Why Invest in the State?
The North Eastern Region of India lags in development far behind the national average. The availability of basic minimum services is very poor. The continuing gaps in infrastructural sectors have resulted in industrial backwardness of the Region. Recognising this, position, the Prime Minister announced on 27 October, 1996
"New initiatives for the North Eastern
Region" along with a Rs. 6100 crores special economic package including Rs. 703 crores for Manipur.
Pursuant to the "New Initiatives", the Central Government appointed a High Level Commission to critically examine the backlog in respect of the basic minimum services and the gaps in important sectors of infrastructure development in the region and suggest policies, programme and the requirement of funds to bridge such gaps and backlogs. The Commission has in its report entitled "Transforming the Northeast" (March, 1997), made an exhaustive 173 recommendations touching upon 27 areas for development. These, among others, include power, roads, civil aviation, railways, waterways, telecommunications, banking and financing, trade and transit, industry, etc. The report recommends a total of about Rs. 9,396 crores for the whole region's requirement in respect of basic minimum services, of which Rs, 1,423 crores is for Manipur. It also makes room for an indicative requirement of Rs. 93,619 crores as total estimated investments in infrastructural sectors for the region as a whole, of which Manipur's share is Rs. 5,815 crores.
The following sector wise allocations are included in the report in respect of Manipur:
(1) Irrigation Sector - Rs. 566 crores
(2) Flood Control - Rs. 45 crores
(3) Railways - Rs. 935 crores
(4) Power Sector - Rs.3,740 crores
(5) Transmission Sector - Rs. 84 crores
(6) Others - Rs. 445 crores
Further, the High Level Commission has advocated to improve the NH-39, the Imphal-Moreh sector in particular, to serve both as a commercial highway and as line of communication for construction of the Rs. 92 crores Tamu-Kalewa Highway sanctioned by Border Road Development Board, as Moreh could become a major nodal point for trade with the South East Asia along the proposed Trans-Asian Highway. In the banking and finance sector, the Commission has, inter alia, spelt out the need to consider industrial finance as part of priority sector lending. The recommendation on the industry sector recognises the need to establish export processing or special economic zones in the region to attract export oriented industries. The Govt. of Manipur is also vigorously pursuing to set up such an Export Processing Zone at Moreh.
Manipur, though located in a far flung north-eastern corner of the country and largely hilly terrain in its landscape, it has got many areas of strength and opportunities that justifies investment in the State. The existing Indo-Myanmar Border Trade currently underway in the border towns of Moreh & Tamu has already paved the way for a full scale trade between India and Myanmar which would further extend to other adjacent countries, like Thailand, Laos, South West China along the old Burma road and the proposed Trans-Asia Highway and railway. In this context, Manipur is the gate way to the International trade route connecting between Indian sub-continent including Nepal, Bhutan and Bangladesh. Resultantly, not only the production and trading units can flourish taking advantage of the expanding international trade but there is also good scope for investment in creating infrastructure facilities in the areas of road construction, power generation, developed industrial areas, water facilities, IT services, etc.
Another important competitive advantage thereby increasing the strength and opportunities of the state is the suitable agro-climatic condition prevailing in the state. The climatic condition of the state is very much suitable for growing almost all kinds of agricultural and horticultural crops and taking up afforestation activities and as such, there is great potential and prospects for large scale plantation of fruits and vegetables and setting up agro-horti based industries particularly food processing industries. For instance, the agro-climatic condition is so suitable that potato can be harvested two times in a year.
There are more than four lakhs unemployed youths in the live register of the Employment Exchange. Of these, more than 2.5 lakhs are educated youths who are matriculates and above. There is therefore, adequate educated manpower for absorption to any economic/business venture in the State.
Manipur is unique in its craftsmanship. The artisans are adorned with innate qualities of craftsmanship. There are more than 1.5 lakh artisans in the trade of cane and bamboo.
In addition to the above mentioned strengths and opportunities, the State Govt. has fully taken note of the Central Govt.'s new economic policy initiatives in the post-1991 era to:
- Create a liberal investment environment for economic activity especially industrial activity.
- Minimise Govt. regulation and control.
- Move towards a supportive role, i.e. facilitation.
- Create internationally competitive basic infrastructure facilities.
- Extend preferential treatment to priority sectors of industrial activity through an incentive mechanism.
- Provide full freedom of industrial and commercial activity within clearly established and transparent parameter.
Keeping in view these new policy initiatives of the Govt. of India, the State Government has adopted the "Industrial Policy of Manipur, 1996". This policy among others seek to:
- create an integrated investor-friendly environment;
- bring about industry and trade supportive infrastructural establishments and other facility centres;
- maximise utilisation of various resources including raw materials and skills in the manufacturing sectors and accord priority to industrial investment;
- modernise technology and upgrade skill of the manufacturing units to improve the quality and thus competitiveness of the products;
- revive the sick industrial units;
- take positive steps to optimise the advantages offered by the recently opened Indo-Myanmar border trade through Moreh in Manipur; and,
- provide a comprehensive and attractive package of incentives to the industries.
The package of incentives offered by the State Government over and above those provided by the Government of India are as follows:-
- Preferential allotment of land and subsidy on cost of land development.
- Provision for allotment of sheds to SSI Units and subsidise the monthly rent.
- Subsidies on Manpower Development.
- State Capital Investment Subsidy.
- State Transport Subsidy upto Siliguri and upto Patna on case to case basis by surface route.
- Interest Subsidy upto 7% on working capital & term loan taken from banks/financial institutions.
- Power subsidy on the tariff, drawal of power lines and purchase of diesel generating set.
- Subsidy for feasibility study and project report preparation.
- Subsidy for the cost of technical know-how obtained by SSI units.
- Price preference of 20% in favour of SSI units.
- Reimbursement of Stamp duty and Registration fee for securing loans and other incentives from financial institutions.
- For purchase of testing equipment upto 25-30% of cost for improvement of the quality.
- State capital investments Subsidy for modernisation/ expansion/ diversification through purchase of plant and machinery
With this brief commentary on some aspects of the State developmental endeavours which underlines the strong commitment of the Government for promoting industries. Manipur is well set to welcome investors as a major player in industrial development. The Government of Manipur is prepared to update the existing Industrial Policy to meet the requirements of private investors in the State.