A week back we had some of the who’s who of the business world – both Indian and foreign, throng to Guwahati for the Advantage Assam Summit. There have been numerous MoU’s signed to the tune of more than Rs. 1 lakh crores. It’s a first for the state, which has hosted such an extravaganza and a great initiative by the state government to try and create a buzz in favor of Assam, which can potentially usher in generating employment opportunities in the state. A region that has been a laggard since independence, if all these MoU’s fructify, has the potential to create thousands of direct and indirect employment opportunities. However, as seen in a number of such events in other states, the actual investments in the form of setting up actual operations are a lot less than promised.
In the first day of the summit, we saw some of the biggest mes in Indian industry announce investments to the tune of thousands of crores. However, if we take a closer look, we would observe that most of these companies like ONGC, IOC, India Oil, Reliance Jio, Reliance Retail, Tata Hospitals, Spicejet, Dalmiya Bharat Cement, OLA to me a few, already has a presence in Assam. By these announcements, what we would actually see is expansion of existing facilities or setting up of additiol units by these companies, not new companies setting up manufacturing units. Besides, most of these investments are in the service sector, with almost negligible presence in manufacturing. And it’s in manufacturing and allied industries that majority of unskilled and semi-skilled people can be absorbed.
There are several underlying reasons for lack of lower investments in manufacturing, one of them being lack of ebling infrastructure and the culture of bands and protests at the slightest pretext. While talking of infrastructure, roads, rail connectivity and electricity, the three pillars of infrastructure have a lot to be desired in the region. If we really want to attract big manufacturing houses to the region, the driving force should be infra development. Though the Modi regime’s thrust area has been development of infrastructure in the North-east and there have been a lot of visible changes in this front, in the form of doubling railway lines, connecting remote regions with rail infrastructure, building four lane highways, air connectivity through the UDAN scheme, a lot still remains to be done, especially on the electricity front. Incremental improvement in the form of improving T&D losses would not solve the root cause, till the time small and big power plants are set up in the region. There are several vested interests and parties who have been retorting to roadblocks and protests in the me of protecting the environment. If we are to attract private investments in the power sector, the focus of the government should be to create ebling environment for business houses to invest in power plants. No power company would want to invest, if protests and roadblocks are the norm, where there is a threat to life and property. And if there is lack of quality and continuous power supply, no industry can survive.
There is a lot of talk of Ease of Doing Business in Assam, however, here too there are a lot of gaps. Today, all applications required to start a business are to be done online. However, high-speed internet penetration in the district centers is still not upto the mark. Unlike other developed western and southern states, we still have a long way to go, and if we truly want to truly want to attract investments, this area requires utmost importance.
Major focus area of the government should be to encourage local entrepreneurs develop small and medium factories, which has the potential to employ lakhs of people. Moreover, private individuals should be encouraged to set up skill development training centers under the Skill India program, so as to eble not only big manufacturing and service industries but small and medium enterprises to hire skilled individuals. Under the Make in India and Start-up India programs, the focus should be not just on technology start-up’s but on innovative manufacturing start-up’s as well. There can be certain focus areas like handloom and textiles and food processing industries, ethanol production where local people can invest. Assam, being home to the famous pat and muga silk, medium scale industries can potentially be developed. Besides, there are a lot of fruits, medicil plants and cereals found only in this region, which can probably be developed to small scale food processing industry.
There can be different incentive structures for different sets of industries like tax breaks for those that employ a certain number of employees. Fees and user charges for setting up factories and processing units can be waived off for resident individuals, so as to encourage more and more locals to come forward and create enterprises in Assam. Moreover, big business houses should be encouraged to procure local products and transfer best practices to local entrepreneurs.
It’s praiseworthy that under the dymic leadership of our Chief Minister and with a big push by the Prime Minister, we have at least made a start. The key now is to create an ebling environment by monitoring rapid infrastructure development, especially on the electricity, telecom, law and order front. Infrastructure is the base on which all industries flourish, and this must be the center of attention, and not just on hosting Global Investor’s Summit.