#36 - SEPTEMBER 2010 by CyberMedia (I) Ltd

OPPORTUNITIES IN NORTHEAST Business Opportunities PMâ&#x20AC;&#x2122;s Look East Policy Spotlight on Government Agencies 5 Heads of State Interviewed Over 20 Entrepreneurs Featured Cluster Analysis Tech Corner

Opportunity

Entrepreneur of the Month

Leverage Cloud Computing Now

Setting up High-tech Coaching Centres

Bhavin Turakhia

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Building World Class Web Services Company

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Contents

BOARD OF ADVISORS N R Narayanamurthy

Chief Mentor, Infosys

Kanwal Rekhi

Chairman, TiE

Romesh Wadhwani Chairman & President, Wadhwani Foundation Gururaj ‘Desh’ Deshpande

40 Opportunities in North East

Chairman, Sycamore Networks

Saurabh Srivastava Chairman, Indian Venture Capital Association Kiran Mazumdar Shaw R Gopalakrishnan

Chairman & MD, Biocon Executive Director, Tata Sons

Philip Anderson

Professor of Entrepreneurship, INSEAD

Shyam Malhotra Editor-in-Chief Abraham Mathew President Prashanth Hebbar Senior Editor ANALYSTS Binesh Kutty Nimesh Sharma Shinjini Ganguli Shradha Mohanty OPERATIONS Ajay Dhoundiyal Product Manager Prasanna Srivastava Product Manager Debabrata T Joshi Manager Events VIjay Rana Design Anil John Photography

SALES & MA Jaideep Mario Gabriel Yogesh Bhosle Ankur Kalia Manas Mishra Kingshuk Sircar

MARKETING Associate VP National Sales Manager West North South South-East Asia

PRINT & CIRCULATION SERVICES Rachna Garga VP T Srirengan GM, Print Services Sudhir Arora Senior Manager Circulation Sarita Shridhar Assistant Manager, Reader Service

Printed and published by Pradeep Gupta. Owner, CyberMedia (India) Ltd. Printed at International Print-O-Pack Limited, B-204-206, Okhla Industrial Area, Phase 1, New Delhi-20 Published from D-74, Panchsheel Enclave, New Delhi-17. Editor: Krishna Kumar. Distributors in India: Mirchandani & Co., Mumbai. All rights reserved. No part of this publication may be reproduced by any means without prior written permission. BANGALORE 205, 2nd Floor, # 73, Shree Complex, St.Johns Road, Tel: 43412333 CHENNAI 5B, 6th Floor, Gemini Parsn Apts, 599 Mount Road, Tel: 28221712 KOLKATA 23/54, Gariahat Road, Ground Floor, Near South City College, Tel: 65250117 MUMBAI Road No 16, D 7/1 MIDC, Andheri (East) Tel: 42082222 DELHI D-74 Panchsheel Enclave Tel: 41751234

With a great deal of resolve and enterprise the hard working folks of the north-east are wiping the blood of their picture postcard homelands. Will their efforts pay off?

40 An Overview: Sun rises in the Northeast By Shinjini Ganguli

42 Business Opportunties: Peaks of Opportunity in Valley of Doom By Shinjini Ganguli

45 Important Statistics from North East By Nimesh Sharma

46 PM’s Look east Policy: On the Drawing “Bored” By Shradha Mohanty

68 Spotlight: Government Agencies Give Colour to Entrepreneurial Dreams

PUNE Flat No. 9, F Block, Popular Heights 3 Koregaon Park Tel: 65000996 SECUNDERABAD #5,6 1st Floor, Srinath Commercial Complex, SD Road. Tel: 27841970 SINGAPORE 1, North Bridge Road, # 14-03 High Street Center Tel: +65-63369142 CORPORATE OFFICE Cyber House, B-35, Sec 32, Gurgaon, NCR Delhi-122001 Tel: 0124-4822222, Fax: 2380694

106 pages including cover 6

By Shradha Mohanty

72 Cluster Analysis: Together They Profit By Shradha Mohanty

75 Enterprising North East By Shinjini Ganguli, Shradha Mohanty, Nimesh Sharma

NORTH-EAST INTERVIEWS

39 OP Bhatt, Chairman, SBI 48 Neiphiu Rio, CM, Nagaland 50 Janaki Ballav Patnaik, Governor, Assam 52 Mukul Sangma, CM, Meghalaya 54 Pu Lalthanhawla, CM, Mizoram 64 Dorjee Khandu, CM, Arunachal Pradesh 66 RK Garg, CGM, SBI By Shinjini Ganguli

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Contents ENTREPRENEUR OF THE MONTH

STATISTICS

30 Bhavin Turakhia, Directi

26 Private Equity / Venture Capital Investments in Microfinance COLUMNS

22 The Secret to Winning Over Competition By Vijay Anand

28 The Entrepreneur’s “Friends” on the Team By Anurag Batra

34 Business of Emotions By Dr. Hrishikesh Damle Established in 1998, Directi is valued in excess of $300 million and has a workforce of more than 550 employees. Directi’s portfolio includes over 25 Internet Software Products for a global audience that serve over 10 Lakh customers and over 50,000 channel partners. Turakhia began his entrepreneurial journey when he was a teenager. Today, at the age of 31 years, Directi Group is an one of the leading web services provider serving a growing audience of customers in over 230 countries

TECH CORNER

36 Meetings... Conference Calls... Yaaawn! By Rajaram Rajendran

81 How to Develop North East India? By Paranjoy Guha Thakurta

84 Managing Liability By Srikala Bhashyam EVENT

We dwell on the trends that are currently shaping up the area of cloud computing in India. Plus, we see what enterprises are currently moving towards – private or public cloud.

24 DARE - CGTMSE Webinar on Collateral Free Loans 29 Sparks of Technology 33 SME CEOs Knowledge Series 82 Headstart - Startup Saturday August

OPPORTUNITY

NEN

18 Coaching Centers on Tech Steroids

102 The Great Indian Campus Challenge

88 Leverage Cloud Computing Now

OTHERS

12 Exchange 17 Feedback 94 Back of the Book

SMS: “DARE <your comments, questions or suggestions>” to 56677 Email: dare@cybermedia.co.in The pressure of CCE system has led to basic nuances of academic subjects going for toss. Will the new-age coaching centers be able to compensate for that and create interest in students to understand and learn the subjects with all that cool branding and cooler technology? By Nimesh Sharma 8

Website: www.dare.co.in Follow us at: http://twitter.com/daretostartup

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From the editor

/Prashanth Hebbar

Jewels of North-East India First hand report from the furthermost corner of India

I DARE Team with J B Patnaik, Governor, Assam

n true entrepreneurial spirit we undertook an ambitious trip to the north-eastern states of India. What we saw there convinced us that the region is full of life, ideas, entrepreneurial energy and it just cannot wait to be connected with the rest of India and the globe. There are a number of agencies, banks, the Ministry of Small and Medium Enterprises, the Ministry of Development of North Eastern Region and the state governments who are working towards giving the regionâ&#x20AC;&#x2122;s entrepreneurial talent a boost. Our analyst Shinjini Ganguli went around the region meeting officials, entrepreneurs, heads of governments to put together our special report. I spoke to Shinjini on her experiences. Excerpts: What struck you the most in the north-eastern states? The entire region is really beautiful, of course. I was surprised to find that though the states do not have too many industries, their standard of living appeared to be very decent. People are nice. They are not closed to outsiders. The culture is different and very colorful. Is the perception of a troubled region for real? No, not really. I saw a perfectly normal life. I think the outside world has developed the perception mostly because of what filters through the media which

are mostly about troubled incidents. Again, the remoteness and bad connectivity makes for bad press, I guess. Are there opportunities for rest of India? Definitely, there are ample opportunities out there. Tourisim is one obvious opportunity though. Shinjini and Dare team toured the north-eastern region for 20 days. The team landed there without any leads or references. However, developmental agencies and most importantly SBI came to our aid. They helped us make our way, get to meet people and travel around with ease. We experienced the northeastern peopleâ&#x20AC;&#x2122;s hospitality first hand. We have put together a vast resource of reading and referral material on north eastern states in this issue. Take for instance how Dr Mukul Sangma, Chief Minister of Meghalaya talks about horticulture and compares with the advances made by Netherlands. We interviewed more than 20 micro and small and medium entrepreneurs. If you want to get in touch with them, mail us and we will put you through them. The project was a real eye opener for us about north-eastern states of India. While we cannot claim it to be comprehensive, I really hope you will benefit out of this special report. Interact with me on Twitter @phebbar DARE.CO.IN | BLOGS | SEPTEMBER 2010 11

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Exchange Submit exchange requests at: website: http://www.dare.co.in/ marketplace.htm OR email: dare@cybermedia. co.in or SMS ‘DARE <your msg>’ to 56677

Launched a prototype of an innovative solar boat and are looking for funds We were covered in April, 2009 issue of DARE in the story—Sun Rider in the Solar Boat. We have launched a prototype of our product, a solar boat, and are looking for funds to scale up the project. - Sandith Thandasherry Response Please call me as I can help you with funding and mentoring to scale your business idea and model. - Viraj

Have an art gallery in Chennai and want to meet buyers abroad I am a regular reader of DARE since the first issue and I find it more useful for budding entrepreneurs. Now, I am into the art business. I have my gallery where eminent artists contribute their arts. I have already found a buyer in London. I want to contact somebody who can help get buyers from abroad. - Lakshmanan Response Please contact me. - M. Harsh

Want to start a company based on white LED and Solar Cells I am a fresher in BE (electrical and electronics), waiting for my TCS call letter. My aim is to start a company based on white LED and solar cells with my friend after three years. I wa nt to meet somebody who can give me a clear picture about the sector and how to start my work. - Civaraj Response Call me for more information. I can help you take your business to new heights with access to funding, mentoring and guidance in implementation. - Viraj

Support sought for a business of cartridges/toner reﬁlling I am writing this on behalf of my son who is a visually challenged person. He runs his own retail business of cartridge/toner refilling, making compati12

ble cartridges and stationery, including computer consumables in Chennai. He has been struggling for the last 25 years to make the business financially sound so he can stand on his own. We are looking for support in promoting and marketing products and services. - Rao Response It is quite inspiring to learn about your son and I strongly feel that he should not give up. Marketing this business could be quite difficult as it caters to something that is not widely acceptable i.e. cartridge refilling. However he could try to approach the IT companies in Chennai who could perhaps give some business. I am primarily into energy conservation and solar energy in Mumbai. If you think I can be of any help, please do not hesitate to contact me. All the best to you and your son. - Rathin Vyas

Partners required to set up an e-waste management project I am currently working on a plan to set up an e-waste management project in Bangalore. If somebody is interested and would like to join me, kindly contact me giving brief details of your experience and strengths. - Umang Agarwal Response Are you looking for partner or technology provider? If you are looking for JV partner, what kind of investments are you looking at? - Rathin Vyas

Channel partner needed for a preschool concept We have a play school/preschool concept with day-wise curriculum. We are looking for a channel partner to promote franchiser/franchisee module. Those with 300-400 sq.ft. office space or ready to start a play school in Chennai, Bangalore, Mumbai or Delhi can become our channel partner. - Sunil Response Please send me the details - Tharun

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Franchisee Opportunity We are one of the biggest manufacturers and suppliers of world renowned Thewa jewelry and handicrafts based in Pune. In order to expand our network in other metro and mini metro cities, we are in the process of appointing franchisee. Any woman enterprenuer interested may contact us. - Kataria Pravita

Need mentoring and guidance on marketing and sales We at transparent IT Solutions, provider of on-demand technology business management software. We are planning to have private beta in few weeks, would like to get guidance on marketing and sales area. - Vijay

People needed for opportunities between South Africa and India We are an Indian company looking for trading opportunities between South Africa and India. Product line is not yet decided, and we are currently conducting surveys. Interested parties may contact. - Rana Jitendra Singh Response We request you to please mail us your details. We welcome you for an international business with us! - Anubhav Kr. Sengar

International Stafﬁng Company We have come up with a very unique international staffing model, focusing on servicing Asian, European and South American markets. There are three modes of revenue. It would include placements,training and contracting in the international markets.

We are looking for experienced people who are based in Europe or SouthEast Asian countries who would be interested in joining us in the international staffing business. Job seekers, please excuse. - Sathish Response Exchange column | ‘International Staffing Company’ by Sathish. Kindly request to give his contact details - Via SMS

Looking for partners for entering mango kernel extraction business I am interested in the mango kernel extraction business and would like to have more details on the same. If found lucrative, I should be able to put up the project in the next six months. I have all the infrastructure to set up a factory. - Sanjay Kothari Response I am interested in the setting up a factory. Please let me know the details. - Mujeeb I had been in this business as a trader. There are very few players in this field but the problem is that again very less buyers are there in the market. It requires a good investment but then at present return is less and most are not ready to offer good price as its still considered waste even if buyers want to buy it for industrial purpose only. More over prices are variant of international market. Market has to be created for this and it has good gumption. Just thought of sharing my knowledge. Best of luck for your business. - Anuj Gupta

Rating of universties There is a need for rating the universities, colleges and schools; something similar to Credit rating of companies. The government is working on a legislation in this regard. I understand there is a need for a large number of concerns which can rate universities. Can some one guide on how to proceed further to commercialise this idea? - Srirama

Need guidance to expand boutique business I want to start a women’s boutique chain in Maharashtra. I have already started two boutiques in Pune and Aurangabad recently from my own investment. I have a small manufacturing unit in Pune. Can an body guide me to expand my business? - Alpanna Suratkar Response I am an upcoming and better established businessman. I am into decorative painting application, distribution, tours and travels. I am planning to diversify into some new ventures. I am interested to support your venture for your boutique business, but the boutique will be operated in Chennai city. I am looking for some business for my wife. So if your interested to go further in the process, kindly let me know on by email. - Ramesh, Chennai

Looking for partner or associate with a passion for art I have a very unique idea that I have developed over the years by thinking and researching in the art field. I have also done most of the work on strategy, technology, logistics, branding and finances. Also there is very little competition in the market to face. What I need is a very enthusiastic partner/associate who has a great passion for art and one who can take the entire business operations from here. Most of the tasks would be around: 1. Conducting offline marketing activities, and promoting products/services to hotels/restaurants/interior designers/architects. Explaining them the benefit and increasing sales. Increasing brand presence and establishing it as a major player in this field. 2. Maintaining the online art store and arranging domestic logistics. Keeping track of orders, customer requests and support, and other administrative work. I even have rented out a office in Pune to carry out the operations and

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would prefer if the associate/partner is in Pune itself. If the proposal interests you, please feel free to contact me with more details about yourself. - Anand Khinvasara

Looking for co-founder with experience in Meat industry I have been working on developing a business idea which relates to the meat market. I have a team of three enthusiastic members. However we have done one-and-half-year extensive research in the meat market and are ready with our plan. We want to have a team member who is having experience in the meat market. The plan is ready and we want to enter the market ASAP. We are based in Bangalore and our business geography would be same. People having needed experience and entrepreneurial spirit can contact me. - Anuj Gupta

Planning to open an online optical store I have an optical shop in my city and dream of making it into a retail chain. However, due to lack of funds, I am currently trying to open an online store for my business. Since I have no experience in this, can somebody help me with this. - Shahid Ali Response Itâ&#x20AC;&#x2122;s not that hard. I am an engineer in the field of computer science and I guess there are so many options right in front of us with which we can open an online store. We basically are going to promote and sell the products so not that hard. Mail me about your further plans. - Amitava Deb

Contacting SMEs to enter US market Response I am a software engineer by profession and strategically working in search of my eureka which also satisfies my genuine interest. Cross culture business is something which really intrigues me and once I, along

Need Funds and Team for Electric Vehicle Company We are a Bangalore-based startup company. We are working on electric vehicle components and products for the last three years. Our products are being appreciated by our countryâ&#x20AC;&#x2122;s best research organization. We are looking for a good team and funds for taking this venture to greater heights. We are commercially ready for our products and people can start earning profit from day one. We need right people who can approach us and who would love to work in clean technological space, automobile space, and social entrepreneurship funding area. - Nagaraj Ramanna

with my colleague, thought of executing one in which we can help Indian companies to extend their footprints but that remained just an idea because we lacked credentials, experience and guidance. Now I see that you are in the same business. Sir, it would be really great for me if you can give me a chance to work with you. I ensure that I would be adding value to your organisation. - Anuj Gupta

Information required for preschool in Chennai Response I appreciate your willingness to kick start a preschool. Keep in mind that you should offer innovative learning process instead of what market is offering. For more tips, you can reach me on my phone. - M N Gujr

Business advise required I want to start a business of paper dish, bowl making. Please give me information regarding this like how much potential is there, product range of this class, marketing tips, fund required, machinery required. My capacity of investment is two lakh rupees and I want to do this in Surat for now. Is this business considered as gruh udyog? If yes then what is the procedure to register it and what is the benefit to register the same? Also guide me for loan and benefit available. - Bhavik Gaudani

Anybody interested in a project in the education space? Am an edupreneur and an educational consultant. I have various educationrelated startup ideas. Anyone interested in opening a college or run education-based business in online(virtual) or real space can reach me. - Prof. JS, Indore Response I am a postgraduate in Computer Applications from Bangalore and I am also thinking of an educationbased online project. Feel free to contact me. - Anwar

Partners required for setting up a vocational training center I have been working in the development sector in the area of sustainable livelihood for the last 15 years in Madhya Pradesh with a long term presence in Mandla (130 villages) and Bhopal city slums. We have a federation of 165 NGOs in Madhya Pradesh and have a close network of more than 45 like-minded NGOs. We are keen to set up a vocational training center for people with disabilities and ex-servicemen leading to employment in the corporate sector or self- employment. We are looking for experts, partners, ideas, advice and mentors on the subject to proceed further. - Anand Response Educell - QEA - A society of 200 IITians and 250 professionals. We are running programs of quality education for all. DARE.CO.IN | EXCHANGE | SEPTEMBER 2010 15

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We have huge team of highly qualified professionals. You can contact me for some kind of association. - Shreyansh Jain

An Internet startup looking for a sales adviser We are an Internet-based startup company. We are looking for a sales adviser or are willing to outsource the sales activities on incentive-based scheme. Rahul Response I would like to be your sales advisor. Let me know how can I help you? You can reach me on my email and phone. - M N Gujr

Need Help/Assistance in Starting a newspaper I wish to start a fortnightly newspaper (12-16 pages) at Bhopal (M.P.). The framework is almost ready and the content would be in both, English and Hindi. I have also gone through the details and stipulations of RNI (Registrar of Newspapers of India). The aforesaid mentioned publication would be different in terms of content, layout and I hope would interest readers from all age groups and walks of life. The initial readership is targeted around 3000-4000, locally. If everything works out well, then other cities shall also be targeted. I am looking for someone who can help me out in RNI Work, i.e; a registration, permissions, etc. and has previously dealt with similar kind of work/agencies and has the know-how of its working. All kinds of help/suggestions/guidance will be more than welcome. You can contact me at my email or my cell phone. - Shiladitya Verma, Bhopal (M.P.) Response Please send me Shiladitya Vermaâ&#x20AC;&#x2122;s email id. - Via SMS

Commercial plant tissue culture I am a plant molecular biologist having immense knowledge in plant tissue culture and raising transgenic and working business plans on bringing 16

Investment for Patented Technology I hold a patent for step-change technology in the field of liquid dispensing. This is a digital controlled valve for precise liquid dispensing by gravity flow. Applications are like formulation batch mixing, filling, programmable dosing, pH control, etc. The invention benefits the end-user most by savings in capital expenditure, space, piping, manpower, electricity and most importantly, recurring savings of raw material. The invention offers wide range of liquid dispensing from single valve and accuracies beyond international standards. This will have good impact on almost all industry sectors and irrigation too. Plan is to appoint minimum 100 system integrators from each industry sector like oil and petroleum, pharmaceutical, flavors and fragrances, paint and resins, dairy, food and beverage, pesticide, polymers, plastics, leather, textile and many more from various countries. The venture will deal in patented technology creation, manufacturing key products from mechanical, embedded electronics and interfacing software packages. The standardised applications will be executed by SI network. I have already received grant from TePP (DSIR, Govt of India). For more details please contact, matter is on fire. - Satish Pathak

commercially important crops which are to meet the Indian unseasonal, food inflation and population demands in the present and future. If anyone has the same kind of visionary in the long run in this segment of moving ahead, you can contact me over my mail. - Bala Krishna reddy

Inda. However there are some models that closely mirror this idea and they are all working profitably. The initial order of investment will be $150000 and can go up gradually once the model begins to work and attracts many more farmers to join the crusade. - S. Raghavan

Funds Require For Mining Overseas

Looking for franchisees for preschool business

We need funds for our upcoming big mining exploration in Oman, Sudan, Albania, and Turkey, etc and iron ore business in India. Interested investor, please contact me on email or phone. - Raj Kumar Swain

We are looking for franchisees across the country. We have a unique business model with low entry cost and very high ROI. Our entry cost is all inclusive and there is no hidden cost. We are also looking for master franchisee in all locations. For further details please contact Saborni or Arnab or email. - Saborni Bhattacharya

Emancipation of Indian Small and Marginal Farmers in a forproďŹ t manner I have a business idea for emancipating Indian small and marginal farmers. Actually this idea can be deployed in any developing and under-developed economies. Investment can be enhanced after an initial trial is done for the satisfaction of any investor to test the efficiancy of this idea as this has not been tried out anywhere in

DISCLAIMER: Due to a big deluge of exchange requests from our readers, we had to restrict the number of requests being published in the magazine to include new, broad-scoped and higher-on-quality requests. www. dare.co.in/marketplace.htm

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Keeping Babies Warm and Safe: Nursing Home Financing One of the most difficult aspects of getting a loved one medical care is a nursing home financing. There are options available to help with the expenses when funds are needed. Not many people are able to fund medical expenditures out of their own pocket. - Rumana Akter

Business of Medical Oxygen Gulbarga is the biggest district in Karnataka. Taluka-wise it is having a population of about six lacs and more than 50 hospitals and about 4200 bedded hospitals. The district has only one oxygen plant and setting up another plant in this area is advisable or the existing is sufficient for above said population and hospital? - Sandeep Patil, Karnataka

Is Your Car Really Your Status Symbol? While I too am a believer of eco-friendly living. I think you are way off-mark. For one, India being a tropical country and highly populous, if someone were to cycle all the way, where average office-home distance is measured as 12~15 kms, they would be drenched in sweat. Imagine getting to work sweaty and smelly! Even the very thought puts one off. Secondly what’s the point when one is most likely to sit in an air con-

ditioned office, whose contribution to pollution is almost equal if not more than what a car can spew out? Cycling is feasible in Amsterdam and other cooler places, for one, you do not sweat, and two the population on the road, is not too much of a bother. Don’t simply try to cut and copy practices from the West and replicate here. They simply will not work. Start thinking!! (of innovative ideas, not cut and paste solutions) - Shailesh

Capt. G R Gopinath I had the privilege to work for this great man in a small office space in Bangalore in the early nineties. He had words of wisdom for me and one question which changed my life although now in retrospect am not sure whether for the good or bad...life is good and I take it as such. Captain, you are a legend and an inspiration to millions, thank you and wish you all the very best in everything that you do. God bless. - Madan Mohan

Autos are the lifeline of Delhi’s middle class Refer to “Amazing businesses around Autos” (Dare August 2010). No doubt there are hundreds of hassles in travelling in Delhi autos but they are the lifeline of middle class Dilliwalas. The Mumbai example of discipline of autowallas and police attitude is badly needed in Delhi too. It is time to tame the auto rickshaw drivers and their menace too. Taxis are too costly and beyond reach of an average Dilliwala. Buses are overcrowded and for senior citizens, physically challenged persons the only convenient mode of transport in Delhi is autos. As they are available at doorsteps just like your own car! To ease bus rush, I suggest the authorities to issue permits to auto rickshaws and taxis to have point to point services at fixed rates per passenger—allowing five persons in taxis and three persons in the auto rickshaws on sharing basis for two important points say from Green Park to ITO, Green Park to Connaught Place, and Chandni Chowk to Hauz Khas, etc. The auto rickshaws are rightly allowed to run on environment-friendly CNG fuel, but action should be taken to discipline errant auto rickshaw drivers who fleece passengers. This would also be a good step keeping in view the Commonwealth Games in Delhi this year. Mahesh Kapasi DARE.CO.IN | FEEDBACK | SEPTEMBER 2010 17

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Coaching Centers on Tech Steroids The pressure of CCE has led to basic nuances of academic subjects going for toss. Will the new-age coaching centers be able to compensate for that and create interest in students to understand and learn the subjects with all that cool branding and cooler technology. /Nimesh Sharma

f you are a parent in a middle class family, educating a child in a metropolitan city with those high tuition fees after the over-therooftop school fee will blow away your pocket. However, an increasing number of tuition centers have made private coaching a lucrative business opportunity. A billion dollar industry it is poised to be in next 10 years. And we are talking only about CBSE / ICSE coaching, and not IIT-JEE prep industry, which is already booming, thanks to worldclass institutions like IITs. Unlike school, the tutor your child goes to, is running a business and is expected to give a professional treatment. Though a lot of private tutors have acclaimed fame in their regions, not all the tuition centers are being professionally run. Now, smelling an opportunity, a new breed of private coaching firms is coming up which claim to be professionally run and boast of quality education. We talked to Riju Gupta, Director, Educomp Leap and Anand Ramabhadran, Business Head, Education, HT Media, on what is the thought behind this initiative and how is it better than the neighbourhood private coaching centers. Educomp Leap is from the stable of Educomp and Studymate is a joint initiative of Hindustan Times and Mumbai based Mahesh Tutorials. 18

Educomp Leap "Smart Class" in action

Why coaching in first place? After launch of CCE system in schools, the pressure on teachers has been increased. Teachers are required to be more tech savvy because of which basic nuances of various subject have gone for a toss. According to Jaspreet Kaur, a veteran teacher, “Because of the situation brought in by CCE, and parents understanding that private coaching is surely required, they are increasingly opting for it.” “Unlike students of smaller schools, those in big schools find a dire need for coaching,” she adds. A good point

Ramabhadran adds is, “In India, kids take tuition to get more marks, unlike US where its remedial tutoring”. Few of the students, DARE team interacted with said, “In school, they don’t teach, they rush.” About the novelty factor, Gupta says, “We follow a complete academic process. Every student gets his own separate file and Parent Teacher meetings are held regularly.” The evaluation system is very organised with report cards and marks being recorded for every test held frequently. There are projection systems in class with

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every teacher having a laptop. They have in-house content development teams to develop the video and print study material. All students are given books which ease the learning process. While, in Studymate, electronic attendance system automatically sends sms to parents about kid’s absence/ presence, in Educomp, students can access online video recordings of subject faculty anytime from home. On being asked the need for such branded coaching centers, Ramabhadran says, “7% of the schools in India are run by private bodies and enroll 30% of students while balance 93% are run by government, which implies that there is a increasing need for quality education.” Also, where else would students get personality and career advice and counseling. Students often need to clear their doubts at late in the night before exam day. So, if something like a 24 hour helpline is to be offered to help them, it can only be done by an organised player. Its the comprehensive package one offers that can attract students to the organised coaching center. Getting good teachers and scaling up: In every region, there are few brilliant private tutors who have not been recognised by the system and are happy teaching on their own. The only issue is that since they are all self-trained entrepreneurs, they need to be trained in some aspects to

“There should be focus on incremental change in every kid by every tutor, rather than just a ‘pass marks’ attitude” — Riju Gupta, Educomp Leap

become world-class teachers and to be able to help the students wholistically. From the point of professionalism, Bindu Puri, a teacher and Center Head with Educomp, and an IITian says, “I feel like having joined a corporate firm and not an educational institute.” “We are giving a professional career to college grads aspiring to be teachers”, adds Gupta, who recruits grads from IIT and DCE. While its very difficult for a coaching center to scale up offering the same quality of teaching at all its centers, for these players, the model is self sustainable. The selection & training processes established for teachers makes sure of the uniform teaching quality students get across any of the centers. While Educomp is leveraging V-SAT technology to have best faculty teach at remote places, Studymate officials personally find and meet the tutors in each area and then give them training. To help students understand and learn what they don’t, in schools, in a better, easier, and interesting way, use of technology is inevitable. Educomp uses its in-house technology “Smart Classes”, which has live videos and simulation of graphics. In fact, it is using better technology in its centers outside Delhi, where classes are being taken using V-SAT technology, with a teacher teaching live on a screen from a distance. Studymate uses Mahesh Tutorial’s TAT (Technology Aided Teaching) as its competitive edge. It counts its two advantages as Visual Retention because of the live imagery and teachers’ ability to have full time eye contact with students ensuring personal attention, rather than back towards them, which is a small but good step. Teaching the most common subjects of class 9 to 12, the pricing ranges from Rs 11000-25000 per year for one subject, with conditional bulk discounts for more than one subject. Both Gupta and Ramabhadran agree to the common objective behind

“An ideal tuition center should not only help you score well, but help you pursue what you love to do, since that will give you your career” — Anand Ramabhadran Studymate starting the ventures. “Students wanting to get the best, have to go to different subject experts, while here they get all subject experts under one roof, which saves their time and money.” Anita, a parent at Educomp Leap center, says, “The score of her child has improved, and now he likes to come here to study”. Independent interaction with students elicited only positive response from them. They were more than happy with the study material, with the teachers, with the classrooms and their results. What can tutors do? Tutors must attend workshops on their subjects to remain updated on their subject, and also extensively use internet to go to international websites on their subject, say MIT’s site for science teachers. Besides, they must become technology friendly, which will help them become an entrepreneur and not be a one man show. Technology shall enable them to better help & assess the students. The best thing a tutor can do is to train new tutors of equal quality, who can teach and help more and more students. If you are an aspiring tutor entrepreneur wanting to go the organised way, you now know how you can create competitive edge over others. Education is the way to go up, for the nation, quality education is the way to go up for tutor entrepreneurs. R DARE.CO.IN | OPPORTUNITY | SEPTEMBER 2010 19

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HTTP://WWW.DARE.CO.IN/INSPIRING50

Dear SME Ecosystem Partner, Time has come for us to step up and give the heroic Indian SME Entrepreneurs a national identity. We are all well aware of the fact that the SME Entrepreneurs are responsible for about 26 million SME units which are the real economic backbone of India. They contribute 10 per cent of the GDP and 40 per cent of total exports by the country. Indian SMEs employ an estimated 60 million people across the country. They are the growth engines which are driving Indiaâ&#x20AC;&#x2122;s fortunes. A number of SME Entrepreneurs manage to break away from the pack and jump to the next level. Yet much of this contribution and achievement go unnoticed barring a few exceptions. There have been efforts to identify high performance SME Entrepreneurs and recognize them so that they become role models to their community. Such efforts have been too fragmented and too scarce. In order to give Indian SME Entrepreneur a national identify and a purpose of excellence, Dare with the support of a number of industry associations, nationalized banks, developmental agencies and the SME community has launched a nation-wide program to identify 50 leading SME Entrepreneurs from across industrial sectors and regions and recognize them. They will be brought together under the banner of Dare Inspiring 50 SME Entrepreneurs. Dare Inspiring 50 SME Entrepreneurs will focus on businesses which are in the revenue bracket of Rs 100 million to Rs 500 million. We are inviting nominations from the SME community in India. The nominations will be screened by a panel of Jurists put together by Dare editors. The shortlisted 50 entrepreneurs will be profiled in the December 2010 issue of Dare. We also intend to capture success stories on videos. A super jury comprising eminent industrialists will pick out awards for Entrepreneurs from the shortlisted 50 and the awards will be given away at a felicitation program in December 2010 at New Delhi. It is our mission to reach out to as many industrial clusters as possible across India and get quality nominations. Since you have decades of experience in the sector and have watched, mentored and/or funded the SME Entrepreneurs in various sectors, we request you to help us in reaching out to potential nominees. It would be a privilege to be associated with you and your organization in giving a face and a voice to the unsung heroes of the Indian economy, the SME Entrepreneurs. Please feel free to call our Program Manager, Mitali Ghosh, for any details. Her contact detail is as follows: Mitali Ghosh, Email: mitalig@cybermedia.co.in, Phone: +91 9999133314, + 91 9833392255. In anticipation of a widespread support from our beloved SME ecosystem. Yours Sincerely,

Prashanth Hebbar Editor, DARE A CyberMedia Publication 20

SEPTEMBER 2010 | PROGRAM | DARE.CO.IN

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blogs/opinion

/Vijay Anand

The Secret to Winning Over Competition Competition is rife in the industry today. With new companies joining in, it is about time the existing ones took steps to stay ahead in this race. Read on to find out how.

e have all seen this time and time again. There is a company that makes a bold entry into a space, and with enough time, research and investment they breakthrough and then the floodgates open. Suddenly a new industry and vertical is born, the media acknowledges it and creates an environment where hundreds of companies are born to compete in every dissected vertical of that marketplace. Tough luck.

The Strategy of the Giant India is a country where demand is being created in such a pace that the economy is not grown, but dragged into its size by the sheer momentum of the desires, aspirations and needs of the populace. While there are companies striving to break into the market place, there is a sense of lethargy as organizations grow to not renew themselves over time. The founding team grows and moves out and a management team that grooms the company through its growth phase and perhaps prepares it for an Initial Public Offering (IPO) comes in place. And the thriving enterprise officially becomes an incumbent player in that vertical. 22

The key for organizations as they grow, to sustain themselves to become a brand and company that people can relate to, is in the ideology of reinventing itself. The concept while it sounds simple can be a bit of a tricky proposition. You can be rest assured that if you ever try to reinvent a companyâ&#x20AC;&#x2122;s goals and missions, there is a real good chance that the board might fire you. Reinventions have to be done ahead of timeâ&#x20AC;&#x201D;not as a reaction to competition getting too close; and to commit such an act when the company is doing well and on a pathway takes a lot of effort. Consider how HCL reborn with a new brand is challenging the entire industry; the way organizations are managed and even repositioning the companyâ&#x20AC;&#x2122;s value proposition is a testament to this act. It takes guts, grit and the ability to be able to convince your board that you will take them through. It is my opinion that India is a market where the next 25 years are going to witness tremendrous growth, and the value propositions and the very demographic that we are targetting will change along with it. To put it very mildly, it will be like shooting

a moving target. Reinvention is not an option, it has to become part of the strategy. Here are six tips if you are a growing, or large organization that would like to retain its leadership: 1. Set a vision for the company that goes past the goal of building and taking a product to market. Envision the future. 2. Bring your employees and the board to the reality of tomorrow and the vision of the company. 3. Make it a mandatory process to open up communications within the team for suggestions about new product roadmaps and processes. 4. Hire, if not buy talent: Acquire companies that are smart and working in your space. It is not always possible to innovate everything internally, hence acquire fresh blood from time to time. 5. Keep the founders around: While industries and offerings change, the thought process that triggered the initial ideation process for the first line of products is pivotal when you reinvent your company and vision. While you bring the new team onboard, also create a means to keep the founding team around.

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6. Revel in your constraints: If you are a successful company, create artificial constraints without becoming bureaucratic. Constraints are the best means to foster innovation for emerging markets.

The Strategy of David On the other hand, as India grows, markets \that never seem to exist before are burgeoning all around us. Markets are getting segmented further and further and given the size of the population, it still offers a means to build offerings towards a targeted segment making businesses viable. If you are a startup, you are constrained by everything — talent, time, resources and yet there are going to be companies who threaten to enter into the market you are in with much of the things you do not have. Here are six tips for startups to stand up against competition: 1. Do your own groundwork—what makes a company unique is the capability of the founders to be able to look at a problem, its interpretation and the solution they come up with the domain knowledge they possess. While people can steal and imitate the prescription, the process as to how you arrived there is a hard one to replicate. It is uniquely you. No first iteration of the product ever survives the marketplace; as such, when you need to get to the drawing board to iterate what you have build and the problem you wanted to solve, you obviously have a better leverage. Market research data and anything that you read can be good indicators, but the strong recommendation would be to get your hands dirty by getting as close to the source as possible. 2. Do not race against time—It has never been in the history of any company that they have raced against time with a competitor and got a product out that works, or has been successful. You only

A successful partnership in most cases leads to an acquisition and that is an experience every entrepreneur should be a part of have two options when serving a market, either to lead or to follow. If you are leading think way ahead of the pack; if competitors are closing in, you aren’t ahead of the pack, make a call to either follow or raise your standards. Samsung as a company is a great example of being a follower and taking on the big guys. While companies like Sony have been leaders in their sector, Samsung has managed to replicate cheaper, better variations of their offerings and has built a significant marketshare in their shadows 3. Do not catch up, overtake—One of the things that startups are rather good at is working overtime, hoping to build a product that is better than the offering of a competitor. Common sense would tell you that if the competitor built the product over ten years with a team size of 200, no amount of overtime is going to do justice to be able to deliver a product that has more features and better than the offering that is in the market. Differentiate and take a short cut. Build a product which is either significantly different or which has less features and can target the demographic which is currently being ignored by the existing offering. This pretty much explains why investors and experienced entrepreneurs hide away from Me-too offerings.

4. Invest in the team—You will have to build a team and its skills but persist to hire anyone that will raise the average IQ of the team by some level. With a great team, anything is possible. 5. Iterate, again and again—The strength of a smaller company is in its ability to change things quickly. If you are not a company that can leverage that luxury which is available for a very short period in its existence, you are not making good use of it. 6. Work with Partners—With reference to my article on Exits in the previous issue of Dare (July 2010), the startup ecosystem is quite nascent in India and is evolving with the process as to how we innovate. Larger companies are part of the ecosystem to fill in the missing pieces of what smaller companies cannot do —as such work with them. A successful partnership in most cases leads to an acquisition and that is an experience every entrepreneur should be a part of. India, in my mind, is in the time period as where the United States was in the 1980s. This is the time period where retail chains and the era of McDonalds was in full bloom. We are looking at a very similar situation in India. The key realization is also that the catching up of almost three decades from 1980s to 2010 will happen within less than a decade here in India. Opportunities will bloom but so will the time period within which the demographics we target remain what they are, they will also evolve. Evolve along with them, or we go the way of the dodo. R

Vijay Anand is a serial entrepreneur, the founder of Proto.in, and the Vice President (Incubation) at IIT's RTBI. He tweets at @vijayanands. To write to the author, please send an email to dare@ cybermedia.co.in with the subject line 'Vijay Anand'. DISCLAIMER: The views expressed here are that of the author and do not represent the magazine's.

DARE.CO.IN | COLUMN | SEPTEMBER 2010 23

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DARE-CGTMSE Webinar on Collateral Free Loans D

Mr. UR Tata, GM, CGTMSE

ARE in association with CGTMSE, organised a webinar on “How To Get Collateral Free Loan upto `1 Crore For Your Business”, on August 25, for aspiring entrepreneurs who wish to avail of loan facilities from banks. Mr. UR Tata, General Manager was the guest speaker and gave an introduction to CGTMSE, talked about the schemes for entrepreneurs, the procedures involved and the lenders associated with CGTMSE. Later he addressed the queries of the entrepreneurs and gave them solutions on their problems regarding credit cover. The queries were as varied as: 1. What is the detailed procedure for an entrepreneur to inform the bank to avail of guarantee, considering it being an B2B procedure?, 2. As you have said loan has to be through authorised banker from you, my question is what documentation is required what is rate of interest and what time it will take to get sanction from bank?, 3. To My understaing the lending is given for working capital, is it also available for term loans and for organisation just above the Rs 2 crores threshold, say Rs 2.5 crores. If not, then what is the available for such organisations? and 4. We are a services organization, looking at expansion and need funds for procuring an office and equipment. Are we eligible for CGTMSE scheme? Some of these were answered by Mr. Tata. All questions and their answers will be published on the microsite (See details below). The webinar was attended by over 100 entrepreneurs and SME businessmen and was a huge success. All the queries of the attendees could not be answered and many of them had to be taken offline. Those entrepreneurs who missed the webinar can visit the DARE’s microsite: www.DARE.co.in/cgtmse and listen to the recorded webinar and interact with other entrepreneurs. R

SEPTEMBER 2010 | EVENT | DARE.CO.IN

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Discover your Potential at

Unleashing Entrepreneurship Indian Economy is now going global and its surge ahead is creating opportunities in manufacturing, financial and service sectors. Stimulating and informative sessions at BUSINESS MANTRA SAMMELAN would connect aspiring and existing entrepreneurs with knowledge to start up and or scale up their business to new heights and help them capture global opportunities. BUSINESS MANTRA SAMMELAN also provides a unique platform to many products/service providers to connect with entrepreneurs.

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Sep10 advertisement.indd 25

CYBERMEDIA Abhishek Sinha Mobile: 9999644178 Email: abhisheks@cybermedia.co.in

PHD CHAMBER Sachin Shrivastava Phone: 0755-4221868 Email: phdcci_bpl@yahoo.com

9/2/2010 10:08:08 AM

Statistics

Private Equity /Venture Capital in June 2010

PE/VC Investments in Microfinance Microfinance was one of the very few sectors which witnessed growth in PE/VC investments even during the Oct-09 to Mar-09 period during which investment activity came down quite sharply in other sectors.

VC Investments in Microfinance (Jan-Jul) Amount

US$ Millions

120

No. of Deals

100 80

60 40

20 0

2007

2008

2009

2010

PE investments in Microfinance (Year on Year) Period

No. of Deals

Amt ($M)

2010 YTD

2009

160

2008

182

2007

59 SOURCE: Venture Intelligence PE/VC

PE investments Year

VC investments*

No. of Deals

Amount (US$ M)

July 2010

656

July 2009

218

SOURCE: Venture Intelligence PE/VC Deal Database

Year

No. of Deals

Amount (US$ M)

July 2010

July 2009

* VC investments are a subset of PE SOURCE: Venture Intelligence PE/VC Deal Database

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Deal Database The spectacular returns made by PE investors in the recent IPO of SKS Microfinance - at the IPO price, investors like Sequoia Capital India and Unitus have made returns of over 11 times their original investment in the company â&#x20AC;&#x201C; is expected to spur further PE/VC activity in this sector. As and when other leading microfinance companies like Spandana and Equitas go in for their IPOs, they can also expected to provide handsome returns to their investors.

Top PE investments in Microfinance* Company

Investors

Amt ($M)

Date

SKS Microfinance

Sandstone Capital, Kismet Capital, SVB

Nov-08

Share Microfin

IFC, Others

May-09

Share Microfin

Aavishkaar Goodwell, Legatum

May-07

Basix

Matrix Partners India, Lok Capital, Hivos-Triodos Fund

Mar-10

Equitas Micro Finance

CLSA Capital

Mar-10

* By Investment Size

Company

Industry

Investors

Panchshil Realty

Hotels

Xander

110

IDFC

Actis

100

Blackstone, Others

Monnet Power

Infrastructure Finance Rice Processing (Basmati Rice) Power

Blackstone

Asian Genco

Power

PTC Ashmore

REI Agro

PRIVATE EQUITY

Top PE Investments in July 2010 Amount ( $ M )

VENTURE CAPITAL

Top PE Investments in July 2010

Top VC Investments in June 2010 Company

Industry

Investors

Amount ( $ M )

Aqua Designs India

Water Treatment

Peepul Capital

InMobi

Mobile VAS

Sherpalo Ventures, KPCB

National Collateral Management Services

Services to Commodities Firms

Rabo Equity

Perfint Healthcare

Medical Devices

Norwest, IDG Ventures India, Accel India

Komli Media

Online Services (Advertising & Marketing)

DFJ, Helion Ventures, Nexus Ventures

7.2 6

Top PE Investments in July 2010

DATA SOURCE: DARE.CO.IN | STATISTICS | SEPTEMBER 2010 27

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blogs/opinion

The Entrepreneur’s “Friends” on the Team /Anurag Batra

Friends bring meaning to life but entrepreneurial friends not only bring meaning but also get values and ideas on the table for the company’s growth and enjoy the boss’ confidence

his Friendship Day I was talking to a very close friend of mine who used to a senior executive in a Japanese MNC in India. He has quit his job to pursue his passion in sports and had started working for a friend’s sporting enterprise. He said that working with close friends is a different and experience altogether. Another friend who was listening to the conversation gave an example of an achiever and entrepreneur who had made life and businesses by working with friends. That’s when I started thinking about the friends who work together, achieve together and are basically ideal foils for each other. To create an enterprise one needs a vision and a team to convert the dream into reality. The entrepreneur needs a team to make things happen. Every entrepreneur has his set of trusted advisors, lieutenants, specialists, friends’ core team who he/she trusts and entrusts with important initiatives. Some term it as the coterie of the entrepreneur. This is the inner circle, the trusted aide who influence the implementer and sometimes act as the link to the outside world. He/she could be a school or college mate or a distant relative but most of the time it is a friend who has turned a colleague. To share the dictionary meaning of coterie “A set or circle of persons who meet familiarly, as for social, literary, or other purposes; a clique”. The relationship between the entrepreneur and this trusted colleague/friend is special and sometimes unusual.

Sometimes this friend is the troubleshooter, a man for all seasons, it is somebody who understands the objectives he has in mind and the temperament of his boss and friend. He or she acts as the trusted advisor putting his boss/friends' interests ahead of every other stated or unstated objective. This trusted aid could heir the title of a CEO and might be on the board of the company. Sometimes this friend/advisor might not even have a title or designation but has tremendous influence. People who do not understand the value this individual brings to the table might call it as extra constitutional authority. Even Hindu mythology had Gods and kings had trusted friends as advisors. Anil Ambani has Amitabh Jhunjhunwala, Mukesh Ambani has Manoj Modi. Almost every Indian entrepreneur has someone who fits this stereotype and description. Is this a healthy friendship? Is this relationship good for the friend/advisor? Let me say with confidence that this relationship certainly works for the entrepreneur company and the trusted advisor. This trusted friend is like Arjun’s (entrepreneur’s) Krishna (friend). He is his saarthi, his guide, his shield,his tool depending on the situation. The entrepreneur is successful as he or she can extract value from everyone and create a win-win situation for all involved. In the case of a friend also, the entrepreneur might start the relationship because they have been college

buddies and have trust but eventually the friend delivers great value in ideas and execution and that’s why enjoys the unique status he or she has. Having showcased the positives of this relationship, that there are several of those who continue to disagree with me about friends working together. My article brings out most of the positives of this relationship. But what happens when: 1. The relationship with the friend does not work out? Can the entrepreneur/boss/friend sideline or fire his friend? 2. The friend becomes overly protective and possessive of his entrepreneur friend’s assets, upsets the rest of the system and because of this pulls back the risk appetite of the business? I know some of you may not agree with me but I would like to quote to get you thinking Napolean and Lord Byron: “Large legislative bodies resolve themselves into coteries, and coteries into jealousies” says Napolean Bonaparte Lord Byron commented “The wouldbe wits and can’t-be gentlemen, I leave them to their daily “tea is ready,” smug coterie and literary lady”. R Anurag Batra is real life, first-generation entrepreneur who is Much Below Average (MBA) from the prestigious Management Development Institute, MDI. When he is not busy writing such columns, he can be reached at anuragbatrayo@gmail.com. Anurag is the founder and editor-in-chief of exchange4media group which includes exchange4media.com. To write to the author, please send an email to dare@ cybermedia.co.in with the subject line 'Anurag Batra'. DISCLAIMER: The views expressed here are that of the author and do not represent the magazine's.

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Sparks of Technology TechSparks 2010 has shown us how there are a huge number of innovations taking place in innovative product technology /Shradha Mohanty

n a bid to encourage entrepreneurship and innovation in the field of product technology and innovation, Microsoft BizSpark and Canaan partners came together to organize a one of a kind pan-India competition for product technology startup ventures, called Microsoft Cannan TechSparks 2010. The flagship event of yourstory.in was covered along with DARE acting as print media partner. Microsoft Cannan TechSparks 2010 was a resounding success with over 200 participants from all over the country fighting it out to prove their worth. The search for the best product tech came to an end this August

13, 2010 with 5 winners being chosen by the distinguished panel out of the shortlisted 18. The top five winners were Pellucid Networks, ArrayShield, Vmukti Solutions Pvt. Ltd., Sporting Minds Technology Private Limited and Icreate. The event basically focused on software products, mobile products, cloud computing and Web 2.0. They were awarded with customized solutions to meet their growth, handle challenges in getting funding and marketing support and in the process attain nation wide visibility. This event was held to identify such innovations so that they can bridge the huge gap between entre-

preneurs in the product tech space and the Investor community. Shradha Sharma, founder of Yourstory.in said this event hoped to bring them under one roof taking into consideration that it takes a lot of capital and time for these start-ups to go ahead with their ventures. It would act as a ‘launchpad for the talented entrepreneurs’. Yourstory.in is an online platform through which entrepreneurs can improve their visibility and develop their networks in the market. The assessment was carried out using an assessment tool called G/Score. It is a standardized, scalable methodology used for assessing the team and its' how it executes itself along with determining its commercial viability. The competitors were judged on whether they have defensible technologies which can leverage Microsoft technologies so as to create an impact in the market place, whether they are viable in terms of market opportunity and competition and whether their product is going to be relevant in the IT landscape. A panel discussion was carried out on ‘Product Technology: Investment, Opportunities and Challenges which included Charles Assisi, executive editor, Forbes India; Shereen Bhan, executive editor, CNBC TV 18; Alok Mittal, MD, Canaan Partners; Girish Joshi, Technology Advisor, MS BizSpark India, Shailendra Singh, Managing Director, Sequoia Capital India; Ravindran Govindan, Executive Chairman, Mercatus Capital, Singapore, Ravi Bharadwaj, GM Marketing, DEll; and Prakash C V, Founder and CEO, Gradatim IT Ventures. R DARE.CO.IN | EVENT | SEPTEMBER 2010 29

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entrepreneur of the month

Established in 1998, Directi is valued in excess of $300 million and has a workforce of more than 550 employees. Directi’s portfolio includes over 25 Internet Software Products for a global audience that serve over 10 Lakh customers and over 50,000 channel partners. Turakhia began his entrepreneurial journey when he was a teenager. Today, at the age of 31 years, Directi Group is an one of the leading web services provider serving a growing audience of customers in over 230 countries enesis of Directi It was in 1989 that I was in my sixth grade and I fell in love at first sight with computers at my school in Bandra, Mumbai. I still remember trying to spend as much time as possible on it – lunch breaks, after school hours, and so on. By tenth grade, I spent hours together on the programs available back then for building software, writing code, etc – simply because I loved it. It is since then that I had it in my mind that I needed to do something in my life around computers. Thanks to my Dad, I had read a lot of biographies and I knew that I had to do a business on my own. That said, it was around 1994-96 that India started witnessing the internet revolution, with BSNL giving out TCP/IP, Shell accounts, etc. I got a connection for my home PC and tried out couple of different businesses side by side – assisting with network setup, hardware assembling, buying and selling computers, and so on. In 1997 I booked the domain Directi.com and I started building a job board similar to what Naukri or Monster is today. I had tried to build software at that point of time which does artificial intelligence job such as matching employers & employees. However, as it turns out, this concept

back then was way ahead of its time. With only 30-35 thousand people connected on the web in India, there were no buyers for such software. By 1998, I and my brother (who had just joined me in the venture) realized that this concept is not going to work out and that we needed something so fundamental that people will want to buy it today. So in November 1998, bought my first server in US and started providing the most fundamental web services. To be clearer, we were the one stop shop for any company which wanted to set up anything on the internet (email, website, shopping cart, and so on). We borrowed 25 Thousand rupees from Dad. We started our business operations from a residential property, owned by Dad, which was not being used at that point in time. Within a couple of months itself you know I made enough, we sold 40 times in the first months a more in the next month we made enough money to pay back the loan. This business was well accepted and our first year turnover was around 4 Lack rupees. This was the start of Directi.

two and half years after we had set up Directi. By then, we had clienteles in two main categories. One was the corporate organizations who wanted to set up portals for their employees, emailing, etc. The second category consisted of all those portals, which spent extravagant amount of money on useless things to catch more eyeballs. Luckily, we had fair share of the first category of clients in the growth phase i.e. around 1999-2000. The fact that these clients were growing rapidly in the dot-com boom helped us in making reasonable amount of sales and revenue, because they were in need of the software services and products that only few of us had to offer. By the time things started fall out, we already had a significant client based that wasn’t dependent on dot-com boom per say for revenue. So there was a marginal impact during that phase nothing that would damage us in any manner. If you look at the dot-com burst there was no tangible business model

How did you see through the dotcom bubble burst? The dot-com bubble burst happened

Directi

Bhavin Turakhia

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I strongly believe, the simple formula that gets businesses through rough patches is that the amount of value that your product or service is providing to the consumer should be greater than the amount of revenue you expect from the consumer

behind these businesses that went burst. There was no value being provided by them per se. I strongly believe, the simple formula that gets businesses through rough patches is that the amount of value that your product or service is providing to the consumer should be greater than the amount of revenue you expect from the consumer. How was it like to start your own business at an early age? Like most parents in India, my parents too were worried about me securing my future in terms of academics, career, etc. Academically, I had always been a bright student from the beginning. The expectations were that I would do engineering. I switched gear after 12th grade and decided to drop out of engineering. I subsequently, on my parents’ insistence, picked up a commerce degree, while setting up my company. They had been critical about my decision, and my Dad never failed to speak out his opinion, that was in the lines of I should finish my academics and then go ahead with this plan of doing my own business. The thing about them is that despite the fact they didn’t agree with my decision, they never failed to support it. Like I mentioned earlier, my dad provided me with the initial office space and capital, besides many other things. My argument was that the earlier you start up a business, the risk remains lower because the worst case scenario is if you don’t succeed you are still young enough to finish your academics. I saw a lot of people getting stuck in this rut of getting a job and getting settled. This whole concept of getting settled is quiet in contrast of being an entrepreneur – an entrepreneur is never settled, he always tries to find some new challenge. What were the mistakes that you learnt a lot from? There have been several mistakes,

and those have been at different stages. The early stage one for me was not looking beyond the credit and collections problem. We used to spend 30 to 40% time collect money from clients who already owe to us. This was a ridiculous! So we took a decision that we will just reverse the entire process. We decided to collect money in advance, and this did bring about the loss of 20 percent clients, but this was a risk we were willing to take. The other thing, which is not a mistake, but more of a learning experience, is that as the numbers of people in your business grow in size, in the likes of 30-60, you owe them an office space. When everybody is on the same floor, they bump into each other at the cafeteria, water cooler, and so on – they end up sharing time, information, and knowledge. This information automatically gets circulated across the organization, without having to put in any efforts. The moment you are a 500 people company, it is a completely different ball game. The environment does not remain the same, and you have to put into place processes to maintain the same culture, the openness, the transparency, to ensure that everybody has the right information to take the right decisions. What is the one thing that any aspiring entrepreneur should avoid when starting up? As an entrepreneur running a growing business, there is a need felt for bringing in more people. Over a period of time, entrepreneurs start compromising on the quality of hires, and that is when the growth stops or slows down because the entrepreneur spends all the time sitting and managing people. You need to make sure that you hire the best people, so that the growth never stops. If you have even the slightest of doubt of him/her being the best, do not hire the person. R

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SME CEOs Knowledge Series I

CICI Bank, India’s largest private sector bank, in association with CyberMedia, Asia’s largest specialty media house, organised the third event of the second season of the innovative nation-wide SME CEOs Knowledge series program at Chennai on Aug 19th, 2010 at Hotel GRT Grand. This session was focused on the Auto & Engineering Cluster.The event got an overwhelming response with over 150 SMEs attending the sessions. It is a first ever initiative, taken by ICICI Bank to connect with SMEs and provide them with the relevant expertise to help them enhance their growth. The objective of the series is to provide holistic solutions through mentoring and providing opportunities for networking. It creates a platform where problems faced by the SMEs are analyzed, discussed and workable solutions are offered. The event started with the Finance Clinic where the entrepreneurs were offered customized expert advice on how to raise capital for their business depending on the stage of business and the optimal level of capital mix their business needs, through a discussion on a wide array of topics like - Debt Financing, Private Equity, IPO, M&A, Forex Advice and other risk management products. Parallelely Deloitte held a session on “Accounting and Governance Challenges faced by SME’s”.This was followed by a one-on-one mentoring session with experts from Marketing & Branding from Amity Business School, Taxation from Deloitte and HR, Finance from ICICI Bank. The programme concluded with a panel discussion, where the panel in addition to the experts also included successful en-

trepreneurs, who shared their experiences and knowledge with the aspiring SMEs. ICICI Bank SME CEO Knowledge Series was launched in April 2008 by Hon’ble former President Dr. A.P.J. Abdul Kalam. The first season of ICICI Bank SME CEO Knowledge Series in association with Cyber Media was conducted in 15 cities, where approximately 2000 Delegates attended and were offered valuable inputs. The subsequent events of the

Knowledge Series Season II, will be held in Coimbatore, Mumbai, Hyderabad, Bangalore, Ahmedabad, etc, addressing various clusters including IT, Infrastructure and Pharma. ICICI Bank has initiated several programs like Emerging India Awards and SME Toolkit to help SMEs interact and transact among themselves and also with large corporations, thereby providing a complete ecosystem to the SMEs to scale up to the next level of growth. R DARE.CO.IN | EVENT REPORT | SEPTEMBER 2010 33

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blogs/opinion

/Dr Hrishikesh Damle

Business of Emotions Emotions are a good marketing device; to capture and cash in on these emotions in various fields is where lies the human capabilities....read on to find out more

ometime back a leading national news channel was carrying a live coverage of a bizarre incident. A boy was trapped inside a tube well (borewell) and a cameraman and the crew were at the spot beaming live pictures. The attempt was futile and the boy died. Many VIPs had visited the place. The story was beamed for the next few days. There were discussions by intellectuals on what needs to be done to stop such incidents in the future. The leading dailies carried the news on the front page, as expected. Good Samaritans were busy collecting money and trying to bring some solace to the shattered family members. Fair enough. There was another story buried inside the inner pages of the same newspaper. It was about eleven boys who were washed away in floods in Bihar. There was TV crew covering the floods, there were newspaper reports. But the tragedy of eleven boys being washed away was just one liner in the description of catastrophe. Probably no VIP visited their families, no compensation reached them. Why are we so different to these two stories? Despite being the most intelligent animal on earth, we are still susceptible for emotional deception. Across the world it has been proved that hu34

man hearts move and respond to the agony of one child as against many children. It is difficult to raise funds to feed thousands of children suffering in Africa but relatively easy to find donors for the treatment of a child suffering from blood cancer. Let’s confirm it for ourselves. Close your eyes for a moment now and try to recall two of the four events which have been described so far. The first one to come to your mind would either be “child suffering from blood cancer” or “boy in the borewell”. That’s why television channels carried the right story. The media knows which event appeals people more than the other. So

Despite being the most intelligent animal on earth, we are still susceptible for emotional deception. Across the world it has been proved that human hearts move and respond to the agony of one child as against many children

eleven boys were sidelined against one boy in the borewell for want of TRPs. Our brain, having been wired in a peculiar way, lets people take a ride on us. But the business of emotions doesn’t stop there. At times it is not deliberately done. Blame it on the structure of our brain, we are woven so much in the web of emotion that it is difficult for us to analytically evaluate the events. If you closely watch, much of the communication between the seller and the client touches buyer’s emotions at some level. After a surgery when a surgeon declares to the relatives that despite the procedure being tricky, risky and time-consuming, it went on well; he is laying the foundation for justification of his exorbitant fee. For a moment the relatives go into trance to recover moments later with a sigh of relief. Smart, isn’t it? A few years back, one of my friends, a clinical psychologist, quizzed me to understand new perspectives of our choices. His first question was “Does your son wear the most expensive dress or most comfortable dress as his first choice?” Obviously all parents would admit that children go for latter than the former. His next question was “Do you dress to impress others?” It was a big “No” from my side. Come to think of it, that’s not true. We are not at our best attire on a Sunday morning

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at home. We do rush to the dressing room and improve our clothes, quite often if not all the times, when not so familiar guests arrive at our door. The confession is, we dress up to impress others as much as for our own sake. If you keenly observe, that’s what apparel commercials keep telling you on the television. They have influenced your psyche and kindled your emotions so much that you are captivated in the clutches of fancy brands. They do it with just twenty seconds of commercial, crafted with brilliant words and sticky visuals. In a professional world, it is easy to ward it off as a branding exercise without realizing the innate changes it brings in our perceptions. Perhaps, many so-called cultures of the world and associated rituals are outcome of such emotional manipulations. It is easy to watch a television show beamed in the language best known to us even in a noisy household. But if you are watching an English movie, you need to be a bit more observant (For most of us Indians, English being the second language of preference, this example) and may request others to be quiet and let you focus. Does it mean that English channels are less clear than the regional channels? Definitely not. Basically we understand most part of the dialogues through a combinational effort of reading lip movements and phonetic outcome. Our brains can make a guess on the word much before the word has been completed. Construction of the sentence, sayings, idioms and phrases are so familiar to us, we do not really need to listen to the audio completely. But watching a foreign accent, with unfamiliarity to their expressions, warrants us to observe carefully before things sink into our heads. This kind of automatism does exist in every part of our lives and reflects in our day-to-day businesses as well. We carry a baggage of pre-conceived notions about the kind of personalities we deal with or the way we are sup-

TV Commercials have influenced your psyche and kindled your emotions so much that you are captivated in the clutches of fancy brands in just 20 seconds

pose to carry out the businesses. Urban rich becomes our primary target of business till someone comes with a book on “Bottom of the pyramid”. Automatism has crept into every walk of our business. The distinct advantage of automatism can be appreciated in human ability of driving a car. Driving is a spontaneous activity of humans which requires a perfect co-ordination of visual and auditory stimuli, understanding of temporal measurements and a good feel of the vehicular movement which culminates into good reflexes in controlling the vehicle on the road. Similarly the experts in a special field imbibe enormous amount of data on the subject and use them subconsciously as much as consciously to find solutions to specific problems. We can call true mentors as individuals whose right instincts are to be attributed to enormous amount of subconscious computing taking place which is difficult to be expressed on a piece of paper. They have insights which are right responses created after having understood the most probable outcome of the same or similar activity. That’s why an experienced individual finds it a cakewalk to repeat an endeavor while a novice finds it to be humungous task. Though automatism is a part of our life, we have several mechanisms to counter such behaviors. Challenging once own thoughts and deeds keeps happening in our brain’s factory. It is

left to us to constantly harness such abilities and improve upon ourselves constantly. A simple example, though derogatory on outcome, can verify this argument. All of us wish to wake up early in the morning and start our day. The alarm buzzes sincerely by 5:00 am as set by you. You wish to wake up but your body says no. You press snooze button a few times and end up waking up by 6:30. Here mainly your body was influencing your mind to postpone the most desired task of the morning. Similarly our right brain and left brain contradict and keep providing options to us to choose. This has been demonstrated, during earlier days, in patients whose left and right hemispheres use to be divided as a treatment for epilepsy. In such individuals the left and the right hand use to disagree with several tasks. It was observed that, in such split brain patients, there were incidents when the left hand picked the phone receiver, the right hand grabbed it and hanged it down! There are also constant emotional and analytical arguments in our brain between new evolved human brain and rudimentary systems left over from animals. Though emotions make ultimate decisions, they can be influenced efficiently by our analytical skills, thinking abilities, planning and decisionmaking apparatus. The more we use them, the more prolific masters we can be in our business. After years of experience, these tasks get embedded in our ‘brain’s circuitry’ enabling us to make spontaneous decisions like a seasoned pro. That’s the stage of automatism of mentors. That’s when we understand the emotions of others and start ruling them. R Dr. Hrishikesh Damle is a first generation entrepreneur. He is CEO of Atrimed, a pharmaceutical company. To write to the author, please send an email to dare@cybermedia.co.in with the subject line 'Dr. Hrishikesh Damle'. DISCLAIMER: The views expressed here are that of the author and do not represent the magazine's. DARE.CO.IN | COLUMN | SEPTEMBER 2010 35

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blogs/opinion

/Rajaram Rajendran

Meetings... Conference Calls... Yaaawn! How much time do you spend on these ?

People like fast and logical decision 36

eam meetings, briefs, objectives, problems, solutions, goals, timelines and serious discussions. But someone didn’t understand, someone misunderstood, someone didn’t get a few details. Some are silent throughout, some just sleep with eyes open. Moments of the meeting: e-mail follows. Some things are different from what was discussed. Queries, smaller group discussions, confusion, and escalation. Someone important couldn’t attend the meeting. Seperate briefing for him/her. Second meeting. Clarifications, more doubts. More time is spent about discussing the meeting outside the conference room than the meeting itself. Conference call with the team abroad. Five people dial in from five locations. Updates on weather, last project, introductions to members in the call, then jumbled words and different opinions all over. These seem to happen a lot. Most often a con-call is followed by a much clearer e-mail. Which makes the call look like a waste of time. Same with meetings. Are these the only options? Do we get into meetings when an e-mail would’ve done a job better? Especially in times where there’s no discussion involved, it’s more if information, e-mails are definitely a better option. If the decision has to be

made by a single person, a committee or a group conference never helps. It adds more confusion and the outputs mostly seem to be compromised. Unnecessary meetings and conference calls take up a lot of time. But we have a conference room. We do meet. How can meetings be better? Maybe listing the objectives before the meeting, and a checklist after the meeting? Does that really help? Perhaps setting a timeline for the meeting and ensuring all points are covered. What if the discussion goes off-topic? Should someone monitor throughout? Or do we really assess the need for a meeting and then decide? These things make a lot of difference in the way a project is handled and also the overall morale of the team. People like fast and logical decisions. If a conference doesnt give that output, we should think of alternatives. Again as always, things that work and don’t work for us might be different for your organization. Best of luck. If you want to discuss, do write in and let’s have a conference call. Lol. R The writer is an entrepreneur, designer, digital artist, wannabe musician and a jack of all, who thinks black & white photography is very cool. To write to the author, please send an email to dare@cybermedia.co.in with the subject line 'Rajaram Rajendran'. DISCLAIMER: The views expressed here are that of the author and do not represent the magazine's.

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Presents

OPPORTUNITIES IN NORTHEAST • Overview • Business Opportunities • PM’s Look East Policy • Spotlight on Government Agencies • 5 Heads of State Interviewed Janaki Ballav Patnaik, Governor of Assam Dorjee Khandu , Chief Minister, Arunachal Pradesh Dr Mukul Sangma, Chief Minister, Meghalaya Pu Lalthanhawla, Chief Minister, Mizoram Neiphiu Rio, Chief Minister, Nagaland

• Over 20 Entrepreneurs Featured • Cluster Analysis • Interview: O P Bhatt, Chairman, State Bank of India

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INTERVIEW t gives me great pleasure to know that DARE magazine is bringing out a special supplement on the SME sector in the North East. This beautiful corner of India was at the time of Independence having an enviable economic position with per capita Domestic Product much above the country average. However, over time this position got eroded considerably and the economy of the Region suffered a setback. We have come a long way since then and the North East is now poised to make a come back in the economic scenario of the country. The core strengths of the North East include hydel power, oil and gas, agro based industry and tourism. There is a large pool of educated English speaking population whose skill sets have been recognized across the country in the retail, hospitality, travel and IT enabled services sector. It is also the gateway to South East Asia. As the pioneer Bank in the North East, we have been closely associated

with the SME sector. Starting with the conventional Working capital and term financing, we now offer the full bouquet of products and services for the SME sector. As a part of our Consultancy Support to SMEs we have been catalyzing Technology Up-gradation in SME clusters in the North East through our Project Uptech with the objective of making the clusters more competitive. Among the clusters we have taken up are the bell metal industry in Hajo and the brass industry in Sarthebari. We have also been conducting Entrepreneurial Development Programmes in association with the Indian Institute of Entrepreneurship for the skill development of entrepreneurs. Our latest products which we have rolled out in the North East include Electronic platforms for Dealer and Vendor finance of industry majors, collateral free loans to Micro and Small Enterprises, and interest free loans in the form of equity assistance to set up new units. With the

O P Bhatt Chairman State Bank of India rapid increase in projects in the infrastructure sector in the North East, we are also focusing on funding viable projects. In addition, we have six dedicated SME City Credit Centres across the North East to serve as an efficient delivery platform for these services. These are backed by dedicated teams of Relationship Managers besides our Branch network of 527 Branches. We recognize that if we are to continue to be the preferred bank for Small and Medium Entrepreneurs in the North East, we have to go beyond numbers and bring customized value propositions to our SME customers. We are doing this with intense inter action with all stake holders in the North East, a task which we are uniquely placed to do, with our reach and coverage. I am sure that this issue of DARE magazine would awaken interest amongst entrepreneurs of the opportunities that exist in the North East. We look forward to serving them. R DARE.CO.IN | INTERVIEW | SEPTEMBER 2010 39

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Sun rises in the Northeast With a great deal of resolve and enterprise the hard working folks of the northeast are wiping the blood of their picture postcard homelands. Will their efforts pay off? Will they finally find a place under the sun? We find out in this feature /Shinjini Ganguli

hen you hear northeast, what comes to your mind: A brilliant picture of unspoilt natural beauty, or the hard face of a Kalashnikov-wielding ULFA gunman? For decades, the menace of militancy has bloodied popular imagination about India’s devastatingly beautiful eastern fringe, chasing both tourists and businesses away from its largely unexplored bounties. Result: despite its abundant natural wealth, the northeast remains one of the nation’s least developed regions, marked by deep pockets of despair. On almost every count of economic well-being, per capita income, employment, spending, the region lan-

guishes in the doghouse, at the bottom of the barrel. Slowly, however, the sun is beginning to break through over the eight star-struck states, as the clouds of militancy begin to blow over and India as a nation zips into an economic overdrive. Besides, with terror becoming a commonplace global phenomenon, the world is today obsessed less with sabotage and more with opportunities, particularly in virgin territories. That new-found dare, if you like, is as Indian as it is global—and it is not to be hijacked by fear. Clearly, therefore, the focus in India too is shifting from the region’s

blood-spattered history of civil strife, to its wealth of natural resources: massive reserves of coal, crude gas and minerals that lie unexplored under its verdant grounds. In these bleak economic times, when the whole world is looking east for hope and revival, can India afford to behave any differently? For an answer we need only to look at PM Manmohan Singh’s recently unveiled Look East Policy, a document that charts out an elaborate road map for propelling the resource-rich region to an orbit of rapid growth. Even regardless of the Look East policy, the traditionally snoozy air around the northeast is beginning

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to crackle with new-found energy, a bracing buzz of confidence as communities, entrepreneurs, NGOs and government bodies collaborate to help its literate, industrious but woefully poor people to get on their feet and run, if not alone then in clusters (See: Together They Profit). Says an enthusiastic Prodip Borah: “I started my business in 1980 when the Assam agitation was in full swing but the state today is way more peaceful with the cases of insurgency led violence becoming a relative rarity. There isn’t a thing now that can stop investments from coming in.” Many in fact say, with some justification, that Imphal today is no more a dangerous a place than say Delhi or Mumbai. This new-found feeling of “wecan-win” is catching fast, helped along, no doubt, by a slew of government schemes, incentives and policies designed to fire up investments and business in the region. The union government plans to invest a massive `50,000 crores on just building roads in the region over the next five years! This is in addition to plans that could transform connectivity all over the northeast, across all modes: air, rail, road and telecom. Then there are several juicy sops that make investing in the region a mouth-watering proposition. Sure, there is a huge downside to all this. Be it the length of its creaky road network, airports, or hotel rooms, the northeast is woefully underserved,

and lags far behind national averages. Just take roads for example. The NER has about 282456 km of roads, which on the face of it, is certainly not bad. The northeast makes up only about 8 per cent of the country’s total area and yet has 10 per cent of its roads. Exceptional! But here is the reality: Assam alone accounts for 68 per cent of all the roads in the northeast! The scenario is just as bad when it comes to banks, telephony, hospitals or railways: The northeast, in one word, is underserved. But that is precisely why we ought to be excited: there is so much to do out there, such massive opportunities to capitalize on ((See: Peaks of Opportunity...). There are roads, hotels, hospitals, power plants, airports, factories and everything else you can imagine to be built on unimaginable scales. What will all this be worth as a business opportunity? Start counting. Or, better still start investing. Look at just one state at a time to get something like a realistic idea of what lies ahead. Arunachal Pradesh has the potential to produce over 50,000 MW of hydel power, which is a good 25 per cent of all the energy the nation aims to generate by 2020. And guess what the entire northeast currently generates: a little over 2000 MW! In other words, if the region were to get anywhere close to realizing its gargantuan potential, the business will be worth many countless billions of dollars.

Indeed, northeast observers are just as breathless about the dozens of medium and small scale units that are likely to burst into life in the wake of those giant power and steel plants, feeding on their spin-offs. The opportunity is massive for players in a whole range of sectors from packaging and petrochemicals. And this is just power, and only Arunachal Pradesh. What about the fabled tea gardens of Assam and Darjeeling? The floating lake of Manipur that harbours the world’s only mid-water wild-life sanctuary? And the massive reserves of coal, limestone and uranium in Meghalaya...the list is endless and so are the opportunities. Nowhere are these opportunities more promising than in the region’s budding micro, small and medium scale (MSME) sector, that finds a special mention in the Look East policy and now has the backing of a dedicated task force (see: On the drawing “bored”). Still, it is clear that the road ahead for the northeast remains uphill and at places treacherous. There are painful memories to erase and many bridges to be built before the eight states of the region can hope to move as one. But amidst all the historic worries and a painful legacy of social unrest, it will be safe to say that beautiful northeast is finally beginning to break out of the shadows of isolation and finding a place for itself in the sun. There are brave-hearts out there making those rockets—-we met them. R

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Peaks of Opportunity

in Valleys of Doom /Shinjini Ganguli

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n the beguiling thrall of the northeast region (NER), giant mountains romance happily with lush tea gardens, sleepy meadows, aromatic plants and bright little cottages. Yet, the imagery is hardly picture perfect. Say northeast and the mind instantly convulses to a whirl of nasty pictures—of militancy, bloodshed and social tumult. But things are changing. Like many remote outposts, the northeast too is waking up from its slumber and tapping to the scorching beats of a nation in tearing hurry. Result: opportunities for enterprises are beginning to spring everywhere—tourism, hospitality, power, horticulture, agriculture, petrochemicals... This is because, the region, a universally recognized “bio-diversity hotspot“ (54 per cent of the region is forest land), is blessed with extraordinary natural advantages: 1. Picture-postcard environs, ideal for the tourism industry 2. Forests full of rare forms of flaura, fauna, exotic plants and herbs 3. Perennial rivers with huge potential for hydel power generation 4. Massive hydrocarbon reserves, enough to fire a small industrial revolution 5. Strategic location: the NER shares 98% of its border with five South Asian countries—Nepal, Bhutan, China, Myanmar and Bangladesh. Plus, it serves as a strategic gateway to the economic powerhouses of Southeast Asia In addition to those godsends, the population of the region is among the most enlightened in the country, with literacy rates of nearly 70 per cent. In other words, the NER is brimming with opportunities. But how much. of this has actually been realized? Indeed, very little. This much is clear from the fact that the NER languishes pretty much at the bottom of the heap on key socio-economic indicators. Its per capita income at `6625 is well below the

national standard of `10254. Similarly, more than 34 per cent of its population lives under the poverty line as against the countrywide average of 26 per cent. Finally against a potential of 63, 257 MW of hydel power, the total installed power capacity in the region is a pitiable 2600 MW. But precisely because the territory has been such a snail all these years, the prospects for the future are alluring, as the eight states begin their long haul of reconstruction and hope. There are roads, power plants, hotels, horticulture hubs, packaging factories, refineries and so much more to be built. All at a frenetic pace and on unprecedented scales. Just for example, the road and rail density in NER are just 395 km and 10.9 km per thousand sq km respectively against all-India averages of 839 and 395 km. Says Santosh Jaiswal who owns the `200 crore Biscon Steel Industries: “With insurgency on the retreat, this is the right time to invest in the region." Other than steel, Jaiswal is looking to diversify into tourism, which he believes will be the big story of the future. There are many business leaders who agree with Jaiswal’s analysis. Says Mizoram R L Rinawma, Commissioner/ Secretary, Government of Mizoram, “There are new opportunities for investors opening up beyond the traditional areas of crude oil, bamboo and coal. Each of the nu-

“There are new opportunities for investors opening up beyond the traditional areas of crude oil, bamboo and coal. Each of the numerous deficiencies in the state particularly in the infrastructure sector translates into a mouthwatering opportunity” — R L Rinawma Commissioner/ Secretary, Govt. of Mizoram

merous deficiencies in the state particularly in the infrastructure sector translates into a mouthwatering opportunity."

Opportunities: The Big 3 1. Tourism With all its natural oomph, one would have expected the NER to be among the hottest destinations in the country’s tourism circuit, which ranks 11th in the Asia Pacific and 62nd overall as per the World Economic Forum’s Travel and Tourism Competitiveness Report, 2009. But, with the picture postcard blotted by infrastructural glitches and an unfriendly image, the region remains a fringe player at best: in 2009 it received just 51 lakh tourists against a national figure of 6637 lakh. Independent studies suggest that this figure could easily quadruple in the next five years subject to a massive ramp up of tourism infrastructure, including the road-rail network, airports and hotels backed by effective marketing. The image of the northeast as a dangerous place stalked by gun toting militants has to change. Strengths: Natural beauty; strategic location; unique features like the famous tea gardens of Assam and Darjeeling and the world-renowned largest freshwater lake in Manipur with its unique floating wildlife sanctuary—the only one of its kind on earth. Weaknesses: Poor infrastructure; un-friendly image; non-existent marketing. Opportunities: Hotels, resorts, airports, roads, infrastructure for adventure sports like trekking and mountaineering and entertainment malls. Hopeful signs: Government plans to invest about `50000 crores on roads in the region over the next five years. 2. HYDRO-POWER With 75 per cent of the nation’s coal reserves and huge hydro potential (over 60,000 megawatts), the NER clearly has the muscle to become the DARE.CO.IN | OPPORTUNITY | SEPTEMBER 2010 43

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nation’s numero uno powerhouse. India currently has an installed capacity of around 170,000 MW (July 2009). But according to planning commission estimates it will need to ramp that up to 1200 GW by 2020 to sustain its giddy economic growth translating into USD 600 billion of investments. Roughly, one-third of that figure could flow into the northeast. Strengths: Massive hydropower potential and huge reserves of coal, crude and other minerals. Weaknesses: Poor infrastructure; inclement weather; difficult terrain; scanty hydrological data; problems in land acquisition and clearances and contentious border-related issues both interstate and international. Opportunities: Hydel and thermal power plants. Positive signals: The government’s Hydro policy 2008 targets a multi-pronged strategy to promote investments in power: a) Qualifying threshold for special benefits lowered to 350 MW from national level of 500 MW. b) Raft of subsidies and tax waivers on cost of infrastructure, transport and power. The entire region declared SEZ. c) Even power plants generating 10 MW on both conventional and non-conventional fuels eligible for capital investment subsidy, interest subsidy and comprehensive insurance. Broad Figures Area: 262179 sq.kms., 7.9 per cent of the country’s total landmass Population: 39 million Density of population: 148 per sq. km. against the national average of 324 States of Potential Power (Figures in MW) Meghalaya- 2394 Arunachal- 50,328 Sikkim- 4286 Others- 6249 44

Capacity Yet to be Developed 100%

93.78%

91.12%

85.99%

80% 60% 39.15%

40% 20% 0% Meghalaya

Arunachal

Sikkim

Others

Capacity Yet to be Developed Source: CEA, 2009

3. MINERAL RESOURCES The NER is blessed with abundant reserves of minerals like coal, petroleum crude, natural gas, lime stone, dolomite and uranium. Assam boasts of reserves over 1.3 billion tonnes of crude oil and 156 billion cubic metres of natural gas. In all, the region is a repository of about 23,000 million cubic meters of natural gas. According to ONGC’s exploration studies, the NER has a production potential of 3.5 million cubic meters of gas per day. The total validated reserves of crude in the NER as of now are estimated at 158 million tonnes. This, however, is excluding the unexplored fields in Mizoram, which experts believe, could yield 170 million metric tonnes of crude, turning the region into a Kuwait of the North East. The sheer range and abundance of natural resources, opens outstanding opportunities for a whole range of small and big businesses. For instance, the `5,460.61-crore Assam Gas Cracker project, at Dibrugarh,

“With insurgency on the retreat, this is the right time to invest in the region” — Santosh Jaiswal MD, BISCON

Assam, is expected to trigger massive growth in sectors like packaging and textiles across the NER. According to the Central Institute of Plastic Engineering and Technology, 500 plastic processing industries will come up in the region once the plant goes on stream in 2011. Strengths: Massive reserves of a range of minerals from crude and gas to coal and dolomite. Weaknesses: Huge investments required; deficient infrastructure; acquiring land and clearances still a headache. Plus, lack of skilled labourer Opportunities: Power plants, refineries, plastic and packaging units, textiles Positive signals: Investors eligible to 100% income tax exemption, capital investment subsidy, interest subsidy and comprehensive insurance.

Watch out for... Mizoram: Port The upcoming Switte port, connecting Mizoram to the Bay of Bengal through Myanmar, will provide the region easy access to its immediate eastern neighbours. Nagaland: Year of Entrepreneur The government of Nagaland has declared 2010-11 as the ‚‘Year of the Entrepreneur‘, the thrust being on encouraging gainful self-employment. Arunachal Pradesh: Hydropower boom The state has identified 135 hydro electric projects with a potential of 57,002.50 MW, of which it has signed off 72 HEPs with a potential of 25,722.50 MW to CPSUs and private developers. Assam: Assam Gas Cracker project The `5,460.61-crore Assam Gas Cracker project in Dibrugarh, Assam, will support a gamut of downstream enterprises like packaging, textiles and agriculture from 2011. R

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Per Capita Income of NE States (in Crores) States

Per Capita NSDP (Current Prices) 2007-2008 2008-2009 Arunachal Pradesh 28945 33302 Assam 21991 23993 Manipur 19780 21062 Meghalaya 29811 33674 Mizoram 27501 29576 Nagaland NA NA Sikkim 33349 37553 Tripura 28806 NA Average NSDP of NER 27169 29860 India’s NNP Per Capita 33283 37490 NER GDP % of India’s GDP 0.82 0.80 Source: Central Statistical Organisation (As on 12-04-2010) and RBI reports

% Growth over previous year 2007-2008 2008-2009 12.55 15.05 8.9 9.1 6.17 6.48 12.98 12.96 7.08 7.55 NA NA 11.84 12.61 3.56 NA

Micro Finance sanctioned and disbursed by NEDFI (as on March 31, 2009) (Amount in Rs. Lakh) Amount Sanctioned Amount Disbursed No. of Projects Assisted No. of Groups/SHGs/JLGs No. of Benefi ciaries No. of Women Beneficiaries No. of SC/ST Beneficiaries

FY 2007-08 1216 673 11 3285 20868 17056 6920

FY 2008-09 1510 1229 20 3147 23638 21253 6825

Cumulative as on 31 Mar 09 5073 3860 373 10177 83367 60247 28990

Source: NEDFi

Gross State Domestic Product at Current Prices States Arunachal Pradesh Assam Manipur Meghalaya Mizoram Nagaland Sikkim Tripura Total Northeast India’s GDP NER GDP % of India’s GDP

GSDP (Current Prices) 2007-2008 2008-2009 3888 4536 71625 79277 5848 6344 8472 9611 3305 3663 NA NA 2298 2612 10821 NA 106257 106043 4320892 4933183 2.46 2.15

(in Crores) % Growth over previous year 2007-2008 2008-2009 13.92 16.67 11.17 10.68 8.24 8.48 15.58 13.44 10.31 10.83 NA NA 12.7 13.66 4.83 NA 11.11 14.33 14.17

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On the drawing

“bored” Several policies and schemes are aiming to boost the growth of micro, small and medium enterprises in the north-east, but lack of efficient implementation could spoil the show /Shradha Mohanty

epresenting eight per cent of the nation’s ballooning GDP, the micro, small and medium enterprises (MSME) sector forms an important chapter in the “Great Indian Growth Story,” a compelling page-turner that’s selling fast around the world. The sector, therefore, hogs a great deal of attention. There are multiple schemes and programmes fashioned by various organizations to optimize its efficiency and to give it a global outlook. In the north-eastern region (NER), in particular, such schemes are not only bringing about social and economic development, they are also encouraging creativity and innovation on a large scale. Prime Minister Dr Manmohan Singh’s Look East policy placed special emphasis on speedy development in the northeastern states of Assam, Meghalaya, Mizoram, Manipur, Nagaland, Tripura, Arunachal Pradesh and Sikkim. Dr Singh is himself a Rajya Sabha member from Assam and has always taken keen interest in the economic and social development of the region. In February 2010, an MSME meet

with a special focus on NER was organised in Guwahati by the Chamber of Small Industry Associations (COSIA), with support from the central Ministry of Micro, Small and Medium Enterprises and in association with North Eastern Small Scale Industries Association (NESSIA). The purpose of the meet was to discuss how various government policy provisions, including those of the Look East policy, could be dovetailed into an effective strategy to make enterprises in NER globally competitive. At the Guwahati meet, President of COSIA M.R. Khambete put forth the idea of forming a COSIA taskforce to assist the MSME community in the region. The handicaps the community faces are unavailability of finance and infrastructural facilities. A more worrying problem is that some 85 per cent of the units in the region are not registered, which makes it difficult to frame and implement schemes for them. All these issues were discussed at the meet. A specific taskforce was set up in September 2009, under the chairmanship of the principal secretary to

the Prime Minister to address the issues of the MSME sector such as lack of credit, high cost of credit, procurement of raw materials, inadequate infrastructure and lack of technology. The taskforce has created a subsidiary group to look into the development of MSMEs in the Northeast in particular. The issues the sub-group is taking up on an immediate basis are: getting the government to make available the components of the stimulus package specific to MSMEs by another year as of 31 March 2010; getting all scheduled commercial banks to achieve a 20 per cent year-on-year growth in credit to micro and small enterprises to ensure enhanced credit flow; and, utilising the Small Industries Development Bank of India’s (SIDBI) Special Fund for Micro Enterprises for loans to micro enterprises. “Institutions established by the government are helping the MSMEs,” says Ravi Capoor, Commissioner & Secretary, Industries and Commerce, Assam. Capoor reveals that they are in the process of announcing a price preference policy under the Micro, Small and Medium Enterprises De-

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velopment (MSMED) Act, 2006. He says small and medium enterprises will get 10 per cent and 5 per cent protection, respectively. And if a micro enterprise expands its business and becomes big, it will receive 15 per cent price protection. “The Northeast received its main thrust after 1997 with the North-east Industrial Policy (NEIP), through which we got sale taxes exemptions, central or excise exemptions, and many other such incentives,” says Santosh Jaiswal, an entrepreneur in the steel sector. The Federation of Industries and Commerce of North East Region (FINER), an apex industry association for trade, commerce and industry, played a huge role in shaping the Northeast Industrial Policy (NEIP) 1997. FINER Chairman R S Joshi says, “The government of India looked into the concerns raised by us and a new policy — the Northeast Industrial and Investment Promotion Policy (NEIPP) — was announced because we had been constantly pressing the Central government. Earlier, we had NEIP 1997. Now we have the NEIIPP 2007, which has been extended for a period of ten years.” The NEIIPP 2007 offered various benefits to the MSME sector. Some of these are: • All units that would go into expansion/commercial production within the ten year period from the date of notification of the policy were eligible for incentives for a period of ten years. • The distinction between 'thrust' and 'non-thrust' industries made in the NEIP 1997 was discontinued. • 100 per cent income tax exemption was to be provided • Capital investment subsidy was enhanced from 15 per cent of the investment in plant and machinery to 30 per cent. • Sikkim was included under the policy.

Abhijit Barooah, former Chairman of Confederation of Indian Industry (CII), which plays a big role in bringing about MSME development in the region, says, “The NEIIPP offers very good incentives for entrepreneurs to set up industries.” As a result, the sector has seen a good number of investments in the last two years. The NEIIPP 2007 has made it attractive for entrepreneurs to set up manufacturing industries to cater to the local market. Another entrepreneur, Bidhan Deb, who has set up a printing and binding business in Guwahati, says government policies have become more transparent and this has helped industries from other parts of the country to divert their attention to the Northeast. “Business organizations have established their businesses here which need to print stationery. That way, we are able to procure our raw material from source,” he explains. Till ten years ago, the market for multicolour printing was small, so the process of acquiring raw material was an expensive affair. In all this euphoria, B L Agrawala , President, All Assam Small Industries Associations (AASIA) strikes a note of discord: “The NEIIPP is not rel-

In the services sector, according to the Act, a micro enterprise is one that has not invested more than `10 lakh in equipment; a small enterprise is one that has invested more than `10 lakh, but less than `2 crore in equipment; and a medium enterprise is one that has invested more than `2 crore, but less than `5 crore in equipment. In the manufacturing sector, under the Act, a micro enterprise is one that has invested less than `25 lakh in plant and machinery; a small enterprise, one that has invested more than `25 lakh and less than `5 crore in plant and machinery; and a medium enterprise, one that has invested more than `5 crore and less than `10 crore in plant and machinery.

evant to the Northeast. Micro units should not have been clubbed with small and medium enterprises in the MSMED Act,” he asserts. In his view, it is necessary for governments to craft policies customized for the very unique needs of micro outfits, starting with simplified procedures. AASIA is a non-governmental organization, which aims to create clusters in the Northeast and involve the government both for providing financial support and region specific technology. Referring to the NEIIPP 2007, FINER Chairman Joshi adds, “See, in the case of the Northeast, people are always apprehensive about whether they will receive the committed benefits of a ten-year policy all through the ten years.” Mr Barooah says, “Right now, I think the policies are okay and we have whatever support is required. Of course, there is always scope for improvement on the implementation front.” Implementation remains the Achilles Heel in the region—the main reason why the benefits of the Look East policy are not percolating through. Special attention still needs to be paid to getting transport subsidies, tax exemption and financial assistance to micro and small enterprises in a simple and transparent manner. The MSME associations of the area need to be made aware of the implementation process and periodic meetings ought to be held with these associations to ensure proper delivery of concessions and incentives.

An Act of Enterprise The MSMED Act, 2006, helped to bring about a clear distinction between an ‘industry’ and an ‘enterprise’. Before this Act was passed, an entrepreneur had to go through the Small Scale Industry Registration process for his enterprise. But now, all he has to do is file an Entrepreneur Memorandum and get an acknowledgment. R DARE.CO.IN | MSME PLANS | SEPTEMBER 2010 47

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Photo: V Sudershan/THE HINDU

INTERVIEW

Shri Neiphiu Rio Chief Minister Government of Nagaland /Shinjini Ganguli

he year 2010 is declared as the “Year of the Entrepreneur.” What does this year long project entail? In Nagaland, the dependence on the State Government as an employment provider has been more a rule than an exception with almost the entire populace dependent on Government salary earners. The ratio of Government employees to population is among the highest in Nagaland and

the capacity of the Government has been stretched to the limit. The situation could only be changed with gainful and meaningful engagement of the local youth in self-employed trades and activities. In fact, development and growth of entrepreneurship would not only translate into economic growth and creation of income, it would also see the emergence of a new generation of entrepreneurs.

So in an effort to generate self-employment avenues, the State Government declared 2010-11 as the "Year of the Entrepreneur”. Launched on April 30, 2010 at Mokokchung, the year long project would entail, among others, the following major areas of focus: • Identification of areas or scope for development of enterprenuers in the State • Creating, enabling environment

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for promotion of enterprenuership in the State. • Organizing training and capacity building programmes from potential enterprenuers • Working out a calendar of activities at the State, Disctrict and Block levels to highlight the potentials of enterprises and enterprenuers. • Indentification and promotion of successful enterprenuers and instituting Recognition and Awards to such enterprenuers. What business opportunities does Nagaland offer to the rest of the country? Nagaland has huge scope in tourism. It was, in fact, awarded ‘India’s most Picturesque destination of the year 2008’ at the 11th Today’s Traveler’s Platinum Award. But despite the potential, the tourism industry isn’t flourishing as the PAP (Protected Area Permit) is still in force in most of the States and little is being done to revoke or relax these restrictions. It, therefore, remains a major deterrent for the tourists, as well as potential investors. The agriculture and allied sectors in Nagaland offer good inputs for development of a host of industries. Almost all agro-horticultural products in the state are grown ‘chemicalfree’. In order to make Nagaland a totally Organic State, the Government of Nagaland has adopted the Nagaland State Policy for Organic Cultivation. And the hill section of the state has already been declared organic zone. Nagaland has achieved remarkable progress in development of horticulture particularly in the field of fruits like Passion Fruit, Pineapples and Oranges. The Technology Mission has helped in increasing production manifold. Our flower production has crossed 1.6 million stems of high quality flowers such as Anthurium, Roses, Carnation and Lilium.

However, in the absence of processing units and marketing linkages, most of the produce is marketed locally leading to surplus and wastage. Medicinal and Aromatic Plants and herbs are found in abundance. Patchouli, Lemon Grass, Aloe vera, Geranium, Citronella, etc. are being successfully cultivated. Ginseng, a valuable medicinal herb is also available in Nagaland. We also produce Turmeric which has curcumin content of over 9 per cent. Nagaland is rich in forest produces such as timber, cane and bamboo. The development of bamboo, another of Nagaland’s rich resource, is taking off at a very fast rate. Great opportunities are emerging in this sector, especially in the backdrop of global warming and climate change. Our target for bamboo cultivation is 50,000 hectares by 2012. Our rich mineral resources still lie largely untapped. The exploration and exploitation of oil have just begun, while the mountains of chemical grade limestone, the huge reserves of coal, marble and decorative stones along with the magnetite of nickel-cobalt-chromium are waiting for commercial exploitation. With highly literate youth, which is tech-savvy as well, there are tremendous opportunities in the IT & ITES sector for us. Complemented with the salubrious climatic conditions and pollution free environment, healthcare is another sector that offers tremendous investment opportunity. Out of two Special Economic Zones (SEZ) approved to be set up in Nagaland, plots are already available for takers at the 50 hectare Agro & Food Processing SEZ, which is developed by Nagaland Industrial Development Corporation (NIDC). It is the commitment of the Government of Nagaland to facilitate rapid and sustained industrial development in the State through enhanced investment opportunities, an investor

friendly environment, provision of infrastructure and institutional support, attractive incentive package and optimum utilization of existing resources in order to gainfully exploit emerging opportunities in the national and international markets. What incentives does the state offer to investors? The State Industrial Policy provides the following incentives so as to make setting up of industrial units in the State more attractive and viable: • Power subsidy: Reimbursement of 25% to 30% of power cost. • Cost of drawal of power upto a ceiling of Rs 2.00 lakh. • 50% Subsidy for Feasibility Study Cost. • 25% Manpower Subsidy • Special incentives for 100% Export Oriented Units(EOU). • Subsidy for Quality Control measures • Sales tax exemption • 50% Stamo duty exemption • 15% Price opreference & exemption of Earnest Money Deposit Does the Govt have any immediate plans to exploit the emerging market opportunities in the neighbouring countries? The State Government has been participating in a number of trade meets and events in the neighbouring countries such as Thailand, Vietnam, Myanmar, South Korea and Bangladesh promoting and highlighting the potential of the State and inviting investors to invest and set up industries & businesses in the State. Buyer-seller meets and meetings have also been organized in the State with delegations from some of these countries. Some entrepreneurs from the State have already established business contacts and are exploring possibilities of trade with their counterparts from the abovementioned countries. R DARE.CO.IN | INTERVIEW | SEPTEMBER 2010 49

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INTERVIEW

Shri Janaki Ballav Patnaik Governor of Assam /Shinjini Ganguli

SEPTEMBER 2010 | INTERVIEW | DARE.CO.IN

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hat makes Assam attractive to investors? Assam was the first state in the Northeast to attract business from all over the country. For instance tea was first discovered in Assam. And today, a significant amount of the total tea production in the world is produced in Assam. In fact, it is one of the major industries of the country today. Since the time when oil was discovered in Assam for the first time in 1889 at Digboi in Tinsukia district, it has been the reason for the existence of several small and large businesses. It has been a roaring business ever since. Besides tea and oil, Assam has large reserves of coal too. The State is said to contain about 1200 million tonnes of coal reserves. The entire coal in this region is unique in the sense that it is highly volatile (36 per cent – 42 per cent), has low ash content (3 per cent – 15 per cent) and possesses high crackling index (10 per cent – 29 per cent). The state is also one of the favorite destinations for tourists. We have river tourism, wild life tourism, cultural tourism, etc. Tourists, particularly, come to Assam to visit Kaziranga where rhinos and tigers are a common sight.

Apart from the above-mentioned industries, we have handicrafts. Assam’s handloom and handicrafts are much in demand. However, handloom and handicrafts are not large or medium scale industries, they are mostly small and micro enterprises. These enterprises also generate a lot of employment opportunities especially for women. Lastly, the most important sector is agriculture. There is immense potential in the agricultural sector given the fact that the state is endowed with the very rich Brahmaputra, which can be used for irrigation purposes. The land is good for agriculture, horticulture, floriculture, etc. I consider that agriculture should be declared as an industry not only for Assam but for the entire country because there is immense possibility for agricultural growth How is the government promoting entrepreneurship in the state? Government has an industrial development policy in place to take care of the needs of entrepreneurs. In fact, this year we had organized for an industrial meet, wherein we had invited industrialists from all over the country. The Chief Minister personally educated them on the opportunities and prospects of the re-

gion. All top-notch companies like TATA, Reliance, etc. had participated in the meet. What incentives does the state provide to investors from outside Assam? The most important thing that we provide is peace. Assam is no-more how it used to be. The cases of conflict and unrest in the state are on a gradual decline. It is as safe as any other part of the country. There is no reason for investors to think twice before investing here. The state is way peaceful now. What are the prospects for MSME sector in Assam? I would say, there is lot of scope for MSMEs in the state. The state is basically driven by the MSME sector. We don’t have many large enterprises, except for a few public sectors. And it is very recently that large sectors have entered the state. We are basically an MSME economy at the moment. But, certainly, there is ample scope for large industries. Do you think cluster approach helps in inducing entrepreneurship? Sure, it does, which is exactly why we are taking necessary steps to promote clusters in our state. R

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INTERVIEW

Dr Mukul Sangma Chief Minister Government of Meghalaya /Shinjini Ganguli

SEPTEMBER 2010 | INTERVIEW | DARE.CO.IN

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hat are the investments opportunities for the MSMEs in Meghalaya? As far as Meghalaya is concerened, there are various sectors that provide investment opportunities. The first and foremost sector which can generate a lot of ancillary activities for the MSME sector is agro-horticulture sector. We produce a variety of agro-products in our state. The famous Lakadong variety of turmeric, which is known to have the highest percentage of curcumin, is one of our specialities. We also produce both fibrous as well as non fibrous varities of ginger. However, due to lack of industries, the raw materials produced here are bought and transported elsewhere for conversion into finished products. This adds on to the cost of the raw material, resulting in inflated prices. The process could, however, be cut short and customers could benefit, if the investors decide to invest in the region where the production takes place. There’s lot of scope for value addition units. In fact, depending on the absorption capacity of value-addition units coming up, the production could also increase. We produce several types and species of fruits. Garo Hills is the number one producer of cashew nut. It, in fact, is the only so called district to have substantial production of cashew nuts. The cashew produced here has a natural sweet taste, we needn’t sweeten it. Apart from cahew nut, we have a variety of citrus fruits, bamboos, etc. Meghalaya also has significant potential in pisciculture. Today, the fish that is consumed in the state is imported from West Bengal or Andhra Pradesh, which essentially means that

the avenue hasn’t been tapped yet. Therefore, we are focusing on promoting fish development. We will conduct certain fish production programs wherein the small and marginal farmers will be the targeted groups. Under such programs, we’ll encourage farmers to breed fish in those areas considered appropriate for construction of fish farms. We have also planned some capacity training programs for farmers that will educate them about new technologies. This will help increase the production manifold. And if the production exceeds demands, the surplus could be used for value addition. What keeps Meghalaya from becoming the agro capital of the region? Honestly speaking, agriculture is often considered as something which is left to the less privileged people. It isn’t as attractive as IT or petroleum. For promoting the sector, it is important to attract the younger generation and the educated lot. If you look at Netherlands, the country has sensibly utilised its immediate available area of cultivable land, its human force and available technology. And today, they stand second to the US, the number one exporter of agricultural products in the world. The younger generation doesn’t find the agricultural sector lucrative enough. But I’ll give you an example here. On an average, we produce about 20-25 kg capsicum per sq meter. And on a average field size of 600 sq meter, the normal production would be around 12,000 to 15,000 kg. At the standard market price of Rs 40-50, the total production would fetch anywhere between Rs. 4,80,000- 7,50,000. So, don’t you think that’s lucrative enough!

Which are the three top sectors for investment in Meghalaya, apart from agro-horticulture sector? Health, education, and hospitality are looking really bright. If we blend these three sectors together as far as Meghalaya is concerned I am sure others things will just fall in line. Say for instance, there are no decent restuarants or roadside cafés in the entire stretch between Guwahati and Shillong. This could be seen as an oppotunity. Oppotunities are in abundance, what is needed is a pool of local talent. So, that investors interested in opening up a food industry or restuarant, can easily find trained people. Are investors outside NER welcome to exploit the business oppotunities? Certainly, they are. We have a vibrant industrial policy which welcomes outsiders. In foreign projects (set up by investors from outside NER), however, we encourage the participation of locals. by having one local director or local partner wherever possible. How are you promoting entrepreneurship within the state? We are conducting several entrepreneurship development programscum-seminars. We are involving the youths in these programs as that will help them identify the areas of opportunity and gain knowledge in the same. And since there is immense scope in the horticulture sector, we are imparting training on how to use technology for horticultue so as to reap maximum benefits from the minimum available resources. R DARE.CO.IN | INTERVIEW | SEPTEMBER 2010 53

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INTERVIEW

Shri Pu Lalthanhawla Chief Minister Government of Mizoram /Shinjini Ganguli

SEPTEMBER 2010 | INTERVIEW | DARE.CO.IN

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hat are the various investment opportunities in the state? Bamboo is the biggest resource we have. With one of the best qualities of bamboo, we can have various bamboo-based industries in the state. Some big names in the market have approached us and have offered to start paper mills and bamboo chipping industries. The local people are also making good use of bamboo. They have invented a machine to make incense sticks. The second most important resource available with the state is educated youth. Mizoramâ&#x20AC;&#x2122;s literacy rate is 94 plus, which is commendable. Investors can tap the largely educated human resource in the state. We are also encouraging our youth for self-employment. The state produces strawberries, grapes, pineapples, passion fruit, etc. in large quantities. Investments could be made in food processing, contract farming, etc. While only a few wineries are operating in the state, there is a plenty of scope wich means many more can come up. Particularly, the MSME entrepreneurs will gain by way of providing raw material and sale of the produce. Also, there is scope in poultry farming and cattle rearing.

Despite being a beautiful state, why hasnâ&#x20AC;&#x2122;t eco-tourism taken off in Mizoram? Infrastructure - lack of it has been a major hindrance. We have one airfield at Lengpui and flights are more often than not, erratic. We have a National Highway 54 coming from Silchar in Cachar, Assam. This is not up to the mark. Proposal for 4-laning is going on, but the pace has been somewhat

tardy. The National Highway Authority has suggested a PPP mode in its implementation. But there are few takers as the traffic flow is not enough for attracting investors. Rail connectivity is also yet to be developed. How will the upcoming Switte port change the trade scenario in the state? This is one good investment being made by India, albeit a little late. We are told China is making a lot of investment forays into Myanmar already! With our improving equation with our neighbors in the eastern sector, the development of Sittwe port will definitely open up new areas for trade with Myanmar and Bangladesh. We all know how richly endowed Myanmar is in terms of oil and gas and other natural resources including timber so we must also tap the potential. What are the industries that will be positively impacted from this step? Almost all the industries would gain - the energy sector, agriculture and overall trade. Entrepreneurship and skill development through the Entrepreneurship Development Program of the Government of India can play a big role. MSMEs are complementary to large industries as ancillary units and contribute enormously to the socio-economic development of the country. It is well established that the Micro, Small and Medium Enterprises (MSMEs) sector has emerged as a highly vibrant and dynamic sector of the Indian economy over the years. MSMEs not only play crucial role in providing large employment opportunities at comparatively lower capital cost than large industries but also help in industrialization of rural and backward areas, thereby, reducing

regional imbalances, assuring more equitable distribution of national income and wealth. What are the major obstacles that have hindered the progress of MSMEs in this region? Lack of awareness is one, and another is the outreach of financial institutions. We have more than a 100 bank branches in the State but their rural outreach (Other than SBI) is almost NIL - sorry to say this. So the very FINANCIAL INCLUSION envisaged in the 11th Plan is still a far cry for the entrepreneurs of Mizoram. In addition, some banks do not provide COLLATERAL-FREE LOANS to the Entrepreneurs in spite of RBI guidelines. We all need to work on MUTUAL TRUST. This includes our commercial and nationalized banks. What incentives does the government provide to local entrepreneurs? If you look at our Industrial Policy, a lot of incentives are available for the local entrepreneurs. We have the Investment Subsidies for making a level playing field for the locals to start with. What is required is dedication and commitment. What future plans does the government have in place to promote MSMEs? As I have just said, government is the biggest employer in Mizoram. However, it has become quite unmanageable in recent years and we may have to adopt DOWNSIZING just like everybody else. In such a scenario, government has to promote the development of micro and small enterprises with the objective of creating self-employment opportunities and upgrading the relevant skills of existing and potential entrepreneurs. R DARE.CO.IN | INTERVIEW | SEPTEMBER 2010 63

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INTERVIEW

Shri Dorjee Khandu Chief Minister Government of Arunachal Pradesh /Shinjini Ganguli & Nimesh Sharma

hat investment opportunities does the state hold for non-resident investors? To attract more investors in the state, an investor friendly State Industrial Policy 2008 was launched. The Highlight of the State Industrial Policy 2008: • Investors will be encouraged to invest in the state with 100% equity ownership for a period of 50 years by the end of which such equity holding shall be reviewed if considered necessary to do so. • Outside investors shall be allowed to hold land on lease for a period of 50 years, after which the lease may be renewed further.

• State government shall provide 99% Sale Tax (VAT)/EntryTax exemption for Industries in case of entry of Plant & Machineries, raw materials and sales of finished products in the local market for a period of 7 years. • Liberalization of the issue of Trade License. • 80% exemption on Stamp Duty • Special Incentives for Food Processing Industries as additional State Capital Investment subsidy @ 20%. • Priority clearance for setting up of Large/Heavy Enterprises. In addition to the above State Fiscal Incentives, the State Govern-

ment extends the following incentives under North East Industrial & Investment Promotion Policy 2007 (NEIIPP). • 90% Transport Subsidy (for raw & finished Goods) • 30% Capital Investment Subsidy • 3% Interest Subsidy on Work Capital • 100 % comprehensive Insurance Scheme • Tax Holiday in case of Excise Duty and Income Tax etc. Infrastructural Support to the investors with nominal Lease Rent: • 13 Industrial Estate and areas in various district of Arunachal Pradesh.

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• One Industrial Growth Centre at East Siang. • An Integrated Infrastructure Development Centre is coming up at West Siang district for MSME. Which are the booming sectors in the region? Hydro Power, Tourism, Mineral, Horticulture, Agriculture, Food Processing, Industries based on non-timber forest produce: bamboo, cane, medicinal plants/herbs, aromatic grass, tea, etc. are some of the sectors that are doing well. What is the scope of investment for MSMEs in the power sector? The Investment opportunities in Power Sector are: • Small hydropower capacity upto 10-20 MW. (Can avail central/ state fiscal jncentives) • Captive Power Projects. • Engineering and Allied Industries (Rolling Mill, Steel etc) • Cement Manufacturing Industries • Ceramic Insulators Industries for MSMEs like High Tension Insulators (Eg: Pin Insulator, Disc Insulator, Post Insulators) • Cable Manufacturing Industries • Transformer Manufacturing Industries.

How big is the Tourism Industry in the State? And what are its future prospects? The State has tremendous potential in tourism, especially in adventure and eco-tourism. It has a number of wildlife sanctuaries and national parks. The sector opens up the following investment opportunities• Star Hotels, Budget Hotels, Lodge • Construction and management of Tourist Resorts • Transport services like Helicopters, small air-craft luxury buses • Adventure sports like white water sports/rafting, angling etc. • Way side amenities To tap the potential, a master plan has already been prepared and a separate Engineering wing has been created. The number of tourists are increasing with every year. Data reveals that more than 4,000 foreign tourists & 1.50 lakh domestic tourist visited during last year (2009). Are the mineral reserves good enough to attract investments in the state? Arunachal Pradesh is enriched with several mineral occurrences like: Coal, Dolomite, Limestone, Graphite, Marble, Oil & Gas, Lead, Zinc, Quarts etc., occurrences which can be taped

SL No. Mineral

Location

District

Coal

Dolomite

Limestone

Graphite

Namchik-Nampuk Rupa Kaspi Tidding Pangin Hunli Menga Bopi Khetabari Taliha Tezu Dora Hunli Piyuli

Changlang West Kameng West Kameng Lohit East Slang Dibang Valley Upper Subansiri Lohit Dibang Valley Upper Subansiri Lohit Lohit Dibang Valley Dibang Valley

Estimated Reserves (Million Ton) 84.23 143.00 11.13 140.00 225.00 13.35 0.70 2.46 13.35 0.70 30.30 43.30 2.34 0.18

Marble

Kalaktang

West Kameng

Ferro-Silicon Quartzite Oil & Gas

Kharsasng & Diyun

Changlang

Not Established

Lead & Zinc

Shergoan

West Kameng

Not Established

1.25

and explored commercially. This is a virgin sector where large-scale investments can be made. What are the prospects of IT sector in the region? This is an up coming sector which is also an identified thrust sector of the state. The state government is giving more emphasis to IT related developmental projects in the state. Schools and colleges are prescribed to make IT a compulsory subject. Establishment of IT Park is in pipeline for which we invite private parties to invest in the state under PPP mode. What is the state doing to exploit emerging market opportunities in the neighboring countries? State government is pursuing central government to open International trade route through Myanmar. China, and Bhutan to exploit the emerging market opportunities in the neighboring countries. The World Trade Centre, Mumbai (WTCM) is very much interested in setting up a centre at Itanagar, Arunachal Pradesh. In view of the high potentiality in international trade, border trade in the following sectors are being proposedIndo-China Sector Kenzamane (Zemithang) in Tawang District, Bumla in Tawang District, Gelling (Kepangla Pass) in Upper Siang District, Kibithoo in Anjaw District, Mechuka (Lalla Pass) in West Siang District, Monigong (Dumla Pass) in West Siang District, Taksing in Upper Subansiri District. Indo-Myanmar Sector Pangsu Pass (Nampong) in ChanglangDistrict Indo-Bhutan Sector Belting (Namtsering) in Tawang District, Dongshengmangand Bongkharin Tawang District R DARE.CO.IN | INTERVIEW | SEPTEMBER 2010 65

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INTERVIEW 66

Shri R K Garg Chief General Manager State Bank of India /Shinjini Ganguli

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hen did SBI first enter the North Eastern Region? How much has the Bank grown in this region since the opening of its first Branch? State Bank of India is the harbinger of Banking in the NE Region. The first Branch of the Bank (in its earlier Avatar as Imperial Bank of India) was opened in Dibrugarh in the year 1923. State bank of India today is a pioneer of Development Banking in the North East. Some parameters are as under: (as on 31st March 2010) • Number of Branches: 525 • No of employees: 9038 • Total deposits: 35387.74 crores • Total advances: 13283.24 crores • Total Business 48670.98 crores • Net Profit: 1214.45 crores • Advances to: • Agl (Agricultural Loan): 1271.19 crores • SSI (Small Scale Industris): 499.60 crores • SBF (Small Business Finance): 899.34 crores • Total priority sector advances: 4871.59 crores • Market share: Deposit as on Sep 2009- 44% Advance as on Sep 2009- 49.55%

You are the only Bank with such high penetration in the NE. Why do you think other Banks are lagging behind? Ideally it is for other Banks to re-

spond. But, I think the reason could be that while we see ourselves as an agent for change and development and therefore, are present in inaccessible villages, others see NE as a business opportunity and are largely present in big towns and cities. What plans do you have for MSMES in the North East? Our near term plans and commitment for different states of North East are given in the table: We are planning for an annual growth of 25 pre cent in the next year and are committed to maintain the CAGR of 25 pre cent in coming years. What incentives does the bank provide to investors from outside NER? People from outside the region bring the much needed entrepreneurial quality, expertise and capital to North East. The government encourage outside investors with open arms. Our attitude is also very positive and we extend all possible help and liberal finance to such investors. Does SBI encourage the Credit Guarantee scheme by CGTMSE? The answer is yes. In SBI, Operating Functionaries are instructed to use CGTMSE cover as an enabler, and are mandated not to insist on collateral security up to Rs 10 lacs and instead obtain CGTMSE cover. We finance deserving entrepreneurs up to `100 lacs without insisting on

Performance as on 31/03/10 Sl State No

Projected growth for 2010-11

C&I(Commercial & Institutions

SSI

SBF

Total

C&I

SSI

SBF

Total

1250.39

299.81

488.99

2039.19

242.5

130

450.5

Assam

Arunachal

49.13

38.31

37.57

125.01

21.5

59.5

Meghalaya

139.60

34.27

98.48

272.35

Mizoram

51.18

32.93

49.38

133.49

Manipur

72.01

24.50

41.90

138.41

Nagaland

24.60

34.93

68.35

127.88

Tripura

83.06

34.85

114.67

232.58

TOTAL

1669.97

499.60

899.34

3068.91

343

125

282

750

Collateral security and by obtaining CGTMSE cover. How difficult it is for the Micro and small enterprises to secure a loan against medium enterprises which always take away the bigger pie? I do not see as it micro and small versus medium enterprises. Medium enterprises, because of scale, need higher credit amount. They have to fulfill more stringent requirements to qualify for finance. Most of them have to satisfy internal Credit Risk Assessment standards to be eligible for finance. The bigger ones having credit requirements of `5 crores have to be rated by external agencies. Our approach to financing Micro and Small enterprises has been very liberal. As mentioned earlier, we are prepared to finance deserving MSE units up to `1 Crore without collateral security. Funds have never been a constraint to finance Micro and Small Enterprises. We have set up MPSTs, to reach out to SME sector, SMECCCs/ RASMECC to centralize processing of MSME Sector. A commercial Branch has been set up at Guwahati to cater to larger MEs. RMMEs are in place to provide Relationship Banking to SME sector. What does SBI offer to the aspiring entrepreneurs scared to take the first step? Our Branches and Lead Bank offices act as MSME counseling centers for aspiring entrepreneurs. They are encouraged to set up micro enterprises where we give loans on easy terms, without collateral security. We have a scheme called SBI SMILE under which we give long term interest free loan up to `10 lakh to deserving and technically qualified and professional entrepreneurs who are not in a position to bring in their share of margin in the form of equity. We have specialized Branches, dedicated and empathic team to guide and help SME units. R DARE.CO.IN | INTERVIEW | SEPTEMBER 2010 67

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Govt agencies give colour to entrepreneurial dreams However, there remain some core problems, such as militancy, extortion, quality of education and lack of infrastructure, and these need to be addressed /Shradha Mohanty

n recent years, there has been a spurt of interest in developing and encouraging the growth of the micro, small and medium enterprises (MSME) sector in Northeast India. The sector had been in a dismal state of stultification because of low levels of industrialisation in the region and lack of government support.

The immense opportunities offered by the region remained underutilised. But now, say the entrepreneurs here, the conditions are improving. They point to the vigorous entrepreneurial activities taking place all around to illustrate their point. These entrepreneurial activities are given a hefty boost by the vast support

system that has been set up by the Ministry of Micro, Small and Medium Enterprises. Letâ&#x20AC;&#x2122;s take a look at some of these bodies that are changing the industrial map of the eight states that make up Northeast India. The Micro, Small and Medium Enterprises Development Institute (MSME-DI) is one of the statutory

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bodies set up in Guwahati by the Ministry of Micro, Small and Medium Enterprises. The MSME-DI is involved in identifying prospective entrepreneurs and training them to set up micro and small enterprises. It has a total of six branches in Assam, Arunachal Pradesh and Meghalaya. To encourage entrepreneurship in the region, the MSMEDI has come up with a number of schemes among which there’s one that helps existing industries acquire ISO certificates and the other assists in barcoding an entrepreneur’s products. “This is a

very encouraging scheme for entrepreneurs under which they can avail 75 per cent reimbursement on the total cost of acquiring ISO certificates or getting barcodes,” says S R Payeng, Deputy Director, MSME-DI. The institute provides tool rooms, training centres, project management services and even residential accommodation to its trainee/ students. As part of its marketing development programme, the MSME-DI is encouraging entrepreneurs to showcase their products in foreign markets. Last year, 15 entrepreneurs were sent to Japan and Korea to showcase their products. The results were very encouraging and the entrepreneurs received a healthy number of orders for their products from both countries. A scheme called the Prime Minister’s Employment Generation Programme (PMEGP) has been started to redress the issue of unemployment in the region. Under the PMEGP, loans of up to Rs 25 lakh are provided to unemployed youth and existing entrepreneurs to help them in their business ventures. The Northeast is still hampered by problems such as its geographical location and poor infrastructure facilities. “If the government takes up the Look East policy, then development will definitely follow. They are trying — the ministry has formed the Development of North East Region (DONER) for this,” says Mr Payeng. As of now, the DONER focuses on skill development programmes, which are being conducted in association with some private institutions. It is also seeking to create awareness among entrepreneurs in rural areas about how to conduct their business. The Indian Institute of Entrepreneurship (IIE) was established in Guwahati to undertake training, research and consultancy activities for micro and small enterprises, thereby playing an effective role in enterprise development. The IIE has tried to change its modus operandi by de-

“We have encouraging schemes for entrepreneurs under which they can avail 75 per cent reimbursement on the total cost of acquiring ISO certificates or getting barcodes” — S R Payeng Deputy Director, MSME-DI viating from the kind of schemes it used to adopt earlier. “I found that the IIE was doing a programme called the Rural Industries Programme with SIDBI, however, in a limited way. I was not very happy with it,” says K. Ahmed, Director, IIE. The Rural Industries Programme was started in collaboration with the Small Industries Development Bank of India (SIDBI) and helped in promoting 89 rural enterprises in Nagaon district of Assam. It then sought to go beyond just training entrepreneurs and began taking up area approach programmes which are more beneficial for entrepreneurs. “So, we got a programme called STED (Science and Technology Entrepreneurship Development) under the Ministry of Science and Technology, in which it is mandatory that we have a two member team that will constantly interact with potential entrepreneurs, counsel them, offer them training programmes, take them to banks, provide them linkages and help them set up their units,” explains Ahmed. More emphasis was placed on developing entrepreneurship in science and technology in the small industries sector. While the MSME-DI and the IIE focus on the small and micro enterprises sector, the National Bank for

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“NEED was started to basically help first generation entrepreneurs with their projects. Our mandate was to develop local entrepreneurship” — Olee Bora Deputy General Manager, NEDFi

Agriculture and Rural Development (NABARD) provides funds solely to medium scale enterprises. Disbursement of credit to the micro and small enterprise sectors is negligible or almost nil. In the small enterprises sector, NABARD is involved only in the Cluster Development Programmes. NABARD tries to focus on capacity building and training programmes. It provides grants to a few clusters in Assam. Its main aim is to identify appropriate banks for these clusters, where they can approach for credit. “We want to strengthen them so that they can serve as a model for clusters in other areas on a similar line with bank loans,” says R.M. Talukdar, Assistant General Manager, NABARD, Guwahati branch. The North Eastern Development Finance Corporation Ltd (NEDFi) offers term loans to entrepreneurs in

“Our vision is to establish best quality industrial infrastructure that will cater to the needs of investors in and outside Assam” — Er. Dilip Kumar Barua Deputy General Manager, AIIDC 70

the sectors of infrastructure, animal husbandry, agri-horticulture and medicinal plantations, sericulture, aquaculture, and poultry and dairy. “The North East Enterprises Development (NEED) scheme was started to basically help first generation entrepreneurs with their projects. Our mandate was to develop local entrepreneurship,” says Olee Bora, Deputy General Manager, NEDFi. When NEDFi was set up in 1995, it was on the lookout for projects in which costs were a minimum of Rs 40 lakh. At that time, there were very few first generation entrepreneurs and even fewer entrepreneurs who met their requirements. So, NEDFi initiated NEED for projects in which the costs went up to a maximum of Rs 25 lakh. “The promoters have to bring in only 15 per cent. We are giving 25 per cent as equity, which is mostly interest free in the sense that we charge only a service charge of about 1 per cent. They can get the remaining 60 per cent as a normal loan. Thus, the promoter’s contribution is less and the effective interest comes down as well. They get a huge advantage,” says Bora. NEDFi has also come up with the Woman Enterprises Development Scheme for projects with a maximum cost of Rs 5 lakh. There is no bar on the kind of activity taken up. “There are a number of women entrepreneurs in Meghalaya and there is a separate woman entrepreneurs’ market in Manipur,” says Bora. This organisation also has schemes that focus only on jute enterprises such as the Jute Enterprises Development Scheme. The Assam Industrial Infrastructure Development Corporation (AIIDC) focuses on infrastructure development in Assam with an industrial perspective. It was formed with the purpose of securing and assisting in the rapid and orderly establishment of organisations and industries in in-

dustrial areas, industrial estates and growth centres and in the establishment of commercial estates for the growth of industries in Assam. “Our vision is to establish best quality industrial infrastructure that will cater to the needs of investors not only from Assam and the Northeast, but also from other parts of India and the neighbouring Southeast Asian and South Asian countries,” says Er. Dilip Kumar Barua, Deputy General Manager, AIIDC. There are many more organisations and schemes that cater to the needs of the entrepreneurial community in the Northeastern region of India. Ideally, they need to focus on industries that have been identified as thrust areas. Hotel and tourism related industries find place high up on the priority lists of almost all the states. These industries offer huge potential for foreign investments. Tea in Assam, spices in Meghalaya and bamboo in Nagaland are some more examples of such thrust areas. However, the ground realities haven’t changed. People still migrate to other states after they finish school. Although the level of literacy in the region is high, the quality of education is considered low. Only those who are not fluent in either English or Hindi look for local jobs. For most people, entrepreneurship is just setting up a small store or outsourcing some items or re-selling products to make a living. Banking and financial services are still at a nascent stage. Banks such as the State Bank of India and United Bank of India have a presence, but only in the major cities. Unstable government policies pose an additional problem in some places. Extortion by local hooligans and militant insurgency also discourage many people from setting up new enterprises. These are some problems the government agencies should take up on an urgent basis, adopting a holistic approach to take both developmental and corrective measures. R

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Telephone Connection in North Eastern Region Sl. No. 1 2 3 4 5 6 7 8

States Arunachal Pradesh Assam Manipur Meghalaya Mizoram Nagaland Sikkim Tripura North Eastern Region

No. of Telephone Connections 307725 48582 32661 64848 55075 45604 17443 79519 651457

Source: Amar Asom (Assamese news paper), 1st May 2010

Number of Tourist Spots and Tourists in North East India States Indian 149292 3489814 101000 375911 44226 20953 215843 229621

Arunachal Pradesh, 2008-09 Assam, 2007-08 Manipur, 2006-07 Meghalaya, 2005 Mizoram, 2007-08 Nagaland, 2009 Sikkim, 2007 Tripura, 2006-07

Tourist Foreigners 3020 13799 460 5099 735 1423 9001 3177

Total 152312 3503613 101460 381010 46312 22376 224844 232798

Source: Arunachal Pradesh at a Glance 2006, Statistical Handbook of Assam 2007, Manipur 2006, Meghalaya 2007, Mizoram 2008, Nagaland 2006, Sikkim, A Statistical Profile 2006-07, Tripura 2007

NE Statesâ&#x20AC;&#x2122; Literacy rate State Arunachal Pradesh Assam Manipur Meghalaya Mizoram Nagaland Sikkim Tripura India (2009) Kerala (Most literate state)

Population

No. of literate people

1097968 26655528 2166788 2318822 888573 1990036 540851 3199203 1166079217

484785 14015354 1310534 1157875 661445 1132323 318335 2022099 769612283

Literacy rate (in %) Total 54.3 63.4 70.5 62.6 88.8 66.6 68.8 73.2 66 90.9

Male 63.8 71.3 80.3 65.4 90.7 71.2 76 81 76.0 94.2

Female 43.5 54.6 60.5 59.6 86.7 61.5 60.4 64.9 54.3 87.9

Source: Primary Census Abstract: Census of India 2001 and CIA World Factbook DARE.CO.IN | STATISTICS | SEPTEMBER 2010 71

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Together they profit Find out how marginal entrepreneurs in obscure villages are reaping the benefits of collaborative business /Shradha Mohanty

I “We opted for cluster development because despite a slew of training programmes small enterprises were falling sick at an alarming rate.” — Dr Sriparna B Baruah Head, Centre for Industrial Extension 72

f you cannot stand alone, try a huddle. It is an idea that may not always work with arthritic patients. But when it comes to the northeast region (NER), it seems to be working wonders. Known as business clusters or simply clusters this unique business formula for collective well-being is believed to be particularly effective among societies suffering from a deep sense of neglect and isolation, like the states in the NER for years since independence. For these seven sisters and one brother, as they are sometimes

called, bonding is more than a mere sign of sibling solidarity. It stands for an all new “cooperative” way of doing well in business by working hand in hand. Call it the rustic extrapolation of M&A! K Ahmed, Director, Indian Institute of Entrepreneurship (IIE), where the Regional Research Centre was set up in 2008 to incubate the cluster idea, is convinced that clustering “is the only way to bring about development in the north-east.” So, what exactly are business clusters and how do they work? Put simply, small solo entrepreneurs en-

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gaged in similar businesses across a region come together to form groups or “clusters” to achieve greater scale, knowledge and strength, the key ingredients of success in cut-throat modern markets. Consider for example, the brass and bell metal cluster at Hajo in Assam and the Eri (a type of silk indigenous to Assam) cluster at Nongpoh in Meghalaya. These clusters are in fact, groups of specialized suppliers, service providers, ancillary unit owners and manufacturers, who have joined forces in quest of another business imperative of our times: optimum efficiency and productivity. Unity, they have realized, is indeed strength.

How are these clusters created? First, a list of possible locations for setting up a cluster is drawn up. Then each of the sites is evaluated for viability in relation to the market requirements for the business. This is followed by “soft intervention”, or training programmes and seminars, designed to build capacity. Finally, a cluster site is made ready for hard intervention—a stage where the nuts and bolts issues are addressed and the business takes shape and form. But who does all this ground work? Men like Mr Ahmed who have been involved with the RRC, since its inception in 2008.

LEADING THE CHARGE Micro, small and medium enterprises – Development Institute (MSME – DI) manages four clusters in the NER that produce a range of items: brass and bell products in Hajo to knives in Jorhat. “We are creating awareness among unemployed youth and providing them with training programs for the clusters” says SR Payeng, Deputy Director, MSME – DI. National Bank for Agriculture and Rural Development has six on-going cluster development programmes in different parts of Assam, focussed on cane, bamboo, sericulture and pottery items. The basic thrust at these clusters is on building capacity among the stakeholders. All Assam Small Industries Association is a non-governmental organization that works with clusters that are engaged chiefly in producing incense sticks and knives used in tea gardens.

Says Dr Sriparna B Baruah who heads the Centre for Industrial Extension at the IIE: “We opted for cluster development because we realized that despite a slew of training programmes small enterprises were falling sick at an alarming rate. Clustering, we believed, was the only viable remedy.” Before setting up the RRC, development experts at the IIE experimented extensively with the cluster idea at locations across the NER. Notably, they started a handloom cluster in Imphal, a notoriously difficult terrain for business. However, the Imphal experience proved to be remarkably successful and yielded useful lessons for future clusters set up by the RRC.

Special Purpose Vehicles: Village B-Schools

“Clustering is the only way to bring about development in the north-east.” — K Ahmed Director, Indian Institute of Entrepreneurship

After selecting a site for a business, people from the RRC like Ms Baruah get busy with teaching what they call Special Purpose Vehicles or SPVs, which are in a manner of speaking retro-fitted Executive Training Programmes. For the communities concerned (usually artisans, craftsmen and traders) the SPVs are like Bschools, designed to train them in the art of managing collaborative businesses. All this is part of the preparation for the period when the RRC is

no longer present at the clusters. The participants sit through classes on the basics of the cluster business model, which in essence is a series of “how to’s.” The courses are designed to help the participants run and manage clusters on their own, once the RRC managers have moved out. The curriculum includes lessons on how to make the most of utilities like the Common Facility Center (CFC), which provides the participants with machines and technology tools that would not have been accessible to them had they continued operating independently. In addition monthly meetings involving self-help groups are organized to educate cluster members about the benefits of using techno aids like artisan cards. Similarly, there are a range of other meetings organized to help the clusters work collaboratively and resolve their own problems. The immediate priority for the RRC is to tap the best possible help for different clusters and thereby enhance their business prospects. Efforts, for example, are currently under way to involve the Department of Sericulture to source knowledge and the best of Eri seed for the 830 weavers who are part of a cluster engaged in the silk business in Nalbari, a small, nondescript village in the state of Assam.

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MAJOR CLUSTERS ASSAM The Bagulamari Jute Craft Cluster Location: Dhubri Footprint: Bagulamari and Aironjongla villages Participation: Around 170 household units housing 500 active artisans. Products: Door mats, wall hangings, toys, table mats, carpets, hats and bags. The Pyranga Eri Cluster Location: Boko Footprint: Pub Pyranga and Panchim Pyranga villages Participation: About 42o households engaged in Eri rearing and weaving. Products: Eri Handloom Products Dhamdhama Handloom Cluster Location: Nalbari Footprint: 35 kms around Nalabari Participation: 830 weavers who work at 570 looms MANIPUR Greater Imphal Jewellery Cluster Location: Imphal Footprint: Wahengbam Leikai and Malom villages Participation: 120 artisans Products: traditional designed jewellery used for ceremonies and marriages. Malom is engaged in making modern designer jewellery. Khangabok Kouna Cluster Location: Thoubal Footprint: Five villages in the Thoubal district Participation: 280 households Products: Kouna stools, Shoes, flower baskets, cushions, baskets, hats and bags. ARUNACHAL PRADESH Tawang Carpet Making Cluster Location: Lhou village of Tawang Footprint: Lhou Products: Carpets MIZORAM Bamboo Cluster Location: Bairabi Participation: 200 families Baktawng Carpentry Cluster Location: Baktawng Participation: 335 artisans of the Pu Ziona Pawl Products: Carpentry and pottery items including door panels, doors and windows, ventilation frames, dining tables and beds. MEGHALAYA Umden Eri Cluster Location: Nongpoh Footprint: Ribhoi district Participation: 246 women artisans

Similarly, the RRC has helped artisans in the village of Malom in Assam organize themselves into a cluster and access the knowhow and finances they desperately needed to turn their exceptional skills in crafting artificial jewellery into a viable and lucrative business. The entire village depended on the non-gold jewellery for their livelihood. But life was a struggle as they could neither raise the finances nor reach the markets for their exquisitely crafted products. But the cluster approach has changed all that. The help is extended at every stage of the incubation process, from helping villagers learn how to open bank accounts to providing them with business specific training and access to markets. In the Thoubal district of Manipur, for example, the village artisans were much too ignorant to even understand what a bank was let alone knowing how to operate an account. Their business cluster has however been a life-changer. Says Dawoo Brajabashi, a cluster member, who now owns a bank account among several other symbols of newly found prosperity: “We always knew how to work with the Kouna fabric. Now, because of the cluster programme we also know what sells in the market. We now make designs that fetch us a good price.” A design development programme was conducted by the RRC recently at Thoubal, where artisans were taught 15 new designs over 15 days flat. And there is more to the story: a retail outlet based in Bangalore has asked for samples of Thoubal’s new designs, making this the very first known instance of a cluster gaining access to a major metro market. Similarly, in insurgency torn Mizoram, around 25 cluster enterprises have come up after the state government rolled out its much talked about Bamboo Policy in 2002. Members were encouraged to form Self Help Groups and learn to save some of their incomes in banks.

The effort at all times was to encourage these people learn to solve their own problems and gain relevant exposure. Recently a group of artisans from a carpentry cluster in Baktawng, a back-of-beyond village in Mizoram, travelled all the way to Saharanpur in UP, a town globally famous for its handcrafted carved wood products. The tour, a part of an exposure visit programme organized for the group, was to help the artisans understand the dynamics of a cottage industry that employs nearly half the population of the town. It was to help them get a first-hand feel of how their business is being done in a different and much larger market. What sets the Umden Eri cluster in Meghalaya apart is the availability of skilled artisans and their expertise in natural dying. Every house in the region is involved in cocoon cultivation, rearing, spinning, dying and weaving their indigenous designs. “This area has a huge potential of getting converted into an Eri Hub,” says Ahmed. With the exception of Nagaland and Sikkim, all the above-mentioned cluster programmes are through with the initial stage of ‘soft intervention.’ What helps is the fact that the RRC also acts as a technical agency for the cluster set up by the Khadi and Village Industries Commision (KVIC) clusters under the Scheme of Fund for Regeneration of Traditional Industries (SFURTI). RRC's objective is to help the clusters eventually establish their own brand identities and gain access to national if not international markets. While global markets might still be some distance away, the fact is that for some of the poorest craftsmen on the fringes of the country, clusters have awakened new hope. For these largely unlettered but brilliantly gifted craftsmen, it suddenly makes business to stand and walk together—if possible in a cluster! R

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Enterprising Northeast If you want to connect with these entrepreneurs, mail us at: dare@cybermedia.co.in with their name as the subject line. Abhijit Barooah, MD Assam Air Products Pvt Ltd. Since: 22 years How to contact him:Maniram Devan Road, Guwahati-781003

bhijit Barooah, Managing Director of Premier Cryogenics Ltd, a leading manufacturer of industrial gases in the region, set up the company’s ﬁrst liquid nitrogen and oxygen manufacture unit called Assam Air Products at Sibsagar, Assam. The company has grown exponentially since its inception, while it earned a mere `50 lakh back then, it now earns `25 crores. The company has a current work force

of 100 employees. Issues: Lack of technical manpower was one of the major hurdles Assam Air Products in its early years. Another problem in the region is that of transportation. Manufacturing goods in the North East and then transporting them to the outside world has always been difficult and expensive because of the region's difficult terrain.

Bidhan Deb, MD Bhabani Offset and Imaging systems Pvt. Ltd Since: 21 years How to contact him: Rajgarh Road, Guwahati- 781007

idhan Deb established his business initially as a letterpress and later went on to install his ﬁrst offset machine in 1993. Two years later he took a loan from Punjab National Bank to take a press on lease. Fifteen years later today, he is one of the major players in printing sector in the North East region. The demand for printing and stationary in the state has went up lately as several companies and industries have set up branches in the region in order to avail the incentives under

NEIIPP. Emergence of the telecom industry and banking sector have also boosted the printing sector. Issues: Unavailability of raw materials and limitation in logistics; high production cost as a result of expensive raw materils which again is due to increased transportation costs; lack of skilled labour Mr Deb mentions that, "There is no dearth of young talent, entrepreneur skills need to be enhanced by proper guidance and training."

Kamakhya Borthakur, MD Gargo Motors Since: 36 years How to contact: A T Road, Hijuguri, Tinsukia

amakhya Borthakur started his business with a single vehicle that he used for transporting crude oil for Oil India Ltd in Duliajanm, from its different production centres to collection centres. For long, he and his devoted team worked hard towards reaching their goal of becoming a Civil ‘A’ Class Contractor and a supplier of Crane services to Oil India Limited, Duliajan. Today he is the owner of Gargo Motors which deals in Tata vehicls. It has been able to achieve an annual sale of 3000 commercial vehicles and

1500 passenger cars and its annual turnover is almost `200 with a workforce of 400 people. As part of its corporate social responsibility (CSR) activities it is now providing financial support to 6 students for their higher education as well as providing a dead-body-carrying van for the public. He has also donated a Tata Safari to one of the greatest music icons of our country, Dr. Bhupen Hazarika to promote his noble endeavors and provided a sound system to the Rotary club of Duliajan.

Prodip Borah, MD Borah Hyundai Since: 30 years How to contact: Dibrugarh, Assam

‘S

buses in his ﬂeet by 1983. He has now acquired a dealership with Piaggio and Hyundai. With a workforce of 170 people and a manpower retention rate of 95 per cent he generates a turnover of 50 crores from his transportation business and dealerships.

carcity creates demand,’ was the mantra that ﬁred Prodip Borah’s entrepreneurial dream. He saw the problem of connectivity between Guwahati and interior parts of Assam and started with operating a taxi between the two places. Later on he upgraded to a mini bus and subsequently had 11

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Santosh Jaiswal, MD Jaiswal Group of Industries Since: 24 years How to contact: S J Road, Athgaon, Guwahati- 01

antosh Jaiswal heads the Jaiswal Group of Industries, a leading manufacturer of steel in the North East region with projects spread across Assam, Meghalaya, Jharkand and Orissa. The enterprise's current turnover is over `200 crore while it has a workforce of 1800 employees. The Jaiswal Industries owns the best selling brand of NER, “BISCON”. He says that, "Of late, this region is undergoing positive changes and development in terms of transportation, logis-

tics, investment and banking activities. Mr. Jaiswal also feels that tourism is one of the main entrepreneurship focus in North East, but is still left behind due to the lack of good infrastructure facilities. He believes that tourism would be the next big thing that would power North East ahead Issues: Shortage of technical manpower; unavailability of latest technology; limited transportation facilities; poor communication infrastructure; unavailability of power

James Syiemiong, CEO Theodore Since: 17 years How to contact him: Nichol’s Roy Building, Shillong- 793002

ames Syiemiong started his footwear business in Meghalaya somewhere in the year 1993 with the help of Prime Minister Rozyar Yojna (PMRY) loan. Started with an initial loan of `83,000, his total turnover today stands at `10 lakh. He has about 10 workers, who make a variety of beautifully crafted shoes against the orders that he brings.

He is basically a boot specialist. Issues: He says that even though his business is doing well, it is bound within the state and that it is very difﬁcult for him to expand it outside his state. The shoe industry does not have many manufacturing units there. They get their raw materials from Agra, Kolkata, Delhi.

Vikram Singhania, MD Singhania Group of Industries Since: 40 years How to contact: Thana Road, Shillong-793001, Meghalaya

ikram Singhania’s printing press is a family business that started in the 1960s. Around 38 employees are a part of his business which is set up in Shillong. They are now moving into a newer technology of offset for multicolor and black and white printing. He says he has achieved almost 70 per cent growth in his work in the last 5 years. The current turnover of the press is 10 crores.

Their future plan is to come up with a new printing press in Guwahati equipped with the latest technology. Issues: Regarding opportunities he says that even though various facilities and incentives are being provided by the Government, there is a lack of technical and skilled labor in Shillong which is a major impediment for their business.

C S Bhattacharjee, MD Bulland Cements Private Limited Since: 2 years How to contact: Rajgarh Road, Guwahati - 781003

ulland Cements Private Limited, which started in 2008 in Guwahati, manufactures around 300 tons of cements per day. C S Bhattacharjee says “the company hopes to expand and produce a thousand tons on a daily basis.” It has around 100 to120 employees. Issues: There is stiff competition in

cement industry sector in the North East and having a proper distribution system is an important part of their business. Bhattacharjee says “the roads are not at par with the rest of the country which is why the freight charges are very high.” He explains that having four lane highway will help them solve the purpose.

Sushikato Achumi, MD Infoways Since: 10 years back How to contact: E-2, T.S. Arcade, Nyamo Lotha Road, Dimapur -797 112

his second loan of `8 lakh sometime back which he is repaying currently. He has a turnover of about 5-6 crores. Issues: Frequent curfews and undeveloped transportation have been a major concern.

ushikato Achumi started as a selffunded entrepreneur. He runs a gaming zone, a gaming machine assembly unit, a cyber café and Nokia Customer Care franchise and has 19 people employed under him. He took his first loan of `2 lakh in 2004 and

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Ayan Choudhry, MD F.W. Ferro Tech Private Limited Since: 2 years How to contact: 2nd Floor, Assam Ispat Complex, N.S. Road, Fatasil, Guwahati – 781 009

yan Choudhry from Ferro Tech Private Limited, Guwahati says “We have not really faced much problems in setting up units in the North East as we have been born and brought up here and are used to whatever comes across our way.” The company has taken up a loan from SIDBI, but at least 70% of the company is self funded. The company

has a turnover of 1.32 crores. Issues: Power seems to be the major problem in the region for the last seven years. He says, “This is reason enough for any company to be hesitant to set base here.” He adds that “Drawing power in the region is a very expensive affair and that it is not available at scheduled times either.”

Khanjan Baruah, MD Olivia Auto Since: 11 years

hanjan Baruah from Guwahati has been in the automobile sector since 1999. He says the response has been pretty good and that his last turnover was as much as 13 crores. He has been dealing with TVS and Mahindra automobiles from long time. He recently joined hands with Bajaj in 2009.

Issues: Baruah says starting a business in the automobile sector is not an issue as long as it is in Guwahati. Beyond this region, the condition of the roads is bad and transportation of vehicles to areas where terrorist activities occur, like Imphal and Dimapur, becomes difﬁcult.

Anupam Deka, CEO SRD Nutrients Private Limited, Sundaram Foods Private Limited, Repos Food Private Limited Since: 9 years How to contact: SRD Nutrients, Mangaldoi, Assam

nupam Deka has been in the food sector since the last nine years. He owns three companies, the turnover of which is 70 crores. He says the food industry in Assam has definitely improved in the last 10 years. In fact, it is still growing at 15-17% every year. He believes, “bank are more open to providing loans to the food sector now more than before as earlier there was no thorough project study to show the banks about the prospects of this industry.” Food chains like CCD, Barista and KFC are coming up in Guwa-

hati and Repos Foods provides bakery products to KFC there. Issues: There is a lack of skilled labor and migration of skilled labor means extra costs. Also, there is a dearth of project consultancies in the area. To overcome this problem the company sent its employees to Delhi and Bombay for training. This way they can get more people through them. They have been doing this since the last 3-4 years. He adds that, "Although this region has immense potential, people are apprehensive about settling down in this part of the country."

KK Bajaj, MD Silverdrops Foods & Beverages Since: 26 years How to contact: Amnigown, Guwahati - 31

K Bajaj ventured into manufacturing of packaged drinking water in 1984 in Guwahati and started the Eastern zone’s biggest rice mill later. With 200 people employed, his group’s turnover is `100 crore p.a. Issues: Subsidy amounts are released after 7-8 years and not in the initial stages.

Power plays truant for upto 910 hours for which gensets have to be used. “Insurgency has reduced with people getting increasingly employed,” says Bajaj. “Government is just holding on to North East Region as if it could anyday be taken by China/ Myanmar etc. and not giving attention to its development.”

Pranab Chakraborty, MD New Tina Studio Since: 15 years back How to contact: 39, Narsingh Coop. Complex, Agartala, Tripura (West)

for a loan, a friend told him about SIDBI. He applied for loan to SIDBI once in 2008 and again in 2009 and got a digital still camera with the amount. Now he earns about `2-3 lakh per year. Issues: He had a problem of transportation and equipment but now he has got a bike and a camera. He plans to buy a bigger camera.

ranab Chakraborty started his photo studio about 15 years back. With some money from his family and from market, he was able to establish his business. He also bought a computer and installed some editing software. Overtime his business prospered and he was incited to buy enhanced equipments. And while he was looking

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Siddharth, MD Biswajyoti Graphics Since: 5 years back How to contact: Krishna Nagar, Agartala, Tripura (West)

iddharth’s mother started the DTP and printing unit, where they print books, cash memo, and other kinds of stationery. Unable to find a decent job, Siddharth joined this business. And with loans from SIDBI bought a digital photocopier with networking printer and scanner and offset machines. He has two employees work-

ing under him today. Issues: Commuting is a problem here. Railways is just 2-3 years old in the region. There’s only meter gauge and no broad gauge. Therefore, cargo movement takes place only through roads which translate into high cost and makes their raw material expensive.

Rina Saha and Gopalchandra Saha Rina Enterprise Since: 3 years back How to Contact: Rina Enterprise, Sripally, Badharghat, Agartala, Tripura

ina Saha and Gopalchandra Saha, a couple from Agartala, started their synthetic gum manufacturing unit 3 years ago. With a loan from SIDBI in 2009, they acquired PVA (Polyvinyl Alcohol) containers of 30 ml, 200 ml and 500 ml and a weighing scale. Theirs is the only such unit in the area and they

sell the gum to wholesale stationery shops and others. They soon plan to start a paper envelope manufacturing unit for which they have already submitted the proposal to SIDBI. Issues: They haven’t had much problem so far. Things have been good for them.

Rupchand Sutradhar, MD Rup Furniture Since: 12 years back How to contact: P.O. Bimangarh, Agartala, Tripura (West)

upchand Sutradhar has a furniture business for the past 12 years. He makes beds, chairs, dining tables etc. With an yearly turnover of `1-1.5 lakh. He had taken a loan amount of

`1.4 lakh for which he pays an EMI of `2,800. Issues: He initially had problems in getting his machines but SIDBI help him ﬁnd a solution to his problem.

Godwynn Nongrum, MD Fanny’s Fast Food Since: 2 years back How to contact: M G Road, Kachahari Road, Shillong – 793001

odwynn Nongrum runs his fast food shop in Shillong Bar Association, opposite SIDBI’s ofﬁce. He has 4 employees working under him. Initially started with a loan of `70,000,

he wants to expand his business now. He has also submitted his proposal for a loan of `1 lakh to SIDBI. He earns about `10,00020,000 pm.

C Teeya Imsong, MD Tribes Music & Media Lab Since: 3 years back How to contact: H. NO. 277, Landmark Colony, Dimapur - 797112

Teeya Imsong runs a business of A/V recording and equipment rental. Being the best studio in the area, it caters to the local ﬁlm and music industry. With 6 employees, he is able to earn upto `8-10 lakh per year. He had self-funded his studio, when he started. And later took a loan of `8 lakh from SIDBI for expan-

sion purposes. Issues: According to him, in Dimapur ( a district in Nagaland) itself, there are 36 dialects. So, marketing is a big problem as people there speak so many different dialects. “Funding agencies are more interested in manufacturing and handloom based businesses”, he says.

Satya Saikia, MD Saikia Developers Since: 1.5 years back How to contact: Saikia Developers, Jail Road, Jorhat, Assam – 785001

transportation is poor. There are strikes very often. As power comes for only 6-7 hours a day, gensets have to be used. He doesn’t have any option other than to deal with these issues. He’s waiting for the government to take some steps soon.

atya Saikia undertakes construction of both commercial & residential properties. With base in Jorhat and 65 people as employees, his annual turnover is `8.5 crores. Issues: He has no option but to wait for delivery of raw material as

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blogs/opinion

How to Develop North East India? /Paranjoy Guha Thakurta

North East India adds mystery and beauty to the country. What could have been one of the most prosperous regions of India, it now lies in complete alienated state, waiting for revival and survival. Read on to find out more...

he North Eastern part of India comprising the “seven sister” states of Assam, Arunachal Pradesh, Meghalaya, Nagaland, Manipur, Mizoram, Tripura and the eighth state of Sikkim is separated from the rest of the country by a narrow “chicken’s neck” near Siliguri, in the northern part of West Bengal-–a land corridor that is physically just 29 km wide. More than geographical separation, sections of people in the north-east have for long felt “alienated” from India’s political, social and economic mainstream. The North East has around four percent of India’s population living in eight percent of the country’s geographical area. This region is surrounded by four countries: Bangladesh, Bhutan, China and Myanmar. Ninety-six percent of the borders of the north-east region of India are international boundaries. A slew of questions relating to sub-nationalism, regional and ethnic identities, illegal immigration and violent separatist movements have dominated much of the discourse on the north-east. At the time of Independence, the North East was one of the most prosperous regions in the whole of India. More than six decades later, this has become one of the most troubled and backward regions in the country. In 1947, Assam had the second highest per capita income among all states in India. After the 1965 India-Pakistan war, transit facilities between the North East and West Bengal through Bangladesh (then East Pakistan)

were denied. Subsequently, the North Eastern part of India started witnessing problems associated with all landlocked regions. Before 1947, the distance between Guwahati and Kolkata would be less than 600 km against 1,300 km at present; the distance between Agartala and Kolkata would be 350 km against 2,000 km now. This region has traditions of community-based economic and social organizations. Nagaland’s experience of communitization acknowledged as an exemplar for the country. However, the writ of the Union Government in New Delhi does not run uniformly in the North East. There are strong local traditional institutions formed under Schedule VI of the Constitution. At the same time, in many parts, over-dependence on funds from the Union Government has incubated powerful and corrupt elites. Until local groups address the issue of corruption by exerting pressure from below to ensure greater transparency on the part of politicians and officials, the future economic development of the region will be severely constrained. There are upper classes and lower classes but the middle classes are relatively small in number in the North East in comparison to the rest of India. Private enterprises play a relatively minor role in the economy here. It depends heavily on agriculture. Traditional cropping techniques using “jhoom” or “slash and burn” are prevalent in certain areas. There is considerable potential for hor-

ticulture, floriculture and cultivation of medicinal plants. Besides traditional crops like tea, there is scope for developing plantations for bamboo, rubber, spices and fruits. The North East has amazing forest wealth, bio-diversity and genetic resources. Arunachal Pradesh is considered to be one of the world’s most important ecological hotspots. Floods are a regular problem, especially in Assam. Large dams have become increasingly unfeasible for social, environmental and technical reasons and there is need to focus on small and medium irrigation projects. Yet, under pressure from powerful lobbies of contractors with support from their political mentors, a number of major hydro-electric projects have been envisaged that have the potential of disrupting the fragile ecology of the region. Information technology and education have huge possibilities for generating productive employment in the region. The government needs to expeditiously integrate its “Look East” foreign policy with development of this region. On May 13, 2008, a North Eastern Region Vision 2020 document was released. But implementation of the plans and projects envisaged in the document remains painfully slow. R The writer is an independent educator and a journalist with over 33 years of experience in various media – print, radio, television, the internet and documentary cinema. To write to the author, please send an email to dare@cybermedia.co.in with the subject line 'Paranjoy Guha Thakurta'. DISCLAIMER: The views expressed here are that of the author and do not represent the magazine's. DARE.CO.IN | COLUMN | SEPTEMBER 2010 81

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Startup Saturday again brings in Fresh Talent Startup Saturday’s August edition saw many braving the weather to be the first ones to get an insight into the entrepreneurial minds

onnaught Place was one of the worst affected places due to the rains in Delhi. And yet, 55 souls braved a lot to attend the August edition of Startup Saturday Delhi. Alok Mittal from Canaan Partners was the first one to speak and engaged in a Q&A session with the audience. Alok spent a good one and a half hours answering the audiences’ questions and clearly mentioning some of Canaan’s priorities–-focus upon the abilities of the founders rather than their educational backgrounds. He spoke at length on what kind of a startup might have higher chances to be profitable and that certainly has got nothing to do with the VC money. One or the other VC will eventually recognize them as well. Next up was Ashish Kumar, from “Tech-Services” company. His father is a doctor and that’s what got him thinking on how he could possibly club the technical knowledge that he possessed in order to do something which benefits the medical profession. Ashish was of the opinion that such services companies will succeed if the founding members brought in different skill sets, different thought processes to the table. Ashish also took up questions on the motivation and success parameters of being in such a business. Abhishek Rungta kicked off the latest edition of Startup Saturday Kolkata. He found Kolkata to be most cost-effective HQ for his operations, and it has not restricted the growth of his web solutions company Indusnet 82

across borders. His presentation was more of an inspiration and mentoring act. According to him, the time you are going to spend looking for funding, negotiating minute details of the investment and business plan, ensuring legal compliance and so on, is valuable time that could have been spent on more beneficial pursuits. He emphasised on the fact that a service-based startup company can be created best through bootstrapping with following factors for drastic cost reduction (attribution: Paul Graham): 1. Reduced software cost (open source/freewares) 2. Reduction in price of high-end hardware (as suggested by Moore’s Law) 3. Marketing costs are in a downward spiral because of the Internet (social media, affiliate marketing, cheap SEO services) 4. Fewer people can build a software due to improved languages. The event ended with hot samosas and an engaging networking session, where some of us debated on the ways of evolving the Kolkata edition to bring out the lost Bengali entrepreneurial spirit. This edition at Startup Saturday Mumbai showcased the theme - Outliers. The session was kick started by Pankaj Patel, of Logix Microsystems Limited. He presented in detail all the challenges he faced to create a completely new market which till date is untouched by many. The company today is mentioned in various reports

from Capgemini and is considered among the leaders in its own niche. End of the day, Pankaj’s strong belief in himself and the solutions that he proposed for all the challenges he faced has today made him an outlier worth following. Next was an interesting showcase by Vikas Mujumdar, founder of Surround School. We all learnt about Sine, Cos and Tan. But truth be told, no child is interested to know Math and Science. But how planes fly? How the galaxy actually works? And many such unanswered questions. Working on concept maps, it provides content delivery engine and visualization tool which can help a child with answers he is seeking and teach him without the pressure. Surround School targets to fill the gaps in the current education system. Next was Ankit Mehta showcasing his company - IdeaForge. (Their quadraptor was featured in the movie 3 Idiots). Developed with DRDO, Netra – the unmanned aerial system can help in multiple areas and solve issues we never thought are solvable. It can be used to monitor and direct city traffic, help during emergencies, combat terrorist attacks, surveillance, security and many more emergencies. Next showcase highlighted very complicated design and engineering solutions. Thanks to the wit and humor of Abhishek Jain from Zeus Numerix, attendants understood how precise science can be and why that matters for our survival. Zeus Numerix

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is in the simulation business. What Zeus Numerix does is that it provides real simulations through which one can calculate how the object will move, how the temperatures will change, how events will occur and how the subject will react to it. Just imagine the permutations that one can do and the speed in which the R&D can be done if we can simulate everything precisely without doing a trial in reality. Today Zeus Numerix is one of the very few companies that work in this niche and provide solutions that are precise to this level. Having such talented team and innovative startups flourishing in India, is definitely a boon and inspiration to the entrepreneur community.

Last was a business pitch. Five minutes of fame, where an entrepreneur presents his concept and the audience react, question, cross question and appreciate. Naman and his team from FreeCharge.in presented a concept where you log in to their site. You recharge your mobile instantly and the coupons of same amount (currently McDonalds and Barista) are delivered free to you at your doorstep. Free recharge for the customer, more business for the telecom companies, more footfall for the retailers and more business for FreeCharge! Are you thinking why it didnâ&#x20AC;&#x2122;t click you?

Hope you enjoyed this brief roundup of the August Startup Saturday sessions. Do mark the second Saturday of every month (11 September as next) as your Startup Saturday day and be there to experience the inspiration, knowledge, breeding innovation and fun! Carpe Diem! R Startup Saturday is an initiative by HeadStart to provide entrepreneurs in each city with a monthly community driven forum that is structured in agenda but open in discussions. A Startup Saturday provides a forum for entrepreneurs to discuss, present, network and learn from peers, prospective customers, adopters, partners and investors. Currently SSs are held in Bangalore, Delhi, Hyderabad, Pune, Kolkata, and Mumbai, on the second saturday of every month. http:// headstart.in/ Inputs from Amit (Bangalore), Ritesh (Delhi), Arpit (Pune), Mitesh (Kolkata) and Saptarshi (Mumbai) DARE.CO.IN | EVENT | SEPTEMBER 2010 83

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blogs/opinion

/Srikala Bhashyam

Managing Liability Running cash flow is the backbone of any enterprise; but liquidity comes with some strings attached...too much borrowing can land an entrepreneur in deep trouble. Here are some tips to tackle it

A Debt-Equity ratio of less than one mostly holds good for larger enterprises but not for small and medium enterprises 84

couple of weeks ago, an entrepreneur with a track record of two decades in commodities trading business walked into my office for financial planning. He is a successful entrepreneur with a business which has the ability to generate four to five lakhs income without much effort. Considering that he runs an office with staff strength of five to six people with average salary cost, you would be tempted to call him successful. But the guy has a loan which is more than two times his annual income flow. Needless to say, he is in a complete financial mess. Managing cash flow and liability is a bigger challenge for an entrepreneur and has to be at the top of the list of priorities. Since an entrepreneur does not have the luxury of regular and assured cash flow (at least for a while), financial prudence is a necessity than luxury. The trouble of liquidity management becomes less challenging when liabilities are under control. Then how does one manage liability when they are needed to grow business? While a traditional accountant would tell you that debt-equity ratio of less than one is always welcome and mangeable, it probably holds good

for larger enterprises. In the case of small and medium-sized enterprises, debts are built up in the hope that they would help the business to generate higher revenues over a period of time. The trouble comes when the business faces the pressures of cyclical downtrends immediately after the loan book expansion. In the case of smaller enterprises where there is no distinction between enterprise and entrepreneur, the loan book includes both personal as well as corporate organization account. As a result, business has the potential to suffer even if an entrepreneur has borrowed for his personal needs. The client who walked into my office was in the above situation as some of his loans were a result of home loans borrowed against multiple properties purchased for personal use. His intention of investing in properties began with the idea of creating assets which were expected to help during the downtrend! Often, entrepreneurs get into the over liability zone due to a number of factors. Here are some of those: 1. Focus on liquidity: Ask an entrepreneur and he would tell you that his biggest challenge is

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liquidity or lack of it. Every small scale industrialist would tell you that his business has the potential to grow by another 15-20 percent but the stumbling block is the banker. Since a banker focuses on assets and receivables for fixing working capital limit, no industrialist is happy to deal with his banker. As a result, he ends up with multiple borrowings to meet liquidity needs. While a loan can give instant relief, check out if the business has the ability to service and repay the liability. 2. Fix the term: While borrowing in itself is not a crime, it can be if the business does not have the target to get rid of liability. While borrowing is a continuous process, particularly in the manufacturing sector, every loan should have a mortality rate. So business should focus on closure of loan as part of its business plan. 3. Explore options: It may be easier said than done but often tendency of an entrepreneur is to go for a borrowing which is less tedious despite being expensive. The enterprise should set itself the target of being a preferred bank borrower to enjoy lower rate of interest rather than opting for easy loan products from the unorganized sector which are more expensive. Over a period of time, small and medium-sized enterprises should aim for the next level of funding options like private equity or capital market products which are less expensive. Critics are bound to argue that loans are an integral component of a business and particularly in non-service sectors where receivables are the main culprits. With payment cycles getting longer in India Inc., companies are forced to take the borrowing route to keep the production running. Over a period of time, businesses too get used to the idea of running these

Treat your enterprise as an employer and hence make it pay up your salaries on a regular basis

loan books. While loan in itself is not a culprit, the trouble comes when it reaches a flash point. Hence it is important for the business to read these signs well in advance. For instance, a business which does not have the ability to generate cash flow to meet its interest cost should not have the mandate for fresh borrowing. If an enterprise hasnâ&#x20AC;&#x2122;t been successful with its operations, chances are that it is unlikely to become even with fresh funds. So, when a business fails to clock profits within the stipulated duration, look for sore points and fix them rather than putting further strain through borrowings. More importantly, business should get into the habit of creation of wealth after infancy as it would become a habit. A mere focus on volumes would be meaningless unless operations have the ability to leave something on the table. Besides actual expenses, businessmen should also get into the habit of taking care of notional expenses. A classic example is the salary of an entrepreneur. Treat your enterprise as an employer and hence make it pay up your salaries on a regular basis. Not only will it bring the desire efficiency into business but will also make the entire business process accountable. And a final word for entrepreneurs. Do not get into the habit of creating assets in the hope that it would come in handy for funding your business at a later date through borrowed capital. It is a receipe for financial muddle at a later date. R

Srikala Bhashyam is an investment consultant and runs her own consulting firm in Bangalore. She has been a regular columnist for the print and internet media on personal finance. To write to the author, please send an email to dare@cybermedia.co.in with the subject line 'Srikala Bhashyam'. DISCLAIMER: The views expressed here are that of the author and do not represent the magazine's. DARE.CO.IN | COLUMN | SEPTEMBER 2010 85

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TechCorner

Before You Move to Cloud Computing /Anil Chopra

here is considerable interest amongst organizations to move their apps to the Cloud. But, like any new trend or technology, there are lots of doubts and questions in everyone’s mind. We’ve attempted to clear those doubts with the help of this story, in which we’ve given a mix of both theory and practice. Before you dive into the story, here are a few things that you must know about Cloud Computing:

There’s more to Cloud Computing than a few Internet based services Cloud Computing is more than a few applications you can access over the Internet. It allows you to buy hardware resources online, take an entire platform for software development, or setup a platform yourself inhouse.

Cloud Computing is a fundamental shift from how your current IT infrastructure is configured Most of the time, when people talk about cloud computing, they refer to the public cloud and some apps you can use from it. But there’s a lot more to cloud computing than procuring a few online services. It’s a fundamental shift from the traditional

client/server architecture. Instead of having multiple servers, and even clients, all over the place, they’re all consolidated into fewer, powerful machines. That’s going back to the mainframe days, you might say, but back in those days, you didn’t have mobile users carrying laptops, netbooks, and smartphones, with Internet access. So Cloud Computing is how your IT infrastructure will change in the near future, to become more flexible, agile, efficient, cost effective, and accessible from anywhere. This sort of tuning will require careful planning, and would need to be done gradually in multiple phases over a period of time.

Cloud computing is about reducing wastage of IT resources & utilizing them more effectively Whether it’s the service provider’s cloud, or your own, it’s all about utilizing your IT infrastructure more effectively. Most cloud applications are built upon virtualization of hardware resources. While virtualization let’s you use the hardware more effectively, other tools let you do the allocation and de-allocation of resources

dynamically. Cloud computing to users is what electricity is to consumers When you plug an electrical or electronic device into a wall outlet, you expect the device to work. You’re not concerned about how electricity is generated at the back-end. This in a nutshell, is what cloud computing is supposed to do to your IT infrastructure. Why should users have to know the complexities of the IT infrastructure at the back-end? They should be able to access the services seamlessly without any glitches.

Cloud computing does not equal the Cloud While the cloud is typically another name for the Internet, cloud computing is goes much beyond that and defines your IT infrastructure. There are three models of cloud computing-public, private, and hybrid, and three different ways of implementing them-SaaS, PaaS, and IaaS. All these have been explained elsewhere in this story. In this story, we’ve covered everything you need to know before you decide to move to the cloud. R The content for this article is sourced from PCQuest Visit their website: www.pcquest.com

What to Move to the Cloud? /Rahul Sah

T experts, analysts, industry leaders and everyone else talks about Cloud Computing today. While some peoplebelieve that it is Internet’s next evolution, others say that it’s just hype. But what one doesn’t argue about is the business benefit proposition that Cloud Computing offers to an organization. Both IT and business managers are already inundated with information on the benefits of a cloud centric infra-

structure. The question now that they seek an answer to is not on whether to move to the cloud or not, but how and what to move to the cloud. Let’s try and address this issue.

Public or Private? A public cloud will be like services from Amazon, Microsoft, Google or Salesforce.com that will drive the costs down and relieve you of the manage-

ment of resources burden but at cost of losing some control over them. Whereas a private cloud will be built using an enterprise’s own resources in the data center, will reside within the enterprise firewalls, and you’ll have to manage the whole resources while having full control over them. Making a choice between these two adoption approaches is a third option of hybrid cloud, which is leveraging some of the

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TechCorner services on both private as well as the public cloud.

Private Cloud: Enterprise’s choice Any large enterprise or organization would have a clear choice of adopting a private cloud, as they do not want to compromise on the critical security policies involved with data and information. The main benefit of private cloud over a public cloud that an enterprise see is that in a private cloud all the services, data and processes will be managed within the organization without restrictions of network bandwidth, security and legal requirements that using a public cloud over public network could involve. Also they have the resources to have virtual infrastructure to adopt the cloud computing model. While small organization or SMBs won’t be having that kind of virtual infrastructure that enables remote configuration of a virtual network involving routers, firewalls etc. Any large organization, say a bank, would not port their business critical applications like core banking solution onto the public cloud. They want total control over their business applications and related data, therefore a private cloud infrastructure suits them well. But many organizations would have already invested on their own data center for next 4-8 years. They cannot abandon these investments overnight and move towards cloud. So what is a viable option for them? Actually, the idea of adopting a private cloud is to make use of existing virtualized data centers. Since virtualization is just the base layer for having cloud infrastructure, and most data centers would already be having servers that support virtualization. The larger organizations with existing infrastructure can leverage virtualization of their servers so as to enable them to manage peaks in demand. By consolidating storage and applications and virtualizing their infrastructure, organizations are beginning to create their own private cloud services. They are modifying their physical data centers by changing the way they manage the services that run

out of their data centers. Services/Resources Providers Doing so they are overcom- Office Apps Zoho.com, Google Docs ing the issues of availability, Virtual Desktop Nivio, 2X CloudClients Zoho, Google, Catch Mail, Microsoft, IBM security, and vendor lock-in Email ERP Ramco, SAP and are getting benefitted CRM Salesforce.com, Zoho.com with easier management of Storage and Backup Iron Mountain, EMC Atom Virtual dedicated servers Rackspace, Flexiscale, Newservers.com, SoftLayer resources. Cloud platform for applications Amazon, Microsoft Azure, Google AppEngine But the question about Application testing SkyTaps, Virtusa, IBM what to move to the private Data center SymetrIQ, GoGrid Zoho, Cisco WebEx cloud remains. IT experts Web Meeting Collaboration OneHub, Drop.io, Box.net say that almost everything Project Management BasecampHQ can be moved to the cloud. But the advisable approach is to move any particular organization by providing those applications that are not perfor- those as services on public cloud model. mance centric to the private cloud. For The cloud service provider takes the care instance, storage, archival applications, of deploying, managing and securing the NAS, etc can be moved. Hitachi Data Sys- infrastructure, and the organizations can tems is offering cloud service for private consume them on demand with a pay for File Tiering for organizations, wherein what you use model. Though, the adopan organization can have their storage tion towards Cloud is increasing, it can in a private cloud within their own data be related to the skepticism that people center and managed by Hitachi. For in- had earlier towards online payments. stance, if an organization is having a NAS During the DotCom days when people of 50TB, it is unlikely that more than 80- were skeptic of giving their credit card 90% of that data would be active. So an details online, but now they are using organization can opt for having a NAS online payment on a daily basis without for 10TB storage and have rest on their second thoughts. Exact same ways will private cloud storage, which will be set- happen with Cloud. As issues with SLAs, up and managed by Hitachi and the or- data security, etc. get worked out and ganization will be paying them on what finalized and standards are adopted; a they actually use. Thereby, shifting their Cloud business model will emerge which capital expenditure on storage devices will be ‘pay as you use’ for different custowards operational expenses. Similarly, tomers like enterprise, end-users etc. Adopting a public cloud makes more apps or processes like email archiving, document management systems, data sense to smaller organizations or SMBs backup can be migrated onto the pri- that can’t invest upfront on hardware or vate cloud initially. Then as the model on licensing of business productivity sostabilizes and the organization has de- lutions like ERP or CRMs. Such organizaveloped or modified their existing busi- tions can opt for cloud services offerings ness applications for the cloud comput- ranging from business apps to having ing infrastructure, it will be in this phase a server on the cloud. The only thing that an organization can move some of that the consumer has to ensure is the their business critical apps on the cloud bandwidth availability for availing these computing infrastructure within their services. Whereas, a large organization data center. This gives organizations to won’t be adopting public cloud comdeliver internal IT services more effec- pletely, rather they would be adopting a Hybrid cloud approach, wherein the will tively and in cost effective manner. host their non-risky data and resources onto the public cloud and have their Public Cloud: For everyone? While the cloud service providers like business critical apps and data within Amazon, Google, Microsoft, Salesforce. their private cloud. R com etc. are all in an endeavor to offer The content for this article is sourced from PCQuest a one-stop shop for all the IT needs for Visit their website: www.pcquest.com DARE.CO.IN | TECH CORNER | SEPTEMBER 2010 89

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Trends in Cloud Computing We dwell on the trends that are currently shaping up the area of cloud computing in India. Plus, we see what enterprises are currently moving towards – private or public cloud /Amrita Premrajan

y 2012, 20 percent of businesses will own no IT assets. Several interrelated trends are driving the movement toward decreased IT hardware assets, such as virtualization, cloud-enabled services, and employees running personal desktops and notebook systems on corporate networks,” says Gartner. Of long, organizations have been stockpiling technology, with the infrastructure revealing problems of under-utilization and existence of too many silos. Information multiplying every single day is making things increasingly challenging for the enterprises to manage them. IDC says that during the coming ten years, data stored in various storage systems will increase by 44 times, with the current rate of data growth. But it won’t be possible for enterprises to increase their IT budgets and scale up their IT infrastructure in tandem with the information explosion that’s happening. Another point is the time to market, which has become significant for businesses and they are looking at ways and means to minimize it. For eg , if an enterprise wants to set up a collaboration service internally or develop social networking capability, they would plan about the hardware, software, service requirements, etc which might take a long time to market. But now with the available cloud services, the same roll out is possible within much shorter time. In such instances, cloud computing is increasingly being looked at by the enterprises as a great alternative as it lets them scale up or down, save

organizations money, decrease the time to market and shift their capex to opex.

Who’s moving to Public Cloud? Currently the trend is that larger enterprises are exploring Public Clouds for support applications such as Dealer Management Systems, Document Management Systems, mailing, CRM and Learning Solutions, etc while critical applications for which data has to reside within a firewall due to regulatory requirements or have to be available physically from the audit point of view are being reserved on the private cloud. Most enterprises want to move to the cloud for the great cost advantage that it offers, but there are hardly few of them who actually move to the cloud for the big security concerns that they perceive in that. SMBs where cash and people resource are scarce, a public cloud’s flexibility, reliability and scalability with no capital expenses, no upfront commitment, low unit costs and pay-as-you-go model, is highly compelling . Also the application development world is increasingly undergoing a significant change through

“We believe that enterprises will leverage and adopt the private cloud model faster than other models, because as a hybrid model of a public and an internal cloud, a private cloud model will utilize resources from both the internal and external pools.” - Manoj Chugh President, EMC India & SAARC.

adoption of Platform as a Service as it is resulting in faster roll-out of applications at lower costs. Public clouds are being used by companies delivering products and services over the Web, with no captured set of users using a single network and software developers with dynamic resource requirements. Another aspect is the presence of a large mobile workforce in organizations that need access to applications on-the-go. Depending upon the criticality of the applications; organizations are hosting these applications on the public cloud and are making them available to its mobile workforce via the Web.

Who’s moving to a Private Cloud? A private cloud can be set up either internally or by partnering vis-a-vis with an external cloud service offerings vendor to identify which model is suitable. The trend is that the larger enterprises having a substantial “OnPremise” IT with many legacy applications and systems are looking to optimize their IT through Private Clouds. Private Clouds are hosted inside enterprise firewalls and have to be controlled by the enterprises themselves. Most enterprises have already started their journey by virtualizing servers and some IT infrastructure. Prospective consumers are being attracted by better automation and self service for users, but these early adopters are facing challenging decisions and integration headaches due to a general lack of standards. As private cloud technologies get adopted, IT managers will start to grow comfortable with the use of

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TechCorner cloud technologies inside their walls. As a result, they will start to look more seriously at the cost/benefit analysis of private versus public clouds. More efforts will be taken to verify the promises of the cloud in terms of cost savings and the ability to deliver functionality quickly. Companies will start to take a more serious look at building hybrid clouds that better integrate existing enterprise applications with cloud-based applications. The proliferation of different services will lead to several models designed to meet the needs of different companies. Most will not prove practical, but a few models will emerge that help balance the needs of security, compliance and cost savings in a practical way.

portfolio against organizational requirements today and in the future, map on the service level requirements and then arrive at what kind of future infrastructure is required. Evaluate the future IT requirement against budget outlay and cloud vendor services and maturity levels available in the market to determine which IT services need to be move to the cloud and which need to remain physical. Finally, identify an end to end vendor solutions provider that brings together different pieces from the larger ecosystem together for simplicity and to avoid vendor lock-in.

Trend towards Hybrid Cloud

Moving to the Public Cloud

“The concept of Hybrid Clouds, primarily for infrastructure is yet to gather momentum. Over a period of time, this is set to change where larger enterprises will increasingly focus on Hybrid Clouds in order to leverage the best of both worlds. This will happen once Public Cloud providers begin to follow open standards that will enable seamless integration between Private and Public Clouds. With this the services oriented architecture would become a focus point as the Hybrid environment becomes more and more sophisticated with apps or services from cloud integrating with apps or services running on premise; it would become necessary to have the architecture in the right way so that they support these loosely coupled models. This would make the hybrid environments to run optimally.”

It is critical for organizations to fully assess vendors’ security systems, as the most critical element of their businesses—information is in the hands of the service providers. It is also important for them to avoid cloud lockin. This will help them switch providers. This approach will help them to retain control over the company’s IT processes. Beyond the data center, threats lie in connectivity to the cloud. So, it is important to have an end point security mechanism in place. The need of the hour is a smart choice of next-generation technologies, which are both effective and cost-efficient and provide a proven way to prevent unauthorized access to critical data and applications.

Questions to ask before you move to the public cloud:

Before you think ‘Cloud’ Amid an ever-increasing bevy of regulations that enterprises need to worry about and a growing number of cloud service providers to choose from, enterprises have a lot of options and a lot of questions to consider concerning cloud computing compliance. Evaluate existing IT infrastructure

Does the cloud offer a service level agreement (SLA) for services? If yes, how many 9’s does it have (look for 99.9% to 99.999% uptime guaranteed)? Does the Cloud have a public transparency site where the system issues or outages are published for everyone to see? Does the Cloud offer compensa-

tion commensurate with any potential financial loss if my business suffers due to lack of availability? Will I be compensated automatically or do I need to ask for it? Does the Cloud have applications and data stored in several geographically separated data centers? If yes, how many datacenters does the Cloud have? If geographically distributed datacenters are used, what countries are involved? Is there a disaster recovery strategy in place? How frequently is it tested? How many copies of the data are backed up? How often is backup performed? Can I readily export my data in a usable format?

Security questions

What are the security measures used to authenticate users? What level of encryption is offered to protect my data? How secure is the Cloud and is it certified with any independent security vendors to vet the overall security of its services?

Moving to a Private Cloud A private cloud can be set up either internally or by partnering vis-a-vis with an external cloud service offerings vendor to identify which model is suitable. The process begins with consolidation - storage, networks, applications, data centers. Storage consolidation alone can realize 2:1 savings. The next step is virtualization, then building in security through identity assurance & access control, encryption & key management, compliance & security information management and fraud protection. Adoption of tiered storage, data de-duplication and applying software and process automation for further benefits. R The content for this article is sourced from PCQuest Visit their website: www.pcquest.com DARE.CO.IN | TECH CORNER | SEPTEMBER 2010 91

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Expertorial

Powering It Right Identifying proper power conditioning systems for your organization is necessary to ensure optimum productivity. Lets take a look at how using uninterrupted power supply (UPS) can benefit your organization

lmost all the activities we carry out in our daily lives revolves around electricity. Especially in a office workspace, it becomes imperative to have a continuous power supply to maintain the smooth and efficient running of the business. Power outages which are still irregular and frequent in India and they are a huge impediment in bringing out productive results for any organization. Not only do they result in loss of data and equipment damage, but they are also a mundane inconvenience which can be done away with if the organization takes proper steps towards power conditioning. This means having a power backup which will keep the computers and other systems running in case

there is a power cut. There are a huge array of companies that will provide power back up solutions and products. Hence, it becomes important for any organization to determine what kind of power conditioning system they require. There are various factors to consider when doing so: The quality of power supply in the area, the size of load that is connected to the power conditioning system, whether the system needs any specific requirements like noise filters or electromagnetic interference, also if the power conditioning system comes within the organizationâ&#x20AC;&#x2122;s budget and can provide for expansion and maintainance.

With the advent of the internet, there has been a huge demand for high-quality power to support the internet infrastructure and it is continues to rise. This makes it absolutely necessary to have an uninterrupted power supply (UPS). Lets take a look at a few power conditioning systems - UPS, Inverters, Generators and see how UPS is more advantageous in comparison to the others.

Uninterrupted Power Supply (UPS) A UPS is basically an electrical apparatus that provides emergency power to computer systems in case there is a power outage. It is different from other power conditioning systems like inverters and generators in the sense that it provides instantaneous power backup when there is a power cut and hence there is absolutely no chance of losing data. It acts as a large battery which will hold power in reserve and will keep the systems running for a certain length of time. It will subsequently shut down in stages to keep the most important elements in a business during a prolonged outage. The amount of power the UPS can give depends upon the size of the backup battery. It also helps in absorbing power surges. INVERTERS An inverter also provides power backup, but the difference between a UPS and inverter is that it does not provide instantaneous power supply in case of an outage. There is a time lag when the invertersâ&#x20AC;&#x2122; power reserve

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TechCorner

starts getting utilized after the power cut which can result in loss of data if it is used for computer systems. However, it is generally used for running other equipments and machinery in building like fans, lights, refrigerators etc. An inverter battery needs to be regularly charged to get uninterrupted service. GENERATORS Generators will continuously generate new power for the business as long as there is a power outage by converting mechanical energy to electrical energy. They are a practical business solution to businesses which require power backup for an extended period of time. The power source is basically a kerosene running engine and hence it needs regular maintainence. In comparison to inverters they are noisy and have a smaller machine life duration. Also, generators need to placed in areas with proper ventilation and require to started manually.

How to decide which UPS is best for you? As explained earlier, a UPS is best suited for any business as it has the advantage of providing power instantly, it is pollution free and does not require any investments in infrastructure for its accommodation. However, the decision of buying a

UPS is not childâ&#x20AC;&#x2122;s play. One has to identify the kind of UPS one needs:Standby UPS systems: Power is fed through surge and noise suppression circuitry and on to your equipment and a battery charger keeps an internal battery to be used immediately. During a blackout, the power in the UPS is utilised and when the power is back, the batter goes back to recharging. Line-Interactive UPS Systems: The UPS regulates high or low voltages to normal levels and sends clean power to the system without using battery power. It works pretty much along the lines of a Standby UPS. On-Line UPS Systems: This is the highest level of battery backup protection available.

There are four type of surge protection-related UPS set-ups: A basic surge protector protects the system from electrical bursts; another type simply keeps the power running for a certain amount of time for you to turn off your system when there is a power outage; the third type UPS system does the same and has an added feature where you can set it up to automatically turn off itself; and fourthly, there is the UPS system that backups data and acts as a storage center as well as protects from power surges. After figuring out what kind of UPS is best suited to your needs and a little bit of market research, one can determine on what kind of UPS to settle down with that are a perfect fit to the system. R

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Back of the Book

On The Bookshelf /Prasheila Lookhar Innovate! 90 Days to Transform Your Business As the name suggests, Rekha Shetty’s Innovate! lays down a step-by-step guide for a business to develop an atmosphere and culture for innovation. This 90-day, do-it-yourself book will help you, your employees and your company operate in an enriching climate, where everyone feels empowered and willing to exploit their full potential. Author: Dr Rekha Shetty Publisher: Penguin Books India Price: Rs 299

The Facebook Effect Get an insider’s view of the phenomena taking the world by storm—Facebook. David Kirkpatrick’s The Facebook Effect explores the history of the company and the impact that Facebook has on our lives. Based on exclusive interviews with in key management, including founder and CEO Mark Zuckerberg, it presents a story on Facebook not found anywhere else. Author: David Kirkpatrick Publisher: Virgin Books Price: Rs 599

TATA: The Evolution of a Corporate Brand Management expert and business historian Morgen Witzel talks about the Tata brand, and the values and perceptions the people in India have about TATA: The Evolution of a Corporate Brand. The author also talks about the leadership of the company and how over a history of over 140 years, the company has had only five leaders. Author: Morgen Witzel Publisher: Portfolio Price: Rs 599

Fooled by Randomness Rated as one of the top 75 “Smartest Books of All Time” by Fortune magazine, Fooled by Randomness contemplates how random events are sometimes taken as non-random by people. It is based on the thesis that human beings overestimate causality and look for explanations where there are none. It discusses misconceptions like skewed distributions and survivor bias. Author: Nassim Nicholas Taleb Publisher: Penguin Books Price: Rs 299

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Gadget Shop

Top List Top gadgets for the business traveler Smart phone Smart phones like Blackberry, HTC etc allow you to access your mail on the go and also act as a great pocket organizer. You can also find your way using the GPS locater inbuilt in most phones, in case you get lost in a foreign city.

Wi-fi finder With a wi-fi finder in your pocket, you don’t need to switch on your laptop to see if there is a hotspot nearby. Simply turn on the finder and it will locate the nearest hotspot for you. Data card Data cards allow you to access the Internet wherever you are, without having to look for a wi-fi hotspot. They are also extremely useful when you are traveling by bus or train.

Privacy filter You can guard your work against those wandering eyes in public places by attaching a privacy filter to your laptop screen. A black piece of plastic, the privacy filter lets you see your laptop display as is, while the “wanderer” only sees a black screen.

Kindling Romance What does the new Amazon Kindle have in store for us? The latest Kindle from Amazon’s kitty is leaner and sharper, though not much different from its predecessor. The functionality pretty much remains the same, with an additional Wi-Fi feature, and the US$ 189 (roughly Rs 9000) tag will likely be the biggest selling point. The size of the Kindle has reduced by about 20 percent, standing at 7.5 by 4.8 by 0.3 inches, with the screen size remaining at 6 inches, but a thinner rim and compacter keyboard. The controls on this one are much better— symmetrical Page Forward/Page Back buttons like the ones on the Barnes and Noble’s Nook, and a four-way toggle button replacing the square trackpoint of previous models. Amazon has definitely learnt a thing or two and also raised the keys on the Kindle’s QWERTY, making them easier to use. The best change perhaps is the improved display. Amazon claims to have increased the contrast by 50 percent and that the display now makes for sharper and clearer text and photos. Page turn speed too has improved drastically. The Wi-Fi feature works fast and downloading books is as fast and simple as ever. The Webkit browser though is a bit of a pain, with navigation of pages taking a long time. Unfortunately, the pages still come in black and white. In spite of its shortcomings, the Kindle is probably the best dedicated e-book reader out there. DARE.CO.IN | BACK OF THE BOOK | SEPTEMBER 2010 95

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Travel Bug Water, water everywhere... Three mesmerizing waterfalls in India

Attukal Waterfalls, Munnar Located 9 kms from Munnar and ideal for long treks.

Jog Falls Shimoga

The highest plunge fall in India, created by the Sharavathi River falling from an altitude of 829 feet.

Referred to as the â&#x20AC;&#x153;Niagara of Indiaâ&#x20AC;?, located on the Kaveri River and famous for medicinal baths and hide boat rides.

Hogenakkal Falls, Dharmapuri

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Fashion

Finding Your Scent Plunge into the depths of the perfume world to emerge with your own signature scent. Nobody likes body odour, nobody... Imagine stepping into a business meeting and having everyone recoil because you don’t “smell so great”! Smelling good is an important part of looking good and feeling the part. As Gianni Versace put it, “Perfume puts the finishing touch to elegance—a detail that subtly underscores the look.” So, how do you go about finding a scent that defines you?

Never more than two at a time Never try more than two perfumes at a time. Your nose will start getting confused and you won’t really get the true scent. Perfumes have three notes— top, middle and base. The base is what lasts, so wait at least 10 minutes after you have put on a perfume for the top and middle notes to evaporate.

Skin type Different perfumes smell different on different skin types. Heavier and spicier scents go well with dry skin, while citrusy, light scents with oily skin types. Always try a perfume on your skin, only then will you get an idea of how it will smell on you.

An Important Tip Tag a friend along Taking a friend perfume shopping is a great idea as it lets you get another point of view, plus you get a fair idea of how other people will “smell you.” Something you fall in love with might actually be strong for those around you.

Too much is not too good! Be judicious when you spray on a bottle of perfume, and be especially careful of the weather. Warm, humid weather intensifies a fragrance, so it’s a good idea to go for something lighter and apply it more often.

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Organizations DARE.CO.IN

covered in this issue, in alphabetic order; first appearance

Aavishkaar Goodwell .......................27

Deloitte ............................................33

Kismet Capital .................................27

Rup Furniture...................................78

Accel India .......................................27

DFJ ..................................................27

Komli Media .....................................27

Saikia Developers............................78

Actis .................................................27

DRDO ..............................................82

KPCB ...............................................27

Salesforce.com ................................89

AIIDC ...............................................70

EMC.................................................90

Legatum...........................................27

Samsung .........................................23

All Assam Small Industries Associations (AASIA) ......47

Equitas.............................................27

Logix Microsystems .........................82

Sandstone Capital ...........................27

Equitas Micro Finance .....................27

Lok Capital.......................................27

SBI .....................................................9

exchange4media .............................28

Mahindra..........................................77

Facebook .........................................94

Matrix Partners India .......................27

Fanny’s Fast Food ...........................78

McDonalds.......................................83

Federation of Industries and Commerce of North East Region (FINER) .......................47

Mercatus Capital..............................29

Amazon ...........................................89 Amity Business School ....................33 Amrita Healthcare ..........................102 Aqua Designs India .........................27 ArrayShield ......................................29 Asian Genco ....................................27 Assam Air Products .........................75 Atrimed ............................................35 Bajaj.................................................77

Forbes India.....................................29 FreeCharge.in..................................83 Gargo Motors...................................75 Gartner ............................................90

Microsoft ..........................................29 Monnet Power .................................27 NABARD..........................................70 Nagaland Industrial Development Corporation (NIDC)..........................49

Sequoia Capital India ......................27 Share Micro n .................................27 Sherpalo Ventures ...........................27 Shillong Bar Association ..................78 Silverdrops Foods & Beverages ......77 Singhania Group of Industries .........76 SKS Micro nance ............................27 Small Industries Development Bank of India’s (SIDBI) ....................46

Google .............................................89

National Collateral Management Services .....................27

Gradatim IT Ventures ......................29

NEDFI ..............................................45

Sporting Minds Technology .............29

Haplaw...........................................103

NEN ...............................................102

SRD Nutrients..................................77

HCL .................................................22

New Tina Studio ..............................77

SRM University ..............................103

Helion Ventures ...............................27

Nexus Ventures ...............................27

Sundaram Foods .............................77

Hitachi..............................................89

Nokia ...............................................76

Surround School ..............................82

BITS (Pilani) ..................................103

Hivos-Triodos Fund .........................27

SVB .................................................27

Blackstone .......................................27

Hyundai ...........................................75

North Eastern Small Scale Industries Association (NESSIA) .....46

Borah Hyundai .................................75

ICICI Bank .......................................33

Norwest ...........................................27

Symbiosis Centre of Information Technology .................102

Bulland Cements .............................76

Icreate..............................................29

Canaan Partners .............................29

IDC ..................................................90

Capgemini .......................................82

IdeaForge ........................................82

CCD .................................................77

IDFC ................................................27

Central Statistical Organisation .......45

IDG Ventures ...................................27

Centre for Industrial Extension ........72

IFC ...................................................27

CGTMSE .........................................24

IIM Calcutta ...................................103

Chamber of Small Industry Associations (COSIA) ........46

Indian Institute of Entrepreneurship (IIE) .....................72

CIA...................................................71

Indian Institute of Technology, Bombay .....................102

Barista .............................................83 Barnes and Noble’ ...........................95 Basix ................................................27 Bhabani Offset and Imaging systems..............................75 Biscon Steel Industries ....................43 Biswajyoti Graphics .........................78

Oil India Limited ...............................75 Olivia Auto .......................................77 Panchshil Realty ..............................27 Peepul Capital .................................27 Pellucid Networks ............................29 Penguin Books India........................94 Per nt Healthcare ............................27 Piaggio.............................................75 Proto ................................................23 PTC Ashmore ..................................27

Spandana ........................................27

TATA ...............................................94 Tech-Services..................................82 Theodore .........................................76 Tribes Music & Media Lab ...............78 TVS..................................................77 Twitter ................................................9 ULFA ...............................................40 Unitus ..............................................27 Venture Intelligence .........................26

Punjab National Bank ......................75

Virgin Books ....................................94

Infoways ..........................................76

Rabo Equity .....................................27

Vmukti Solutions ..............................29

InMobi ..............................................27

RBI...................................................45

World Economic Forum ...................43

Jai Hind College ............................103

REI Agro ..........................................27

Xander .............................................27

Dell ..................................................29

Jaiswal Group of Industries .............76

Repos Food .....................................77

Yourstory.in .....................................29

Dell Services..................................103

KFC .................................................77

Rina Enterprise ................................78

Zeus Numerix ..................................82

CLSA Capital ...................................27 CNBC TV 18 ....................................29 Confederation of Indian Industry (CII) ....................................47

SEPTEMBER 2010 | INDEX | DARE.CO.IN

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People DARE.CO.IN

covered in this issue, in alphabetic order; first appearance

A.P.J. Abdul Kalam..........................33

David Kirkpatrick..............................94

Mark Zuckerberg .............................94

R.M. Talukdar ..................................70

Abhijit Barooah ................................47

Dawoo Brajabashi ...........................74

Morgen Witzel..................................94

Rajaram Rajendran .........................36

Abhishek Jain ..................................82

Dilip Kumar Barua ...........................70

Mukesh Ambani ...............................28

Ravi Bharadwaj ...............................29

Abhishek Rungta .............................82

Dorjee Khandu.................................64

Mukul Sangma...................................9

Ravi Capoor.....................................46

Alok Mittal ........................................29

F.W. Ferro Tech ..............................77

Naman .............................................83

Ravindran Govindan ........................29

Amar Asom ......................................71

Gianni Versace ................................97

Napolean Bonaparte........................28

Rekha Shetty ...................................94

Amitabh Jhunjhunwala ....................28

Girish Joshi ......................................29

Nassim Nicholas Taleb ....................94

Rina Saha ........................................78

Anil Ambani .....................................28

Godwynn Nongrum..........................78

Neiphiu Rio ......................................48

Ankit Mehta......................................82

Gopalchandra Saha.........................78

Nisha Ashikan................................103

Anupam Deka ..................................77

Harshavardhan ..............................102

O P Bhatt .........................................39

Anuradha Parakkat ........................103

Hrishikesh Damle ............................34

Olee Bora ........................................70

Anurag Batra ...................................28

James Syiemiong ............................76

Pankaj Patel ....................................82

Anurag Jain ...................................103

Janaki Ballav Patnaik ......................50

Paranjoy Guha Thakurta .................81

Ashish Kumar ..................................82

K Ahmed ..........................................72

Paul Graham ...................................82

Ayan Choudhry ................................77

Kamakhya Borthakur .......................75

Poyni Bhatt ....................................103

B L Agrawala ...................................47

Keshav Laxman .............................103

Prakash C V ....................................29

B V Phani.......................................103

Khanjan Baruah ...............................77

Pranab Chakraborty ........................77

Bhupen Hazarika .............................75

KK Bajaj ...........................................77

Prasheila Lookhar............................94

Bidhan Deb ......................................47

Lord Byron .......................................28

Premier Cryogenics .........................75

Sushikato Achumi ............................76

Brijesh Bharadwaj..........................102

M.R. Khambete................................46

Prodip Borah....................................75

UR Tata ...........................................24

C S Bhattacharjee ...........................76

Ma a Mudgal .................................103

Prodip Borah....................................41

V M Ponnaiah ................................103

C Teeya Imsong ..............................78

Manmohan Singh ............................40

Pu Lalthanhawla ..............................54

Vijay Anand .....................................22

Charles Assisi ..................................29

Manoj Chugh ...................................90

R L Rinawma ...................................43

Vikas Mujumdar ...............................82

DARE...............................................24

Manoj Modi ......................................28

R S Joshi .........................................47

Vikram Singhania ............................76

Rupchand Sutradhar .......................78 S R Payeng .....................................69 Santosh Jaiswal...............................76 Satya Saikia.....................................78 Shailendra Singh .............................29 Shereen Bhan..................................29 Shradha Sharma .............................29 SR Payeng ......................................73 Srikala Bhashyam............................84 Sriparna B Baruah ...........................72

SMS: “DARE <your comments, questions or suggestions>” to 56677 Email: dare@cybermedia.co.in Website: www.dare.co.in Follow us at: http://twitter.com/daretostartup DARE.CO.IN | INDEX | SEPTEMBER 2010 99

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The Great Indian Campus Challenge Confident and skilled, students lead the charge at India’s leading B-Plan competitions

hat is cooler than a rockstar strumming his guitar at a college fest? “A budding entrepreneur pitching his startup idea at our B Plan competition,” says Brijesh Bharadwaj, Student President of the Centre for Entrepreneurial Leadership at the Birla Institute of Technology and Science (BITS), Pilani. “Entrepreneurship has become cool on campus; our B Plan competition, Conquest, is now one of the most sought after events.” The recently concluded Conquest received over 500 entries, the highest since it was launched in 2004 with over 85 percent entries coming from students. The trend emerging out of B Plan competitions across the country seconds Brijesh’s view. Eureka, Asia’s largest B Plan competition, run by the Entrepreneurship Cell at the Indian Institute of Technology, Bombay, crossed the 2000 mark, a 100 percent increase in entries from three years ago. This year, IIM Calcutta’s i2I Business Plan competition engaged 265 teams and 1100 participants from institutes in India and abroad. First-timers Symbiosis Centre of Information Technology, Pune, which announced Srujan, their first B Plan

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competition last month, has already received 200 entries from aspiring student entrepreneurs.

Students: The new entrants Until five years ago, working professionals, in age group of 25-28, were top favourites at B Plan competitions. In recent years, the spotlight has moved to students. Seven out of nine winners in the last three editions of Eureka

were students, and Harshavardhan, E Leader at IIT Bombay E Cell, attributes it to the “growing skills, knowledge and confidence of the students as budding entrepreneurs-developed through their participation and experience on their campus E Cells.” “Earlier, students were clueless, they were ignorant about terminologies and didn’t even know the difference between an idea and a plan.”

Amrita Healthcare win the B Plan competition Conquest, at NEN founding institute BITS, Pilani

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“Today there are a whole range of programs, workshops and activities available on the campus, run largely by trained entrepreneurship faculty and E Cells, which prepare students for entrepreneurship from fundamentals like idea evaluation to advanced support like hands-on mentoring,” he adds. For example, BITS (Pilani) runs the Spark New Ventures elective course that helps students develop a structured approach towards building their idea into a business plan. NEN Faculty Coordinators at SRM University, Nisha Ashikan, V M Ponnaiah and Anuradha Parakkat guide every participant with their executive summaries before the competition. The E Cell at IIM Calcutta runs Ascent, a business plan writing workshop that helps students evaluate and present their business ideas, and also teaches them “the VC language”. The E Cell at Jai Hind College, Mumbai, connects successful entrepreneurs in its alumni network to aspiring students for mentoring B Plans. Poyni Bhatt, NEN Faculty Advisor and Chief Administrative Officer of Society for Innovation and Entrepreneurship, IIT Bombay, who has

been observing B Plan competitions for the last ten years, agrees. “There is a definite shift in quality and maturity among student participants. Not all their startup ideas are feasible, but they do their homework and come prepared to tackle the jury,’ she says. “I also find that they take the platform seriously; they look at the contest as an opportunity to validate their startup idea,” she adds. Member institutes of NEN are also tapping into the growing NEN community, comprising over 500 of India’s top academic institutes, 1200 faculty leaders, over 3500 E leaders and over 400 student entrepreneurship cells that count more than 70,000 members to drive participation and access resources including faculty development courses on business plans and business models and a 1200-strong pool of mentors and experts. “The change in the mindset, and the growing interest in entrepreneurship-related events in the last few years has been motivated by the activities of the NEN community,” feels Dr B V Phani, NEN Faculty Advisor and Coordinator, SIDBI Innovation and Incubation Centre at Indian Institute of Technology, Kanpur.

Conquest in progress at NEN Fonuding Member institute BITS, Pilani

A serious game Institute-run B Plan contests have evolved from a competition of business ideas to a professional startup competition. With IT-based proposals diminishing, and new sectors coming in -– cleantech comprised 40 percent of the entries at Eureka last year, Conquest received 54 entries in rural healthcare while Jai Hind College received several social ventures. Aspirants are looking at B Plan contests to access focused specialized mentoring and funding to convert their plans to startups. Contestants no longer care only about cash prizes; what they are after is integrated support: funding, mentoring, connection to investors, networking opportunities and incubation support, believes Mafla Mudgal, E Leader at IIM Calcutta. “It is the qualitative gains that matter,” he says. Organizers too demand performance and growth from the winners. “The Rs 21 lakh prize money offered by Eureka is released in installments over the year, depending on the progress and performance of the three winning startups,” reveals Harshavardhan. While the growing interest and awareness of B Plans have benefited the community at large, it is the participants and winners that stand to gain the most. Keshav Laxman’s one line idea grew to become a prize winning B Plan this year at Conquest, thanks to the mentoring support he received since November 2009. He is all set to launch Haplaw, his online legal advice and listing portal, soon. “If I now look at my initial plan, I wouldn’t recognize it. My mentors, including Anurag Jain, Vice-President of Dell Services, helped me recognize critical loopholes and rectify them,” says Keshav. R

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