Nagaland Special Development Zone remains in a 10-year limbo

Seemingly progressive special economic zone facing ‘land’ hurdle  

Imkong Walling 
Dimapur | November 25

Some 10 years ago, the Nagaland state government made a move for creating a special economic zone along the foothills bordering Assam. It came in the form of the Nagaland Special Development Zone (NSDZ), a ‘resolution’ for which was adopted by the 12th Nagaland Legislative Assembly in March 2014. It sought to demarcate a business-friendly area or areas with relaxed trade inhibitions as to attract investment and thereby, a breeding ground for business enterprise. 

The NSDZ however remains a paper document unable to take off for reasons ‘land’ and misgiving that the government venture would dilute, or worse, result in a sellout of the state’s long-established land practices. The resultant opposition from the influential tribal bodies had the state government putting on hold the allegedly well-intentioned NSDZ venture. 

More recently, the government has renewed effort to put to motion the almost a decade old ‘resolution.’ The Chief Minister, at a business conclave in September, this year, went public about the government renewing effort, while maintaining that creating a congenial environment for external investments remains the sole agenda.

The ‘hows’
The part about foreign investors setting up shop has been quite clear but there has been a blank on the ‘hows’ of implementing the scheme in the event the issue of land is resolved. On this note, The Morung Express spoke to a number of resident business people, the conversations revolving around how they perceive the NSDZ.  The individuals, who spoke, wished not be called by name “Considering the volatile nature of the NSDZ issue.” 

In the words of one, the NSDZ should foremost be supported by a clear investment policy taking a cue from existing models in other places. While stating that a State Investment and Industrial Development policy is in the final stage of drafting, he said that without an investment policy no entity would be confident to invest.

As a Naga business man, he felt that the policy should account for “local entrepreneurs’ aspirations, create support systems for the business community to prosper, propel startups and importantly, make entrepreneurship attractive to young Nagas.” 

He visualised the NDSZ as a manufacturing and Information Technology Enabled Services (ITeS) hub for which locals can be trained and employed. Food processing, electronics manufacturing and electric vehicle assembling were sectors which he said has potential to thrive. 

According to him, investors/companies often look for manufacturing products based on the available raw materials. “But if the industrial ecosystem is in place, procuring raw materials from far may not be an issue,” he said, citing Bangladesh as a case in point.

For the ITeS sector, he said that the state’s “young English speaking population has to be leveraged.” With a thriving special economic zone in place, he said that the state would even be able to cater to the requirements of the ASEAN in line with the Government of India’s Act East policy.

Needs & hurdles
Another businessman spelt out a list of necessities or challenges, strictly from a business perspective. For a special economic zone to work, the Dimapur-based businessman, who is a non-Naga, said, “We first need land laws which are investor friendly. The rigid landholding system is a big, if not the biggest, challenge.” 

A taxation regime allowing for relaxations for investors, readily and locally available workforce, easy access to bank finance for the investors along with a vibrant work culture were the other necessities he listed. 

“If there is proposal for a garments factory, do we have the skilled workforce to sustain one?” he posed. He also cited Bangladesh, a country that has been able to leverage its “cheap and quality labour” to foreign investment. 

Over and above these, he pointed out the apparent lack of tenancy rights. While terming it as not something impossible to address, he referred to a bigger challenge, the proverbial elephant— the Naga political Groups and their taxations. 

Echoing the preceding business man’s view, he said that there has to be availability of raw materials to some extent but it should not be a cause for concern with a robust manufacturing base in place.

Another Naga businessman perceived the NSDZ as a progressive scheme. But he expressed reservations about it actually taking shape given the rigid land-holding system, and the distrust with which the tribal hohos have viewed the land-leasing concept. He remarked, “No one will invest without assurance that investment will not be under landowners’ ransom.”