TOPIC:- THE SUNRISE STATESRealizing the growth potential of North-East

UNLEASHING THE HIDDEN POTENTIALA novel process to use resources and create brands and employment opportunities

Team: Rohit AgrawalRohit RanavatShikhar JainNikhil ParasampuriaMalhar Aras

College:- BITS Pilani - K.K. Birla Goa Campus

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

432367650489

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

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

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

Setu

p o

f SD

CSe

tup

of

SEZ

an

d L

ink

wit

h S

DC

Sup

ply

Ch

ain

M

anag

em

en

t

3

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

Ph

ase

1

Ph

ase

2Number 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

20

13

-20

15

75,000

20

15

-20

17

60,000

20

17

-20

19

20

19

-20

22

15,00050,000Phase 1 Phase 2

4

CREATION OF SPECIAL ECONOMIC ZONES (SEZ) AND LINKING WITH SDC

Private Sector56%

Government 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

Ph

ase

1

Ph

ase

2Number 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

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

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

Go

vern

me

nt

Sup

po

rt

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

Imp

act

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

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/OfficeAssistant

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

Setu

p o

f SD

C(G

ovt

.)O

blig

atio

ns

of

an S

EZ

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

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

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 certificationSDC

•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

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