DARE - Because Entrepreneurs Do

In the beguiling thrall of the northeast region (NER), giant mountains romance happily with lush tea gardens, sleepy meadows, aromatic plants and bright little cottages. Yet, the imagery is hardly picture perfect. Say northeast and the mind instantly convulses to a whirl of nasty pictures—of militancy, bloodshed and social tumult.

But things are changing. Like many remote outposts, the northeast too is waking up from its slumber and tapping to the scorching beats of a nation in tearing hurry. Result: opportunities for enterprises are beginning to spring everywhere—tourism, hospitality, power, horticulture, agriculture, petrochemicals...

This is because, the region, a universally recognized “bio-diversity hotspot“ (54 per cent of the region is forest land), is blessed with extraordinary natural advantages:
1.    Picture-postcard environs, ideal for the tourism industry
2.    Forests full of rare forms of flaura, fauna, exotic plants and herbs
3.    Perennial rivers with huge potential for hydel power generation
4.    Massive hydrocarbon reserves, enough to fire a small industrial revolution
5.    Strategic location: the NER shares 98% of its border with five South Asian countries—Nepal, Bhutan, China,

Myanmar and Bangladesh. Plus, it serves as a strategic gateway to the economic powerhouses of Southeast Asia
In addition to those godsends, the population of the region is among the most enlightened in the country, with literacy rates of nearly 70 per cent. In other words, the NER is brimming with opportunities. But how much. of this has actually been realized? Indeed, very little.

This much is clear from the fact that the NER languishes pretty much at the bottom of the heap on key socio-economic indicators. Its per capita income at `6625 is well below the national standard of `10254. Similarly, more than 34 per cent of its population lives under the poverty line as against the countrywide average of 26 per cent. Finally against a potential of 63, 257 MW of hydel power, the total installed power capacity in the region is a pitiable 2600 MW.

But precisely because the territory has been such a snail all these years, the prospects for the future are alluring, as the eight states begin their long haul of reconstruction and hope. There are roads, power plants, hotels, horticulture hubs, packaging factories, refineries and so much more to be built. All at a frenetic pace and on unprecedented scales. Just for example, the road and rail density in NER are just 395 km and 10.9 km per thousand sq km respectively against all-India averages of 839 and 395 km.

Says Santosh Jaiswal who owns the `200 crore Biscon Steel Industries: “With insurgency on the retreat, this is the right time to invest in the region." Other than steel, Jaiswal is looking to diversify into tourism, which he believes will be the big story of the future. There are many business leaders who agree with Jaiswal’s analysis. Says Mizoram R L Rinawma, Commissioner/ Secretary, Government of Mizoram, “There are new opportunities for investors opening up beyond the traditional areas of crude oil, bamboo and coal. Each of the numerous deficiencies in the state particularly in the infrastructure sector translates into a mouthwatering opportunity."

Opportunities: The Big 3
1. Tourism
With all its natural oomph, one would have expected the NER to be among the hottest destinations in the country’s tourism circuit, which ranks 11th in the Asia Pacific and 62nd overall as per the World Economic Forum’s Travel and Tourism Competitiveness Report, 2009.

But, with the picture postcard blotted by infrastructural glitches and an unfriendly image, the region remains a fringe player at best: in 2009 it received just 51 lakh tourists against a national figure of 6637 lakh. Independent studies suggest that this figure could easily quadruple in the next five years subject to a massive ramp up of tourism infrastructure, including the road-rail network, airports and hotels backed by effective marketing. The image of the northeast as a dangerous place stalked by gun toting militants has to change.

Strengths: Natural beauty; strategic location; unique features like the famous tea gardens of Assam and Darjeeling and the world-renowned largest freshwater lake in Manipur with its unique floating wildlife sanctuary—the only one of its kind on earth.

Weaknesses: Poor infrastructure; un-friendly image; non-existent marketing.

Opportunities: Hotels, resorts, airports, roads, infrastructure for adventure sports like trekking and mountaineering and entertainment malls.

Hopeful signs: Government plans to invest about `50000 crores on roads in the region over the next five years.

2. Hydro-power
With 75 per cent of the nation’s coal reserves and huge hydro potential (over 60,000 megawatts), the NER clearly has the muscle to become the nation’s numero uno powerhouse.

India currently has an installed capacity of around 170,000 MW (July 2009). But according to planning commission estimates it will need to ramp that up to 1200 GW by 2020 to sustain its giddy economic growth translating into USD 600 billion of investments. Roughly, one-third of that figure could flow into the northeast.

Strengths: Massive hydropower potential and huge reserves of coal, crude and other minerals.

Weaknesses: Poor infrastructure; inclement weather; difficult terrain; scanty hydrological data; problems in land acquisition and clearances and contentious border-related issues both interstate and international.

Opportunities: Hydel and thermal power plants.

Positive signals: The government’s Hydro policy 2008 targets a multi-pronged strategy to promote investments in power:
a)    Qualifying threshold for special benefits lowered to 350 MW from national level of 500 MW.
b)    Raft of subsidies and tax waivers on cost of infrastructure, transport and power. The entire region declared SEZ.
c)    Even power plants generating 10 MW on both conventional and non-conventional fuels eligible for capital investment subsidy, interest subsidy and comprehensive insurance.

Broad Figures
Area: 262179 sq.kms., 7.9 per cent of the country’s total landmass
Population: 39 million
Density of population: 148 per sq. km. against the national average
of 324

States of Potential Power
(Figures in MW)
Meghalaya- 2394
Arunachal- 50,328
Sikkim- 4286
Others- 6249

3. Mineral Resources
The NER is blessed with abundant reserves of minerals like coal, petroleum crude, natural gas, lime stone, dolomite and uranium. Assam boasts of reserves over 1.3 billion tonnes of crude oil and 156 billion cubic metres of natural gas. In all, the region is a repository of about 23,000 million cubic meters of natural gas. According to ONGC’s exploration studies, the NER has a production potential of 3.5 million cubic meters of gas per day.
The total validated reserves of crude in the NER as of now are estimated at 158 million tonnes. This, however, is excluding the unexplored fields in Mizoram, which experts believe, could yield 170 million metric tonnes of crude, turning the region into a Kuwait of the North East.

The sheer range and abundance of natural resources, opens outstanding opportunities for a whole range of small and big businesses. For instance, the `5,460.61-crore Assam Gas Cracker project, at Dibrugarh, Assam, is expected to trigger massive growth in sectors like packaging and textiles across the NER. According to the Central Institute of Plastic Engineering and Technology, 500 plastic processing industries will come up in the region once the plant goes on stream in 2011.

Strengths: Massive reserves of a range of minerals from crude and gas to coal and dolomite.

Weaknesses: Huge investments required; deficient infrastructure; acquiring land and clearances still a headache. Plus, lack of skilled labourer

Opportunities: Power plants, refineries, plastic and packaging units, textiles
Positive signals: Investors eligible to 100% income tax exemption, capital investment subsidy, interest subsidy and comprehensive insurance.

Watch out for...
Mizoram: Port
The upcoming Switte port, connecting Mizoram to the Bay of Bengal through Myanmar, will provide the region easy access to its immediate eastern neighbours.

Nagaland: Year of Entrepreneur
The government of Nagaland has declared 2010-11 as the ‚‘Year of the Entrepreneur‘, the thrust being on encouraging gainful self-employment.

Arunachal Pradesh:
Hydropower boom
The state has identified 135 hydro electric projects with a potential of 57,002.50 MW, of which it has signed off 72 HEPs with a potential of 25,722.50 MW to CPSUs and private developers.

Assam: Assam Gas Cracker project
The `5,460.61-crore Assam Gas Cracker project in Dibrugarh, Assam, will support a gamut of downstream enterprises like packaging, textiles and agriculture from 2011.