1. We want to bring to the world
various facets of this
extraordinary country, its
people and progress…

4. OBJECTIVE :-
The objective of this presentation is to
provide the possible solutions for the issue
regarding the growth potential of States in
north east India , briefly analyse the
performance of the State in terms of
economic growth, focusing more on
constraints and opportunities in the forestry,
agricultural and other natural resource sector
and its implications to rural poverty; and
based on the above analyses make suitable
recommendations for improving the present
scenario in north eastern states.

5. Northeast India is the eastern-most region of India
connected to East India via a narrow corridor
squeezed between Nepal and Bangladesh. It
comprises the contiguous Seven Sister States-
Arunachal pradesh , Assam , Meghalaya , Manipur,
Mizoram , Nagaland , Tripura — and the Himalayan
state of Sikkim. These states are grouped under
the MDONER ministry of the Government of India.
Except for the Goalpara region of Assam, the rest
were late entrants to political India—
the Brahmaputra valley of Assam became a part of
British India 1824, and the hilly regions even later.
Due to cultural and historical reasons parts
of North Bengal in West Bengal (districts
of Darjeeling, Jalpaiguri, and Koch Bihar) are often
included in Northeast India. Sikkim was recognised
as a part of North-East states in the 1990s.

6. I D E N T I T Y C R I S I S
North-East India refers to the easternmost region of the Republic
of India. Geographically and culturally, the region now called
north-east India is situated between the two traditions of Indic
Asia and Mongoloid Asia and is regarded as part of Southeast Asia.
This geographical-cultural condition of "in-between ness" is an
important factor in the area’s crisis of identity. The leaders of the
present-day "underground outfits" continue to struggle for
independence, as the political integration of the northeast to India
was brought about without the approval of its people. The people
of northeast India, who are culturally Mongoloid, refuse to accept
the caste-ridden social system advocated by ‘Indian’ culture.
Similar struggles for independence are also going on in other
northeastern subdivisions or sister regions, such as Assam,
Manipur, Mizoram, Meghalaya and Nagaland. However, the heavy
and privileged status of the security forces in Northeast India, as
well as seeming discriminatory treatment against Northeast
Indians (see Ethnic relations in India) remain factors that
contribute to tensions in the region. For example, the hunger
strike by Irom Chanu Sharmila following the "Malom Massacre" has
not received widespread coverage in India .

7. POLITICAL UNREST
The northeastern states, having a comparatively small electorate (3.8% of India's
total population) are alloted 25 out of a total of 543 seats in the Lok Sabha (Which
is 4.6% of the total number of seats).
Thought during the British Raj, the North-eastern states were isolated from their
traditional trading partners like (Bhutan, Myanmar and Indo-China). In 1947 Indian
independence and partition made this a landlocked region, exacerbating the
isolation that is being recognized lately, but not studied yet. Soon it became
a captive market for mainstream India.
The northeastern states are home to many ethnic groups that are engaged in self-
preservation.
Of late there is a wide recognition among policy makers and economists of the
region that the main stumbling block for economic development of the
Northeastern region is the disadvantageous geographical location. It is argued that
the coming of globalization propagates deterritorialisation and a borderless world
which is often associated with economic integration. With 98 percent of its borders
with China, Myanmar, Bhutan, Bangladesh and Nepal, Northeast India has better
scope for development in the era of globalization. As a result, a new policy
developed among intellectuals and politicians that one direction the Northeastern
region must be looking to as a new way of development lies with political
integration with the rest of India and economic integration with the rest of Asia,
with East and Southeast Asia in particular, as the policy of economic integration
with the rest of India did not yield much dividends. With the development of this
new policy the Government of India directed its Look East policy towards
developing the Northeastern region. This policy is reflected in the Year End Review
2004 of the Ministry of External Affairs, which stated that: “India’s Look East Policy
has now been given a new dimension by the UPA Government. India is now looking
towards a partnership with the ASEAN countries, both within BIMSTEC and the
India-ASEAN Summit dialogue as integrally linked to economic and security
interests, particularly for India’s East and North East region.

9. NORTH EAST
AN EMERGING INDUSTRIAL CENTRE
North East India offers huge opportunities in sectors of strategic
importance like energy and infrastructure; oil, natural gas and
hydrocarbons; agro, food processing and horticulture; floriculture; IT
and ITeS; cement; defence, etc. Tourism is another potential high
growth industry.
North-East India is often described as the Gateway to South-East Asia.
India’s ‘Look East’ Policy aims at transforming the North-East into a
dynamic center of a thriving and integrated economic space, linking the two
high-potential regions with a network of highways, railways, pipelines, and
transmission lines crisscrossing the region. The huge complementarity
arising out of India’s ‘Look East’ Policy and our South-East Asia focus and
the ‘Look West’ Policy of South-East Asian nations like Thailand, gives rise
to immense opportunities for India and ASEAN countries to develop their
trade and investment relations, using the North-East as a primary focal
point.

10. Manipur has huge potential in sectors like power, agro-based
industries, etc.; a greater private sector involvement in the state
economy will ensure local job creation and entrepreneurship
development. The State Government of Manipur lays a major thrust on
Agro and Food Processing; an Agri Export Zone for Passion Fruit is
being developed in the state.
The literacy rate in Mizoram is above 90%, which is the 2nd highest in
India. A well-educated and hardworking young population is an
advantage for Foreign and also domestic corporates ; sectors like IT
and ITeS, agro processing, floriculture and bamboo are some areas
that offer huge opportunities to investors. The state also grows fine
quality of grapes, which can be utilised for large-scale wine production.
The State Government of Manipur is pro-active and industry-friendly,
and investors can be assured of single-window clearances.

11. Assam provides huge investment opportunities in sectors like
hydrocarbons, oil and natural gas, bamboo, handicrafts and tea. Assam
tea is well known for its distinctive quality, and exported to the
developed markets of Europe. Sectors like IT, hospitality and tourism,
power, agro and food processing are poised for impressive future growth
- companies like Infosys and Reliance have already shown interest in
investing in Assam, with Tata Consultancy Services even having a BPO
unit in Guwahati.
However, as indicated earlier, despite these great advantages, the
North-East has not grown at par with the rest of the country, and the
region’ s potential has not been tapped properly. While the significant
initiatives taken by the Government to promote economic growth,
tourism and development in the North-East region can be largely
welcomed, we would like to mention that issues and problems like
shortage of power generation capacity, over-dependence on hydro-
power, absence of proper road connectivity, etc., need to be given
special emphasis in order to help the region achieve high growth.

12. However, the high priority to be accorded to the development of roads
in the North-East Region is well reflected in the Union Government’s
intention to invest nearly Rs.50,000/- crores on the roads sector in the
North-East over the Eleventh Plan period, that is, over the next 5
years.
The East-West corridor project, which will connect Silchar in Assam to
Porbandar in Gujarat, is scheduled to be completed by 2009 – and this
will go a long way in improving connectivity and transforming the
region into a vibrant economic zone.
Also, India is exploring a transport corridor through Myanmar, a
potential gateway to East Asian countries, to form a free-trade region.
The proposed ‘Trilateral Highway' connecting India, Myanmar and
Thailand is being discussed. This project, I believe, has the potential
of strengthening economic exchanges and international co-operation
significantly.
With necessary infrastructure development within the region, and the
building of connecting links between North-East and the rest of India,
and North-East and South-East Asia, the economic potential of the
region can be suitably exploited. Time-bound implementation of
projects, conducive centre-state relations and political stability,
monitoring of fund–flows and necessary marketing and branding of the
region can truly transform this goldmine of a region into a vibrant hub
of business, tourism and trade.

13. Opportunities For Investment In
Agriculture
And Food Processing
Rubber and bamboo are among the important agricultural produces
which can attract a lot of investment opportunities. Tripura is the
chief production hub and has been declared as the ‘second rubber
capital of India’ right after Kerala by the Indian Rubber Board. The
state has the potential to produce 10,000 hectares of rubber (the
available plantation area is 35,760 hectares). Other rubber
producing states in the region are Mizoram and Assam. Coupled
with the fact that globally India ranks third in the production and
fourth in the consumption of rubber creates a huge market for
investors. The NE states also produce a substantial percentage of
bamboo, accounting for 65% of India’s production value and 20% of
the global production value. Mizoram alone contributes to around
40% of the country’s bamboo production. While India’s bamboo
market is expected to grow to 5.5 billion USD by 2015, the UN’s
Industrial Development Organisation estimates the NE’s bamboo
production to grow up to 1.25 billion USD in the same period

15. In spite of the efforts of the MOFPi and regional
development organizations such as the NeDFI, challenges
remain in realizing the full potential of the region’s
agricultural resources. Fragmented land holdings by small
and marginal farmers which dominate the landholding
pattern in the north east is uneconomical. The region has
low proportion of irrigated area and investment in building
irrigation capacity has been insufficient and ineffective.
The use of agricultural inputs in the north east is also low
compared to the rest of the country. Fertilizers used per
hectare during 2010-11 were negligible in the region,
especially in Nagaland (2.35 kg), Arunachal Pradesh (3.01
kg); and ranged between 13 kg in Meghalaya and 63 kg in
Assam compared to the national average of 135.27 kg per
hectare. Also the share of agriculture in total electricity
used is just under 1% in all the north-eastern states,
except Tripura (7.41%), as against the national average of
20.43%.

16. POWER
 The region is endowed with perennial rivers and water bodies,
therefore, it has a huge hydroelectricity potential. This potential, if
tapped well, can be used to export power to other regions of the
country. The spill-over benefits will be the development of
infrastructure such as roads, communications, and electricity supply
to remote hilly areas, resulting in better quality of life. States such
as Arunachal Pradesh, Sikkim and Meghalaya have huge potential in
hydropower generation.
 Many policies such as the ‘50,000MW hydro initiative’, the Hydro
Policy 2008 have been formulated by the central government to
promote investment in hydropower in the region. Under the Mega
Power Policy, the qualifying threshold capacity for setting up
hydropower plants in the region and for availing the special benefits
thereof is 350 MW, whereas for the rest of the country, it is 500
MW.Under the Hydro Policy 2008 the project developers in the
central and state sector can explore the possibility of foreign
assistance to finance their projects. This assistance is already being
utilised by NEEPCO for Pare Hydro Electric Project and MeSEB for
Renovation and Modernisation of Umiam II HEP.

17. SKILL DEVELOPMENT : INSENTIVES TO INVEST
As per the ‘North Eastern Industrial and Investment Promotion
Policy (NEIIPP)–2007’ by the Ministry of Commerce and Industry,
the region has been declared as special economic zone (SEZ).
The central government has implemented various schemes to
attract investors. These are as follows:
Subsidy at 90% of the transport cost of raw materials brought from
outside the region as well as the finished goods sent from the region
to other parts of the country. The transport cost between Siliguri (the
entry point to the north east) and the factory site only is considered
for subsidy calculations. In addition, subsidy is also available at 90%
of transport cost on movement of raw materials and at 50% of
transport cost on movement of finished goods from one state to
another within the region.

18. Income tax exemption for five years for the new industrial units set
up in the region.
Growth centres and IIDCs to be converted into total tax free zones
for the next ten years. Similar benefits will also be extended to new
industrial units or their substantial expansion in other growth centres
or IIDCs of industrial estates, parks, export promotion zones set up
by the states. Similar benefits will also be provided to units located
outside the specified locations, if they belong to the specified
industries listed in Annexture A of the Indian government circular.
Capital investment subsidy (CIS) at 15% of investment in plant and
machinery, subject to a maximum ceiling of 30 lakh INR will be
given. Eligibility conditions will be same as in case of tax benefits.
Interest subsidy of 3% on working capital loans will be provided for a
period of 10 years. Eligibility conditions will be same as in case of
tax benefit.
A comprehensive insurance scheme for industrial units to be
designed, in consultation with GIC and 100% premium to be borne
by the Indian government for 10 years.

19. CONCLUSION
 Institutional change supporting economic enhancement and growth at a
social level requires economic incentives, supported by political will.
With India moving into a new era of economic liberation, the region
should not be left out. The framework for development of the region can
be broadly based upon four vital components. The first component of
this development plan should be social empowerment. It needs to
empower rural communities, create sustainable institutions so that they
manage common activities around microfinance, livelihoods and natural
resource management. The second component needs to be economic
empowerment. The objective of this component should ideally be to
develop the capacity of rural communities to plan and manage funds for
various economic initiatives and common activities for the public. The
third component will be partnership development. The objective of this
component should be to partner with various service providers, resource
institutions and public and private sector organizations to bring
resources such as finance, technology, and marketing into the project
so that the community groups are able to improve their livelihoods. The
fourth and final component will be project management. This will
facilitate various governance, implementation, co-ordination, learning
and quality enhancement efforts in the project.

20.  Thus, with some of the changes that this paper attempts
to deliberate upon, a process could be set in motion that
could support the north east in its endeavor to contribute
to the economic resurgence of the home region as well
as to the development of the rest of the country. It is vital
that this process includes mechanisms for equitably
sharing the benefits to be derived from development and
focuses not only on the big-ticket items that support
broad-based, long-term growth, but also on those
complementary activities that have immediate impact on
poverty reduction at the community level.

21. LIST OF ACRONYMS
NER North eastern region
ASE Association of Southeast Asian Nations
R&D Research and development
NeDFI North Eastern Development Finance Corporation
BRO Border Road Organisation
PWD Public Works Department
NHAI National Highway Authority of India
NHDP National Highway Development Programme
DPR Detailed project report
CONCOR Container Corporation of India Ltd
NEEPCO North Eastern Electric Power Corporation Limited
MeSEB Meghalaya State Electricity Board
NEIIPP North Eastern Industrial and Investment Promotion Policy
NEC North East Council
DoNER Development of north eastern region
IIITAS Indian Institute of Information Technology and Advanced Sciences
UNESCAP United Nations Economic and Social Commission for Asia and Pacific
SEZ Special economic zone
CIS Capital investment subsidy
MOFPi Ministry of Food Processing Industries