Emerging North-East India
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Emerging North-East India Economically and socially inclusive development strategies November 2015 KPMG.com/in © 2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. © 2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Foreword North-East India, covering 8 per cent Shillong. Apart from focussing on The report highlights the potential of India’s land and 3.1 per cent of improving the connectivity in the sectors for development, India’s population is the country’s region, this year the summit will infrastructure and connectivity Gateway to South East Asia. The also highlight the opportunities needs and proposes a number of integration and development of the that improved connectivity will initiatives that need to be taken up region is critical for India’s continued bring about and work towards an in sectors such as tourism, energy, progress. With over 5,300 kms of action plan creating an enabling education and environment besides international borders, it is apparent environment in areas like energy, skill connectivity infrastructure. I would that any development strategy for development and environment. like to thank KPMG in India for the region must necessarily include partnering with us and publishing The Prime Ministers recent visit strategies for collaboration; and this report. to Bangladesh laid great impetus connectivity must be a central theme on improving connectivity with While preparing the report, we have of the strategic road map. North-East India. The renewal of the received substantial help from a First North-East connectivity IWT protocol, MOU on the use of number of organisations. In particular, summit: FICCI had organised the Chitagong and Mongla ports and we would like to acknowledge the First North-East Connectivity Summit starting of bus services at key tourist support we received from Tata in November 2014 which was entry points such as Guwahati are all Consultancy Services who helped in attended by senior representatives moves that will give a major boost to reviewing the initial draft. from the Government of India, State connecivity. Similarly, the framework I am sure the North-East is going Governments, industry, diplomats, agreement on regional transport to become a leading contributor to foreign delegates and multilateral signed recently with Bangladesh, India’s national growth. agencies like the World Bank and the Bhutan and Nepal will facilitate easy United Nations Economic and Social movement of goods and passengers The only question is how soon can Commission for Asia and the Pacific to and from the North-East region. we make it happen. (UNESCAP). North-East Implementation Agency: The summit addressed a number Many well intended plans and of issues pertaining to the strategies have been made for current economic situation in the region and as a result we see North-East India, trade potential substantial progress in many areas between North-East India and ofthe region. If the full measure ASEAN countries, development of success was not achieved, it is of a North-East industrial corridor, because implementing agencies development of roads, railways, were not in sync with the plans. It airports, inland waterways and power is therefore of pertinent importance sector development. A number that we develop a plan to strengthen of infrastructure projects were the implementation capacity. identified such as the North-East I feel this can best be achieved by Economic corridor, inland water setting up a North-East Regional transport, North-East ring road, Trans Project Implementing Authority, himalayan highway . which will not only handle funding Second North-East connectivity of the projects but also put together summit: To take stock of the a team for hands-on monitoring of gains since the last summit and to each project, coordinating with state propose a way forward for thorough governments and all other relevant development of the region, the agencies, which will implement and Ranjit Barthakur second North-East Connectivity monitor each vertical with select Chairman Summit is being organised in private sector partners. FICCI North-East Advisory Council © 2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Foreword North-East, the land of seven We, at KPMG, are extremely sisters, is a serene and ageless pleased to work with FICCI on this picture of lush hills, with a prevailing knowledge paper, which we plan culture unmarked by modernisation. to release at the second North- Unfortunately, its picturesque beauty East Connectivity Summit being is often clouded by instances of held in Shillong. Focussing on the political unrest that keep making opportunities and required enablers news every other day. Despite in the North-East, the report has regular disruptions, the region has been developed based on the initial immense potential that, if utilised in study by FICCI and the secondary the right manner, can put North-East research by KPMG in India. The aim India on the national as well as the is to provide a thorough analysis global map. that can be used by investors and policymakers to develop action plans, This report, Emerging North-East which can help trigger growth in the India - economically and socially inclusive development strategies, region. prepared jointly by KPMG in India and FICCI, aims to highlight the prospects which can be explored. The north-eastern region has the capability to develop as a self- sustaining economic unit of the country, while also contributing towards building a new and improved India, in line with the present government’s aspirations. The publication provides an in-depth analysis of the current state of affairs and the potential of two areas where the region’s comparative advantage is visible tourism and energy. It presents ideas that can act as an impetus for policymakers and government officials to push for further development in the region. We have also identified areas of improvement and provided recommendations that could help bridge the gap. The report highlights growth enablers, such as infrastructure, education and skill development, environment and policy initiatives, which need to be worked on in the interest of progress. Further, the efforts that have set the ball rolling in the past year the smart Ambarish Dasgupta city initiatives, the Look East policy Partner and Head and the BBIN initiatives have also Management Consulting, been discussed. KPMG in India © 2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. © 2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Message North-east India has great potential key challenge. Clearly, we need for development and could well more action on the ground and a become the growth engine that coordinated effort by the government will give the next big push to the and the private sector is perhaps the Indian economy. We believe that the need of the hour. Above all, we need North-East could be transformed to identify an implementation model into an economic corridor connecting that works for the region. India, Myanmar, Bangladesh and This report makes an attempt to the ASEAN countries. The benefits highlight the opportunities that the of such a transformation would be region represents while presenting multifaceted, impacting not only some ideas for enabling inclusive India but the entire sub region, growth. paving the way for integration of India’s North-East with the economic I hope the report serve its purpose mainstream. as a catalyst for thought. The first North-East Connectivity Summit, held in November 2014 had highlighted the connectivity and infrastructure requirements to achieve the transformation. During the last one year, we have seen a lot of forward movement towards removing connectivity and developmental bottlenecks. Major investments in infrastructure have been announced, projects such as the Trilateral Highway are nearing completion and connectivity within the region has seen Dr. A Didar Singh significant improvements. However, Secretary General implementation still remains a FICCI © 2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Table of contents 01 02 03 04 Executive Toursim Energy Infrastructure summary 05-10 11-16 17-22 23-32 • Introduction • Overview • Overview • Overview • Developments • Proposed ideas • Proposed ideas • Proposed ideas during the last one year • Road map for development © 2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 05 06 07 08 Education