(GIST OF YOJANA) Taking The Economy Forward
North East : An Economic Perspective
The Seven Sisters of North East’, comprising of seven separate but adjoining
states as well as standalone Sikkim, definitely occupy a distinctive place in
our country, primarily due to their social, cultural, political, geographical
and historical features. It is worth mentioning that Tripura and Mizoram are two
of the country’s most highly literate states. The Assam tea industry is the
second largest commercial producer of tea, next only to China. The first ever
oil well of Asia, is in Digboi of Assam.
Currently, if we look at the .right side of the picture, as per India Spend
research, the impressive growth rate of 9.7 percent of Meghalaya is higher than
that of the fastest-growing big state, MP at 9.5 per cent. Arunachal Pradesh
grew faster than Gujarat. Fewer people, (12.8 million) fall in the BPL category
in the entire NER than in just one large state, Karnataka (12.9 million). On the
other hand in contrast, Tripura reported India’s highest unemployment rate, 25.2
per cent in urban areas, followed closely by Nagaland with 23.8 per cent in 201
1-12. The share of industrial sector for all the 8 states has increased while
the share of agriculture and allied activities has declined. Unemployment in
urban areas across all the NE states is higher than rural areas and is in line
with the national pattern. The poverty here is also unevenly spread: Manipur is
poorest: Sikkim the richest.
Geographical Factors: The hills account for about 70 per cent area of NER and
accommodate about 30 percent of the population and the plains constituting the
remaining 30 percent of area hold about 70 per cent of its population. The
regions accessibility has always remained weak due to geographical reasons and
underdeveloped transport links with the rest of India. Also, as the region
witness floods and Barak Valleys of Assam, Considerable strain is exerted on the
economy of not only Assam but other NER states too.
Infrastructure Factors: One of the reasons for the economic backwardness of the
North-Eastern states is the poor state of basic infrastructural facilities like
roadways, waterways, energy and so on as well as social infrastructure like
educational institutions, health facilities etc.
Constraints on Industrial Growth: At the time of Independence, there was a
small but significant industrial sector in Assam which was mostly dominated by
the colonial capitalists. This sector consisted of plantation and manufacturing
of tea, mining of coal and oil, oil refinery, manufacturing of plywood and other
forest resource-based products. Post Independence, due to the partition of
India, the industrial sector in Assam received a serious set-back as its trade
routes cut-off from the rest of India.
Agriculture: Despite agriculture being the major subsistence occupation of
the tribal population here, the pattern of agricultural growth has been uneven
across states and between crops. Rice is the major crop of the region (kharif).
Other crops (rabi) grown in the region are wheat, potato, sugarcane, pulses and
oilseeds. The NER produces only 1.5 percent of the country’s total food grains
and provides livelihood support to 70 per cent of the population. The pace of
agricultural growth in the eastern and North-Eastern regions has been slower
than the rest of the country. The Green Revolution was largely limited to the
North-Western parts of the country and has not benefited the North-Eastern
Natural Resource Base: In spite of having a reservoir of natural resources-
soil, water, vegetation and hydrocarbons, the NER is underdeveloped because the
resources are being indiscriminately exploited and mismanaged, thereby leading
to depletion of the very assets that are usually highlighted as triggering the
greatest potential for growth and development of the NER. Also the biodiversity
of the region is under severe threat. The bulk of natural resource degradation
is being caused by coal mining, fertilizer, paper, cement industry etc. and
Transport and Communication: The road development in the region has been very
slow due to various geographical and socio-economic reasons. During the Five
Year Plans, the allocated funds for development of the transport sector in the
Northeast were not adequate in comparison to its needs. Inadequate transport
facility has been a serious drawback that crippled the development of the region
for a long time. As a result of the partition, the region suffered not only
economically in the form of relatively high prices of consume goods but also by
a sense of isolation from the rest of the country.
Social Disorganisation of the region is also a matter of concern. A society
that has insufficient productive forces, makes its members capability poor and a
capability-poor society is also poor in cultural capital and if the standard of
living of such a society is much higher than what it’s productive forces can
afford, then such a society’s economic condition creates moral degeneration and
consequently loss of character. Education system, having miserably failed here,
the well-to-do families send their children to some mainland cities for further
education which gives a big economic blow to the local society. This
brain-drain, attributable to the Policy Paralysis of the region needs to be
The Ministry for Development of North Eastern Region established in September
2001, which functions as the nodal Department of the Central Government to deal
with matters related to the socio-economic development of the eight states of
NE, acts as a facilitator between the Central Ministries/Department and the
States Governments and the states Governments of the North Eastern Region in the
matters of economics development including removal of infrastructural
bottlenecks, provision of basic minimum services, creating an environment for
private investment and removing the impediments to lasting peace and security in
Coming to the developmental initiatives taken by the Central Government
recently in December 2017, the centre has approved North East Special
Infrastructure Development Scheme which will fill the gaps in creation of
infrastructure in two sectors-One is physical infrastructure relating to water
supply, power, connectivity and especially projects promoting tourism. The other
is social sector projects of education and health. The remarkable feature of
this scheme is that this is a 100 percent centrally funded scheme as against the
NLCPR, where 15 per cent contribution had to come from the State
Government.Way-Forward: A six-fold strategy for the comprehensive development of
the region has been proposed-
- Empowering people by maximizing self-governance and participatory
development through grass-root planning to promote inclusive development.
- Creation of development opportunities for the rural areas through
enhancing productivity in agriculture and allied activities such as animal
husbandry, horticulture, floriculture, fisheries and generation of
livelihood options through rural non-farm employment.
- To develop sectors in the region having a comparative advantage such as
agro-processing, hydropower generation.
- Enhancing the skills and competencies of the people and building the
capacities for institutions within the Government and outside.
- Creating a hospitable investment climate to encourage investment by the
private sector particularly for infrastructure.
- Harnessing the resources of the Government and the private sector to
realize the objectives of the Vision.
The latest event of Global Investors’ Summit in Guwahati held on February 3,
2018, itself evinces the sincere approach of the Central Government towards
bringing overall prosperity in the NER. The event undoubtedly, showcased the
states’ investment potential to countries in South and South East Asia, in
sectors including manufacturing, services power, agriculture and food
processing, IT, transportation, petrochemicals, pharmaceuticals, textiles and
handicrafts and tourism.
To conclude, innovation, initiatives, ideas and implementation-all the four
need to go together. What is needed is inclusive growth through inclusive
development with focus on improved governance, doing away with the draconian
laws and ensuring that the local communities are empowered to implement basic
needs and services. For this, all the stakeholders need to formulate an
all-comprehensive realistic plan for the . rall development of NE states.