Squatters camp on the grass verges beside the factory walls, cows munch grass and wander across the potholed roads.

Armed guards man security gates to ward off kidnappers.

"This so-called industrial area is really in a pathetic condition," the manager said. "Bihar really is a hopeless place to do business."

On the wall behind his head he displays nearly two dozen licences he needs to keep his business open, standards for health, safety, labour laws and pollution. Each costs a few hundred rupees a year to renew, plus a Rs10,000 bribe.

"Twenty-three departments have the power to shut down this unit," he said. "They create problems, make money, go back. So much for a liberal economy." Rajesh Singh took a master's in business administration at Bombay University before returning to Bihar to set up a tiny factory on his family's farmland to manufacture jams, juices, sauces, pickles and canned fruits.

"I realized things in Bihar were not very good, so I decided to start an agri-venture," he said. "It was a mix of good potential and good intentions."

But Singh has found the odds stacked up heavily against A1 Farm Solutions. His friends and even his father tried to convince him out of the idea, before his bank manager took over.

"The banker was telling me I was a fool to leave my job and start a business here," he said.

"That is the attitude to coming back-to dissuade you."

It took Singh five years to get a bank loan, of just Rs5 lakh.

To get it, he needed to offer Rs30 lakh as security and have Rs2.5 lakh parked in fixedterm deposits.

Today, his loan has been extended to Rs40 lakh-still, in his terms, "a meagre amount", equivalent to just 10 days of raw material and labour costs.

"I had a lot of orders from the UK, from Sainsbury's for lychees, but I couldn't complete them because bankers are not ready to back us," he said. "I am educated and I have assets. If I can't get finance, how can ordinary Biharis get finance?"

If bankers were not hard enough to cope with, Singh has also found himself sucked into the divisive caste-based politics and society of Bihar.

His high-caste parents feared they would be made outcastes because he employs Dalits or "untouchables" in a food processing factory.

Then a lower-caste boy was killed on his farm when he fell under a tractor trailer. A local politician tried to exploit the issue to get Dalit votes, filing a police complaint in which he claimed the boy had been shot in the head. Although everyone knew this was untrue, the accident cost him a year, he said. "No one was willing to work for us, we couldn't get financing," Singh said, adding that all the time the police had been demanding money to drop the charges.

As we travelled down the potholed road to Singh's factory, a 35km, three-hour trip on a "state highway", he looked around at the congestion, the poverty, the crumbling infrastructure. "Look at this," Singh said. "Someone has to come back...but at times you feel like asking `what am I doing with my life?'"

Is anywhere in the world more challenging to do business? "Maybe Somalia," he said. "They are shooting at you there."