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For vague product requirements the participant needs to apply "product person" skills in figuring out the missing portions of a useful product. I also think communicating directly with the ministry is possible to get a more refined problem statement.
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I think this event is open only to students. This would be a good starting point for them for future entrepreneurial activities.
Practically speaking student built products will never be put into use within the organisation.
I believe that the LUG currently organises a fortnightly hackathon during the weekends. This could be taken up as a part of that, or an extension thereof.