1. Contents :1. Indias Growth & Potential OverviewPopulation Economy Infrastructure2. Designer Cities 3. Designer Cities Augmented with Ports 4. The Agricultural Plug-In AEON Consultants1

2. Indias Growth & Potential Overview( Population ) AEON Consultants 2 3. Growing Indian Urban PopulationINDIA'S URBAN T RANSIT ION Urban Population (million)Rural Population (million) Total Population (million)16001408.931400 1291.30 1230.4812001164.02 PO PU LAT IO N IN MILLIO N 1027.021000 846.30833.88843.77 833.25811.77 800741.67 684.30 628.70 548.20575.68 600524.80 439.10 447.53396.60 400 352.25285.35217.60 200159.50 109.10019711981 1991200120102015 20202030 YEARAEON Consultants 3 4. Indian Urban Growth- FeaturesUrban population has grown at about 4% p.a. vis--vis 1.5% growth in rural areasLevel of urbanisation increased from 23% in 1981 to 29% in 2001 Expected to reach about 36% by 2011 Pace of urbanisation has rapidly increased in the last 2 decadesIncrease in Urban incomes also having an impact on the demand for urban infrastructureShare of service sector in the Indian GDP has increased significantly Has resulted in increase in income levels in the Urban areasOf the 21 mega cities (population. 10 million+) in the world , 17 are estimated to be in developing countries, 3 in IndiaIndia has the second largest urban system in the world. Comprises of over 3700 urban local entitiesAbout 30% of the total population resides in Urban areasTwo-thirds of the above live in Class I (100k plus) cities Metropolitan (million plus) cities have increase from 5 in 1951 to 27 cities in 2001About 1/3rd of the urban population lives in these cities Engine of productivity and growth in the countryContributes about 60% of the national income AEON Consultants4 5. Indias Growth & Potential Overview( Economy ) AEON Consultants 5 6. Burgeoning Indian Economy 1991 2006 GDP GROWTH -> negative GDPGROWTH > 7%INFLATION-> double INFLATION < 5% digitFOREX RESERVES> US$ 140 b FOREX RESERVES< US$ 2EXPORT GROWTH > 20% bFISCAL DEFICIT marginalSENSEX(11700) > DOW JONES FISCAL DEFICIT-> 10%(Apppx) RETURN IN LAST YEAR= 74% CORORATE EARNINGS GROWTH > 20%SENSEX -> around 1500 ANNUAL FII INFLOWS> US$ 10bANNUAL FII INFLOWS>nil MARKET CAPITALISATION > US$ 700b MARKET CAPITALISATION(1998)= US$ 100b AEON Consultants 6 7. Indian Scenario- FeaturesA liberalizing economy and rated as 4th largest country based on Purchasing Power Parity[PPP] Worlds largest democracy & among the strongest emerging markets 1..2 billion people with 300 million in the middle class bracket Well matured financial and securities market Time-tested judicial systems WTO member committed to providing opportunity to the global market Constantly undertaking reforms in every sector with Infrastructure Sector receivingGovernments fullest attention AEON Consultants7 8. Indian Economy Growth- Features India has potential to attract US $ 100 billion over next five yearsExport Oriented Sectors alone to attract US$ 11 billion investmentsIncrease in FDI will lead to increase in GDP by another 2-3 %Potential for creation of 1 Million direct and indirect jobs each year Source: AMCHAM with McKinsey&Co.Large pool of educated manpower available at affordable costSignificant Impact on lifestyle and standard of livingCities with world class integrated infrastructure recognized as necessary drivers of economic growthBetween 2002 to 2007 India has improved its FDI confidence ranking from Rank No. 15 to Rank No. 2 AEON Consultants 8 9. Indian Economy Growth- Features C hinaIndia United S tatesUnited K ingdom B raz ilHong K ongS ingaporeUnited A rabG ermany R us s iaA us tralia F ranc e V ietnamC anadaMalays iaJ apan Other G ulf s tates S outh A fric a TurkeyMexic o P oland Indones iaS outh K orea C entral A s iaC z ec h R epublic0 0.5 11.5 2 2.5FDI confidence maintained FDI confidence gone up FDI confidence loweredOn a scale of 0 to 3 . Source : A.T. Kearney AEON Consultants9 10. Indias Growth & Potential Overview( Infrastructure ) AEON Consultants 10 11. Indian Urban Infrastructure Shortcomings Only 60% of the Urban households have piped water supplyOnly 46% of households have water toilets and only 28% are connected to public seweragesystem Only 60% of them have their garbage collected by the municipal authorities Over 21% of the urban population lives in squatter settlements/slums The Tenth Plan Document has assessed a shortage of 22.4 million houses during the period 2002- 07, which requires an investment of Rs. 4 lac crores The city roads inadequate/poor for traffic requirements, leading to congestion None of the Indian cities have proper MRTS Inadequate medical and health facilities (Appx. 26 beds per 10000 population in Public Hospitals) Demand for Urban Infrastructure investment - Grown beyond the resources of Govt.AEON Consultants11 12. Inadequate Indian Urban Infrastructure Impact ? India Urban Sector is competing with the best cities in the developing countries to attract investments. Thus creating urban infrastructure is mandatory to increase Indias competitivenessSustaining Industrial growth requires development of cityscapesIndustrial growth faces a major impediment as Inadequate infrastructure is identified as one of the biggest constraints of doing business in IndiaInfrastructure plays a major role when it comes to deciding between China, India and other Asian countries for FDI and FII decisions AEON Consultants12 13. Inadequate Indian Urban Infrastructure Impact ? Hampers Economic GrowthAffects the profitability of production, levelsof income, output and employmentPoor Urban Infrastructure Affects Countrys Lower Corporate InvestmentsGlobalCompetitivenessHinders expansion in areas with poor Slows down the pace with which ainfrastructure and lessercountry can integrate its economy developed areas into the global systemPoor urban service coverage is the main hindrance to a citys ability to attract investments which promote economicdevelopmentAEON Consultants 13 14. Inadequate Indian Urban Infrastructure Impact ?Total weighted responsesTax regulations 7Tax rates5Restrictive labor regulations15 Poor w ork ethic in national labor3.2 Policy instability4.5Inflation1.3Bottlenecks inefficient government18Total Inadequately educated w orkforce 3 Inadequate supply of infrastructure 27 Government instability/coups1 Foreign currency regulations3.1 Crime and theft 1.2 Corruption11 Access to finance 4 0 51015 2025 30 Source: Economic Forums Global Competitive Report of FY07; *From a list of 14 factors, respondents were asked to select the five most problematic for doing business in India and to rank them from 1 to 5. Figure 27 shows responses weighted according to their rankings, where higher the figure the more problematic the factor AEON Consultants14 15. Indian vs. China a comparison Indian Urban Infrastructure Requirements Indias investment in infrastructure at around 4.6% of GDP is far lower than that of Chinas at 11%China is investing 8-10x in highways every year since the mid-1990s compared with IndiasinvestmentIn ports, China has on average added 350 million tonnes in capacity every year. This compares tooverall traffic of 650 million tonnes in IndiaChina added 100 gigawatts in electricity generation capacity in 2007 alone. This compares to totalelectricity generation capacity of 140 gigawatts in IndiaThe gap in infrastructure between India and China is so large that for India to catch up with Chinaspresent level of stocks per capita by 2015, Indias infrastructure investment to GDP should rise to12.5% as against the current 3.6%2.8% of GDP(Govt.)0.8% of GDP(Private) AEON Consultants 15 16. Indian Urban Infrastructure Requirements IndianInfrastructure RequirementsThe Gross Capital Formation (GCF) in infrastructure as a proportion of the GDP emerges as the most important key in sustaining high economic growth.However GCF as a proportion of GDP continues to be lower at around 5% onlyAs per the Indian Prime Ministers speech at NYSE 2004 US$150/year bn would be required in next 10 years for infrastructure aloneAccording to the United Nations Population Division (UNDP) by 2030 while the rural population will increase only marginally, urban population will double by 2030 to around 600 million people . AEON Consultants 16 17. Indian Urban Infrastructure Requirements It is estimated that INR34,385 billion (~USD860 billion) worth of construction opportunity in India for the next five years, representing a CAGR of 20% versus a CAGR of 14% for the past five yearsThe Central Public Health Engineering (CPHEEO) has estimated fund requirement of Rs. 172,905 crores (~USD38.42 billion) for 100% coverage of the urban population under safe water supply and sanitation services by 2021The Rail India Technical & Economic Services (RITES) has estimated fund requirement for Urban Transport Infrastructure at Rs. 207,000 crores (~USD46 billion) over the next 20 yearsComparing the demand with the estimated annual institutional finance flow of about Rs. 5,000 crores (~USD1.1 billion) leaves a huge gap in Infrastructure funding requirements AEON Consultants17 18. Indian Urban Infrastructure Government Initiatives Recent initiatives have seen India create a liberalised and free policy regime in all infrastructure sectors i.e Roads Highways & Road development projects worth US$ 12 billion being implemented through National Highway Authority of India (NHAI), have attracted extensive participation of world majors Telecom India is rated as amongst the fastest growing markets Seaports Leading port operators across the world participating in government port privatization and to develop greenfield ports. Power Huge investment plans in power generation, transmission and distribution through both government and private sectors are being planned Railways Moves to augment rail infrastructure through private sector being brought in placeAEON Consultants18 19. OUR SOLUTION.DESIGNER CITIESAEON Consultants 19 20. Why build a whole new city ??Although, each city or town has a master plan and zoning plans and is technically supposed toexpand in conformity with that in a planned manner, the coming up of slums shows a definiteweakness in the system if not a failure of the development authorities The growing urbanization has posed a new challenge to the authorities as there is a continuouspressure on availablebasic civic services likeshelter,drinkingwater, electricity, sanitation, transport, health and education The advantage a new Designer City will have is that they wont carry any historical baggage ofimproper urban planning and development The expenditure on improving the infrastructure in cities is massive and even when incurred, thecities will soon reach saturation. Cost of building new cities is much lower than providing different services to the people scatteredin different slum areas of a city or providing all the rural areas with infrastructure. Increased production of goods and services at a lower cost there by creating efficient contributiontowards Indian Economy One city will not solve Indias problems, but a chain of such cities will go a long distance inurbanising India. AEON Consultants 20 21. Proposed concept A Multi-Product SEZ CityIt is planned to build the city as one Multi-Product SEZ The area for a multi-product SEZ varies from 2500acres(min.) to 12500acres It is mandatory for a minimum of 35% of the area known as processing area to have industriesinvolved in exporting goods and services An SEZ is the most sought after status by the industry players keeping in mind the tax incentivesSpecial Economic Zones (SEZs) in India defined as : Specifically delineated duty-free enclave and shall be deemed to be foreign territory for the purposes of trade operations and duties and tariffsApart from tax benefits, the world class infrastructure will further lure the industries in to the city The SEZ act requires the developer to further develop the social infrastructure in the remaining65% or less area of SEZ known as non-processing area AEON Consultants 21 22. SEZ Added IncentivesHigh Point - Preferential Policy framework with a package of incentives Benefits of local advantages within an international business environment Business Infrastructure combined with social facilities Development, Administration and Operation to be undertaken by private sector to enable a hasslefree operating environment Envisaged as areas of excellence to enable global companies to derive domestic advantages fordoing business An SEZ is ensured of infrastructure support for development in terms of resources like water,power, roads connecting to SEZ by the government Further, government goes a long distance in acquiring the land for an SEZ, which to a greatextent simplifies the process of land acquisition Sectored restrictions on manufacturing sector inapplicable within SEZ Single window clearance All SEZ activities on self certification basisAEON Consultants 22 23. SEZ Added Incentives Inter unit transfer of goods permitted The SEZ developer enjoys various benefits, a few of which are listed below: Exemption from customs/excise duties for development of SEZs for authorizedoperations approved by the BOA. Income Tax exemption on export income for a block of 10 years in 15 years underSection 80-IAB of the Income Tax Act. Exemption from minimum alternate tax under Section 115 JB of the Income TaxAct. Exemption from dividend distribution tax under Section 115O of the Income TaxAct. Exemption from Central Sales Tax (CST). Exemption from Service Tax (Section 7, 26 and Second Schedule of the SEZ Act). Integrated Greenfield cities are the most sought after projects by all state governments under aPPP(Public Private Partnership) model AEON Consultants23 24. SEZ Added Incentives No routine customs examination of export and import cargo Forward looking Labour Laws under consideration 100% FDI for manufacturing units operating inside SEZs through automatic approval route in almostall sectors 100% exemption of income tax for the first 5 years and a 50% exemption for the subsequent 2 yearsfrom the date of commencement of operations. 100% profit repatriation facility from export earnings Permission to sell within the Domestic Tariff Area (DTA) and an exemption from a Special AdditionalDuty (SAD) subject to the company having a positive Net Foreign Exchange Position (NFEP) Supplies from DTA to be treated as exports while those from SEZs to DTA to be treated as imports. Investments in SEZ treated as infrastructure development and eligible for exemption Local inputs at reduced cost without the excise, VAT other levies of India Duty free import of materials for construction, capital goods and goods required for O&MAEON Consultants 24 25. PPP Public Private Partnership ? Goals Use Government resources to attract private investmentsImprove efficiency in service delivery PPP approachPrivate Sector contribution for:Financial investments Improved Technologies Efficiency in service delivery Public Sector contribution for: Financial gap funding to make projects commercially viable Providing institutional support guidance & regulation AEON Consultants 25 26. PPP Public Private Partnership ? Types ofAsset O&MCapitalCommercial Duration ContractsOwnership InvestmentRisk (Yrs) Service Public Private & Public Public 1-2 ContractPublicManagementPublicPrivatePublic Public 3-5 ContractLease PublicPrivatePublic Private 8-15 ConcessionPublicPrivate Private Private 25-30 BOT/BOOT Private &Private Private Private 25-30 Public AEON Consultants26 27. PPP Public Private Partnership ? Public Private Participation is gaining increased prominence in developing countries Investments flows to infrastructure projects with private participation in developing countries grew by 12% to US$ 64 billion China has executed around 406 infrastructure projects during the period 1990-2004 with a cumulative investment of US$ 67 billion Greenfield projects (i.e., BOO, BLO, BOT, BOOT) most common format of Public Private Partnerships Indian Urban Infrastructure sector needs to learn from and build upon the international experience to harness the potential of PPP AEON Consultants27 28. Indian Ports Indiahas got14,500 km ofnavigablewaterways, which comprise ofrivers, canals, backwaters, creeks, etc Presently, about 37,00 km of major rivers is navigable by mechanized crafts but actually only2000 km is being used 160 tonnes of cargo is transported through Inland Water Transport There are 12 major ports in the country apart from 139 minor working ports along the coastline ofabout 5,600 km. The 12 major ports of the country have, on the other hand, handled a total of 519 million tonnesof cargo during the year 2007-08, registering a growth of 12% in cargo throughput. Last year, theports handled 463 million tonnes Major ports are the direct responsibility of the Central Government while the minor/intermediateare under the management of the state governments Kandla, Mumbai, Mormugao, New Manglore, Cochin and Jawaharlal Nehru Port are the majorports of the west coast whileIndian ports handle large quantities of commodities such as crude, iron ore, steel products, fertilizers, food grains and cement. Apart from these electronics, textile, stationery, auto AEONancillaries, leather and jute products are also transported via portsConsultants 28 29. Indian Ports Significantly, India's port sector has emerged the unsung hero in India's efforts to increase its global presence. The country's booming economy along with its foreign trade has given a tremendous boost to the sector, which has been instrumental in increasing India's share in world trade from 1.1 per cent in 2004 to 1.5 per cent in 2006India's share in world trade is likely to increase to 2 per cent by 2009With a growth rate of 19 per cent, India's container cargo traffic is estimated to reach 21 million TEUs(Twenty Foot Equivalent Units) by 2016The share of non-major ports in cargo traffic has increased from less than 10 per cent in 1990 to the current level of 26 per cent AEON Consultants29 30. Indian Ports all major(pink) and a few minor ports AEON Consultants30 31. Traffic & Capacity for major ports for last 6 years TRAFFIC CAPACITY YEAR (Million GROWTH (Million GROWTH Tonnes)Tonnes)2001-02 287.59343.952002-03 313.55 9.03 362.75 5.472003-04 344.89.97 389.57.372004-05 383.7511.30 397.52.052005-0646320.57 457.125 152006-0751912.09 660 15 AVERAGE AVERAGEGROWTH (%) 12.52GROWTH (%)8.97AEON Consultants 31 32. Projected traffic & capacity for major ports for next 6 years PROJECTED TRAFFIC (Million Tonnes) PROJECTED CAPACITY @ 15% growth per annum (Million Tonnes) 2007-08583.642007-08758.732008-09671.182008-09872.54 2009-10771.862009-101003.42 2010-11887.642010-111153.93 2011-121020.78 2011-121327.00 2012-131173.90 2012-131526.00 AEON Consultants32 33. Indian Ports Presently Inadequate ? In its representation to National Manufacturing Competitiveness Council (NMCC), FICCI has urged the Government of India to target over Rs 1 lakh crore(~USD22.2 billion) of investment in ports by 2012-13 so as to support the 12% manufacturing growth.FICCI noted that Indian exports are growing at more than 20% since 2002-03 and last year (i.e. 2005-06) imports grew by 28% mainly on account of demand from manufacturing sector for raw materials, intermediate goods and capital goodsIn addition to the current growth rate in cargo traffic if we consider the likely impact of various FTAs and multilateral trade agreements that India is going to have in the near future on our trade, FICCI feels that the projected traffic could reach 1174 million tonnes by 2012-13 at major portsTo support this traffic, around 1500 million tonnes of capacity is required at major ports by 2012-13, noted FICCI (Here, the underlying assumption is to add 30% surplus capacity over the projected traffic for the year).The present capacity is only around 750 million tonnesAlready, 276 projects entailing an investment of US$ 13.70 billion have been identified. These include development of new berths, expansion and upgradation of existing berths, deepening of channels, equipment modernisation and upgradation of rail and road connectivity AEON Consultants33 34. Indian Ports Presently Inadequate ? Currently, Indian ports have a capacity of 750 million TPA. In comparison, China has an installed capacity of 5.6 billion TPAIndian ports are working at much higher capacity utilization, 90%, as against world standards, wherein capacity is generally pegged at 120 per cent of estimated port traffic to ensure smooth functioning of the portCurrently, most of the ships carrying cargo from East to West break their bulk at Colombo, Hong Kong, or Singapore (this is trans-shipment port - shipment of goods to an intermediate destination before reaching its final port)At present, 80 per cent of the Indian containers are trans-shipped at Colombo, Singapore, and Dubai.Most of the major ports in India are not automated and require up gradation. They are grappling with low productivity compared with world-class ports such as SingaporeFor instance, the time taken for clearing import cargo and shipping export cargo is 21 days and 19 days respectively in India as against 3 days and 5 days in Singapore. In terms of railway costs Indian shippers incur 7.9 cents per km. as against Canadian railway cost of 2 cents.Further, the logistics costs in India accounted for 13% of GDP compared to 11% in Japan; 10% in Europe and 9% in the US on account of poor logistics infrastructure at ports in the country AEON Consultants34 35. Indian Ports Bottlenecks ?? Inefficiencies at the ports affecting the traffic has been a major reason behind not growing at a reasonable rate and lagging behind in the global raceAlthough container traffic has grown rapidly at the major ports in India, inefficiencies due to infrastructure bottlenecks still persistInfrastructure bottlenecks have led to higher dwell time, thus hampering container traffic growthWeak regulatory structures of major ports AEON Consultants35 36. Indian Ports Various State ScenariosGujarat state, with the pioneering work being carried out by its port authority, Gujarat MaritimeBoard (GMB), has already established its leadership position among maritime states of India GMB ports have registered a cargo throughput of 147 million tonnes during the fiscal year 2007-08 as against 132 million tonnes they handled the year before. Maritime states of Maharashtra, Andhra Pradesh (AP) and Tamil Nadu (TN) are neck to neck incomparison when it comes to claiming the No 2 position after Gujarat in port development In east coast it is Andhra Pradesh as in west coast it is Gujarat !There is more of an integrated development happening in Andhra Pradesh than elsewhere in south, eitherSEZ or industrial activity and connectivity. The state is supporting in land acquisition etcTamilNadu (east coast) will come closer to Andhra Pradesh but the issues their are related toland acquisition and when you go down south hinterland gets narrower In terms of traffic volume it is Maharashtra(West coast). There is plenty of cargo availability andports like Rewas, Dharmadhar, Ratnagiri, Dighi would add more pace to throughput in duecourse AEON Consultants36 37. Indian Ports Government plans.. Under the National Maritime Development Program (NMDP), the major thrust is on private sector participation.66 percent of the total investment outlay is expected to the contributed from the private sectorOf this, NMDP has expected a total capital expenditure requirement of RS 55,800 crore(~USD12.4 billion) to expand the existing port capacitiesPrivate players are expected to pump in Rs 34,500 crore(~USD7.66 billion), either as operators of container terminals or by forming joint ventures with port authoritiesFurther, 360 projects have been outlined for all ports put together, including expansion of ports, improvement in hinterland - inland region lying behind a port - connectivity, and deepening of ports (aimed at improving ports statistics) Opening up of this sector for private participation and inducing favorable policies to promote investments will turn out to be the key so successful implementation of the huge capacity expansion project AEON Consultants 37 38. What do we have planned for ports in India and AAJ ? PORT AUGMENTED DESIGNER CITIES AEON Consultants38 39. Proposed concept A Multi-Product SEZ City augmented with a PORTA designer city with a multi-product SEZ status would be an IDEAL location for any manufacturing industry when very near to a world-class port.Not only would the tax benefits be applicable to the trading done via the ports but also to the developer of the portThe tremendous savings on transportation of goods from the factory to the port will further provide an incentive to the industriesThe strategy is in line with FICCI (Federation of Indian Chambers of Commerce and Industry) E&Y(Ernst and Young) paper on transforming Indian ports into world class facilitiesThe FICCI-E&Y paper calls for focusing on three imperatives if the Indian port and shipping sector is to become competitive and world class. These include: Focussed infrastructure developmentFacilitating trade through an innovative mix of IT and other value added servicesPromoting competition through privatisation AEON Consultants39 40. PROBABLE AREAS IDENTIFIED Chennai-Bangalore-Mumbai industrial corridor The Karnataka Government in the State has planned to develop an industrial corridor along thenational highway connecting Bangalore and Mumbai and also between Hubli and Bellary Main idea behind creating an industrial corridor was to see that all districts along the highwaywere industrially developed The State had been divided into six industrial zones and the Government had already identifiedthe nature of industries that could come up, based on locally available raw materials Bellary, where iron ore was available in abundance, was suited for steel industries, whileGulbarga and its surrounding places, which were rich in limestone deposits, were ideal forcement factories Hubli-Dharwad and Belgaum would be given an opportunity to start automobile industries andIT/BT units Food processing units would be started in Bijapur, Bagalkot and Shimoga which are well knownfor their horticultural produce AEON Consultants40 41. PROBABLE AREAS IDENTIFIED AP North Coastal CorridorThe Government of Andhra Pradesh intends to develop Coastal Corridor covering the Districts of Srikakulam, Vizianagaram, Visakhapatnam and East Godavari Districts for providing connectivity through various modes of transport to potentially identified ports both major and minor and power plants of different categories namely conventional, barge based, non-conventional power plantsThe development is proposed for the integrated purpose to create infrastructure on design, finance and build under PPP modeGovernment of A.P. proposes to conduct pre-feasibility and detailed feasibility studies on the existing pattern of road network, rail network and air links available and required for future facilities in order to create self sustaining infrastructure, which in turn generate revenue and improved facilities under the core sectors mentioned aboveThe principle objective behind this project is finally to develop the important connectivity of along the costal regions duly exploring the potentials under various natural resources in the coastal districts AEON Consultants41 42. AP NORTH COASTAL CORRIDOR Development PlansSECTOR SKLM VZMVSP EASTGODV. TRANSPORTATIONTOTALPROJECT 1. a) Coastal Roads 130 km52 km 100 km 156 km 438 KM Pre-feasibility study on1.existing road patternb) Link roads0 688080228 KMa. nature, serviceability, land availability, New alignment with 130120 180236 666 KM connectivity to other salient units under, the proposed corridor 2. Rail NetworkStudy on existing rail links between ports and feasibility for 2 track Port link60 km20 km 60 km60 km200 KM further requirement in the light of goods & cargo handling in the Railwaylineports. 3. Coastal Sea route Establishment of seaPreliminary report prepared for total investment of Rs. 4628.80route along the North crores(~USD1.028 billion)coastal districts. 4. Air Linksa) Air Ports0 0 21 3 Pre-feasibility study to be done for each air port. b) Helistations 2 2 2410 PORTSPort wise feasibility study to be conducted for its initialfeasibility. 1.Major Ports 0 0 11 2 2. Minor Ports4 1 4514 POWERPre-feasibility study to be done for each power plant for itspotential features. Power Plants a) Conventional 2 2 22 8 b) Barge based1 1 11 4 c) Non-conventional 6 6 6624 Source : INCAP (Infrastructure Corporation of Andhra Pradesh)AEON Consultants 42 43. PROBABLE AREAS IDENTIFIED - PROBLEMS/RISKS ??The lands to be acquired are vast and hence sometimes a few small chunks are unavailable due to the presence of a settlementThe government has been proactive in acquiring lands for the projects and SEZs but it faces opposition from a few opposition partiesThe sole reason behind the opposition is the conversion of agricultural lands and inadequate compensation given to the farmers/owners of these landsThe development is also expected to change the natural settings of these areas, further strengthening the oppositionMost of the planned projects though ushering in development in the region, do not take care of the needs of the rural folk in these areas AEON Consultants 43 44. How do we plan to overcome these impediments ?THE AGRICULTURALCITY PLUG-IN AEON Consultants 44 45. AGRICULTURAL CITY .. ! ? Conceived as a huge tract of land which will be utilised for large-scale mechanised agriculturalactivity The agricultural activity shall be carried out in a corporate manner and will follow either a modelof contract farming or co-operative, depending upon which is the more suitable one The land owners shall have contracts with the corporate where-in they would retain theownership of their land and receive an income which would be decided on the basis of his landarea and produce per unit area. The tract of land shall be provided with infrastructure facilities like reservoirs, irrigationgrids, wind energy based power(windmills) if feasible etc., to provide the output an insulationfrom natural mishaps like floods, famine etc The people stand to gain from the proposal as they get a fixed income, betterequipment, improved farming practices, better infrastructure support and hence higher produce The corporates mostly visualised as a food processing firm or a a firm like a textile firm shallhave control over which crop to be grown based on their needs. This ensures availability of rawgoods at cheaper rates and huge cost savings in transport, be it from the farm to the factory orfactory to the port for export. AEON Consultants 45 46. AGRICULTURAL CITY .. ! ? The processing units shall be under the SEZ and hence the before mentioned tax incentiveswould apply We on the other hand would not face the opposition other projects have faced as the people inthis scenario will only stand to gain, though proper awareness regarding the project shall haveto be done and any possible loop holes in the plan after discussion with experts plugged In brief, we plan to promote even those industries in our SEZ which would find it in their bestinterest to enhance agriculture in the vicinity. The location of the land and its suitability forvarious crops shall determine the nature of both the industry and the crop Further the agricultural plug-in would go a long way in bringing an urban lifestyle to the ruralpoor as time progresses soon AEON Consultants46 47. INDIAN AGRICULTURE AN OVERVIEWAbout 70% of the population, and about 75% of the poor, live in rural areas and most depend onagriculture Agriculture provides livelihood to 60 percent of the rural people and remains vital for food security In the past decade (1995/96-2004/05) India's agricultural growth rate slowed down to less than 2percent per year, compared to about 3.5 percent per annum in the preceding decade In the poorest states, such as Madhya Pradesh, Orissa, and Rajasthan, growth in the last decadewas below 1 percent per year The stagnation of agriculture, the high proportion of poor dependent on it, and the widening rural-urban income gaps are the major concerns of the Government of India (GOI) Yields of major crops (foodgrains, oilseeds, other cash crops) in India are lower than in manyother countries - for example, rice yields in India are one-third of Chinas and about half of thosein Vietnam and Indonesia The virtual collapse of the agricultural extension system in most states limits farmers' accessto better technologies and practicesAEON Consultants 47 48. INDIAN AGRICULTURE AN OVERVIEW The effectiveness of the public agricultural research system is undermined by weaknesses in the agricultural research system such as: bias towards irrigated agricultureweak prioritizationproliferation of programstop-down programsweak cost effectivenessThe sustainability of land and water resources is at risk with increasing soil degradation and the over-exploitation of groundwater in many areasIn addition to erosion, salinity and alkalinity, soils are also losing carbon and micronutrients due to unbalanced fertilizer useNearly 30 percent of the blocks in the country are presently classified as semi-critical, critical or overexploited as groundwater use exceeds the rate of groundwater recharge AEON Consultants48 49. INDIAN AGRICULTURE AN OVERVIEW Succinctly put, following are the issues with indian agricultureFarmers own small tracts of land making the use of machinery on their farms financially infeasible for themFurther due to the area being small and no uniformity followed in what is being grown by various farmers, the productivity decreases and sometimes also leads to degradation of soil fertilityFarmers are not provided with the adequate infrastructure support in terms of power, irrigation, flood protection etc.Awareness of the modern farming practices is not there leading to farmers not getting optimum outputsFarmers are taken advantage of by the intermediaries between them and the marketsAgriculture in India needs to be modernized, organised and carried out in a professional mannerIndia is a major exporter of cash crops like cotton which are the raw materials of various industries like textileProperly planned co-ordination between agriculture and agri-industries can highly propel the incomes of both the farmers and the industries. AEON Consultants 49 50. Thank you AEON Consultants 50