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               A Field Report submitted by Oinam Somorendro Meetei for North eastern
               Development Financial Corporation Limited (NEDFi), Guwahati,Assam,India

1. An overview of the state
2. Problems and Pecularities
3. The Prospects
4. Suggested approach
5.Suggested project ideas
6.Investments in Manipur

1. An overview of the State

               1.1     For purposes of development planning, the State has to be divided
               into two geographical units i.e. the hills and the valley. The
               traditional district-wise approach will not be feasible as the districts
               have been formed more out of political and ethnic considerations rather
               than their economic viability or particularity. Besides, the area
               covered by a district in Manipur is very small.

               1.2     The valley constitutes about one-tenth of the total geographical
               area. But more than two-thirds of the population live here. The Meiteis
               who settle predominantly in the valley, have a long cultural and
               political tradition. They form a fairly homogenous people; there is no
               caste system among them even though a majority of them profess
               Vaishnavism. They also constitute the majority in the State. Another
               community in the valley, small in number  but economically significant,
               is the Muslims, known locally as the Meitei Pangals.

               1.3     About two dozen tribes are settled in the hills. Anthropologists
               have broadly classified them under two categories, namely, the Nagas and
               the Kukis. However, many of the tribes themselves often do not want to
               be known or classified as such. Unfortunately, in recent times, friendly
               relations among the tribes is far from the minds of  some of the tribal

               1.4     Agriculture and allied activities provide the backbone to the
               economy in both the hills and the valley. Weaving and pisciculture are
               other important and traditional means of livelihood  in the valley.
               Logging, cultivation of a few cash crops, handloom and handicrafts  are
               traditional sources of additional income in the hills.

               1.5     The State's share from the power generated by the Loktak Hydel
               Project is not sufficient to meet even the domestic requirements.
               Combined with the government apathy, the transport bottleneck and the
               absence of an indigenous entrepreneur class, it is not surprising that
               there are no manufacturing and processing industries worth the name in
               the State.

               1.6     The State is heavily dependent on imports from outside for almost
               all items of everyday need. As such, the reins of the economy are in the
               hands of the 'outsiders' who have an inherent advantage over the local
               businessmen in supplying these items. Thus the Manipuri people get
               little economic benefit out of the Central assistance to the State. The
               per capita income is much lower than the national average.

               1.7     There is a growing army of the educated unemployed, as government
               jobs are perhaps the only avenue for employment. Seasonal unemployment
               and underemployment in the rural and hill areas are no less serious. The
               resultant frustration among the youth is at the root of the massive drug
               abuse among them and also of the climate of increasing political
               violence in the State. The breakdown in the maintenance of law and order
               has now become the biggest disincentive to economic development.

               1.8     The State Government is yet to demonstrate the foresight, the
               ability and perhaps even the sincere willingness to tackle the manifold
               problems arising out of economic backwardness and bring about rapid
               economic development in the State. Corruption is almost endemic at all
               strata of the government apparatus.


2. Problems and Peculiarities

               2.1     Any development plan for Manipur has to take into account the
               crucial role played by women in the economic life in both the hills and
               the valley. The biggest market in Manipur, the Khwairamband Keithel in
               Imphal, is entirely a women's market. The phenomenon is more or less the
               same in countless markets, big and small, which lie scattered in
               Manipur. A strategy for development which does not address their
               specific needs and aspirations is bound to fail.

               2.2     The average land holding in the valley is very small as the
               population density is high. The establishment of major industrial units
               in the valley is more or less ruled out by these factors. On the other
               hand, there is no effective and proper land-use policy even in the urban
               centres. Unplanned industrial growth in the future will do more harm
               than good.

               2.3     Except in urban centres where municipal laws are in force, there is
               generally community ownership of land in the hills. The population
               density is very low and vast tracts of vacant land are available for
               development. There are also rich mineral deposits in the hills,
               particularly along the geological fault line near the Indo-Myanmar
               border. But community ownership of  land creates legal and practical
               hurdles in exploiting the resources. Moreover, non-tribal  people like
               the Meiteis are legally barred from owning land in the hills.

               2.4     In view of the facts mentioned in paras 2.2 and 2.3, a development
               strategy for Manipur has to take into consideration this anomalous
               situation of rich human resources in  the valley but without adequate
               space for development, and vice versa in the hills.

               2.5     It is indeed very unusual for anyone in Manipur to get loans from
               the government or the financial institutions without greasing the palms
               of some functionaries concerned. And more often than not, the
               beneficiaries are persons who do not deserve to get the loans in the
               first place. Of course, the loans usually do not get the intended
               results. Consequently, the record of loan recovery is extremely poor
               which, in turn, tarnishes the image of the entire Manipuri people.
               Genuine and would-be entrepreneurs are trapped in a vicious circle as
               the financial institutions are naturally very reluctant to advance
               further loans.

               2.6     It is generally difficult to find a market for local products,
               except in handloom and food items.  This is mainly due to the
               stranglehold on trade by the 'outsiders'.


3. The prospects

               3.1     The creative genius of the people are reflected in their daily life.
               It may be the clothes, the jewellery, the arts, the music or the dances
               - one can easily notice in them a collective mind which appreciates
               beauty and innovation. The most unfortunate aspect of the second-hand
               development model pursued in Manipur so far is that this talent has been
               completely ignored. The key to economic development in Manipur lies in
               finding  out the appropriate technology and the appropriate economic
               activities where this talent can be usefully applied.

               3.2     Despite the widespread drug abuse and the consequent notoriety in
               having the highest per capita concentration of  HIV positive cases, the
               average standard of physical fitness in Manipur is comparatively high.
               This is reflected in the prowess of the youth in games and sports. This
               asset has not been adequately tapped for economic development.

               3.3     The percentage of literacy in Manipur is higher than the national
               average. There is sufficient reservoir of  trained  and skilled manpower
               for many manufacturing, processing and service industries. Given the
               right incentives, they can be self-employed in gainful activities.

               3.4     The hills are rich not only in mineral deposits but also in a large
               variety of  flora, of which many are rare or have medicinal properties.
               Almost nothing has been done for their commercial exploitation.

               3.5     The opening of the border trade between India and Myanmar and the
               effect of Myanmar as an ASEAN member, give both a challenge and an
               opportunity to Manipur. Officially, the border trade does not allow
               third-country products. However, unofficially, the bulk of the
               transactions is in those items. At the moment, Manipur is flooded with
               cheap, and often sub-standard, electronic, electrical and other consumer
               goods from East and Southeast Asian countries. Such imported items may
               be replaced without much difficulty by local products provided the
               quality and the price are reasonable. On the other hand, a few local
               produce which are not used or consumed by the people find a profitable
               market in Myanmar. Many raw materials required in Manipur may also be
               procured from or through Myanmar.


4. Suggested approach

               4.1     Very few people in Manipur have heard of the name NEDFi, not to
               speak of  an awareness about its activities and objectives. The first
               obvious thing to do is popularize NEDFi among the people as an
               institution which is different in its functioning from other apparently
               similar institutions. Media professionals may be hired for the purpose.

               4.2     In the meanwhile, there is need for the NEDFi to modify its lending
               and other norms to suit the local conditions. For example, the rate of
               interest and the minimum loan amount may be lowered.

               4.3     Following the publicity campaign, it is suggested that the NEDFi
               prepare a database on the number and categories of trained manpower
               available in Manipur. It may begin with data readily available with
               government and academic institutions. But, to satisfy itself about the
               actual and current position, the NEDFi may organize one-day workshops at
               Imphal from time to time for information and motivation to each category
               of qualified and interested persons. A separate workshop for women may
               be conducted to ascertain their specific needs.

               4.4     The preparation of project reports are daunting tasks even for
               otherwise qualified persons. When, after the workshops, specific project
               ideas have been identified according to their feasibility and priority,
               the NEDFi has to engage the services of qualified NGOs or individuals at
               Imphal for assistance in the preparation. Alternatively, it may open a
               branch office.

               4.5     Successful implementation of the projects are essential at any time
               for the entrepreneurs concerned. But the success of the first few
               projects is perhaps more crucial for the NEDFi in order to establish its
               bona fides among the people. Hence, the  need for extra care in
               identification, implementation and monitoring in the initial stage.


5.Suggested project ideas

               5.1     After a preliminary but wide-ranging survey, the following project
               ideas are suggested for implementation in the initial stage:

                       a)      Upgradation of technology/modernization in production of traditional
               handloom items for improvement and standardization in quality

               Reason:  Weaving is the traditional occupation of women in Manipur and
               some of  the handloom products are exported and earn foreign exchange.

                       b)      Cold storage facility with captive power supply

                               Reason: Local producers of perishable goods like fish and vegetables
               are at present compelled to sell at considerable loss in the absence of
               cold storage facilities in Manipur while, at the same time, government
               power supply is unreliable

                       c)      Food processing

               Reason:  Due to favourable climatic and soil conditions, many fruits
               and a few cash crops grow in abundance. They have not yet been
               commercially exploited to their full potential. Food processing units
               using modern technology can function profitably.

                       d)      Readymade garments

                               Reason:  The Manipuris have a general weakness for fashionable dresses
               and even the neighbourhood tailors are adept in designing clothes.
               Though readymade garments will be new as an industry, there is
               reasonable chance that, with modern equipment and methods, their natural
               aptitude can make it a successful venture.

                       e)      Hostels/facilities for overnight stay by women

                               Reason:  Thousands of women go from place to place in Manipur everyday
               for business. These  facilities at suitable locations will go a long way
               in meeting a pressing social need.

               5.2     The following project ideas are suggested for implementation at a
               later stage:

                       a)      Assembly of electronic and electrical goods

                       b)      Upgradation of technology in production and marketing assistance for
               traditional handicrafts

                       c)      Healthcare and medical research facilities

               d) Hotels and other tourist facilities

               e)      Creation of knowledge based employees(IT)


6.Abstract from Business Today " the Best States to Invest in, MANIPUR"

               TOTAL INVESTMENT : Rs 851 crore
               Under implementation : Rs 254 crore

               10 LARGEST PROJECTS
               1. NE Frontier Railways ; Railway lines - Rs 800.00 crore
               2. National Hydro Power Corp ; Hydro-power - Rs 426.00 crore
               3. Government of Manipur; Irrigation - Rs 150.00 crore
               4. State Electricity Deptt.; Thermal Power - Rs 126.00 crore
               5. Government of Manipur; Medical Research - Rs 90.00 crore
               6. Government of Manipur; Irrigation - Rs 72.95 crore
               7. Reliance Telecom; Cellular Phones - Rs 50.00
               8. Government of Manipur; Irrigation - Rs 42.53 crore
               9. Government of Manipur; Irrigation - Rs 18.86 crore
               10. Ministry of Transport; Roadways - Rs 15.00 crore

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