North East India Investment Conference By K N Hazarika

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North East India Investment Conference By K N Hazarika

  1. 1. Emerging Sectors in North East India & Value of Networking K. N. Hazarika, Chairman and Managing Director NORTH EASTERN DEVELOPMENT FINANCE CORPORATION LTD. GUWAHATI, ASSAM “ Development Bank of North East India for North East India”
  2. 2. ABOUT NORTH EAST INDIA <ul><li>Vast natural resources and a cauldron of different people and cultures </li></ul><ul><li>Eight States </li></ul><ul><li>Population:39 mn (3.75% of India) (88% rural population) </li></ul><ul><li>Land area: 7.9% of India </li></ul><ul><li>Topography: 70% hilly </li></ul><ul><li>http://databank.nedfi.com </li></ul>
  3. 3. Before Partition <ul><ul><li>Only three States (Assam, Manipur & Tripura) </li></ul></ul><ul><ul><li>Assam’s per capita income was 5 th from the top </li></ul></ul><ul><ul><li>Industrialisation in 1834 with Tea companies </li></ul></ul><ul><ul><li>Coal industries in 1850’s </li></ul></ul><ul><ul><li>Timber export started in 1850’s </li></ul></ul><ul><ul><li>Railway tracks were laid in 1860’s </li></ul></ul><ul><ul><li>Asia’s first Oil refinery, Digboi (1901) </li></ul></ul><ul><ul><li>Agricultural productivity higher than national average </li></ul></ul><ul><ul><li>Handloom & handicraft products </li></ul></ul>
  4. 4. After Partition (1947) <ul><li>Geo-political: </li></ul><ul><ul><li>Creation of erstwhile East Pakistan made the NER a land locked area : International Borders (98%) </li></ul></ul><ul><ul><li>NER looked through security prism rather than development prism </li></ul></ul><ul><ul><li>Creation of separate states </li></ul></ul><ul><ul><li>Illegal migration </li></ul></ul><ul><li>Economic: </li></ul><ul><ul><li>Huge infrastructure gap - power, road, communication, education </li></ul></ul><ul><ul><li>Lack of industrialization : Unemployment </li></ul></ul><ul><ul><li>Liberalization policy did not have much impact </li></ul></ul><ul><li>Result: Elimination of Region’s traditional trade and commercial linkages that existed in pre-partition days. </li></ul>
  5. 5. NETWORK <ul><li>Network: a group of inter-connected or co-operating individuals/ institutions/ organizations </li></ul><ul><li>Basic objective: to achieve identified end results </li></ul><ul><li>End results: social, cultural, economic, financial, commercial benefits of participating groups and/ or larger collective well being </li></ul>
  6. 6. Value of Networking <ul><li>Synergy </li></ul><ul><li>Output plus – (2+2 = 5) </li></ul><ul><li>Cross fertilization of ideas/ Cross learning </li></ul><ul><li>Leveraging on mutual strengths </li></ul><ul><ul><li>Knowledge </li></ul></ul><ul><ul><li>Experience </li></ul></ul><ul><ul><li>Expertise </li></ul></ul><ul><ul><li>Technology </li></ul></ul><ul><li>Cross selling </li></ul>
  7. 7. Why network with NE-NRIs? <ul><li>Substantial presence of North East Non Resident Indians (NENRI) in USA </li></ul><ul><li>Significant contribution to US economy, academia & society at large </li></ul><ul><li>Large intellectual capital </li></ul><ul><li>Intimate knowledge of people, society, economy of North East India </li></ul><ul><li>Thus, the NENRI is a huge pool of resources NE India can benefit from </li></ul>
  8. 8. North East – NENRI Network <ul><li>Great value in establishing this network </li></ul><ul><li>Can generate new & positive impact in NE India </li></ul><ul><li>Enhance visibility of NE India to wider audience </li></ul><ul><li>Create knowledge platform </li></ul><ul><li>Impetus for change & new direction in business models </li></ul><ul><li>Enhance intellectual resources </li></ul><ul><li>Leverage inherent strength of the people of NER </li></ul><ul><li>Create goodwill for the Region </li></ul>
  9. 9. NENRI (contd…) <ul><li>Networking would </li></ul><ul><ul><li>attract international investors </li></ul></ul><ul><ul><li>mobilize resources </li></ul></ul><ul><ul><li>promote joint ventures </li></ul></ul><ul><ul><li>facilitate inflow of NRI savings into NE India, especially in the fixed income instruments </li></ul></ul><ul><ul><li>create market access & awareness of NE products </li></ul></ul><ul><ul><li>enable technology transfer to suit local needs </li></ul></ul>
  10. 10. Emerging Sectors <ul><ul><li>Infrastructure </li></ul></ul><ul><ul><li>Education </li></ul></ul><ul><ul><li>Information Technology </li></ul></ul><ul><ul><li>Food Processing </li></ul></ul><ul><ul><li>Health care </li></ul></ul><ul><ul><li>Medicinal & Aromatic Plants (MAP) </li></ul></ul><ul><ul><li>Micro Finance </li></ul></ul>
  11. 11. Infrastructure in NE India <ul><li>Investment in next five years </li></ul><ul><ul><li>Roads - USD 12500 million </li></ul></ul><ul><ul><li>Airports – USD 7000 million </li></ul></ul><ul><ul><li>Power – USD 15500 million </li></ul></ul><ul><ul><li>Railways – USD 1500 million </li></ul></ul><ul><li>Projected employment of 27 lakh people in construction industry alone </li></ul><ul><li>Areas of intervention : investments, R&D, Design, Project Management, HR Interventions etc. </li></ul>
  12. 12. Education <ul><li>Outflow of students to higher centers of learning </li></ul><ul><ul><li>Lack of quality education/ educational infrastructure </li></ul></ul><ul><ul><li>Especially technical & managerial education </li></ul></ul><ul><li>Thus, need for quality education – a priority </li></ul><ul><li>Private University Bill has been passed in Assam, Meghalaya, Nagaland & Tripura – facilitating factor </li></ul><ul><li>Can cater to the needs of neighboring countries – </li></ul><ul><li>Cross-country market. </li></ul><ul><li>Areas of Intervention: R&D, University linkages, State of the Art facility, faculty exchange programmes, scholarships/ fellowships, distance learning, franchisees, etc. </li></ul>
  13. 13. Information Technology <ul><li>North East - ideal destination for IT, specifically for ITES sector. </li></ul><ul><ul><li>English education </li></ul></ul><ul><ul><li>Neutral English accent: ideal for BPO industry </li></ul></ul><ul><ul><li>Proficiency/ efficiency acknowledged by captains of IT industries outside the NER </li></ul></ul><ul><li>Could be a valuable KPO & KEPS destination. </li></ul><ul><li>Areas of intervention: investments in IT & ICT, high end facility for skill development and training, infrastructure, business linkages </li></ul>
  14. 14. Food Processing Sector <ul><li>Less than 12% of the total food and vegetable produced in the Region is processed </li></ul><ul><li>Over 30% is wasted owing to lack of scientific post harvest management </li></ul><ul><li>Prospects of Food Processing Industries in NER </li></ul><ul><ul><li>Availability of raw materials within the region </li></ul></ul><ul><ul><li>Large demand in domestic market </li></ul></ul><ul><ul><li>Export potential </li></ul></ul><ul><ul><li>Incentives and facilities from the government </li></ul></ul><ul><li>Areas of intervention : post harvest management, processing technology/ packaging, R & D for consumer friendly product development & market linkages </li></ul>
  15. 15. Health care <ul><li>Lack of adequate healthcare facility in NER </li></ul><ul><ul><li>Flight of capital </li></ul></ul><ul><ul><li>Not affordable for economically disadvantaged sections </li></ul></ul><ul><ul><li>Inconvenient for the sick & aged </li></ul></ul><ul><li>The private healthcare sector is doing relatively well in the NE. </li></ul><ul><li>However, sufficient investment in speciality care is not forthcoming. </li></ul><ul><li>Huge market including neighboring countries. </li></ul><ul><li>Incentives for healthcare sector under NEIIPP, 2007. </li></ul><ul><li>Areas of intervention: more investments in private healthcare sector, introduce international benchmark/ best practices, technology transfer, health insurance services etc. </li></ul>
  16. 16. Medicinal & Aromatic Plants (MAP) <ul><li>About 1500 commercially exploitable MAPs. </li></ul><ul><li>Trade volume and projected export </li></ul><ul><ul><li>The export volume out of NE states estimated to be USD 25 million per annum. </li></ul></ul><ul><ul><li>Projected export volume: 2009-10 (USD 35 million) </li></ul></ul><ul><li>Unique Species : Salam Panja ( Orchis latifolia), Caterpillar mushroom ( Cordyceps sinensis), Agarwood ( Aquilaria sps), Sugandhmantri ( Homalomena aromatica), Naga chilli ( Capsicum pruriens) etc. </li></ul><ul><li>Areas of Intervention: R & D, biotechnology, processing and marketing linkages. </li></ul>
  17. 17. Micro Finance in NE India <ul><li>Estimated Micro Finance market </li></ul><ul><ul><li>Demand: USD 625 million </li></ul></ul><ul><ul><li>Supply : less than USD 25 million </li></ul></ul><ul><li>FDI already started through agencies like UNITUS, Grameen Trust etc. </li></ul><ul><li>Expected return: 9% pa over 10 yrs.+ low risk </li></ul><ul><li>Impact: employment generation, micro enterprise development, poverty reduction, women empowerment </li></ul><ul><li>Areas of Intervention : investments for introduction of IT & ICT, equity investments, capacity building </li></ul>
  18. 18. Can we join hands to….. <ul><li>create better value chain management </li></ul><ul><li>enhance quality of products and processes </li></ul><ul><li>promote </li></ul><ul><ul><li>technology transfer/ innovations including rural technology </li></ul></ul><ul><ul><li>capacity building/ skill up-gradation/ HR development </li></ul></ul><ul><ul><li>product development/ design diversification/ market access </li></ul></ul>
  19. 19. Can we join hands to create…. <ul><li>PPP business models for emerging sectors </li></ul><ul><li>IT & ICT enabled credit delivery mechanism at the grassroots </li></ul><ul><li>Financial partnership </li></ul><ul><ul><li>to enable equity investments & create a specialized Sustainable Livelihood Promotion Company (IFC, BASIX) – expanding Micro Finance & reducing poverty </li></ul></ul><ul><ul><li>NENRI Fund </li></ul></ul>
  20. 20. Proposed investment portfolio of NENRI Fund <ul><ul><li>Infrastructure </li></ul></ul><ul><ul><li>Education </li></ul></ul><ul><ul><li>Information Technology </li></ul></ul><ul><ul><li>Food Processing </li></ul></ul><ul><ul><li>Health care </li></ul></ul><ul><ul><li>Medicinal & Aromatic Plants (MAP) </li></ul></ul><ul><ul><li>Micro Finance </li></ul></ul>Incubation Startups Venture capital Emerging sectors Development activities
  21. 21. Strategy for utilization of NENRI Fund <ul><li>15% for developmental activities </li></ul><ul><li>85% for emerging sectors </li></ul><ul><li>to be managed by the experienced fund managers </li></ul><ul><li>oversight committee to monitor the fund </li></ul><ul><li>subject to all regulatory clearances </li></ul>
  22. 22. Investment horizon of NENRI Fund
  23. 23. NEDFi – A Potential Credible Partner <ul><li>A single window partner to: </li></ul><ul><ul><li>facilitate financial intermediation for corporates/ HNIs </li></ul></ul><ul><ul><li>raise capital and channel FDI funds for North East India </li></ul></ul><ul><ul><li>raise debt & equity </li></ul></ul><ul><li>Banking system expanding in North East India, which can be a launch pad for innovative interventions by NRIs </li></ul>
  24. 24. About NEDFi <ul><li>NEDFi promoted by All India Financial Institutions in 1995 to catalyze & accelerate economic growth in North-East India </li></ul><ul><li>Only dedicated development Financial Institution operating in the eight states of North East India (Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim & Tripura) </li></ul><ul><li>Beyond lending – creating an enabling environment </li></ul><ul><li>Creating synergy & impetus to achieve growth </li></ul>
  25. 25. <ul><li>Yes, we believe, there is value in Networking. </li></ul><ul><li>Let us join hands to increase the Net worth of North East India. </li></ul>
  26. 26. Thank You…… <ul><li>North Eastern Development Finance Corporation Ltd. (NEDFi) </li></ul><ul><li>Basundhara Enclave, B.K. Kakati Road, Ulubari, Guwahati </li></ul><ul><li>Assam, India - 781007 </li></ul><ul><li> :+91-361-2529202-206 </li></ul><ul><li>Fax:+91-361-2529178,2529338. </li></ul><ul><li>E-mail: cmd @ nedfi .com </li></ul><ul><li>web site: www. nedfi .com </li></ul><ul><li>(for more information, p.r.t. http://databank.nedfi.com ) </li></ul>

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