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  1. 1. TOPIC:- THE SUNRISE STATES Realizing the growth potential of North-East UNLEASHING THE HIDDEN POTENTIAL A novel process to use resources and create brands and employment opportunities Team: Rohit Agrawal Rohit Ranavat Shikhar Jain Nikhil Parasampuria Malhar Aras College:- BITS Pilani - K.K. Birla Goa Campus
  2. 2. PROBLEM- MIGRATION • Over 4,14,850 people from Northeast India migrated to mega cities of the country during 2005 and 2010. It is 12 times growth as only 34,000 people had migrated during 2000-05 • Main reason is lack of education and employment opportunities. • At current trends it is predicted that in the decade of 2011-2021 there will be only 2.6 million jobs for 17 million job seekers in the North Eastern Region. MIGRATION 432367 650489 1111680 1981 1991 2001 Total Out-Migration from North Eastern Region Total out-migration Linear (Total out-migration) Linear (Total out-migration) 41.73 37.29 14.71 46.33 61.79 78.74 0 20 40 60 80 100 North Central zone NER East zone West zone South zone Employment in Organised sector(in lakhs) Employment in Organised sector(in lakhs) 1
  3. 3. PROBLEM- LACK OF SKILLS & UNEMPLOYMENT 96% 80% 75% 68% 10% 0% 20% 40% 60% 80% 100% 120% Korea Japan Germany UK India Percentage of workforce receiving skill training 0 50000 100000 150000 200000 250000 300000 350000 400000 450000 North South West East Govt. and Pvt. ITI’s in India Seating capacity (Govt. Seating capacity (pvt) Total • Alarming situation throughout India. • Only 2% recieve formal training and 8% informal training. • Lack if adequate number of skill development centers forces migration Interestingly the North Eastern States enjoyed the highest per capita investment by the Centre, averaging INR 2,574.98 against the all-India average of INR 683.95 Thus the revenues have to be spent in a manner to ensure inclusive growth and create socio economic development 2
  4. 4. PROPOSED SOLUTION - OVERVIEW Linking these centres with industries and creation of SEZ Supply Chain management Skill Development Centres(SDC) • Skill Development Centres (SDC) shall be setup • This shall be done through public private partnership • The courses shall range from 2 months to 6 months • The people of North East shall acquire skills here • The government will create Special Economic Zones( SEZ ). • Each SEZ shall have government workshops. • Private companies shall also setup workshops/small industries. • The pvt. companies who had earlier setup SDC shall receive incentives from the govt. while setting up workshops/small industries in SEZ. • After acquiring skills from SDC, the people of North East shall get employed here. • The government run workshops in SEZ shall also have its own Supply Chain Management • It shall follow a Business to Business to Customer model (b2B2C) • Thus this shall lead to creation of brands of products in North East Setupof SDC SetupofSEZandLink withSDC SupplyChain Management 3
  5. 5. THE SKILL DEVELOPMENT CENTRES(SDC) CURRENT SCENARIO- National Skill Development Centre(NSDC) Setups 0 50 100 150 200 North South West Central North East 1%11% 59% 1%3% 18% 7% SDC in North East(NSDC Setups) Arunachal Pradesh Assam Meghalaya Manipur Nagaland Sikkim Tripura PROPOSED SOLUTION • Skill development Centres which will be setup shall be a public private partnership. • Apart from the government setups, private companies will setup SDC and companies will receive incentives and other rebates while setting up factories/workshops in Special Economic Zones(SEZ) • Setting up of SDC will be carried out in two phases: Phase 1 (2013-2017) Phase 2 (2017-2022) • The average duration of a course shall be around 3 months • Size of SDC:- 300 sq mt. ,125 sq mt to be used for machines and 275 sq mt will be used to setup 4 classrooms and each class room shall accommodate 75 students • Roughly about 4 courses to be taught in a year , thereby each SDC will impact 1200 students in a year Major Issues:- • Unequal distribution of SDC over population in North East • Few SDC in major states like Assam, Manipur Phase1 Phase2 Number of SDC to be setup • Arunachal Pradesh-15 • Assam-40 • Meghalaya-7 • Manipur-15 • Mizoram-5 • Nagaland-15 • Sikkim-4 • Tripura-10 Number of SDC to be setup • Arunachal Pradesh-10 • Assam-20 • Meghalaya-5 • Manipur-5 • Mizoram-5 • Nagaland-7 • Sikkim-2 • Tripura-8 Intake of students in SDC 2013-2015 75,000 2015-2017 60,000 2017-2019 2019-2022 15,00050,000 Phase 1 Phase 2 4
  6. 6. CREATION OF SPECIAL ECONOMIC ZONES (SEZ) AND LINKING WITH SDC Private Sector 56% Governme nt Sector 40% BPO Setups 4% Private Sector Government Sector BPO Setups • Considering the terrain of North East, each SEZ built shall not be more than 10 hectares. • The land in SEZ shall be used for Government Setups, Private Setups and BPO setups. • The skilled people coming from SDC shall have a choice of working in the Private sector companies in SEZ or working for Government brand products. • The government shall identify products which it can make and thereby employ people and aim at creating sustainable brands in North East • A good example could be setting up of a workshop for making bamboo products • Single window clearance system to be introduced for SEZ CURRENT SCENARIO- SEZ Setups Only 1 SEZ in Manipur ,and 2 SEZ’s in Nagaland have been granted approval PROPOSED SOLUTION- Setting up of 50 SEZ’s Advantages of creating SEZ and linking with SDC:- • Presence of localized skilled labour ensures continuous supply for SEZ demand. • SEZs encourage township development, which make provisions for additional employment opportunities for accessory vocations. Land allocation of each SEZ Phase1 Phase2 Number of SEZ to be setup(26) • Arunachal Pradesh-3 • Assam-5 • Meghalaya-4 • Manipur-3 • Mizoram-3 • Nagaland-3 • Sikkim-2 • Tripura-3 Number of SEZ to be setup(24) • Arunachal Pradesh-3 • Assam-5 • Meghalaya-3 • Manipur-3 • Mizoram-3 • Nagaland-3 • Sikkim-2 • Tripura-2 Setting up of SEZ will be carried out in two phases: Phase 1 (2013-2017) & Phase 2 (2017-2020) 5
  7. 7. SUPPLY CHAIN MANAGEMENT Supply chain management shall be done through a b2B2C model North East shares its borders with 5 foreign countries:- • Bangladesh • China • Myanmar • Bhutan • Nepal  Thus , using this advantage, export shall be a main focus of the products.  50 to 60 % Production Mandatory for Export  The products shall be made considering the market demands of these countries.  The ASEAN–India Free Trade Area shall help in trade between countries.  Apart from export, products will be sold to major sellers in India like FabIndia Creating Value Delivering Value Capturing value Key Aspects 6
  8. 8. THE BPO PROGRAMME • In the SDC, there shall be 4- 6 months courses to teach students basic computer skills • Schools in North East shall also emphasize on teaching of computer skills • 1 acre of each SEZ made shall be used to setup BPO’s 10 50 500 500 2,50,000 BPO’s per SEZ Total SEZ’s Total BPO’s Employees per BPO Total people employed GovernmentSupport Subsidies in order to setup BPO in terms of buying computers or using communication lines and power rates. Giving Initial Projects like Census Data entry, UID Card, RTI Facility on a voice call basis, Support and Helpline centre Why North East? Various parameters were taken into account to mark each city in NE out of 100 such as:- • Govt. Policy • Manpower • Telecom Infrastructure • Connectivity Infrastructure • City Infrastructure • Power • Law and order 0 10 20 30 40 50 60 70 80 90 Impact The graph shows that North East is highly favourable for setting up of BPO’s Feasability of setting up BPO in North East ( City wise) Survey done by IIM A 7
  9. 9. FINANCES & STRATEGY Type Cost Land cost(300 sq.mtr approx) 9,50,000 Machinery cost 4,00,000 Furniture, computer etc 5,00,000 Total 18,50,000 Post Salary p.a.(each) Nos Total Costs Manager 3,00,000 1 3,00,000 Accountant/Office Assistant 1,25,000 1 1,25,000 Trainer 1,80,000 5 9,00,000 Office Boy 75,000 3 2,25,000 Total 15,50,000 Infrastructure Cost Human Resource Cost SetupofSDC(Govt.)ObligationsofanSEZ 34,00,000 Grand Total (per SDC) Achieve positive net foreign exchange earning (NFE) Provide periodic reports to the Development Commissioner & Zone Customs. Execute a bond cum Legal Undertaking with the Zone Customs for their operation in the SEZ. Fulfill the environmental and pollution control norms. Act with the Registrar of Companies for undertaking Indian operations Any company set up with FDI has to be incorporated under the Indian Companies 8
  10. 10. IMPACT Our methods will ensure better GDP contribution of the NE states The SDC setup will provide skills to approximately 1.35 lakh people in a year in the first phase which would gradually increase to 2.0 lakh skilled people in the next phase An Additional 2.5 lakh people will be employed in the BPO over the period of 7 years. The SEZ will provide employment to around 2 lakh skilled people from SDC and around 2 lakh people from other sources. The North-Eastern states together have received only 0.03% of total FDI. We expect to increase it to 1%. 9
  11. 11. RISKS & CHALLENGES • Attracting or mobilizing students to these SDC’s • Finding appropriate and qualified trainers for the courses • Retaining students in the Skill Development Centres • Establishing a system for third party assessment and certification SDC •North East is cut down from rest of India due to poor road and railways and hence companies refrain from setting their unit here. •If SEZ built on agricultural land the farmers will loose their livelihood & as they are not skilled labourers it would to tough to relocate them to other jobs SEZ •Transparent decision making process- Better coordination & screening required •India has very small size of EPZ’s(Experience with Export processing zone),therefore the product marketing is a key challenge •Remotely located and isolated, hilly terrainOTHER 10
  12. 12. APPENDIX Thank You • www.censusindia.gov.in • www.nsdcindia.org • www.sezindia.nic.in • www.dget.nic.in • http://www.indiainbusiness.nic.in/industry-infrastructure/infrastructure/sez1.htm • http://pib.nic.in/ • http://www.northeastblog.in/ • www.sezindia.nic.in/ • www.kpmg.com/in/en/issuesandinsights/.../kbuzz/pages/education.aspx • http://www.sezindia.nic.in/writereaddata/pdf/StatewiseDistribution-SEZ.pdf • http://www.sezindia.nic.in/writereaddata/pdf/Sector-wise%20distribution-SEZ.pdf