(GIST OF YOJANA) North East : An Economic Perspective [APRIL-2018]


(GIST OF YOJANA) Taking The Economy Forward

[APRIL-2018]


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 regions.

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 militant activities.

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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 addressed.

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 the region.

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.

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