There is more talk about reform than action in India’s poorest state

IT IS surely no coincidence that Bihar, besides being India’s poorest state, has also been its least inviting for entrepreneurs. That is supposed to be changing. Nitish Kumar, Bihar’s chief minister, has spent his five years in office fixing the roads and other infrastructure. Crime has fallen, so the bright and wealthy are no longer frightened off by the threat of kidnapping, extortion and murder. Stability has allowed local trade to flourish. A state official reels off an impressive-sounding list of 398 approved investment proposals—from sugar mills to power plants—worth $4.8 billion. That all sounds rosy, until you look for success on the ground. India’s tycoons have visited, and left. There is not one example of a big industrial investment to show for it.

Perhaps local officials are failing to spot the brightest entrepreneurs—those deft enough to avoid the bureaucrats. Take the case of Husk Power Systems, formed in 2007 by three young Biharis and an American friend. It runs 50 micro power plants in rural areas fired by burning otherwise useless rice husks. Now employing more than 250 people, the firm sells cheap electricity to 200,000 rural folk, who previously relied on kerosene lamps or candles. …