MANIPUR - INDUSTRY

1.2 To make good the infrastructural bottleneck, Government has given a new thrust in this area. The Prime Minister had already announced a special economic package for the North Eastern Region including Manipur and a region-specific industrial policy is already framed.

1.3 However, Manipur although bottled up in the North Eastern corner of India, is gradually emerging as an important gateway for external trade. International imagination has been excited of a South Asia Development Triangle - including eastern and North – eastern India, Nepal, Bhutan and Bangladesh - an extension of which within a larger growth quadrant takes in Myanmar, Thailand, Laos and South-west China along the old Burma Road and the proposed Trans-Asian Highway and Railway. With this in the backdrop, the restoration of Indo-Myanmar Border Trade via Moreh in Manipur and the just concluded Ganga Treaty with Bangladesh herald a new chapter for international trade through Manipur with South-East Asian countries. An ever widening market for industrial products in the State would warrant greater investments to precast new industries in Manipur even without awaiting the international trade route to develop fully. Such industries should obviously be based either on the wider demand or the availability of raw materials locally, or both. Given the high level of investment and management capability, the enterprises could well flourish with adequate return.

1.4 The varied climate and the agro-climatic zones in the State affords wide range of agricultural and horticultural crop and forest produce. These can well be utilised by setting up suitable industries.

1.5 With this expose‚ in the background, a modest attempt follows which gives an overview of Manipur touching upon some selected features including the land, its people and the state of economy, and then with the new Government endeavour for development and some accounts on a few successful units, etc., and further to identify a few techno-economically viable industries. This may help take investment decisions. Appropriate project studies in detail as are contemplated follows up. The State Government will make every possible endeavour to participate in the venture.

Situated between latitudes 23.80 o N to 25.68 o N and longitudes 93.03 o E to 94.78 o E, Manipur covers a total geographical area of 22,327 Sq.Km. Of the total area, about nine-tenths constitute the hills which surrounds the remaining one-tenth valley. It is one of the border States in the North-Eastern part of India, bounded by Nagaland on the north, Assam on the west and Mizoram on the south and along the east it shares a 352 Km. long international boundary with Myanmar.

2.2 The People:

Manipur is inhabited by three major ethnic groups in Manipur - the Meiteis in the valley, the Nagas and the Kuki-Chin tribes in the hills. The Meitei Pangals (Meitei Muslims) form a minority community. Besides this, other communities from the other states of India have also settled in the State. People are predominantly Mongoloid, and speak Tibeto-Burman languages. The Meitei language which is the mother-tongue of the Meitei people is the lingua-franca of the State.

2.3 Population:

Manipur has a population of 23.88 lakhs (2001 Census provisional figure). Of the total population, 58.9% live in the valley and the remaining 41.1% are in the hill areas. The hills are inhabited mainly by the tribals and the valley by the Meiteis (including Meitei Muslims). The distribution of area, population and density, literacy rate, etc. as per the 2001 Census provisional figures are as below:

Physiographically, Manipur may be characterised in two distinct physical regions – an outlying area of rugged hills and narrow valleys and the inner area represents the features of flat plain topography with all associated land forms. These two areas are not only distinct in respect of physical features but are also conspicuous with regard to various floras and faunas.

The valley region would have been a monotonous, featureless plain but for a number of hills and mounds rising above the flat surface. The Loktak lake is an important geographic feature of the central plain area. The total area occupied by all the lakes is about 600 Sq.Km. The altitude ranges from 40m at Jiribam to as high as 2,994m at Iso Peak near Mao above MSL.

Within the State of Manipur, there are two major river basins, viz. the Barak River Basin and the Manipur River Basin. The total water resources of the two basins have been estimated to be 1.8487 million hectare metre in the form of annual yield.

The Barak river originates from the northern hills and is joined by a number of tributaries such as Irang, Maku, Tuivai, etc. and thereafter enters Cachar District of Assam. The Manipur river basin has eight major rivers such as Imphal, Iril, Nambul, Sekmai, Chakpi, Thoubal and Khuga. All these rivers originate from the surrounding hills. Almost all the rivers in the valley area are in the mature stage and, therefore, deposit the load in the Loktak lake.

The rivers draining the Manipur Hill Area are comparatively young due to the hilly terrain through which they flow. These rivers are corrosive in nature and assume turbulent form in rainy season. Important rivers draining the western area include Maku, Barak, Jiri, Irang and Leimatak. Rivers draining the eastern part of the State include Chamu, Khunou and other short streams.

The soil cover can be divided into two broad types, viz. the red ferrogenous soil in the hill area and the alluvium in the valley. The soil generally contains small rock fragments, sand and sandy clay and are of varieties. The top soil on the steep slopes are very thin. In the plain areas, especially flood plains and deltas, the soil is of considerable thickness. Soil on the steep hill slopes is subjected to high erosion resulting into formation of sheets and gullies and barren rock slopes. The normal pH value ranges from 5.4 to 6.8. The climate of the State is salubrious with approximate average annual rainfall varying from 933 mm at Imphal to 2593 mm at Tamenglong. The temperature ranges from sub-zero to 36 o C.

The natural vegetation occupies an area of about 14,365 sq. km. which is nearly 64% of the total geographical area of the State. The vegetation consists of a large variety of plants ranging from short and tall grasses, reeds and bamboos to trees of various species. Broadly, there are four types of forests below:

(i) Tropical Semi-ever Green

(ii) Dry Temperate Forest

(iii) Sub-Tropical Pine

(iv) Tropical Moist Deciduous.

Teak, Pine, Oak, Uningthou, Leihao, Bamboo, Cane, etc. are important forest resources growing in plenty. In addition, rubber, tea, coffee, orange, cardamom, etc. are also, grown in hill areas. The forests offer avenue of livelihood and employment to large section of the hill population.

Food and cash crops occupy the main vegetation cover in the valley. Paddy occupies about 86% of the total valley area. Other important crops include sugarcane, potato, tobacco, mustard and pulses. Horticultural trees and plants like pineapple, banana, lemon, pears, peach, etc. constitute other vegetation cover.

While Imphal valley region can be understood as an area of intense economic activities, the Manipur hill area, on the other hand can be seen as an area of low level of economic development yet having much prospects.

Notwithstanding diversities in the physical and economic factors above, a great deal of interdependence exists between the two, which makes them a well-knit fabric of interactions. The Manipur hill area has rich reserve of natural resources which is exploited in the central valley for economic and industrial development. In the central valley, where there is no forest wealth, there are number of industries based on forest resources. This region, therefore, depends entirely on the hill region for the supply of firewood, timber and other forest products. The shifting cultivation practised in the hills leads to deforestation and soil erosion in the hills and silting of the rivers and lake beds causing floods in the plain. Ecologically also, therefore, the two regions form inseparable part of the total system.

Imphal, the State Capital, is well connected by air with Delhi, Calcutta and Guwahati. Further, National Highway No. NH-39 and NH-53 link the State with the rest of the country respectively through the railway heads at Dimapur in Nagaland at a distance of 215 km. And Silchar in Assam of 269 km. from Imphal. The total road length in Manipur is about 7170 km in a net-work connecting all the important towns and far off villages of the State.

The Power supply of the State of Manipur depends upon the Central Sector Power Plants located in the North Eastern Region. The share of power for Manipur from the Central sector power plants including the shares from the unallocated share of power of the Central Projects is 141.15 MW when the plants are operated at their full capacity. The availability of power from the Central projects varies from month to month depending upon the hydro-power generation which are dependent on rainfall. At present, the availability of power from the Central Sector Power Plants during peak hours is 63.75 MW. The requirement of the State is 120 MW during peak hours. At present the State draws 83.75 MW by overdrawing 20 MW from the Central Projects. Availability of power from Central Sector Power Plants is shown below:-.

The peak power requirement of Manipur by the year, 2006-07 and 2011-12 as per the 16th Electric Power Survey of India are 252 MW and 406 MW respectively. The Region has many more ongoing projects. There will not be any shortage of power for the region as a whole and for the State of Manipur as well for another 10 years.

The State Power Department is currently engaged in taking necessary actions for generation of at least 1654.5 MW as below:-

The State Power Department has completed construction of Heavy Fuel Based Power Project (6x6 MW) at Leimakhong. Trial run test of the six units has been done successfully in March and April, 2002. Commercial operation is being started shortly. Once the project is commercially operated the peak hour shortage of the State can be minimised.

There are seven 132/33 KV Sub-Stations with total capacity of 191.3 MVA to receive power from North Eastern Region Power Grid. These are located at Yurembam, Jiribam, Yaingangpokpi, Ningthoukhong, Kakching, Karong and Churachandpur. Altogether 35 Nos. of 33/11 KV Sub-Stations having a total capacity of 206.1 MVA are in operation for distribution.

Agriculture is the mainstay of the State’s economy. It engages 76% of the workers. The size of the cultivated area is, however, only 9.41% of the total geographical area of the State. Of this total cultivated area, 52% is confined to the valley. Therefore, half of the total valley area which accommodates 67% of the total population is occupied for agriculture purposes. The pressure on land in the valley is thus quite conspicuous.

A high rate of unemployment exists in Manipur, particularly among the educated youth. There are more than 4 lakhs unemployed persons as per the live register of the Employment Exchanges.

2.13 State of Economy:

The per capita net income (SDP) of the State based on a quick estimate at current prices is Rs. 11,370/- for 1999-2000 as against the All India Average of Rs. 16,047/-. The average annual growth rate of the State Domestic Product is 10.52% in 1999-2000 as against 8.03% of the manufacturing sector.

The table below will throw some light on the level of development in the State.

3.1 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.

3.2 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.

3.3 The following sector wise allocations are included in the report in respect of Manipur:

3.4 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..-(12)-

3.5. 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.

3.6 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.

3.7 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.

3.8 The package of incentives offered by the State Government over and above those provided by the Government of India are as follows:-

1. Preferential allotment of land and subsidy on cost of land development.

2. Provision for allotment of sheds to SSI Units and subsidise the monthly rent.

3. Subsidies on Manpower Development.

4. State Capital Investment Subsidy.

5. State Transport Subsidy upto Siliguri and upto Patna on case to case basis by surface route.

6. Interest Subsidy upto 7% on working capital & term loan taken from banks/financial institutions.

7. Power subsidy on the tariff, drawal of power lines and purchase of diesel generating set.

8. Subsidy for feasibility study and project report preparation.

9. Subsidy for the cost of technical know-how obtained by SSI units.

10. Price preference of 20% in favour of SSI units.

11. Reimbursement of Stamp duty and Registration fee for securing loans and other incentives from financial institutions.

12. For purchase of testing equipment upto 25-30% of cost for improvement of the quality.

13. State capital investments Subsidy for modernisation/ expansion/ diversification through purchase of plant and machinery

3.9 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.

3.10 New Industrial Package for the North-East:

The Government of India has introduced a comprehensive new industrial policy for the North Eastern Region. It includes infrastructure support and both project and production related benefits that are meant for all industrial activities including those of small scale and agro & rural industries. The salient features of the policy are as follows:-

I. Development of Industrial Infrastructure.

(a) Government of India will provide entire expenditure on the establishment of Industrial Growth Centre. (Upto a ceiling of Rs. 15 crore as against Rs. 10 crore admissible earlier).

(b) Government of India would provide 80% of funds for Integrated Industrial Development Centres (IIDC’s) as grant (as against 40% earlier) and balance 20% would be by SIDBI.

II. Transport Subsidy

The transport subsidy will be extended for a further period of seven years i.e. upto 31 st March, 2007.

III. Fiscal Incentives

(a) The Industrial Growth Centres and IIDCs would be total tax free zone for the next 10 years. All industrial activity in these zones would be free from income tax, excise, for a period of 10 years from the commencement of production.

(b) Industries located in the growth centre would also be given capital investment subsidy at the rate 15% of their investment in plant and machinery, subject to a maximum ceiling of 30 lakhs.

(c) The commercial banks and the North East Development Financial Corporation (NEDFI) will have dedicated branches/counters to process application for term loans and working capital in these centres.

(d) An interest subsidy of 3% on the working capital loans would be provided for a period of ten years after the commencement of production.

(e) Similar benefits would also be extended to the new industrial units or their substantial expansion in other growth centres or IIDCs or industrial estates/parks/export promotion zones set up by the States in the NE region..-(15)-

IV. Relaxation of PMRY norms

The PMRY would be expanded in scope to cover areas of horticulture, piggery, poultry, fishing, small tea gardens etc. so as to cover all economically viable activities. PMRY would have a family income ceiling of Rs. 40,000 per annum for its beneficiary along with his/her spouse and upper age limit will be relaxed o 40 years. Projects costing upto Rs. 2 lakhs in other than business sectors will be eligible for assistance. No collateral will be insisted for projects costing upto Rs. 1 lakh. Group financing upto Rs. 5 lakhs will be eligible. Schemes will have subsidy component @ 15% with an upper ceiling of Rs. 15,000. The margin money may vary from 5% to 12.5% of the project costs to make the subsidy and margin contribution at 20% of the project cost.

V. Other Incentives

(a) A comprehensive insurance scheme for industrial units in the North East will be designed in consultation with General Insurance Corporation of India Ltd. and 100% premium for a period o0f 10 years would be subsidised by Central Government.

(b) A one time grant of Rs. 20 crore will be provided to the NEDFI by the Central Government through NEC to fund techno-economic studies for industries and infrastructure best suited to this region.

(c) State Government may consider setting up of a "Debt Purchase Window" by the NEDFI which buys the debt of the manufacturing units particularly in respect of the supplies made to the Government Department so as to reduce the problem of blocking funds for these units.

(d) It may be considered to provide assistance for restructuring State PSUs from National Renewal Fund.

VI. Procedure for released of assistance under the New Incentives.

Currently central assistance for Transport subsidy is given on reimbursement basis. The expenditure is first incurred by States and then reimbursement claimed from Centre. Release under the growth centre scheme are made taking into consideration the physical and financial progress and release made by the State Governments. Inadequacy of funds with States delays the releases which affects the progress of implementation or puts the entrepreneurs to hardship. I have been decided that the transport subsidy budget would be released by a designated agency on the basis of the recommendation of the S.L.C. NEDFI would be designated as the nodal agency for release of transport subsidy.

VII. Development of Village & Small Industries

Weavers’ Service Centre (WSCs) in NE region and Indian Institute of Handloom Technology at Guwahati would be suitably strengthened to provide technology and training support to the weavers. National Handloom Development Corporation will give priority in supply of hank yarn to the NE region. All the four varieties of silk would be covered under the Mill Gate Price scheme. Priority would be given to the NE region in scheme of setting up of market complexes and permanent exhibition facilities. A new design centre for development of handicraft would be set up in the NE region. To upgrade the skill of artisans, advance training programme through master craftsmen would be organised. New emporia will be set up and financial assistance for renovation of existing emporia would be provided. The Central Silk Board will give priority to NE region in implementation of its schemes.

4.1 Agro & Food Processing:

4.1.1 Introduction:

Government of Manipur is looking forward to explore the resources available towards the development of Food Processing Industries in the state as Food Processing Sector plays a significant supportive role in diversification and commercialisation of Agriculture, Horticulture, Fisheries, Poultry, Animal husbandry and Forest, improving value addition in the agricultural produce, employment generation and providing income and production of agro-food products for export.

Prospective mobilisation of this sector is mainly concerned with the raw material resources and its potential for future expansion, improvement of infrastructure, investment ability and up-gradation of technology.

4.1.2 Agro-Horticulture:

Agriculture plays a vital role as it is the main backbone of the State economy till today. The agriculture is mainly dependent on monsoon however around 28.49% of area under cultivation is irrigated by Canals. Moreover with a range of natural conditions and varied soil and topography, the state produces sizeable quantity of Paddy, Wheat, Maize, Pulses, Oilseeds such as Mustard, groundnut, Soyabeans, Sunflower, Ginger, Turmeric and Fruits like Pineapple, Lime/Lemon, Banana, Orange, Papaya, Plum and vegetables like, Cauliflower, Cabbage, Tomato, Pea, Squash, Carrot, Pumpkin, etc. The existing area under fruits and vegetable crop is about 1.08% of the total geographical area and with such suitable agro-climatic conditions, the state still has lots of potential areas on the foot hills, mild hill slopes and along the river banks.

4.1.3 Agriculture:

The existing area under cultivation of different crops in Manipur is 2,85,000 hectares as against the available potential area of 3,25,500 hectares.

Rice, wheat, maize, oil seeds, potato and sugarcane etc. are the main crops in the State. Among these crops, cultivation of paddy is the largest both in the plains and hills, and covers 82% of the total cultivated area. Among the variety of rice, there are two varieties of rice locally named as "CHAK-HAO POIREITON" having its natural colour (dark violet) and a distinct flavour and "CHAK-HAO" having its natural white colour, scent and distinctive flavour. Next to paddy, maize is the second largest cultivated crop.It occupies about 40% of the gross cropped area and grown mainly in the hills. Area and production of different crops are given below:

4.1.4 Horticulture:

Manipur has vast potential for commercial plantation of citrus fruits like lemon, lime, orange, grapes etc. and Pineapple, Banana, Passion fruit, temperate fruits and locally available fruits (amla, olive, figs, mandrine and Heirukokthong etc.). The quality of the pineapple (Q-variety) so available in Manipur has distinctive taste and flavour. So far, identified potential area is estimated at 2,77,000 Hectares. Out of this about 24,000 Hectares are covered under different crops. Area and production in respect of some of the fruits in the State are given below: