Centre’s investment in NE to go up

Major Events Vol. 3 Issue No. 25

April 16 -30, 2007

Centre’s investment in NE to go up

The constant clamour for additional funds by the north-eastern States may not be tenable, with the Centre claiming to have pumped in Rs 80,000 crore into the region during the 10th Five Year Plan period alone. What is even more interesting is that more of big time investments are on its way into the region. All these investments has raised question about the ability of the North-Eastern States to utilise the resources.The massive infusion of funds by the Centre into the north-eastern region is being highlighted as one of the major attractions by the Centre to woo private sector participation.
“This year we expect to put in Rs 15,000 crore to the region, while in the next five years there will be investments of the order of Rs 50,000 crore on development of roads,” said Minister Development of North Eastern Region (DoNER), Mani Shankar Aiyar addressing a press conference ahead of the Third Northeast Business Summit.
The Summit expected to be attended by a host of captains of industry from India and abroad, would be inaugurated by Vice President BS Shekhawat.
Adding further, he said that kind of funds could only be spend if the absorptive capacity in capital was available. He invited the corporate sector to participate in public-private ventures to take advantage of the Centre’s benevolence.
The infrastructure sectors including the road and power were identified as the target sectors where the Government was looking for such partnership. Aiyar singled out the road sector in the Northeast, drawing a parallel between Thailand and India. The country has just completed a massive road project. A number of Thai companies with small beginning have gone on to become giants, he said.
The power sector was identified as another such potential destination in the region that could do with public-private participation. In Arunachal Pradesh, 492 sites have been identified for setting up power projects of over 10 MW. “As far as I know 360 such sites are still available for investments,” the Minister added.
The Business Summit, jointly organised by Ministry DoNER and Indian Chamber of Commerce (ICC) that gets underway here tomorrow, incidentally would be first occasion where the Government would meet face to face the corporate world, after announcement of the Northeast Industrial and Investment Promotion Policy 2007. Aiyar, was all praise for the Policy, saying that it would open up immense opportunities for investment and economic activities.

The Minister also allayed apprehension by asserting that the NEIIPP would remain exclusive to the Northeast and that there would be no diversion. The last policy lost much of its impact after a similar package was given to Himachal Pradesh and Uttranchal.
The single most important feature is that it would be valid for 10 years no matter when one starts the industry, he said.

NE can be hub for world trade: Bhairon

The Third North East Business Summit began amidst serious attempts by the Ministry for DoNER and NE state governments to hardsell the region. At the end of the first day of business, at least 110 expressions of intention were received from potential investors.

Trying to ride on the wave of the new North East Industrial and Investment Promotion Policy 2007, the Ministry for Development of North Eastern Region (DoNER) and the State Governments of the Region made fresh attempts to woo investors. The new industrial policy, the favourable investment climate, huge infusion of funds by the Centre to develop infrastructure, proximity to markets of South East Asia were highlighted to market the Region.

The problem areas like poor infrastructure facilities, power shortages, and lack of linkages to market and most important of all, the security problems figured in discussions. The turnout too was impressive and the organisers received over 72 expressions of intention by lunchtime.

The best observation came from managing director and Chief Executive Officer of Hero Corporate Services Limited, Sunil Kumar Munjal who drawing parallel between the North-east and Yunan, said that the Chinese Province was going through a similar situation like North-east. The Yunan Province per capita income doubled after China opened up the region.

“The North-East, just like the Yunnan Province, has the potential of emerging as a vibrant economic zone in the near future through investments in infrastructure sector, and adoption of suitable strategies,” he opined.

But he also recounted the problems faced by the North-East pointing towards lack of connectivity and high class infrastructure. “Connectivity does things that is unimaginable,” he said referring to the possibility of having road links from Mumbai to Singapore through the Region.

He also mentioned about the concerns of the business community over the security scenario, saying that most of the problems stem from lack of economic initiative.
If Munjal saw similarities between Yunan province and China, Minister, DoNER, Mani Shankar Aiyar drew parallel between North-East of today and California of 1849. The region used to be barren until discovery of gold in 1849. North-East is today what California was in 1848. “If you go in now, you will find all advantages but if you go later, you will find competition,” he said.

Earlier, inaugurating the Business Summit, Vice President, Bhairon Singh Shekhawat setting the tone, said the Region has the potential of fuelling a nine per cent rate of growth of GDP during the 11th Five-year Plan period. “The North-East, by virtue of its immense economic potential, can contribute significantly towards achieving a sustainable nine percent growth rate,” he said.
Addressing the Summit organised jointly by the Ministry DoNER and Indian Chamber of Commerce (ICC) the Vice President said that the North-East is the virtual gateway to the South-East Asian countries, and thus, has the potential of emerging as a prominent hub for international trade and commerce. He suggested a holistic development plan to get over problems like poverty and insurgency.
Addressing the Summit, Minister DoNER began by touching on the issue of internal security. It is most unfortunate that North-East figures only in connection with insurgency and bomb blasts. It is extremely erroneous to consider North-east as insurgency affected,” he said, pointing out that there were many areas in the Region, which were safer to invest than NOIDA and Delhi.
He further allayed the apprehension of the investors by stating that he has been authorised by the Home Ministry to announce that request for additional forces by the State Governments to tackle the internal security situation would be met instantly.
The Minister further, dangled the bait of Centre’s huge investments in infrastructure sectors. Centre’s investment in North-east is likely to go up to Rs 1.25 lakh crore during the 11th Plan. The absorption capacity is limited and a quick way is for the companies to go and take advantage of the huge fund flow, he invited.
The Minister also cleared doubts about the connectivity problems, disclosing that Government of India proposed to have 592 flights to link the Region, which will be double from that of the current 226 flights.

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