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Q2.

"The business world behaves in a numerical atmosphere but it's the


labyrinth of Value which differentiates one."
Analyse the North-East for a 'large business house' defining quantitative and
qualitative characteristics perfectly defining the potential of the market
existing here. (750 words)
The North East Region (NER) of India consists of eight states that are :
Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim
and Tripura. The NER is rich in natural resources and manpower, but there is
still a lot to be explored and developed there.

There are ample opportunities for economic growth of the region in the like
agriculture, infrastructure development, skill development, education, apparel
industry, BPOs, FMCG, hydel-power, etc. Also, there are a few challenges that
demand out of the box solutions for reaching out to NE markets like slow
economic growth, poor infrastructure, lesser connectivity, internal terrorism,
etc.
The NER's economy depends heavily on agriculture that is mostly following old
methods of farming. The modern farming practices will greatly help the
economy here. Also, some related inputs like agricultural credit, crop insurance,
farm inputs, storage and processing facilities need heavy investments in the
region. Hence, there is a scope for the financial institutions, agricultural inputs
marketing companies and agricultural infrastructure development agencies to
explore business here. There are a number of natural produce like bamboo,
rubber, fruits and vegetables, flowers, meat and poultry, etc available in the
region that may fetch very good returns, if processed and packaged to be
exported out of the region.
The human resources in the NER are young and energetic. The number of
available manpower in NER in the current decade is pegged at around 16.8
million persons. There is a huge scope for developing skills of this manpower
through imparting basic skills like IT, English language, short term technical
skill courses in nursing, hospitality, plumbing, electrical work, etc.

The region has huge scope for higher studies, especially in the areas of
forestry, plant sciences, geological studies, social/ tribal studies, besides
traditional areas of study. There is a need for investing in good quality
educational institutions that will not only help the local youth, but also attract
foreign students interested in studies specific to this region.
In the hydel-power, there is more scope to set up new projects in the region
and explore the sales of this power to markets in bordering countries like
Bangladesh, Myanmar, Bhutan, etc. The central government has put forward
policies like the 50,000MW hydro initiative, the Hydro Policy 2008 1 to promote
investment in hydropower in the region.
There are a number of incentives given to new investors planning to set up
industrial units in the NER. The Govt of India has declared the whole NER as
special economic zone (SEZ). The North Eastern Industrial and Investment
Promotion Policy (NEIIPP)2007 of the Ministry of Commerce and Industry
provides incentives like 1) income tax exemption for five years 2) capital
investment subsidy (CIS) at 15% of investment in plant and machinery, up to
the maximum ceiling of 30 lakh INR and 3) interest subsidy of 3% on working
capital loans for a period of 10 years for the new industrial units set up in the
region.
To overcome the problem of additional transport costs in the NER, the GOI
provides subsidy at 90% of the transport cost of raw materials brought from
outside the region as well as the finished goods sent from the region to other
parts of the country.
Also, there is a huge scope to accelerate the exports from the region. The NER
contributes only $0.01 billion trade value in against the total national export
volume of $ 254.4 billion. The major export consists of coal and tea. With the
help of new processing industries, there is a huge potential to grow the exports
from NER manifold in goods like bamboo, rubber, fruits and vegetables,
flowers, meat and poultry, etc.
Also, the border trade has not been explored very much along the NER till now
for the manufactured goods produced in areas other than the North East. The
envisaged bilateral trade with the bordering nations along the NER is expected
to be worth around $20 million every year that will be a huge improvement

from the current scenario and will also give a major boost to the local economic
growth.
The NER also has a unique geographical location in proximity with the
significant economic regions like East Asia, South Asia and Southeast Asia. This
is of prime importance if exploited properly to improve economic relationship
with Southeast Asia and China.
Hence,

businesses

should

look

forward

to

NER

in

major

areas

like

manufacturing, power, finance, IT, BPO, as well as out of the box solutions
suiting the local socio-economic environment in areas of skill development,
natural resource management, microfinance, microinsurance, agricultural
development, etc.