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Thursday , January 10 , 2013
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Investments below par, says Ghatowar

New Delhi, Jan. 9: The Centre is disappointed with the response from investors to calls for undertaking projects in the Northeast.

DoNER minister Paban Singh Ghatowar today said the states of the region were yet to witness any major private investments despite the presence of lucrative opportunities in hydropower, infrastructure and natural gas, healthcare, textile, tourism or horticulture.

Ghatowar was speaking at the inauguration of the two-day eighth North East Business Summit, an annual affair organised by the Indian Chamber of Commerce in association with the DoNER ministry.

While guests U Tha Aye, chief minister of Myanmar’s Sagaing region, and Nepal industry minister Anil Kumar Jha called for removal of barriers to encourage trade, for the most part it was a day of introspection for the government.

In what appeared to be an upright assessment of the ratio of investment to outcome, the government clearly expected more.

During the Eleventh Plan period, 336 private and public sector enterprises expressed intention to invest Rs 38,892 crore in the region. “According to the Twelfth Plan, share of investment in Northeast was, however, only 0.58 per cent of the total intended investment,” Ghatowar said.

Planning Commission deputy chairman Montek Singh Ahluwalia is certain to elaborate on the causes when he speaks tomorrow.

Though during the Eleventh Plan, the Northeast’s growth rate was 9.95 per cent compared to the national average of 7.9 per cent, this was driven mainly through the primary and tertiary sectors. Agriculture and the services sector and good performance in transport and communication, banking and insurance and in hotels and real estate had generated employment.

“The manufacturing sector remained subdued; the special fiscal package under the North East Industrial Policy (NEIP) had failed to trigger major investment flow in the region in the manner it was conceived,” Ghatowar said. “NEIP did lead to some investment in industrial units in and around Guwahati but could not attract investors to other parts of the region.”

He said a subdued industry was indicative of ineffectiveness of the massive investments made by the Centre in infrastructure projects in the region.

The Centre had spent over Rs 1 lakh crore in the region during the Eleventh Plan and over Rs 1.5 lakh crore will be spent during the Twelfth Plan period. Yet, capacity under-utilisation, high transmission and distribution losses in the power sector and corruption, besides conflicts, are believed to be responsible for tardy growth.

Nagaland governor Nikhil Kumar directly addressed the problem of conflict and said crime in the entire region was less than in any other state in India.

The response from the various governments and even from the Centre, however, was reflective of the pessimism.

While the summit saw presence of some members of industry, representation from states or even the Centre was lukewarm.

No chief minister turned up for the two-day extravaganza, nor did senior central government officials attend. Only five states were represented by their industries ministers.

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