventures and
Agri- Business
Centres (ABCs)
- MBA, Agri Business

- Agri Marketing
- Market Extension
Services
- Post Harvest
Technology
- Grading
- PPP for ABCs
- Agripreneurship
Development
- Smart Packaging
- ICT Enabled
Agricultural
Marketing Research
and Information
Network
- Agricultural
Knowledge
Management
- Agricultural
Engineering Trades
Agri-Business
Entrepreneurs,
ABC Managers,
MSME-DIC
Staff, Shop floor
personnel in
ABCs, SHGs,
SJSRY
Entrepreneurial
Groups
- Govt. Polytechnic ,
Hajipur (may be
requested to start
this under the Skill
Dev Prog funded by
MoLE)
- Entrepreneurial
Development Centre
(EDC) to be started
under SPUR in
Hajipur
- MSME-DI Centres,
Patna and
Muzaffarpur
- Entrepreneurial
Development Centre
(EDC) to be started
under SPUR
- Indian Institute of
Entrepreneurship,
Guwahati
- Sristi Foundation,
Patna
- MANAGE,
Hyderabad
- CIPHET, Ludhiana
- IARI, Pusa, Delhi
- Rajendranagar
Agricultural
University,
Samastipur
- Directorate of
Marketing &
Inspection, Nagpur
Patna
- Entrepreneurial
Development Centre
(EDC) to be started
under SPUR in
Hajipur
- COMFED Training
Centre, Patna
- MSME-DI Centres,
Patna and Muzafpur
Final Report
Page 183
S.
No.
Existing/
Potential
Business Sector
/ Industry
Proposed
Food park, Agri
Ventures and
Agri- Business
Centres (ABCs)
Dairy-based
Production and
Industries: Milk
Producer,
Retailer of Milk &
Milk Products,
Distributor of
Milk & Milk
Products
Bulk Purchaser of
Milk and Milk
Products,
Transport
Contractor,
Milk plant and
related
machinery,
Packing Material
for Milk and Milk
Products, Repair
and Maintenance
of Milk Plant and
Accessories
Retail Industry
Final Report
Name of Training /
Skill Development
required
- Apiary, Bee-keeping
- Floriculture
- Horticulture
- Vermiculture
- Seed production
and processing
- Pisciculture & Aqua
Culture
- Urban Agriculture
- Organic farming
Dairy Technology,
Production of dairy
& milk-based
Products, Training in
clean milk
production &
handling
Retail Management
(RM), Marketing
Target Group
Possible Training/
SHGs, SJSRY
Entrepreneurial
Groups, Dairy /
Milk Dealers,
- Rajendranagar
Agricultural
University,
Samastipur
- Entrepreneurial
Development Centre
(EDC) to be started
under SPUR in
Hajipur
- COMFED Training
Centre, Patna
- MSME-DI Centres,
Patna and
Muzaffarpur
Entrepreneurs,
RM staff
- Arcade Business
College, Patna
- Inductus Business
School, Patna
- Siddhartha Institute
of Management
- NIESBUD Training
Centre, Patna
Page 184
S.
No.
Existing/
Potential
Business Sector
/ Industry
Proposed
Hospitality &
Hotel Industry
Promotion of
Tourism Industry
Final Report
Name of Training /
Skill Development
required
Target Group
Possible Training/
- M.Sc. Hospitality
Administration
- B.Sc.in Hospitality
and Hotel
Administration
- PGDM in
Accommodation
Operation and
Management
- Craftsmanship
Course in Food
Production
- Craftsmanship
Course in Food and
Beverage Service
- Certificate Course
in Hotel and Catering
Management
- Diploma in Food
Production
- Diploma in Food
and Beverage Service
- Diploma in Front
Office
- Diploma in House
Keeping
- Diploma in Bakery
and
Confectionery
- PGDM, Tourism &
Travel
- PGDM, Tourism &
Travel (Services)
- Short-term Joboriented Courses
Entrepreneurs,
Hospitality staff
at different
levels
- Institute of Hotel
Management,
Hajipur ,Vaishali
(Bihar)
Business
Management, Patna
- Shanti Sewa Samiti's
Indian Institute of
Hotel Management,
Patna
- Institute Of Hotel
Management &
Catering Technology,
Patna
- Entrepreneurial
Development Centre
(EDC) to be started
under SPUR in
Hajipur
Tourism and
Travel
Vendors/
Agencies, Sales
Persons, Travel
Counsellors,
Guides,
Transport
Entrepreneurs,
Master Trainers
Tourism and Travel
Management Goa,
Gwalior,
Bhubhaneshwar,
Nellore and Delhi
Page 185
S.
No.
10
Existing/
Potential
Business Sector
/ Industry
Proposed
Healthcare
Name of Training /
Skill Development
required
Target Group
Possible Training/
- Paramedical
personnel for prehospital care (eg. for
ambulances)
- Dialysis technicians
- Medical imaging
technicians
- Personnel for
operating the ECG
and EEG machines
- Perfusion
technology
technicians
- Advanced MRI
machines
Cluster Development
Executives
Programme
- Unemployed
but educated
(10+2 level)
youth in
Hajipur
- Patna Medical
College, Patna
- Nalanda Medical
College, Patna
- Sri Krishna Medical
College, Muzaffarpur
- Entrepreneurial
Development Centre
(EDC) to be started
under SPUR in
Hajipur
- Apprenticeship/
On-the-job training
with local medical
institutions
- Entrepreneurship
Development
Institute (EDI),
Ahmedabad
- Entrepreneurship
Development
Institute (EDI),
Ahmedabad
- The Livelihood
Institute, Patna
Patna
- IIT-Mumbai,
- TERI
- Min. Of Renewable
Energy (MNRE), GoI
- Indian Renewable
Energy Development
Agency (IREDA)
11
Cluster
Development
12
PPP in LED
Using PPP initiative

for LED
MSME / DI
Officials, Master
Trainers, NGOs
13
Livelihood
Promotion
MSME / DI
Officials, Master
Trainers, NGOs
14
Biomass Energy
Sector
Promotion of
Sustainable
Livelihoods for the
Poor
Installation,
Manufacturing
Processes &
Technology,
Marketing & Sales,
Operation &
Maintenance
Final Report
MSME / DI
Officials, Master
Trainers, NGOs
Entrepreneurs,
Unit Staff of
different levels,
concerned Govt .
functionaries at
diff levels
Page 186
S.
No.
15
Existing/
Potential
Business Sector
/ Industry
Proposed
Entrepreneurship
Development
Final Report
Name of Training /
Skill Development
required
Target Group
Possible Training/
- Entrepreneurship
Development
programme,
- Accreditation
Programme for
Entrepreneurial
Motivation Trainers
- Trainers' Training
Programme for
Enterprise
Launching &
Management.
Trainers'/Promoters'
Programme for
Support
Organisations such
as SISIs, DICs,
Development
Corporations etc
- Small Business
Promotion
Programme
- Executive
Development
Programme
- National Faculty
Development
Programme in
Entrepreneurship
- Integrated
Development
Approach For
Entrepreneurship
Development in
Urban Areas
- Entrepreneurship
Orientation for
Weaker
Sections/DWACRA
Functionaries
Entrepreneurs
Small and
Micro, SHG,
SJSRY
Members,
MSME / DI
Officials, Master
Trainers, NGOs
- Institute of
Entrepreneurial
Development, (IED)
Patna
- Small Industries
Service Institute
(SISI), Patna
- MSME-DI Centres,
Patna and
Muzaffarpur
- Entrepreneurial
Development Centre
(EDC) to be started
under SPUR
Entrepreneurship,
Guwahati
- National Institute of
Micro, Small and
Medium Enterprises,
Hyderabad
- Entrepreneurship
Development
Institute (EDI),
Ahmedabad
Patna
Page 187
8.5 Capacity Building / Skill Development for State/ ULB Level Functionaries
and Elected Representatives
A formal training need assessment will have to be conducted as part of the study which will lead to
the formulation of the Capacity Building Strategy for LED. However, in addition to the capacity
building activities suggested in the table above, the following CB activities are suggested for
State/ULB level functionaries, elected representatives, NGOs and key stakeholders in LED:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
Promotion of Micro Enterprises

Project Identification and Preparation of Project Profiles
Balanced Regional Development with MSME Promotion
Techniques of Economic Investigation for MSMEs
Revitalisation of District Industries Centres (DICs)
Innovative Strategies for SME Development
Planning and Promotion of Agro and Food Enterprises
Promotion of Viable Enterprises for SHGs
Product Identification and Marketing Strategies
Soft and Hard Interventions in MSME Clusters
Preparation of DPR for MSME Clusters
Lending Strategies for MSMEs
Finance for Non-Finance Executives in the MSME sector
Business Development Plan for Micro and Small Enterprises
SME Financing Approaches and Strategies
Total Quality Management & ISO 9001: 2008, 14001: 2004, BS 7799 & Six Sigma (TQM)
Training Programme on Counselling and Mentoring for Industrial Promotion Officers
Capacity Building for providing Alternative and Innovative Livelihood Opportunities for the
Poor
Capacity Building of NGOs in Developing Curriculum for Training Programmes for LED
Development of Entrepreneurship in Service Sector
ICT for Business Promotion of SMEs
Convergence and Networking for Entrepreneurship Development
LED Assessment at ULB / Regional levels
Preparation and Implementation of LED / City Business Plans
Monitoring and Evaluation for LED
Value Chain Analysis of Businesses and Gap Assessment
8.6 PPP and Human Capital Development Interventions for LED in Hajipur
Under the 11th Five Year Plan, the GoI has envisioned the setting up of a National Skill Development
Mission. The National Skill Development Corporation (NSDC) was set up as part of a national skill
development mission to fulfill the growing need in India for skilled manpower across sectors and
Final Report
Page 188
narrow the existing gap between the demand and supply of skills. The objectives of PPP initiatives
for skill development in Hajipur are patterned on the NSDC objectives:
Upgrade skills to national standards through significant industry involvement and develop
necessary frameworks for standards, curriculum and quality assurance
Enhance, support and coordinate private sector initiatives for skill development through
appropriate Public-Private Partnership (PPP) models; strive for significant operational and
financial involvement from the private sector
Focus on underprivileged sections of society and backward regions of the country thereby
enabling a move out of poverty; similarly, focus significantly on the unorganized or informal
sector workforce.
Prioritize initiatives that can have a multiplier or catalytic effect as opposed to one-off
impact
With this PPP model for skill development in mind, the Hajipur ULB can call for proposals from
private entities inside and outside Bihar to participate in skill development initiatives in Hajipur
which are market and supply driven and outcome-based i.e. the skill development entity will be
paid for their services only if a certain percentage of their trainees are employed directly as a result
of the training offered by them. The RfP which is used by NSDC (available on NSDC website
http://www.nsdcindia.org/pdf/proposal-private-players.pdf) for private player participation in
skill development activities may be adapted by the ULB for calling for skill development proposals
in Hajipur, especially in the sectors which have been proposed for development under the City
Business Plan (CBP).
This effort will have to be initiated by the State Skill Development Mission to be set up, with the
help of SPUR under the LED Mission being proposed by SPUR. The LED Unit at the ULB Level will
then be responsible for implementing the same. All the potential business sectors, depending on the
training / skill development needs assessments, could run skill development and training
programmes and courses utilizing this route and could use the skill development modules which
have been developed by NSDC and other suitable training institutions, but adapted to the local
conditions, or develop their own modules in co-operation with business sector experts who have
the domain and market expertise required.
8.7 Entrepreneur Development Centre (EDC)

One of the outcomes of the LED strategy under SPUR is the establishment of an EDC in each Cluster.
8.7.1 Objectives of EDC

The main institutional objective of EDC would be to provide technical and management training
and institutional supports to local youths in specific areas of investment potentials, incubate
potential microenterprises/ innovations and motivate and enable local entrepreneurs to establish
businesses. The EDC would establish institutional accreditations for the training modules/ enable
testing and certification thereof. It would also improve the ability to retain and expand existing
businesses, and provide supports to improve business profitability. The EDC would be the resource
Final Report
Page 189
centre for micro enterprise/ pro poor business start ups and it provide all technical assistance
involved in developing business/investment proposals and establish linkages with various
government and private organizations involved in technical and financial assistances. Besides, the
EDC would enable potential investors to leverage available government fiscal and financial
assistances. In general, EDC would be the resource centre for promoting micro enterprises and
interfacing between local entrepreneurs and local bodies for obtaining governmental approvals as
well as enabling business start ups in the urban region.
8.7.2 Other Tasks of the EDC
Establish a Credible Certification System in collaboration with Assessment Bodies established

by the DGET, accredited industry associations, technical and financial institutions in the areas of
vocation trainings it provide. This is required to enable trained candidates to either get
employed or to set up their own enterprises by accessing loans from banks.
Develop Training Manuals, Modules and tool kits for the skill development programmes
identified. These need to be developed in line with the Skill development and Training
initiatives of the Central Government and State governments.
The EDC would provide support services in the areas of business feasibility studies, investment
proposals, sources of funding and marketing, business information management, etc as to
benefit potential entrepreneurs. It would also set up incubation units to promote unique local
innovations having the potentials to scaling up.
Design and implement all need based skill and entrepreneur development and management
program as envisaged above.
To act as an incubation centre that will assist new innovations.
To establish a management information system which collects, stores, processes and

disseminates all relevant information to support entrepreneurship and businesses.
The EDCs would be required to update the database to determine the progress made by the
trained persons in employment and enterprise development. The database would enable the
program to determine the program effectiveness and efficiency and realization of the project
outcomes.
The EDC would establish linkages with local and national industries and organizations and
institutions in order to promote marketing of the products.
The EDC/MBC would seek the assistance of existing successful entrepreneurs as role models for
aspiring entrepreneurs.
Establish contact with business/industry organizations such as CII, BIA, FICCI, Chamber of
Commerce and other industry/ trade associations to explore opportunities to associate private
sector to strengthen the technical content of the training, fund a part of the total cost and to
utilize training facilities available with private sector and industry related organizations
Final Report
Page 190
8.7.3 Setting up the EDC

The EDC could be set up on a PPP basis. The general guidelines for various types of PPP Business
Models are given in Chapter 7 any of these could be modified as per the requirement of the ULB.
The LED Unit to be established will have to anchor this activity along with the co-operation of the
DIC and UPA cell.
Final Report
Page 191
CHAPTER 9: STRUCTURING CITY/MUNICIPAL BUSINESS ACTION PLANS

9.1 Structuring City Business Operational Plans
Table 56: Operational Plan for Implementation of City/Municipal Business Plan
Area of
Intervention
Development
of
Core
Economic
Activities
of
VaishaliHajipur region
1. Agri-based and Food Processing Industries

1.1 Improving the Agricultural Productivity: - Cheap and
timely availability of power to famers is one of the major
factors to enhance the Agricultural Productivity. Agri-clinic
Network to be set up and help of ATMAs and KVKs to be
taken, E-Chaupal type of information system to be started.
1.2 Greater Access to credit to famers and small

entrepreneurs: - There is urgent need to create a
complete ecosystem for credit on easy terms to small and
micro entrepreneurs.
1.3 Supporting infrastructure to improve business linkages

and prevent produce loss: - Develop and strengthen
region-specific supply chain infrastructure and linkage.
1.4 Repeal of APMC Act: - Agricultural Produce Marketing

committee act needs to be replaced with an appropriate
alternative mechanism of open retail marketing of farm
produce & contract farming systems
Final Report
Implementing Agency/
Agencies
Recommendations / Action Plan / Projects
Implementation
Schedule
Source of Funding
Imme
diate
<1
Year
Short
Term
15
years
Long
Term
>
5
years
1. Energy Department, GoB

2. Private Players
3. DoA, GoB
4. DIT, GoB
1.
2.
3.
4.
5.
6.
1.
2.
3.
4.
NABARD
Central Bank of India
MSME
MoRD and DoRD
SPUR & LED TF
DoA, GoB
MoFPI
Min of MSME
PWD
Agriculture Min (GoI) &
Agri. Deptt. (GoB)
5. Private Entrepreneurs
1. Deptt. of Agriculture
(GoB)
Page 192
1.
2.
3.
4.
5.
6.
7.
1.
2.
3.
4.
5.
1.
2.
3.
4.
Energy
Department,
GoB
DIT, GoB
ADB Loan
Private Investment
Bank Loans
ACABC, MoA, GoI
Agricultural Marketing
Information Network
Scheme, MoA, GoI
Local Banks & NABARD
SIDBI
SHG funds
SJSRY
AHVY etc.
MoFPI
Min of MSME
PWD
Ministry of Agri (GoI)
& Agri. Deptt. (GoB)
5. Private funds
MoA, GoI & DoA, GoB
Area of
Intervention
Development of
Core Economic
Activities
of
Vaishali-Hajipur
Region
2. Establishment of Multi-Product Food Park (MPFP)

2.1 Strengthen the Directorate of Food Processing (State
Level) within the Department of Industry as a single window
for catalyzing the food processing industry
2.2 Launch Awareness and Communication Campaign
regarding establishment of MPFP
2.3 Prepare Detailed Project Report (DPR) for the MPFP,

detailing supply chain and processing linkages prior to
actual implementation
2.4 Detailed Tasks for MPFP
2.4.1
Feasibility Study, DPR Preparation, Procurement,
creation of SPV and implementing all preimplementation activities like land procurement,
licenses, approvals
2.4.2
Development of FCCs (cluster of 10-15 villages) on PPP
basis across villages in Vaishali-Hajipur region.
2.4.3
Development of PPCs (cluster of 5-15 FCCs) on PPP
basis across villages in Vaishali-Hajipur region.
2.4.4
Establishing and Strengthening Agri-Clinic Network
2.4.5
Establishing ABC/s on demand basis
2.4.6
Construction of relevant Support Infrastructure for the
MPFP as per the DPR
2.4.7
Development of Cold Chain and Preservation
Infrastructure
2.4.8
Development of Marketing Linkages internal and
external
Final Report
Agencies
1. DoFP,
Department
of
Industries, GoB
2. Finance Department (GoB)
1. DoFP, GoB
2. Deptt. Of Industries, GoB
3. Deptt. Of Inforamtion &
Public Relations, GoB
4. NGOs
5. Private Media Agencies
1. Department of Industries,
GoB & DoFP
1. DoFP, GoB
2. Rural
Development
Department, GoB
3. Finance Department (GoB)
4. Department of Industries, GoB
and DIC, Vaishali
5. State Investment Promotion
Board
6. Bihar
State
Financial
Corporation (BSFC)
7. Bihar
Industrial
Area
Development
Authority
(BIADA)
8. SPUR
Page 193
Implementation
Schedule
Imme
Short
Long
diate
Term
Term
<1
15
>
5
Year
years
years
Source of Funding
1. Create a Market
Development Fund for
promotion of the
processing products
2. Harnessing resources
and subsidies of
various schemes of the
Government of India
(MoA, NHM, MoFPI,
MoSME etc.) and Dir.
Of Food Processing,
GoB i.e. Integrated
Food Processing
Scheme & Food Park
Scheme
3. Funds from Private

Entrepreneurs
(SPV
and Individual Units
within the MPFP)
4. Bank Loans from Local

Banks, NABARD, SIDBI
etc.
Area of
Intervention
Development
of
Core
Economic
Activities
of
Implementation
Schedule
Imme
Short Long
diate
Term Term
<1
15
>
5
Year
years years
3. Promotion of Organic Farming, Floriculture, Horticulture, Nurseries & Poly/Green Houses
3.1 Organic Farming
3.1.1 Organic and vermicompost fertilizers production by MEs
and SHGs
3.1.2 Training on organic farming
3.1.3 Seed replacement programs
3.1.4 Marketing through ABCs and other appropriate channels
3.2 Floriculture
3.2.1 Support through Agri-Clinic Network
3.2.2 Identification of a Flower Vending Zone in Hajipur
3.2.3 Establishment of Co-operative Florist Organization/s
3.3 Establishing Nurseries & Poly/ Green houses
4. Development of Bio-Seed Research and Production
Centres
5. Promotion of Dairy Sector-based Activities
5.1 Establishing Furnished & fully operational Veterinary
Hospital
5.2 Promotion of milk federation and training on Animal
husbandry management.
5.3 Linkage with Financial institution for credit & Bank Loans
for development of animal husbandry.
5.4 Establishment of Cattle Feed Manufacturing unit.
5.5 Establishment of Milk Processing Plant in Hajipur.
5.6 Para veterinary and management training to animal
rearers.
5.7 Artificial Insemination Centre to be established
Final Report
Agencies
1.
2.
3.
4.
5.
1.
2.
3.
6.
4.
5.
6.
1.
2.
3.
4.
5.
6.
Deptt. Of Agri. GoB

MSME Dept
SPUR & LED Task Force
SJSRY
ATMA & KVKs
ULB
DoA, GoB
NHM
SJSRY
ATMA & KVKs
Private Entrepreneurs &
Farmers
Bihar Rajya Beej Nigam
Deptt.
Of
Animal
Husbandry, Dairying &
Fisheries, GoI & GoB
COMFED, Bihar
Min of MSME
Deptt of Rural Dev.
(GoB)
Private Sector Entities
Micro-entrepreneurs
1. RKVY
2. Hari Khad (Daincha)
Scheme, DoA, GoB
3. SJSRY
4. Bank Loans
1.
2.
3.
NHM, DoA, GoB

SJSRY
Bank Loans
Page 194
Source of Funding
1. DoA, GoB
2. Mukhyamantri Teevra
Beej Vistaar Yojana
3. Intensive Dairy Dev
Prog (IDDP)
4. Strengthening
infrastructure for
quality & clean milk
production Scheme
5. Dairy
Entrepreneurship Dev
Scheme
6. Bank Loans
7. SHG Funds
8. NABARD
9. COMFED
10. Private Finance
Agencies

Area
of
Intervention
Implementation
Schedule
Imme
diate
<1
Year
Development
of
Core
Economic
Activities
of
6.
6.1
6.2
6.3
6.4
6.5
6.6
Promotion of Fisheries Sector

Development of Fish Seed Production Centres
Establishment of an Organized Fish Marketing Centre
Desiltation of Ponds
Providing Support Infrastructure
Post-Harvest Management
Capacity Building & Skill Development
1.
2.
3.
4.
5.
Department of Animal
Husbandry
and
Fisheries (DoAHF), GoB
NREGA
CIFE, Mumbai
College of Fisheries,
RAU
ULB, SPUR & LED TF
Short
Term
15
years
Source of Funding
Long
Term
>
5
years
1.
8.
9.
Production & Supply

of Quality Fish Seed
Scheme, DoAHF, GoB
Maun Development
Scheme, DoAHF, GoB
Fisheries Extension
Scheme, DoAHF, GoB
Training & Extension
Scheme, DoAHDF, GoI
Fish Marketing
Scheme, DoAHF, GoB
NREGA funds
Development of
Infrastructure Post
Harvest Marketing,
DoAHDF, GoI
Bank Loans
Private Funds
1.
2.
3.
DoA, GoB
Bank Loans
Private Funds
2.
3.
4.
5.
6.
7.
7. Development of Apiary Sector (Production of Litchi Honey)

7.1 Identification of Industrial Cluster for Honey Production in 1.
Hajipur
2.
7.2 Development of a brand for honey produced from Hajipur
3.
7.3 Financial Support & Access to Credit
4.
5.
6.
Final Report
DoA, GoB
DoMSME
SHGs
Private Entitie
SPUR & LED TF
Bee Keeping Extension
Centre, Muzaffarpur
Page 195
Area
of
Intervention
Agencies
Implementation
Schedule
Imme
diate
<1
Year
Development
of
Core
Economic
Activities
of
8.
8.1
8.2
8.3
8.4
8.5
8.6
8.7
Promotion of Craft-Artisan Sector

Identification of Craft Cluster
Institutional Development
Mobilisation of Artisans into Self Help Groups
Registration of sikki grass artisans
Establishment of Marketing Linkages
Enhancing Weaving Capacity of the Region
Integrated Sector Development
9. Development of Tourism Sector

9.1 Improvement in condition of tourist sites and wider
recognition of Vaishali as tourist spot
9.2 Development of Basic Tourist Infrastructure
9.2.1 A budget hotel
9.2.2 A tourist shopping complex
9.2.3 Visitor Centre
9.2.4 Spa-Wellness-Spirituality-Nature Cure Centre
9.2.5 Water Sports, Amusement Park and Ecological Tours
9.3 Creation of a Tourist Guide Cadre and Transportation
Linkages
10. Promotion of Biomass Energy Sector

10.1 Establishment of Biomass based renewable energy plant in
Hajipur on PPP
10.2 Backward and Forward Linkages
10.3 Capacity Building
10.4 Providing incentives and exemptions
10.5 Power Purchase Option
10.6 Facilitating credit access for new set ups
10.7 Strategy to increase awareness about benefits available
Final Report
1. Bihar State Handloom,

Powerloom & Handicraft
Corporation, DoI, GoB
2. HMC, SPUR & LED TF
3. SJSRY
4. KVIC
5. NIFT Patna
6. NGOs
7. EDC Hajipur
8. SHGs
1. Archaeological Survey of
India (GoI)
2. Directorate
of
Archaeology (GoB)
3. Department of Tourism,
GoB
4. ULB & Utility Agencies i.e.
PWD, PHED etc.
5. Deptt. Of Information &
Public Relations, GoB
6. ITDC & BTDC
7. BSRTC
8. SSDM & EDC
9. Private Entities
1.
2.
3.
4.
BREDA
DIC
ULB
Deptt of PR & Info. GoB
Page 196
Short
Term
15
years
Source of Funding
Long
Term
>
5
years
1.
2.
3.
4.
5.
DoI, GoB
SJSRY
Local Banks
Private Entrepreneurs
AHVY
1. Archaeological Survey
of India (GoI)
2. Private & Public Trusts
3. ULB funds for public
works and facilities
4. ITDC & BTDC funds
5. BSRTC funds
6. SSDM & EDC funds
7. Private Funds
8. Bank Loans
1.
2.
3.
4.
MNRE, GoI
BREDA, GoB
Private funds
Bank Loans
Area
of
Intervention
Human Capital 11. Human Capital Development for LED

Development
11.1 Establishment of Entrepreneur Development Centre at ULB
and Cluster Levels
for LED
11.2 Upgradation of ITI in Hajipur for development of skills in
the potential sectors as recommended by SSDM/ LED Unit
1. UDHD
2. SPUR
3. SSDM
DGET, MoLE, GoI
Implementation
Schedule
Imme
Short
Long
diate
Term
Term
<1
15
>
5
Year
years
years
1. UDHD & SPUR

2. NRLM
3. DGET, MoLE
1. DGET, MoLE
2. Private funds
1. Department of Training &

Technical Education, GoB
2. Private Entity
NSDC, GoI and SSDC, GoB
11.5 Accreditation and Quality Frameworks developed to be

applied for all CB and SD Courses for LED
NSDC, GoI and SSDC, GoB
12.4 Promotion of PPP ventures

12.4.1 Healthcare Sector
12.4.2 Agro-based MPFP, ABC etc.
12.4.3 Education & Skill Development
12.4.4 Tourism & Hospitality
1.
2.
3.
DIC & ULB

PPP cell under BIADA
Department of Finance
(GoB)
4. State
Investment
Promotion Board
5. Health Department, GoB
6. DoA, GoB
7. Department
of
Education, GoB
8. State Skill Development
Mission
9. BTDC & Deptt of
Tourism,. GoB
10. Private Entitites
Page 197
Source of Funding
1. UDHD & SPUR
11.3 Establishment of Polytechnic on PPP basis for skill

development in Hajipur for Food Processing, Ready-made
Garments and other potential business sectors
11.4 Research and Development studies and Monitoring and
Evaluation programme to gauge effectiveness of CB and SD
efforts
12. Leveraging assets & Promotion of PPP

Leveraging
Assets
& 12.1 Transaction advisor for carrying out PPP Transactions.
Promoting
12.2 ULB to develop in house capacity by appointing suitable
Partnerships
staff.
for
Vacant
Urban Lands
12.3 Institutional support for Development of support
Mechanism for Agro-based Local Economy at Hajipur.
Final Report
Agencies
1.
2.
3.
4.
NSDC, GoI
SSDM, GoB
PPP investment funds
Bank Loans
1.
2.
1.
2.
Deptt of Industries
BIADA
ULB
DIC
1.
Deptt. Of Agriculture,
& DoFP, GoB
MoFPI
Health
Department,
GoB
BTDC & Deptt of
Tourism,. GoB
Bank Loans
Private Funds
2.
3.
4.
5.
6.
Area
of
Intervention
Business
Approval
Systems
Agencies
13. Business Approval Systems

13.1 Deployment of District Single Window Clearance
Committee.
Department of Industries
Implementation
Schedule
Imme
Short
Long
diate
Term
Term
<1
15
>
5
Year
years
years
Source of Funding
1.
DoI, GoB
2.
3.
4.
UDHD & ULB

Deptt of Finance
Deptt of Industries
1.
2.
BIADA
Department
Finance (GoB)
DoA, GoB
Urban Reforms
13.2 Deployment of District Single Window Clearance
Committee.
13.3 Urban governance reforms at ULBs level and
Implementation of e-governance for better approvals
systems
13.4 Institutional support for Promotion of PPPs for
Development of support Mechanism for Agro-based
Local Economy at Vaishali-Hajipur.
1.
2.
Convergence
Vending
Monitoring &
Review of CBP
Final Report
13.8 Identification and formalization of vending activity in

Hajipur city.
13.9 Development of Monitoring & review frameworks for
all major development activities & Projects under CBP
as per performance Benchmarks
PPP cell under BIADA

Department of Finance
(GoB)
State Investment Promotion
Board
1.
DoA, GoB
1.
2.
3.
SPUR & LED Task Force

ULB Planning Officer
UPE
1.
ULB
3.
13.5 Providing required regulatory framework for
alternative to APMC act.
13.6 Providing required regulatory framework for contract
farming
13.7 Convergence of various government schemes and
Budgets to meet objectives of CBP to be done at ULB
Level
1. UPE & LED Task Force, ULB

2. Deptt. Of Planning, Gob
3. DoI, GoB
4. UDHD, GoB
Page 198
3.
of
1. DoA, GoB
ULB
ULB
1. Deptt. Of Planning, Gob

2. DoI, GoB
3. UDHD, GoB
CHAPTER 10: CITY INDUSTRY AND BUSINESS CATALOGUE

10.1 Details for Relevant Government Departments/Public Sector Banks
Table 57: Details for Relevant Government Departments/Public Sector Banks
S.
No.
Name of the
Department
Concerned
Position
Office address
1 General
Administration
District
Magistrate
Secretariat,
Kachahari
Hajipur
9471484084 dmRoad, 06224vaishali.bih@nic.i

272201
n
2 General
Administration
Dy. Collector
Secretariat,
Kachahari
Hajipur
9430277000 sanjivsinghbas@g
Road,
mail.com
3 General
Administration
Deputy
Development
Commissione
r
Secretariat,
Kachahari
Hajipur
9431818357 ddcRoad, 06224vaishali.bih@nic.i

272397
n
4 Govt. Finance
District
Manager
(BSFC)
Bihar State Financial 9939770939

Corporation
5 Govt.
Agriculture
District
Agriculture
Officer
Krishi
Bhawan 9431818744 dao-vaiPolice Line Dighi, 272290
bih@nic.in
Hajipur
6 Govt.
Agriculture
District
Horticulture
Officer
District Horticulture 9431818944 dho-vaishaliOffice, Beside Block

bih@nic.in
Office Compound,
Infront of: Railway
Zonal
Office,
Hajipur, Vaishali
7 Govt. Animal
District
Animal
Husbandry
Officer
Final Report
Office
Phone
Official Email
9430606625
Page 199
S.
No.
Name of the
Department
Concerned
Position
Office address
Office
Phone
8 Govt.Urban Chairman
Development
Hajipur
Parishad,
Kachahari
Road,Hajiur
Nagar 9431026298
9 Govt.Urban Vice
Development
Chairman
Hajipur
Parishad,
Kachahari
Road,Hajiur
Nagar 9431030129
10 Govt.Urban City Manager

Development
Hajipur
Parishad,
Kachahari
Road,Hajiur
Nagar 9470725816
11 Govt.Urban Executive
Development
Officer
Hajipur
Parishad,
Kachahari
Road,Hajiur
Nagar 9431632991
12 District
Industry Center
General
Manager
District
Center,
Hajipur
13 Urban
Development
Executive
Engineer
DUDA
9308114406
14 NABARD
District
Development
Manager
NABARD, Hajipur
9431026924
15 Lead Bank
Senior
Manager
Central Bank of 9534597045

India
06224Anwar
Chawk, 272451
Cinema
Road
Hajipur (Vaishali)
Final Report
Official Email
nagarparishadha
zipur@gmail.com
Industry 9835223553
Page 200
10.2 Details for Business Enterprises/association/Organizations/Federation

Table 58: Details for Business Enterprises/association/Organizations/Federation
S.
No.
Name of the
association/ent
erprise/busine
ss unit in CBP
implementatio
n
Concerned
position
Office address
Office
phone
Chamber of
Commerce
President
Vaishali Chamber
of Commerce
9835458958
Chamber of
Commerce
Treasurer
Vaishali Chamber
of Commerce
9631682623
Agriculture
Technology
Management
Agency,
Department of
Agriculture
Project Director
ATMA
Krishi Bhawan
Police Line Dighi,
Hajipur
9471474284 atmavaisha
li@gmail.co
m
M/s Atta Chaki

Nirmata Sangh
(Association)
Kanhaiya Pd.
Singh
Ashok Kumar
C/o Kanhaiya Pd.

Singh
Baghmali, Hajipur
9431007808
06224287486
M/s Asiana
Plywood
Industries P. Ltd.
Braj Bhusan
Singh
E-1, E-2, Industrial

Area, Hajipur
9835412849
9430469616
9470841779
M/s Bijay Roller

Flour Mills Pvt.
Ltd
Jagdish Chandra
Bansal
Hajipur Industrial
Area, Hajipur844101
9334115415
06224272052
06224273855
Final Report
Official
email
Page 201
Area of
Operation
Overall
business
developme
nt in town
including
mobilizati
on,
facilitation
etc
S.
No.
Name of the
association/ent
erprise/busine
ss unit in CBP
implementatio
n
Concerned
position
Office address
M/s Bharat
Emery Stone Co.
Ashok Kumar
Baghmali, Hajipur- 9431449925

844101
06224272449
M/s Hi- Dairy &

Agro Products
Ltd.
H.S. Maskara
B-13-16,
Industrial Area,
Hajipur-844101
06224272467,
274170
M/s Hajipur
Roller Flour
Mills
G. K. Gupta
S. C. Bansal
Industrial Area,
Hajipur-844101
9835250802
9931767569
10
M/s Hajipur
Industries
Association
President
C/o D. R. Polymer,
C-18, Phase-II,
Hajipur Industrial
Area, Hajipur
062242224979
11
M/s Lumbini
Beverages (P)
Ltd.
Ravi Khilani
Manoj Khilani
H-2, EPIP,
Industrial Area,
Hajipur-844101
9334885200 plant@lum
9334885201 bini.net
9334885202
06224273189,
273430
12
M/s Opel Paints

& Chemicals (P)
Ltd.
Manoj Kumar
Ranjan Kumar
B-44, Phase-I,
Ashok Path,
Industrial Area,
Hajipur-844101
9431021760
06224276516
13
M/s Rakesh
Eatables & Gen.
Prod. Pvt. Ltd.
Ajay Kumar
Rajnish Kumar
B-4, Industrial
Area, Hajipur844101
9308089852
06224271025,
271023,
271020,
271015
Final Report
Office
phone
Official
email
Page 202
Area of
Operation
S.
No.
Name of the
association/ent
erprise/busine
ss unit in CBP
implementatio
n
Concerned
position
Office address
Office
phone
Official
email
Area of
Operation
14
Incord
Foundation
NGO
Ravi Shanker
Chhoti Marai Road

Hajipur - 844101
Bihar
099342
40135
incordfoun
dation@ya
hoo.co.in
Economic
developme
nt
15
Vaishno
NGO
:Mukesh
Indu Sadan
Rajputan Tola
Hajipur - 844122
093341
71477
vaishno_ng
o@sify.com
16
Neet Foundation
NGO
Rajesh Kumar
Hathsarganj
Hajipur
Vaishali - 844101
98356
74933
neetfounda
tion@gmail
.com
Final Report
Page 203
Communit
y
developme
nt
CHAPTER 11: CBP IMPLEMENTATION PROCESS

11.1 Institutional Framework for Implementation
At the outset of the CBP Implementation in the City, it is of imperative importance to constitute a
Local Economic Development Task Force. This Task Force will function as a de facto Steering
Committee for guiding and approving the CBPs and as an effective institutional mechanism for
improving the business climate. This task Force will bring civil society, business persons and local
public authorities onto a single platform for effective networking and co-ordination of the CBP rollout. The indicative list of members on this Task Force will be as follows:
Commissioner/ Executive Officer, Municipal Corporation

Mayor & selected Members, Chapra Municipal Corporation
City Manager, Municipal Corporation
General Manager, District Industries Centre
ED/ Rep from Bihar Industrial Area Development Authority
DAO, Department of Agriculture
Rep. from Department of Revenue
Rep. from Relevant Agro-Processing and/ or Industrial Research Centre i.e. ATMA
Manager, NABARD
Manager, SIDBI
President, Chamber of Commerce or any nother Industry Association of the City
Rep from MSME-DI
Manager, Lead Bank
Reps from any Key NGOs engaged in Micro-finance, Micro-enterprise, Street Vendors, Training,
Skill Development and Livelihood Programs
Any leading, prominent business persons in the town
Reps from Vendor, Labour, Trade, Market, Rickshaw Pullers Associations
However, this will be an interim institutional arrangement, until such time as the LED Units at State
and ULB Level are constituted. The Report on Developing Urban Local Economies (Bihar Urban
Economic Vision and Local Economic Development Framework) issued by the Urban Development
& Housing Department, Government of Bihar has recommended the following Institutional
Structure for development of local economies at State and ULB Level:
It envisages the creation of an Economic Empowerment and Poverty Alleviation Mission, which will
in turn constitute a LED Department, responsible for preparing LED strategies for all urban areas in
the State. Initially, it will focus on the 28 project towns and it would scale up the strategies and
implementation plans at a later stage taking into consideration the lessons learnt.
The LED Department of the Mission will be headed by a full time and senior Administrator, with
functional and financial authorities required to fulfill the responsibilities listed below. An Economic
Planner and a Financing Expert, experienced in economic development planning and public private
partnerships in infrastructure and economic investment projects, will support the LED Mission
Director in his day-to-day works.
Final Report
Page 204
Each ULB shall establish LED Unit within the municipalities during the start up phase of the project.
The LED Officers who are experienced in municipal management and interfacing with private
sector and local communities will head the local LED offices. The LED Officer will be supported by a
municipal planner and an economist for providing technical inputs for preparing LED strategies
and municipal business action plans as well as for interfacing with other economic development
stakeholders. The above LED positions, both at Mission and Municipalities will be full time
positions with focused functional terms of references. Both the Senior LED Director and Municipal
LED Officers will have a committed tenure of at least three years.
These officers will have both administrative and financial powers to meet the main responsibilities
listed below. The SPUR Program and the Project Management Consultants (PMC) responsible for
providing technical supports to the Project Management Unit (PMU) will provide technical supports
to the LED Department and Municipal LED offices during the initial phase of the program. The
broad implementation structure is presented below:
Figure 41: Broad Implementation Structure
11.1.1 LED Department and LED Local Units:

During the initial stage of the SPUR implementation, the Mission LED Department and the
Municipal LED Unit will prepare LED strategies, City/Municipal Business Plans, economic surveys
and preparation of data base of local industries and establishments, etc if required by outsourcing
these tasks to qualified consultants and experts. The Project aims to enhance the capacity of
municipal governments to internalize these activities by the end of the project.
Final Report
Page 205
The main functions and tasks of the Mission LED Director and Municipal LED Officer would include
the following:
1. Undertaking research and analysis to identify strengths, weakness, opportunities and threats
and investment priorities within the municipalities;
2. Developing and implementing LED strategy(s);
3. Facilitating networks and partnerships with other stakeholders/ key players and dialogue with
them to support economic development in line with those strategic directions;
4. Developing and maintaining updated data base and directory on existing businesses, projects,
socioeconomic statistics, etc, to assist in making more informed decisions by investors;
5. Facilitate single window clearances for all new small and medium enterprises, and micro
enterprises (pro poor businesses);
6. Structuring LED programs and projects in alignment with the CDP strategy and capital
investment plans and Central Government Urban Development Strategies and Programs;
7. Supporting new and existing micro enterprises and pro poor businesses to grow and
mainstream with financial institutions and establish sustainable business linkages;
8. Structure and manage the DFID supported Pro Poor Business/Micro Enterprise Financing
Deepening Challenge Fund and Business Linkage Challenge Funds established as part of the
Bihar Urban Management Fund;
9. Facilitate LED activities across municipal departments for effective implementation;
10. Support municipal administrations to enhance revenue generation through various financing
options such as leveraging municipal lands, and private participations in municipal capital
investments; and
11. Monitoring LED projects and strategies.
11.2 The Way Forward

The LED Unit at City level needs to be constituted immediately. The Unit needs to ensure the
involvement of various stakeholders for the development of local economy i.e.
1.
2.
3.
4.
5.
6.
7.
8.
Industries Department
District Town Planning Wing
District Urban Development Agency
Social Welfare Department
Public Health
PWD B&R
Local Representative of Banking Fraternity
Representative from Manufacturing Industry
Final Report
Page 206
9.
10.
11.
12.
13.
14.
15.
Representative from Agriculture Fraternity

Representative from Services Sector
Representative from Transport Services
Representative from Informal Services
Local NGOs
Civil Society / Eminent Citizens
Other need based Special Invitees
By involving the stakeholders, the LED Unit can institutionalize the various initiatives to be taken as
part of local economic development process. In order to implement the various recommendations
of City Business Plan, the LED Unit shall:
1. Advise various concerned Government Departments, the development and implementation of
programmes and measures to facilitate business;
2. Develop and oversee and regularly review government regulations and procedures impacting
on business, with the aims of eliminating outdated or burdensome regulations on business,
3. Enhancing the quality of delivery and business-friendliness of government services to facilitate
business operations and development, and reducing regulatory impact and compliance cost to
the business sector;
4. Set up and steer Task Forces to take forward the regulatory reviews or other business
facilitation initiatives; and
5. Examine other relevant areas to facilitate business as appropriate.
If for some reason, this recommendation of constituting an LED Unit at ULB/District level is not
feasible, the alternative suggested is to populate strengthen the Urban Poverty Eradication Cell
proposed under the SJSRY Scheme and have a trained LED Consultant attached to this Cell, who will
be able to facilitate the CBP along with the concerned departments and agencies at ULB, District
and State Level.
Final Report
Page 207
ANNEXURE:
Annexure 1: List of Stakeholders
Attendance Sheet for Key Stakeholder Consultation Workshop on City
Business Plan for Hajipur & LED Task Force Members
Date: 21-9-2011
S.No
Name & Phone No.
Designation / Organisation
1 Mr. Prem Singh Meena

9471484084
D.M.
Task Force
Member &
Position
Chairperson
2 Mr. Davendra Rajak

9431037108
Add. Collector
Vice-Chairperson
3 Mr. Saket Kumar

4 Mr. Prithvi Raj
9431632991
Sub-Divisional Officer
Executive Officer
Secretary
5 Mr. Upendra Kumar

9473191315
Sr. Dy. Collector+ Assistant Treasury

Officer
6 Mr. Vinay Kumar

7 Mr. Ajay Kr. Mahto
9835223553
Vice-Chairman
General Manager, D.I.C.
8 Mr. Haider Ali

9835053835
Municipal Council Member (Ward15)
Member
Member
9 Mr. Ramakant Thakur

10 Smt. Meena Devi
8084263161
Municipal Council Member (Ward-9)

11 Smt. Seeta Devi

9931006369
12 Mr. Sanjay Choudhary

9430204685
Member
13 Smt. Manisha Devi

9934044175
Member
14 Mr. Anil Kumar Gupta

9308114406
Ex. Engg., DUDA
15 Smt. Sanju Devi

9279564224
Municipal Council Member ()
16 Mr. Rakti Devi

17 Mr. Umesh Roy
9199061054
Municipal Council Member

Final Report
Page 208
S.No
Name & Phone No.
Designation / Organisation
Task Force
Member &
Position
18 Mr. Bhola Bhagat

9234292153
19 Smt. Bhawani Devi

9304329573
20 Mr. Manish Kr. Mishra

9431855893
21 Mr. Satya Narayan Choudhary

9431855986
22 Smt. Indira Devi

9835230977
23 Smt. Rekha Devi
24 Smt. Reeta Devi

25 Mr. Santosh Kumar
9905361179

26 Mr. Pradeep Paswan

9955965124
27 Mr. Mithilesh Kumar

9431026924
DDM, NABARD
28 Mr. Vijay Kumar

29 Mr. Vijeet Kr. Jaiswal
9631682623

Treasurer, Vaishali Chamber of
Commerce
30 Mr. Anil Chandra Kushwaha

9835458958
President, Vaishali Chamber of

Commerce
Member
31 Mr. Vijay Kumar
Secretary, Vaishali Chamber of

Commerce
Sr. Manager, Lead Bank Office
P.D., ATMA
Dy. Collector
Member
35 Mr. Santosh Kr. Gupta

9835273395
Vice-President
Chamber of Commerce
Member
36 Mr. Siya Ram Sah

LED Associate, UTAST-SPUR
LED Associate, UTAST-SPUR
32 Mr. P.C. Singh

33 Mr. Uday Singh
34 Mr. Sanjib Kr. Singh
9430277000
sanjivsinghbas@gmail.com
37 Mr. Avijeet Sinha

38 Mr. Chiranjib
Final Report
Member
Member
Member
Member
Page 209
Annexure 2: Stakeholder Workshop Analysis and Suggestions

HAJIPUR CBP STAKEHOLDER CONSULTATION WORKSHOP
Date: 21-9-2011
Comments/ Suggestions from Stakeholders
1. Mr. Vinay Kumar, Vice-Chairman, Nagar Parishad, Hajipur:
SPUR Project meetings have been going on for 2 years and we have all attended
many meetings, but the proposed activities still have to take off on the ground
All efforts for the CBP have to be integrated at the city level between different
concerned departments and local bodies.
All such plans should be disseminated to the public so that people are informed
about it
2. Mr. Vijay Kumar, Secretary, Vaishali Chamber of Commerce:

There has been talk for a long time regarding the starting of an Agricultural Food
Park in Hajipur, but till now nothing has been implemented. An appeal was made to
the DM to start this project as soon as possible, as it is a much-needed economic
intervention in Hajipur.
3. Mr. Anil Khushwaha, President, Vaishali Chamber of Commerce:
Hajipur & Vaishali have so many tourist spots of historical and religious interest
tourism must be widely promoted
The city entrepreneurs must develop linkages with the industries in the Hajipur
Industrial Estate and EPIP to further their business
Banana fibre products and other banana products like chips should be promoted in
a practical and viable manner
Hajipur has many water bodies and boating and gardens etc can be developed which
will add to the attractiveness of the city and promote local business
Seed business can do very well but because of lack of certification, the local farmers
are getting very poor prices there should be a proper certification process
instituted, so that the farmers can easily get their products certified and they should
have information about it
4. Mr. Mahto, Municipal Councilor, Ward 18
Reiterated point - Hajipur has many water bodies and boating and gardens etc can
be developed which will add to the attractiveness of the city and promote local
business
Unless the sewerage problem is dealt with, Hajipur can never develop- economically
Final Report
Page 210
5. Mr. Haider Ali, Municipal Councilor, Ward-15

Due to traffic jams in Hajipur, residents prefer to go and shop in Patna if we
provide proper parking space, local business will improve
Vendors can be shifted to vacant railway land of Chauri Bazaar
6. DM, Vaishali
He has worked in the Bihar Industries Deptt and from 2002-08, nothing was being
done, but since 2008 a lot of planning and many initiatives are being taken
Feedbacks presentation of the potential businesses in Hajipur is quite
comprehensive in covering all the possible sectors
An IL&FS study done shows that there is an 80,000 cr. market which needs to be
tapped for Food-processing
Agri Food Parks and Business Centres are suitable for Hajipur
Makhana business can be widely promoted in Hajipur 85% of the makhana in
India is produced in Bihar
Due to the potential of the agri-food processing business, a separate directorate has
been set up for this in Bihar, which should facilitate things in this sector
Implementation of good projects in the state is hampered by poor data availability
The establishment of Entrepreneurial Development Centres will be very beneficial
for City business and should be proposed and implemented by SPUR
Need to improve the quality of our products if we want to increase their
marketability
Leather Park should be development on the lines of the one in Kolkata
An example of a well-developed and successful business is the Shakti Suman
makhana industry the owner diversified his business and now its worth 50-60
crores
Sugarcane industry and by products is also something which can be promoted
In Gujarat, no subsidies or incentives are given to industrialists/ business persons
but they are given security. Community participation has a big role to play in the
success in Gujarat and the role of proper infrastructure as a support to industrial
development was also given a great deal of emphasis
Social development, a positive attitude i.e. attitudinal change is very necessary esp
in Bihar
Seed certification we need to link up with the initiatives being taken by GoI in this
field and get leverage for seed certification in Hajipur
Integrated development is necessary in a cluster-wise manner as proposed in the
CBP Overview
Levying appropriate user charges and collection and PPP initiatives are crucial to
the success of business development
Bihar needs to welcome industry by making the business environment attractive to
investors and give a certain amount of statutory protection to the industrial and
business sector as an incentive eg. Gujarat & Rajasthan
Final Report
Page 211
Final Report
Tourism we need to restore and clean up our monuments and self-promotion and
self-governance without much dependence on the government is very imp i.e.
Kerala and Sikkim. Documentation and data is also crucial.
Savings of 77 crores as reflected in deposit amounts in Hajipur is not being
intelligently and fruitfully invested or revolved
Milk processing and storage has to be improved and upgraded to give boost to the
dairy industry in Hajipur
Sericulture can also be promoted
Education, Health and Tourism can be promoted through PPP ventures
We need to sit down and reflect and discuss as to why Hajipur is not developing the
way it should - LED task Force to be constituted can do this
Honey business and apiary can be promoted in Ward 39
In ward 33 banana (fibre and chips) and cauliflower business can do well
The DM finally requested the EO to constitute the LED Task Force as soon as
possible
Page 212
Annexure 3: Investments as per SIPB

Proposed Investments in Vaishali/Hajipur Region approved by State Investment Promotion Board
Sl.
No.
Name of the Company
Proposal
M/s Adarsh Divya Vikash

Hospital and Research
Centre, Patna.
Establishment of
Multipurpose Medical
facilities and Research
Centre in Hajipur.
M/s Bihariji Flour Mills (P)

Ltd., Patna City.
M/s Protech Feed Pvt. Ltd.).,

Hajipur.
(Name has been changed
from M/S Protech BioSystem to M/S Protech
Biosciences Pvt. Ltd.)
(Companys proposal
approved by SIPB on
02.01.08 for production of
LVP in the name of M/S
Protech Biosciences Pvt. Ltd
has been amended and
consent has been given for
establishment of 48,000 MT
per year capacity Cattle and
Poultry Feed unit at E.P.I.P,
Hajipur in the name of M/S
Protech Feed Pvt. Ltd.)
Establishment of 1500
Tons/Month Parle-G
Biscuit in collaboration
with Parle Biscuit (P)
Ltd. at Hajipur Industrial
Area.
Establishment of 48,000
MT per year capacity
Cattle and Poultry Feed
unit at E.P.I.P, Hajipur
8.55
14.7
CM/ Cabinet
approval
date
622
SIPB
Approval
date
2.5.06
208
06-09-06
22.10.06
26-092006
06.01.07
Direct
Employment
60
19.03.11
02.01.08
M/S Dhanuka Pesticides

Limited, New Delhi.
Establishment of Fruit
and Vegetable Centre and
Packaging Centre on
Hajipur-Muzaffarpur
High-way
M/S Dhanuka Pesticides

Limited, New Delhi.
E-mail: dhanuka@bol.net.in
Website:www.dhanuka.com
Setting up of a Fully
Integrated Fruit and
Vegetable Processing
Complex at Hajipur in
two phases
Final Report
Investment
(In Crores
Rs.)
275
27.11.06
55
200
20.12.06
Page 213
Sl.
No.
6
Name of the Company
Proposal
Investment
(In Crores
Rs.)
Direct
Employment
1.37
16
SIPB
Approval
date
CM/ Cabinet
approval
date
M/S Rakesh Eatables and

General Products Pvt. Ltd.,
B-4, Industrial Area, Hajipur,
Vaishali,-844101
(Canceling earlier name of
the company M/S Rakesh
Masala Pvt. Ltd, the new
name as " M/S Rakesh
Eatables and General
Products Pvt. Ltd." has been
approved in SIPB meeting on
14.08.08")
Setting up a Food
Processing Unit at
Hajipur Industrial
Area/Export Zone
M/S Steel Authority of India

Ltd., Bokaro Steel Plant,
Bokaro
Establishment of 1.07
Lakh TPA Steel
Processing Unit at
Sahdei, Vaishali
318.75
M/S Amrapali Foods Ltd.,

Ujjawal, 2nd Floor, Opposite
Planetarium, Bailey Road,
Patna
Proposal for
establishment of Food
Park at Muzaffarpur,
Vaishali (Hajipur).
125
M/S Tiger Warehousing Cold

Chain Pvt. Ltd.,
508, Dalamal House,
Nariman Point, J.B. Road,
Mumbai, Maharastra
(Company's name has been
changed form M/S Central
Warehousing Cold Chain Pvt.
Ltd to M/S Tiger
Warehousing Cold Chain Pvt.
Ltd on 09.02.09,)
Establishment of
Warehousing, Container
Freight and Cold Storage
at Hajipur
10
M/S Amrapali Foods

Limited, Ujjwal, II Floor,
Opposite Planetarium, Bailey
Road, Patna
Proposal for expansion

and Modernisation of
Fruits and Vegetable
Processing Unit at
Hajipur Industrial Area.
2.28
15
17.03.08
31.05.08
11
M/S Licchavi Foundation,

Hajipur ( Vaishali)
Establishment of B.Ed.
Teacher's Training
Institute at Hajipur,
Vaishali.
1.61
19
11.07.08
(Consent
with
condition)
08.09.08
90
250
18.11.08
22.12.08
12
M/S ESVEEGEE
STARCH AND
CHEMICALS PVT. LTD.,
Ahmadabad.
Final Report
19.02.07
(Consent
in
principle)
14.08.08
49.75
250
08.10.07
(Consent
in
principle)
21.02.08
25.02.08
105
09.02.09
04.06.09
17.03.08
(Consent
in
principle)
Proposal for
establishment of Maize
Processing Unit at
Imadpur Raghunathpur,
Block- Bhagwanpur,
Dist.- Vaishali
Page 214
Sl.
No.
Name of the Company
Proposal
Investment
(In Crores
Rs.)
Direct
Employment
SIPB
Approval
date
CM/ Cabinet
approval
date
13
M/S Aasma Foods &

Beverages Pvt. Ltd., Patna.
Establishment of Fruit &

Vegetable Processing unit
with the capacity of 2500
MTA at EPIP, Hajipur.
1.1
72
19.10.09
11.02.10
14
M/S Lichchhwi Foods India

Pvt Ltd, Hajipur (Vaishali).
Establishment of 7000
MT per year Capacity
Multi Commodity Cold
Storage, 2000 MT per
year Capacity Deep
Freezer and 2 MT per
hour I.Q.F Line Freezer at
Dighi Kala, Industrial
Estate Hajipur
8.72
09.11.09
11.02.10
15
M/S Mirzanagar Gramodyog

Sahyog Samiti Ltd, Hajipur.
Establishment of Honey
Processing and
Packaging Plant at
Mahua, Hajipur.
1.166
14
23.11.09
25.05.10
16
M/S Golden Dairy Products

Pvt. Ltd, Patna.
1.96
37
21.12.09
17
M/S Bansal Biscuits Pvt. Ltd,

Kolkata
(Amending the proposal
approved on 21.12.09 for
establishment of 12,600 MT
per year capacity Biscuits
production unit at EPIP,
Hajipur, approval has been
given for manufacturing of
36,000 MT per year capacity
Biscuit manufacturing unit at
EPIP, Hajipur on 26.05.11)
Proposal for
establishment of Icecream and Dairy Products
unit at Industrial Area,
Hajipur.
Proposal for
establishment of 36000
Biscuit production unit at
EPIP, Hajipur Industrial
Area.
50.57
328
21.12.09
Final Report
26.05.11
Page 215
25.05.10
Sl.
No.
Investment
(In Crores
Rs.)
54.67
Direct
Employment
SIPB
Approval
date
01.02.10
Name of the Company
Proposal
M/S UAL Industries Ltd,

Kolkata.
(Company's proposal
approved by SIPB on
01.02.10 for establishment of
1,20,000 MT per year
capacity Asbestos Cement
and corrugated Sheets Plant
at Bakhtiyarpur has been
amended and consent has
been given for establishment
of 2,33,000 MT per year
capacity Asbestos Cement
Sheet, Corrugated Sheets
Plant in two phases at
Goraul, Vaishali in the name
of UAL-Bihar in SIPB
meeting held on 21.07.10)
Establishment of 2,33,000
Asbestos Cement Sheet
and Corrugated Sheets
Plant in two phases at
Goraul, Vaishali in the
name of UAL-Bihar
19
M/S Milsha Agro Exports

Pvt. Ltd, Kolkata.
Establishment of 500 MT
capacity Multi Purpose
Cold Storage, 10 MT Precooling Room, 5 MT
Pulp Processing Unit in
Phase-1 and 1 MT
Individual Quick Freezer
in Phase-2 at Hajipur
Industrial Estate.
5.6
41
15.02.10
20
M/S Britannia Industries Ltd,

Bangalore(Karnataka)
55
330
19.04.10
21
M/S Khilani Agro Foods Pvt.

Ltd, Hajipur.
15.77
25
03.05.10
22
M/S Shimla Horticulture Pvt.

Ltd, Kolkata.
Proposal for
establishment of 50,000
Bakery Product and
production of Biscuit at
E.P.I.P., Hajipur.
Proposal for
establishment of 12.73
Crore pieces per year
capacity Preform Pet
Bottle's unit at E.P.I.P.
Hajipur.
Proposal for
Multipurpose Cold
Storage at EPIP, Hajipur.
15.66
400
24.05.10
23
M/S Sandeep Sijol

Infrastructure Pvt. Ltd,
Mumbai
Proposal for Generation

of Electricity from 3 MW
Solar Photo Voltaic
Modules at Madhubani /
Samastipur / Vaishali.
57
23
24.05.10
24
M/S Royal Manucon Pvt Ltd,

Patna.
Proposal for
establishment of 120 Lac
Liters per year capacity
Packaged Drinking Water
unit at Industrial Area,
Hajipur.
1.45
20
08.06.10
18
Final Report
210
CM/ Cabinet
approval
date
21.07.10
Page 216
27.02.11
Sl.
No.
Name of the Company
Investment
(In Crores
Rs.)
Direct
Employment
SIPB
Approval
date
6.1
67
29.06.10
6.16
62
29.06.10
Proposal for
Edible Oil Refinery Plant
and 1000 KVA Captive
Power Plant at Akbar
Malahi, Lalganj, Vaishali.
Proposal for
Plastic Molded unit at
E.P.I.P. , Hajipur.
Proposal for
establishment of 900 MT
per year capacity Banana
& Bamboo Fiber Yarns
unit at Hajipur.
49.5
130
29.06.10
5.62
40
21.07.10
2.06
120
21.07.10
Proposal
25
M/S Akanksha Foods Pvt

Ltd, Patna City, patna.
26
M/S Peerage Buildtech Pvt.

Ltd, New Delhi.
27
M/S Siddhi Refoils &

Industries Pvt. Ltd, Kolkata.
28
M/S Shree Saibaba Plasto

Products Pvt. Ltd, Kolkata.
29
M/S AKS Fashion News Pvt.

Ltd, Patna.
30
M/S Sona Biscuits Ltd,

Kolkata
Proposal for
Biscuit production unit at
E.P.I.P., Hajipur.
26.51
219
13.08.10
31
M/S Narayani Packaging Pvt.

Ltd, Patna City, Patna.
4.51
51
13.08.10
32
M/S Minakshi Rural Agri

Business Pvt. Ltd, Patna.
Proposal for
Corrugated Box
production unit at
E.P.I.P., Hajipur.
Proposal for
MT Modern Multi
Purpose Cold Storage at
Chandpur, Baligaon,
Patepur, Vaishali.
9.56
40
27.08.10
Final Report
Proposal for
Flour and Bran
production unit at E.P.I.P.
, Hajipur.
Proposal for
Noodle production unit at
Industrial Area, Hajipur.
CM/ Cabinet
approval
date
Page 217
20.02.11
Sl.
No.
220
SIPB
Approval
date
27.08.10
1.35
53
27.08.10
Proposal for
establishment of 7.5 MW
Biomass based Power
Plant at three placesSasaram (Rohtas),
Harnaut (Nalanda),
Rafiganj (Aurangabad)
and 10 MW Biomass
based Power Plant at two
places- Vaishali (Dist.Vaishali), Begusarai
(Dist.-Begusarai),
Proposal for production
of 84000 MT per year
capacity of Cattle and
Poultry Feed at EPIP,
Hajipur, Vaishali.
191.25
225
29.11.10
(Consent
with
condition)
17.05
220
29.11.10
M/S Devlok Agro and

Beverages Pvt. Ltd, Patna.
Proposal for
establishment of 96 Lac
Liters per year capacity
Packaged Drinking Water
unit at Hajipur.
1.58
32
29.11.10
M/S T I Cycles of India (M/S

Tube Investments of India
Ltd.), Chennai, Tamil Nadu.
Proposal for
establishment 20 Lac
pieces per year capacity
Cycle, Cycle Parts and
Accessories
manufacturing unit at
E.P.I.P, Hajipur.
45.1
500
25.02.11
Name of the Company
Proposal
33
M/S Lumbini Beverages Pvt.

Ltd, Hajipur.
Proposal for capacity

expansion from 39971250
Liters per year capacity to
67971250 Liters per year
capacity and
Modernisation in the
existing unit of
manufacturing of PET
Bottle, Aerated Water and
Juice Based Drinks at
E.P.I.P, Hajipur.
34
M/S Shree Tel Fab Industries

Pvt. Ltd, Hajipur.

expansion from 5000 MT
per year capacity to
10,616 MT per year
capacity in the existing
unit of P.V.C. Pipe and
P.V.C. Filter at Industrial
Area, Vaishali, Hajipur.
35
M/S Green Horsepower Pvt.

Ltd, New Delhi.
36
M/S Godrej Agrovet Ltd,

Mumbai.
37
38
Final Report
Investment
(In Crores
Rs.)
31.89
Direct
Employment
CM/ Cabinet
approval
date
Page 218
80
SIPB
Approval
date
26.05.11
140.5
140
26.05.11
Proposal for 30,000 MT

per year capacity
expansion in the existing
unit of 18,000 MT per
year capacity of Poultry
Feed and Cattle Feed at
5.4853
21
27.07.11
M/S Vaishali Fresh Fruits and

Vegetables Pvt. Ltd, Patna.

expansion from 2500 MT
per year capacity to 7500
MT per year capacity in
the existing unit of Fresh
Fruits and Vegetable
Processing at Industrial
Area, Hajipur.
0.7517
28
27.07.11
43
M/S Phular Cold Storage Pvt.

Ltd, Vaishali.
Proposal for
MT Multipurpose Cold
Storage, Multiproduct
Grading Line and Agri
Mall Warehouse under
R.A.B.C. at Mansoorpur,
Kanti, Muzaffarpur.
8.545
40
27.07.11
44
M/S L V Commercial Pvt.

Ltd, Patna.
Proposal for
Roller Flour Mill at
E.P.I.P, Hajipur.
11.141
69
27.07.11
45
M/S Nalanda Biscuit

Company Ltd, Patna.
Proposal for
Flour Mill unit at E.P.I.P,
Hajipur.
14.6753
40
27.07.11
Sl.
No.
Name of the Company
Proposal
39
M/S Anuj Dairy Pvt. Ltd,

Patna
Proposal for production

of 5475 MT per year
capacity Milk Powder
and 255.5 MT per year
capacity Butter or 164.25
Ghee at Industrial Area,
Hajipur.
40
M/S Chandigarh Distillers

and Bottlers Ltd, Chandigarh.
Proposal for
establishment of 330 Kilo
Liter per day capacity
ENA, IMFL, Country
Liquor, RS, IND Alcohol,
DNS, Ethanol Absolute
Alcohol production unit
at Patna/Vaishali.
41
M/S Nandita Poultry

Integrators Pvt. Ltd, Ranchi.
42
Final Report
Investment
(In Crores
Rs.)
10
Direct
Employment
CM/ Cabinet
approval
date
Page 219
Sl.
No.
46
Name of the Company

M/S River Valley Flour Mills
Pvt. Ltd, Hajipur, Vaishali.
SN
Proposal
expansion from 49,500
MT per year capacity to
75,000 MT per year
capacity in the existing
unit of Flour Mill at
Sector
Investment
(In Crores
Rs.)
Direct
Employment
SIPB
Approval
date
6.2
17
27.07.11
Healthcare
275
593
Agro & Dairy-based

Industry (Steel units, sheet making, bottle units,
package drinking units, plastic moulds, pipe
making)
Industry - Bakery/Biscuits
141
Cold Storage/Warehousing Industrial Units
76.5
Eduation
Biomass Powerplant
Final Report
CM/ Cabinet
approval
date
500
1.7
191.25
Page 220
Sl. No.
Name of the Company
M/S Avant Garde

Re-Energy Ltd,
Kolkata.
M/s Association of
Management
Studies, 17, Mall
Road , Meerut
Cant (U.P).
M/S Sri Moti Pvt. Ltd.,

Hajipur
Investm
ent
(In
Crores
Rs.)
Proposal
Proposal for
establishment
of 10 MW Solar PV
Power
Plant unit at Vaishali
Establishment of
Engineering/
Management/
Medical College at
Hajipur
and Patna.
Proposal for
establishment of
6500 MT capacity Cold
Storage, 2 MT per hour
Potato Grading Line,
Weighing Line-1, 500
MT
Agri Input Godown and
600
MT capacity
Warehouse unit
under R.A.B.C at
Khalpura,
Motinagar, Hajipur.
55.00
Remark
Direct
Emplo
yment
31
17.50
5.61
27.08.
10
20
Proposed Investments
Industry
Rs. In Crores
Power
107.25
Agro-based Industries
731.73
Education
Final Report
SIPB
Appr
oval
date
17.5
Page 221
01.02.
07
23.03.
10
CM/
Cabinet
approv
al date
Annexure 5: Comments on Draft CBP Arrah and the changes made
S.
No.
Comment from SPUR
Page number where it has been

addressed in the Final Report
Chapter 1 Background & Approach

1
Page 19, in my view the No Competition From economic perspective, competition

indicator should get more score than is important for quality delivery.
competition indicator
Chapter 2 City Profile
2
1. Economic Profile of Ara Urban Area is

not elaborate and there are no tables
given.
2. Service sector has not been considered
at all.
3. Even though there is absence of any
secondary city level data at city level, for
service sector and Household units of
manufacturing sector, some micro level
information is available, even from the DIC
and Chamber of Commerce such
Page 22, can we get more recent WPR rate
based on 2010 census
Page 23, is total refers to Bihar, if so state
Page 25 and 37, the location quotient

analysis done is confusing, first of all it is
not clear whether this is done at ULB,
district or state level data and whether it
is done for the major sector or done at
disaggregated sector level, the conclusion
should be supported with the summary LQ
analysis
Page 27, the vacant and arable data are
not the same, it has to be corrected, refer
Table 7
Final Report
1. Please refer to sections 2.3 and 2.4 in

pages 41-52
2. Please refer to section 3.2.3 on page 67
3. Please refer to tables 11, 12 and 13 in
pages 44 and 45
The most recent data available has been

used
Please refer to table 9 on page 44
Please refer to page 47.
LQ analysis has been done at the major
sector level. Hence summary is not
provided.
Please refer to table 16 on page 53
Page 222
Section 2.4, the analysis should conclude Please refer to sections 2.4 and 2.5 in
which direction the town is growing and pages 47-54
why, what type of suburban linkage
determine the urban growth, is the sprawl
due to unorganized urban growth, and
what are the implications on the provision
of urban infrastructure and growth of
local economy. This section should
provide a clear analysis on the economic
base of the town, it is not clear.
8
Page 34, on what basis the report states Please refer to section 2.6.2.1 on page 57
that ULB is debt ridden, use the fiscal data
available for the town and qualify this
information, more than the debt servicing
issue, it is the poor capacity to design and
implement investment plan is a major
worry in most cases
Chapter 3 Identification of Core Economic Sector
9
10
11
1. The information relating to the local

economy is given for Bhojpur district,
which is fine to account for various
linkages. However, this uses only
macro data from centralized sources.
Since the analyses have focused on
data, potential linkages have not been
established.
2. Section 3.3 provides an incomplete
picture of the employment options in
Ara. It only provides the WPR data
from Primary Census Abstract.
(Chapter 3)
3. The SWOT analysis is very general
especially the Opportunities section.
(Section 3.5)
4. Recommendation is very generic and
does not provide any solutions to the
issues discussed.
The overall analysis is very short
Page 39, implications of the trends shown
in the table need a better explanation
1. Please refer to section 3.4 and its

subsections in pages 69-74
2. Please refer to section 3.3 in pages
68-69
75-77
75-77
Please refer to sections on issue and

challenges on page 65
Page 40, are the issues discussed related Please refer to sections 3.2.2 and 3.2.3 in
to Bihar or Bhojpur, not clear, necessary to pages 66-68
review the last three paras based on the
Arrah context
Sections 3.2.1 to 3.2.3 requires better
analysis
Final Report
Page 223
12
Page 46, the food processing sector is Please refer to section 3.4.1 in pages 69stated as the competitive sector, but this 73
does not come from any sector or sub
sector analysis
13
Section 3.5, the SWOT analysis requires a Please refer to section 3.5 in pages 75-77
reworking based on clear methodology
and identification of strengths and
weakness, while some section is related to
State level profile, some are ULB based,
there is a big connect in the unit of
analysis, please rework on this section. On
what basis sweeping statements as stated
in the Threat section should be reviewed
and made more contextual
14
Page 49, lack of cold storage is stated as Please refer to paragraph on Cold Chain
one of the main constraints for agro based and Preservation Business in page 52
processing industry, the report does not which has details about cold storages
state the number and type of cold storages
in the district, if at all and what is its scope
based on the approximate outputs
Chapter 4 Business Competitive Assessment of the City
15
16
17
1. Sample and method for the analyses

needs to be clearly incorporated.
2. Recommendation is very generic and
does not provide any solutions to the
issues discussed. The vending zones
have not been identified and the
recommendation for identification is
given.
3. Figure 30: Location of Industries does
not provide sufficient details of the
activities like vending, pro poor
business in Ara. Further the
approximate number of units is also
not provided for either the pro poor
businesses/ micro enterprises or the
vendors (information provided to the
consultant)
Page 50, what is the source of the figure
12
Page 52, what is the relevance of table 15
Final Report
5. Methodology has been included in

chapter 1 and survey formats have
been included in inception report.
6. Recommendations in the Hajipur
context are different from Arrah.
Hence, this comment does not apply
to Hajipur
7. Please refer to section 6.1.2 on page
155
Please refer to source mentioned in

figure 13 on page 80
Relevance comes from the fact that
business climate of Hajipur gets affected
by presence or absence of cities with high
potential under Business Climate in its
proximity.
Page 224
18
19
20
21
21a
22
23
Section 4.1.1, the methodology is poorly

stated, first of all what is the rationale for
take 2000-2005 and 2005-2010 periods,
and how these numbers are generated, the
number of surveys and their types used
for the perception survey, and what
conclusions are drawn from the table 16
Page 53, give a summary of score across
all variable in the Annex and explain each
of the figures given in this section, has to
go beyond stating that the trends and
explain the changes in business climate
more sensibly and convincingly
Page 56, could not make any sense out of
table 17, how the list of sectors are
selected and how the potentiality is
determined. Requires better explanation
and analysis
Page 57, explain what is meant by P, Y and
N
Section 5.4, this section is very weak, the
supply chain discussed are very generic
and could go in the Annex, this section
should identify the core sector based
supply chains, using the generic supply
chain framework, what is existing and
what is missing (gap), this should clearly
emerge from this section. For example,
what are the value additions in the dairy
processing happening in the district and
what additional value additions could be
developed considering the local potentials,
this is in summary what should come out
of this section
Section 4.3, is 7000 rural markets and
Haats at the state level, this mixing up
district and state level data should be
addressed
One of the major impact on development

of the state was the change in political
and regulatory scenario in 2005.
Results of perception survey is based on
primary survey conducted by Feedback
Infra.
Scores are not relevant independently
and only aggregate to make a significant
case wrt the section.
The list of sectors emerges from

perception survey conducted. They are
also reflected in recommendation in
chapter 4.
Please refer to the table 28 on page 85
Please refer to section 4.2.1 to 4.2.5 on
pages 87-95 where gaps in the value
chain as well as opportunities available
have been highlighted.
Dist level figures have been used

wherever the data was available. In
absence of district level data, state level
information has been stated to illustrate
the point.
Table 20 is good, but it is difficult to know Table 30 brings out the major food crops
the rationale for scaling the potentials
which are traded in the major mandis.
This information re-confirms the
presence of major food crops and how
large amounts of these crops are sold in
raw, unprocessed form.
Final Report
Page 225
24
25
Page 68, the justification for a Food Park is

not clear, necessary to show this based on
the outputs, value additions and markets
Page 69, what is the linkage between this
table and table 17, not clear
Please refer to section 4.5.1 in pages 102108
Section 5.3.1 dealing with SJSRY does not

adequately cover the problems in the
implementation of the programme
Section 5.1 dealing with the government
programmes discusses only two govt.
programmes (SJSRY, PMEGP). The other
skill training and pro poor/ Micro
enterprise development programmes of
the State or Central Govt. have not been
discussed. This has resulted in limited
scope for Aligning Business Needs with
Govt. Schemes (Section 5.2)
Page 76, discuss the vending issues in a
separate section instead of mixing it up
with formal industry sectors
Page 83, on what basis the issues for
successful
establishment of
micro
enterprise as stated in this section is
determined
Section 5.2, besides aligning the CBP
activities with the ongoing government
programs, it is important to identify the
gaps in these programs which could be
plugged by the CBP
Please refer to table 42 under section

5.1.1.1 on pages 134-136
Recommendations in the Hajipur context

are different from Arrah. Hence, this
comment does not apply to Hajipur
26
Section 4.4 is based on a clustering Please refer to section 4.5.1 in pages 102approach. This is done without any useful 108
analysis, why clustering and what
advantages could be generated from this
approach. Please review this section and
examine the earlier core economic sector
analysis and business climate analysis and
conclude whether a clustering approach is
the right one, if what type of food
processing sectors should come under the
clustering approach. For example, is rice
bran could be used for fuel generation, can
we justify the amount of rice bran made
available, etc. A broad sector assessment
is required to determine the structure and
form of industry cluster that could be
promoted in the district
Chapter 5 Synergy through Alignment
27
28
29
30
31
Final Report
Please refer to sections 5.1.2 to 5.1.11 on

pages 136-142
Please refer to section 6.1.2 on pages

155-156.
Perception
research
survey
and
secondary
Please refer to table 42 under section

5.1.1.1 on pages 134-136
Page 226
32
Section 5.3, the main objective of this

section should be to determine whether
the CDP has addressed the economic and
physical infrastructure requirements of
the core economic sectors and how best to
link the municipal capital investment plan
with the CBP investment needs. This
section should be reoriented to answer a
simple
question
whether
the
infrastructure plans stated in the CDP
addresses the infrastructure needs of the
Core economic sectors, if not in which
areas there is a short fall and how to meet
them. In my view this section could be
shortened and well structured
Chapter 6 Business Approval Assessment
Recommendations given in CDP in

different
components
of
urban
infrastructure in the city have been
clearly linked to opportunities for city
business development and vice versa.
33
Section 6.2.1, Table 41 is not required

apart from the Municipal Business Tax.
Under the same section the Table on
Construction permit (Table no. not
provided) mentions the details of Patna
Municipal Corporation
34
Table 39 under Section 6.2.2 does not fit in

Chapter 6 and should have been discussed
in earlier chapters
35
Section 6.3 gives incomplete information

relating to the existing steps taken by GoB
and also does not refer to the PCC. The
recommendation is also very generic and
inadequate
This information is useful from the larger

perspective of functional industries and
also to estimate the expenditure for
common residents in urban areas of the
state particularly when they are
considering entrepreneurial options.
Table gives an overview of the informal
sector which is integral part of the city
business environment.
Although the existing steps and scenario
has been a part of our investigations and
findings, in the report we have focused
more on the areas of improvement and
recommendations based on the findings.
In addition, we have focused in detail on
recommendations in the business sector.
Final Report
Page 227
36
37
38
Chapter 6. The business approval for

operational and policy purpose could be
decoupled from the approval systems at
DIC level and at Municipal level. This
section is very important for improving
the transaction related issues faced by the
business community, and hence necessary
to identity the institutional and
operational constraints based on ULB
based analysis
and identify the
management reforms required for fast
tracking the approvals. For example, if 105
days are taken up for building approval in
Patna, what is the story in Arrah and if the
time required is too large, why and what
should be done to reduce the time taken.
In the absence of this prescriptive
analysis, the project can do little to
improve the business climate in the town.
It is important this section should be town
specific for all the various towns in each
cluster
Section 6.2.2 is very shoddy and requires a
great deal of reworking. This does not jell
with the rest of the sections and should be
given separately
These recommendations cannot be town

specific as these are state-wide
regulations and are applicable in all
towns. However, macro level reforms are
suggested under section 3.6 in page 7779.
The business of registration of land and

property is an essential part of doing /
establishing business and as such it is
included in the business process
required.
Section 6.3 is very generic and is more at Business approvals and processes cannot
the State level. Necessary to rewrite in the be town specific as these are state-wide
context of Arrah
regulations and are applicable in all
towns.
Final Report
Page 228
Chapter 7 Leveraging Assets and Promoting Partnerships

39
40
Section 7.2 on Utilisation of Vacant ULB

Land may include options for Vending
Zones and slaughter houses, which are
critical urban requirements. The data on
land availability that could be used for
leveraging as shown in table 45 is very
useful, but the subsequent section
describing the various investment
potentials has not come up from earlier
analysis, they are standing alone and the
potential investments which could
leverage through a PPP model should
emerge from the core sector or need
analysis.
Absence of an analysis of the service
sector of Arrah is one of the main
limitations of this report, even though
some of the PPP investments are service
sector oriented. This should be linked to a
Service Sector Analysis of Arrah, besides
the industrial analysis. In most of these
small towns, trade and service sectors are
the economic growth drivers
Section 7.3, the generic discussion on PPP
model should be moved to Annexure
Recommendations integrate the findings

of investigations, including perception
survey and stakeholder workshops, and
analysis, resulting in emergence of
potential sectors. The other basis is
recommendations of City Development
Plan, Hajipur.
This part has not been shifted to

Annexure as it will disrupt the flow of
information on PPP in suggested projects.
Chapter 8 Human Resource Development

41
The funds available for the training could

be provided from the various schemes of
the government as well as private sector
initiatives have not been mentioned in
Table 55 on Training under various
sectors
42
Section 8.4, S. No. 10 Urban Agriculture Table 55 for this report has been
mentions medicinal plantation and herbs : prepared in context of Hajipur and does
ATMA should have been mentioned for not include the mentioned point.
training institute as it is the nodal agency
Final Report
The target groups of these courses / skill

development training could be from
heterogeneous urban groups depending
on their needs, where as Government
funds
under
Schemes
for
skill
development tend to be targeted towards
special categories. Therefore, it is more
relevant to mention the target groups
(wrt occupation) and the concerned
institutions rather than the schemes.
Page 229
43
Section 8.5 on Capacity building of A prescriptive list of capacity building

government
officials/
Elected initiatives has been detailed for public
representatives is very ambitious and functionaries as it is essential for
somewhat unnecessary
effective
implementation
of
recommendations suggested in CBPs. The
same may be matched with the specific
plans of the ULB and funds available.
44
Section 8.7.3 is inadequate on set up of Please refer to section 8.7 in pages 188EDC
190
Chapter 9 Structuring City/ Municipal Business Action Plans
45
Section 9.1, Table 56 does not provide all Section 9.1 in pages 191-197
possible sources of funding and merely
mentions the state department funds. No
GoI schemes have been considered
46
Action plan needs a complete revision Section 9.1 in pages 191-197
with relevant suggestions and information
for the town
Chapter 10 City Industry and Business Catalogue
47
The catalogue is very short and does not Please refer to section 10.1 in pages 198have enough information on the business 202
enterprises/ associations. The information
for the entries is also incomplete
Chapter 11 CBP Implementation Process
48
49
No practical suggestions. LED Task Force

not mentioned for implementing the CBP
and also not mentioned anywhere in the
report
Present and Future Role of Task Force has
not been adequately mentioned
Please refer to section 11.1 on page 204205

Please refer to section 11.1.1 on page
205-206. The role outlined for the LED
Unit will be performed by the LED Task
Force, till such time as the LED Unit
comes into being.
General Comments
50
51
52
Suggestions provided at the end of Please refer to section 3.6 on page 77-79
chapters are very generic
and the chapter 4 which includes
recommendations wrt every sector
considered.
Central and State Government schemes Please refer to sections 5.1.2 to 5.1.11 on
have not been mentioned in details
pages 136-142
The tables are not followed with adequate The tables are not standalone and are
analysis
integral to the section where such
analysis has been presented alongwith
the tabular information.
Final Report
Page 230
53
54
55
Table and Para numbering has to be

corrected for the entire report in the final
draft
Annexure 3, what is the source of this
information
The report indexing and references has

been checked
Please refer to source mentioned in

figure 13 on page 80
Annexure 4 concludes that out of the 50 Please refer to section 4.1.2 in pages 82industries listed only 9 are working. The 84
earlier section dealing with the industrial
based of the town did not examine the
reasons for the high mortality/non start
rate of industries. This data is not used
effectively
Final Report
Page 231

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