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Summary%20 vision%20document%20final%204.10.2007

  1. 1. Peace, Progress and Prosperity in the North Eastern Region: Vision 2020 National Institute of Public Finance and Policy, New Delhi A SUMMARY I. IntroductionIndia’s Northeastern region is a beautiful land. It stretches down from the foothills of theHimalayas in the eastern range and is surrounded by Bangladesh, Bhutan, China andMyanmar. It includes the eight states lying to the north and east of the narrow Siliguricorridor namely, Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland,Sikkim and Tripura. Verghese (2004: p. 1) describes the region as a “rainbow country:extraordinarily diverse and colourful, mysterious when seen through parted clouds, adistant and troubled frontier for all too many”. Marked by diversity in customs, cultures,traditions and languages, it is home to over 200 of the 635 tribal groups in the country,speaking a variety or Tibeto-Burman languages and dialects with a strong tradition ofsocial and cultural identity. Troubled by history and geo-politics, the Northeast has remained one of the mostbackward regions of the country. The trauma of partition of the country in 1947 not onlytook the region backwards by at least a quarter century, but also placed hurdles on futureeconomic progress. It isolated the region by sealing both land and sea routes forcommerce and trade. It severed the access to traditional markets and the gateway to theEast and South East Asia – Chittagong port in East Bengal (now Bangladesh). Itdistanced mainland India, made it inaccessible to the private investment with 98 per centof the boundary of the region connecting to international borders. It blocked the arteriesof transport and communication by inland water, and closed access to sea ports. Development of the region has been further hampered by poor infrastructure andweak governance. The governments have become ineffective and often remote from thepeople. Inability to control floods and bank erosion has caused unmitigated disaster tothousands of people every year. Seclusion, backwardness and a sense of alienation hascreated frustration and a breeding ground for armed insurgencies. The developmental vision, if it has to be realised, should be based on the needsand aspirations of the people. People of the region are tired of insurgency, lack ofgovernance and stagnation. They have an ambitious vision: by 2020, they aspire to seetheir region emerge peaceful, strong and confident, and ready to engage with the globaleconomy. They would like to march on the path of economic, social and cultural progresstowards prosperity and wellbeing. They would like to see every family in the region havethe opportunity to live a secure life with dignity and self-respect. Moving away from thedependency syndrome, people in the region would like to acquire the capabilities andself-confidence to shape their own destinies. They would like to enjoy their freedoms –freedom from hunger and poverty, the freedom to exercise choice in their avocations andincome-earning and spending decisions, and political, economic and social freedomswithout fear, in the larger sense of the term. They would like to enjoy peace and achievesustainable progress and prosperity.
  2. 2. The challenges to ensuring peace and progressing towards prosperity in the regionare formidable. The gap between the region and the country in terms of variousdevelopmental outcomes, productivities and capacities of people and institutions is largeand growing, and has to be bridged. Even within the region there are vast differences,particularly between the populations living in the hills and plains. The developmentstrategy for the various tribes in the region will have to be evolved in their own setting.Given the complexity of the task, augmenting investment to accelerate growth of theregion is only part of the story. The success of transforming the investments intodevelopmental outcomes requires a variety of strategic initiatives. We have put forward a strategy for encompassing (inclusive) development of theregion and realising the vision of the people with five interdependent components whichare: (i) participatory development articulated through grass-roots planning to focus ondevelopment of sectors and sub-sectors with comparative advantage; (ii) augmenting thecapacity of the people to participate productively in economic activities, and developingthe capacity of the institutions to design and implement developmental programmes; (iii)augmenting infrastructure, particularly connectivity and transport to facilitate two-waymovement of people and goods within the region and outside, open up markets for theproduce, attract private investments, create greater employment opportunities; (iv)ensuring adequate flow of resources for public investments in infrastructure and creatingan enabling environment for the development of the markets and flow of investments toharness the resources of the region for the welfare of its people; and (v) transforminggovernance by providing a secure, responsive and market-friendly environment. II. Northeastern Region: Economic, Social and Demographic ProfileThe eight states located in India’s north-east cover an area of 2,55,000 sq. km.constituting 7.9 per cent of the country’s total geographical area, but only about 3.8 percent of the total population of the country. Over 68 per cent of the population of theregion lives in the state of Assam alone. The predominant hilly terrain in all the statesexcept Assam is host to an overwhelming proportion of tribal population ranging from19.3 per cent in Assam to 94.5 per cent in Mizoram. It is home to over 200 of the 635tribal communities in the country. The region is predominantly rural with over 80 percent of the population living in the countryside. Richly endowed with natural resources, the region is identified as one of theworlds biodiversity hotspots; it hosts species-rich tropical rain forests and supportsdiverse flora and fauna and several crop species. The forest cover in the regionconstitutes 52 per cent of its geographical area. This limits the availability of arable landand enhances the cost of delivering public services. Similarly, reserves of petroleum andnatural gas in the region constitute a fifth of the countrys total potential, but the regionhardly gets any benefit from it. The region is covered by the mighty Brahmaputra-Meghna river system and small rivulets. However, water has been a source of miseryrather than a resource. The floods and erosion of river banks has been an annual featurewith enormous loss of life and livelihood. Geographically, apart from the Brahmaputra,Barak and Imphal valleys and some flat lands in between the hills of Meghalaya andTripura, the remaining two-thirds area of the region consists of hilly terrain. Driven by expanding global trade, the region was in the forefront of developmentalmost 150 years ago. The large river systems and small rivulets provided a means oflivelihood for the vast majority of the population in the valleys and plains. Global trade 1
  3. 3. was conducted through the sea-route, a network of inland waterways, and landtransportation through road and railways. In fact, the railway network between Dibrugarhand Chittagong was one of the earliest projects in India implemented by the British. Therapid spread of tea gardens followed the first tea garden in 1835 and the first consignmentof tea export to London in 1838. The discovery of oil in Makum and establishment of arefinery in Digboi in 1890 gave an impetus to the industrialisation of undivided Assam.The zeal of the missionaries was largely responsible for spreading literacy. Partition of the country following independence in 1947 changed the economiclandscape of the region, virtually disconnecting it from the mainland. The only link thatremained was the narrow 27 km Siliguri corridor; almost the entire boundary of theregion (98 per cent) is an international border shared with China and Bhutan in the north,Myanmar in the east and Bangladesh in the south and west. The carving out of EastPakistan from Bengal blocked the natural sea route through the port city of Chittagong.Political fragmentation, a quest for ethnic and regional identity and nationalism fomenteda climate of insurgency in several parts of the region and this was exacerbated bydissatisfaction with hegemonic domination and frustration with the lack of development. Not surprisingly, the standard of living of the people in the region as measured byper capita gross state domestic product (GSDP) has lagged significantly behind the rest ofthe country. At Rs. 18,027 in 2004-05, it was less than the all-state average of Rs. 25,968by 31 per cent. Interestingly, at the time of independence per capita income in theundivided state of Assam was higher than the national average by 4 per cent. Thepartition of the country took the region backwards in development and by the late 1960s,the region lagged behind the country in per capita income. After economic reforms in1991, the divergence in income growth increased further. In 1990-91, the region’s percapita income in current prices was lower than the country average by 20 per cent andthis difference increased to 31 per cent by 2004-05. The aggregate picture presented above, however, hides vast differences among thestates. In the region, except for Mizoram, Nagaland and Sikkim, per capita income levelswere lower by varying magnitudes. Assam, the largest among the Northeastern states hadthe lowest per capita income at Rs. 15,661 which was lower than the country average by40 per cent. Furthermore, even in the three states with per capita income levels higherthan the national average, much of the income generated was in the public administrationsector. This underlines the overwhelming dependence of the population on thegovernment for generating incomes and lack of productive economic activities inprimary, secondary and tertiary sectors of the economy. The region lags behind the rest of the country not only in per capita GSDP but inseveral other development indicators as well. The development indicators such as roadlength, access to healthcare and power consumption in the region are well below thenational average. The region generates less than 8 per cent of its 63,257 MW ofhydroelectric power generation potential and the per capita power consumption in theregion at 117 Kwh is less than a third of the national average (373 Kwh). The literacy ratein the region is above the national average, the employability is low resulting in high rateof unemployment and underemployment. The incidence of poverty in the region is highand the official income-poverty measure does not accurately reflect the deprivation. The partition of the region not only isolated it but also caused structuralretrogression. With poor penetration of the markets and development not based on the 2
  4. 4. resources of the region, the planning process failed to strengthen forward and backwardlinkages with the rest of the country. Low productivity, poor infrastructure andconnectivity combined with the climate of insurgency have created an inhospitableclimate for investments. III. Progress to Peace and ProsperityGiven the rich endowment of resources and social and cultural heritage, the people of theregion aspire to achieve peace and prosperity, eradicate poverty and have a sense ofbelonging and harmony while maintaining their distinct identities. By 2020, they wouldlike to catch up with the rest of the country and contribute to its affluence by becoming aprosperous part of India. They would like to see every family in the region receivessufficient food, clothing and shelter, and the abundant natural resources are harnessed ina sustainable manner for the welfare of the people. They would like to see opportunitiesfor the youth to participate in gainful economic activities. (a) Catching up with the rest of the country Improving the standard of living of the people would require sustained increasesin per capita income levels and its fair distribution among people of different states,communities, and groups within the region. By 2020, people of the Northeast should haveliving standards comparable to people in the rest of the country. Given that income levelsin the region are lower than the national average by over 30 per cent and that the regionhas lagged behind, catching up with the country by 2020 would require significantacceleration in the growth performance of the NER. The task has been made even moreformidable as Indian economy itself has reached a higher growth trajectory. The continued growth of Indian economy at 8 per cent per year from 2004-05 to2020 would, on average, increase per capita income by about 6.5 per cent (Table 1). Asover the period, population growth is expected to decelerate, per capita income growth isexpected to accelerate from 6.5 per cent in the Eleventh Plan period (2007-12) to 6.8 percent during the Thirteenth Plan (2017-22). Thus, by 2020, per capita income in the Indianeconomy is expected to be about Rs. 78,000 at 2006-07 prices or about USD 2,000 at theprevailing exchange rate. To reach this level of income, between 2006-07 and 2019-20,GSDP in the Northeastern region will have to grow at 11.8 per cent per year on anaverage, or at 10.5 per cent in per capita terms (Exhibit 1). The process should be put in place to expeditiously accelerate the growth processin the region. However, it would be unrealistic to expect that the growth rate of per capitaincome will accelerate from 4.6 per cent recorded during 2000-04 to 10.5 per centimmediately. The realistic path is to phase in the acceleration in the three Plan periods tosteadily increase the growth rate to achieve the target. An illustrative scheme of phasingout is shown in Table 1, according to which the growth rate of per capita GSDP shouldaccelerate from the average of 4.6 per cent during 2000-04 to 7.9 per cent during theEleventh Plan (2007-12), 11.34 per cent during the Twelfth Plan (2012-17) and 13.31 percent during the Thirteenth Plan (2017-22). The growth rates required to catch up with theper capita GDP of the country in different states is summarised in Table 2. 3
  5. 5. Table 1 India and NER: Projected Per Capita GDP and GSDP at 2006-07 Prices: 2007-08 to 2019-20 GDP (FC) at 2006-07 Per Capita GDP at Population Prices 2006-07 Prices Level (Rs Persons Year/ Plan GR (%) GR (%) Level (Rs) GR (%) crore) (crore) 2006-07 3,743,472 111.22 33,659 XI FY Plan 8.00 1.39 6.52 XII FY Plan 8.00 1.24 6.68 XIII FY Plan 8.00 1.11 6.81 2006-20 8.00 1.26 6.65 NER states (Average GR Required = 11.78%) Per Capita GSDP at GSDP (FC) at 2006-07 Prices Population 2006-07 Prices Level (Rs Annual Average GR Persons Year GR (%) Level (Rs) GR (%) crore) GR (%) (%) (Crore) 2006-07 92,233 4.17 22,139 XI FY Plan 9.25 1.25 7.90 XII FY Plan 12.65 1.17 11.34 XIII FY Plan 14.50 1.05 13.31 GR (%) pa) 11.78 1.18 10.47 Data Sources: 1. Population estimates: Registrar General of India, Census 2001. 2. Quick estimates of GDP at factor cost: Government of India, Press Note on Revised Estimates of GDP, dated 31 May 2007 3. GSDP: Ministry of Statistics and Programme Implementation. Table 2 Acceleration in Growth Rates Required to Achieve All India Per Capita GDP Level in 2019-20States Average Annual Growth of GSDP (FC) Average Annual Growth Rate of Per 2006-07 Prices Capita GSDP 2007-12 2012-17 2017-20 2007-20 2007-12 2012-17 2017-20 2007-20Aru. Pradesh 8.15 10.75 12.75 9.93 6.88 9.51 11.62 8.69Assam 10.00 14.90 17.25 13.21 9.61 13.54 16.01 11.86Manipur 9.00 12.85 15.75 11.73 7.71 11.59 14.57 10.47Meghalaya 8.0 10.75 12.0 9.86 6.73 9.51 10.88 8.62Mizoram 9.68 9.68 9.68 9.68 8.40 8.45 8.57 8.44Nagaland 8.52 8.52 8.52 8.52 7.24 7.30 7.43 7.30Sikkim 7.80 7.80 7.80 7.80 6.51 6.60 6.73 6.71Tripura 7.50 8.50 8.50 8.16 6.24 7.29 7.41 6.94NER 9.25 12.65 14.50 11.78 7.90 11.34 13.31 10.47India 8.0 8.0 8.0 8.00 6.52 6.68 6.81 6.65Source: NIPFP Estimates. 4
  6. 6. Exhibit 1 Assumed Real Growth Rates of the NER Economy to Achieve Economic Target by 2020 Per Capita Income Growth 13.31 11.34 Overall CAGR of GSDP 2007-08 to 2019-20 7.90 11.78% GSDP Growth 14.50 12.65 XI FY Plan XII FY Plan XIII FY Plan 9.25 Overall CAGR of PCGSDP 2007-08 to 2019-20 10.47% Population Growth 1.25 1.17 XI FY Plan 1.05 XII FY Plan XIII FY Plan XI FY Plan XII FY Plan XIII FY Plan Overall CAGR of Population 2007-08 to 2019-20 The vision of the people is not merely confined to improving income levels. Theywould like to banish poverty from the region by 2020. The estimated poverty ratio in theregion using the mixed recall period in 2004-05 was 17 per cent, but actual deprivation isestimated to be much higher. Empowering people with capabilities ensures they receiveadequate food, clothing, and shelter, and that every family is free from hunger, leads ahealthy life and participates productively in the growth process. An important component of the people’s Vision 2020 is to achieve a high level ofhuman development. Raising the quality of education and health is as much a goal initself as it is a means to enrich the quality of life for people, and expand their life choices. 5
  7. 7. Human development contributes to welfare by enhancing ‘capabilities’, increasingproductivity of the population and enhancing their incomes and wellbeing. The vision of prosperity for the people requires participatory development byharnessing the resources of the region. The people would like to see the large riversystems converted into a source of wealth, and the mineral wealth generates opportunitiesto increase employment and incomes. They would like to harness the vast hydroelectricenergy potential and use the comparative advantage to expand economic activities in theregion. They would like to see that the global public goods they provide through the vastforest cover is recognised and given adequate compensation. They would like toovercome their saving-investment deficit by increasing the credit-deposit ratio throughthe generation of economic activity in the region. The people in the region envision having state-of-the-art infrastructure not only toenhance the quality of life but also to dictate the pace of economic activity, and the natureand quality of economic growth and ensure peace in the region. The lack of connectivityhas virtually segregated and isolated the region not only from the rest of the country andthe world, but also within itself. The people would like the region to be economically and socially integrated sothat it becomes an important hub of trade and commerce and an economic bridge to Eastand Southeast Asia. Opening up the trade routes will expand economic opportunities forthe region and accelerate the growth process. The region can regain its place as a centreof flourishing trade with East and Southeast Asia through the land (silk) route to Chinaand Myanmar and through the sea port from Chittagong and Kolkata. An integral part of the people’s vision of development is of a land with peace andharmony, free from insurgency. Insurgency has taken a heavy toll of people’s happiness.Governance is weak and there are widespread leakages. The practice of parallel taxcollections, random extortion and kidnapping has robbed the region of incentives to saveand engage in productive economic activities. The people of the Northeast would likepeace to return to their lives, leakages to cease and development to take precedence. IV. Realising the Vision: The New Development StrategyThe challenge of accelerating development in the Northeastern region to realise theVision is formidable and the road to peace and prosperity is long and arduous. Thepeople’s vision requires a participatory development strategy. The High-LevelCommission appointed by the Prime Minister in its report submitted in 1997 has statedthat there are four basic deficits confronting the Northeast: a basic needs deficit; aninfrastructure deficit; a resource deficit and a two–way deficit of understanding with therest of the country. To this should be added the governance deficit (India, 1997).Overcoming these deficits will call for a paradigm shift in development strategy,supplemented by reforms in policies and institutions including capacity building andstrengthening governance. (a) Components of the development strategy The participatory development strategy calls for a complete shift in the planningprocess towards designing and implementing people-centric programmes based onharnessing the natural resources of the region. The five components of the strategy are: (i) First, participatory development through grass-roots planning to harness thenatural resource advantages of the region. In agriculture, inclusive development will 6
  8. 8. require increasing crop intensities, enhancing productivity and developing fisheries toensure food security and enable a transition to high-value agriculture, including organicfarming wherever feasible. In manufacturing, the focus will be agro-based processing andother areas that draw on the resources of the region, or in which the region has acomparative advantage. Similarly, an expansion of non-governmental service sectors willbe based on the comparative advantage. (ii) Capacity development is critical to participatory development. Developingpeople’s capacities will enable them to participate productively in economic activitiesand strengthen institutions to design and implement developmental programmes asdesired by the people. (iii) Given the poor state of transport and power infrastructure in the region, itsaugmentation is an important precondition for development and to attract privateinvestment into the region. (iv) An important deficit in the region, as pointed out above, is the resourcesdeficit. Augmenting infrastructure requires significant investment, a considerable portionof which will come from central and state governments. This will require a large increasein the central government’s allocation for infrastructure in the region, accompanied by amore efficient use of funds. Ensuring adequate resources for public investment ininfrastructure, implementing a framework for private participation in augmentinginfrastructure and creating an enabling environment for the flow of investments toharness the physical resources of the region for the welfare of the people are issues thatneed to be addressed on a priority basis. (v) An equally important component of the strategy is transforming governanceby providing a secure, responsive and market-friendly environment including protectinginvestors’ property rights and ensuring a corruption-free administration. Protecting therights of tribal people to use the land and forest resources is particularly important toinstil in them a sense of belonging and security. Strengthening governance includesputting an end to insurgencies and to leakages in the system – the widespread “rovingbanditry” from a parallel tax system, extortions and “informal trade”. (b) Participatory development Realising the people’s vision of development will call for a paradigm shift in theplanning process – from the allocation of investment from above to allocation determinedby the needs of the people. The centrality of local governments – panchayats in villagesand municipalities in urban areas - is critical to planning at the grass-roots level. Thedetailed methodology of such grass-roots planning is spelt out in general terms in a recentreport of the Planning Commission (India, 2006). Participatory development is based on harnessing the natural resources of theregion and so would give priority to the primary sector in the development process. Over86 per cent of the population in the region resides in villages and therefore, encompassingdevelopment is possible only with the development of agriculture and allied activities. Atpresent, of about 40 lakh hectares under cultivation, 39 lakh or over 97 per cent is underfoodgrains production. At about 1,520 kg/hectare, land productivity is very low in theregion. Despite a vast potential, only 20 per cent of the net sown area is under irrigation.Almost 95 per cent of the region’s soil is acidic with pH value below 5.6. Jhum 7
  9. 9. cultivation, widely practiced in the hills, has kept productivity low and contributed tounsustainable agriculture. The target should be to increase foodgrains production in the NER to 75 lakh MTin 2010, 87 lakh MT by 2015 and 110 lakh MT in 2020, which would requireaccelerating the growth rate to 2 per cent in the first phase, 3 per cent in the second and4 per cent in the third. This implies increasing the productivity of land to 1,570 kg/ha inthe first phase, 1,610 kg/ha in the second phase and 1,650 kg/ha in the third. The people-based approach to development in agriculture should adopt a separatestrategy of development in the plains and in hill areas. In the plains, the goal should be toincrease crop intensity, by better utilisation of irrigation potential and cultivation of short-duration crops. In the plains, increasing the land area (about 1.5 million ha) under double-cropping to 25 per cent in a phased manner, would considerably enhance productivity.Adoption of improved technology such as expanding the area under high-yieldingvarieties (HYV) of seeds, a more balanced use of organic manure and chemical fertilisersand pesticides, and steps to balance soil conditions to reduce acidity in land are some ofthe measures needed. It is also important to expand area under cultivation from thecurrent 17.8 lakh/ha to 25 lakh/ha by bring under cultivation, cultivable waste land andareas developed under the command area development. Controlling the fury of floods in Brahmaputra and strengthening embankments tocontrol soil erosion should be an important part of the strategy for the development ofagriculture in Assam and parts of Arunachal Pradesh. Floods and bank erosion in theBrahmaputra river basin are annual phenomena and the elevated river bed in severalplaces caused by the Great Assam Earthquake of 1950 has increased over-bank dischargeand expanded the area under the fury of the flood, increased soil erosion in the riverbanks. The various government schemes to control the fury of floods have beenconstrained by embankment failures, bureaucratic apathy and technocratic arrogance thathas excluded people’s participation. Mitigative measures necessarily entail creation offlood detention structures and that involves agreements between Arunachal Pradesh andAssam. In this context, creation of ‘trusteeship zones’ or industrial growth areas indisputed areas bordering the two states could provide an opportunity to harness the waterresource of the region for the betterment of the living conditions of the people better. In the hills, the strategy should be to wean cultivators away from jhum cultivation,by enhancing their capacities to engage in productive and sustainable livelihoods. Thereis tremendous potential for growing horticultural crops in the hills, but success dependson the development of rural infrastructure including marketing links, cold storages andprocessing facilities. There should also be extensive extension service, provision of seeds,inputs and seedlings. The NEC estimates that if fruit production is taken up in ‘MissionMode,‘ with the provision of complementary infrastructure and services, by 2020 the areaunder fruit cultivation could be increased by 50 per cent (from the present level of 4 lakhhectares to 6 lakh hectares) and production of fruit crops could be raised from theprevailing 40 lmt to 60 lmt. The high fertility of virgin land in the hill areas of the regionis conducive for the introduction of organic farming of horticultural crops under theNational Programme for Organic Production (NPOP). The people of the region are predominantly non-vegetarians and the production ofmeat and eggs is inadequate to meet the demand. Thus, there is a significant deficit andthe region has to import about 50 per cent of its milk consumption and over 87 per cent of 8
  10. 10. the eggs consumed; as the population grows, this shortfall will increase over time. Thedeficit indicates the vast potential that exits for giving a big thrust to animal husbandry inthe region which would increase productive employment as well as incomes. Similarly,despite the network of large and small river systems, the region is significantly deficientin fish production by 55 per cent and has to ‘import’ this from outside. Marketing andstorage infrastructure will provide a boost to pisciculture, which would create significantemployment earning opportunities. A thrust to agricultural and allied activities requires significant governmentalinitiative in terms of providing rural infrastructure and extension services. An extensiverural road network is necessary to increase the mobility of people as well as themovement of goods, while the electrification of the villages is necessary for increasingcrop intensity and spreading rural industrialisation. Extension services are critical bothfor production and marketing, and need significant upgradation. Establishing a networkof cold storage facilities and information centres and organising marketing and financialsupport through self-help groups will have to be initiated on a large scale. The participatory development approach requires the development of themanufacturing sector based on the resources of the region. Agro-processing industrieswill have to play an important role in the emerging scenario. Horticultural crops needprocessing support and it would be necessary to tie up with the corporate sector for theprocessing and marketing of fruits and vegetables, including organic products. Similarly,there is considerable scope for expanding handlooms and handicrafts, particularlysericulture which currently employs the most people after agriculture. It is important tomodernise the sector and help producers with design inputs, financial support andmarketing assistance, including exports. There are about 181 large and medium-scale industries in the region and over 70per cent of them are in Assam. Most of the units are based on resources, such as oil, gasand wood. The significant deposits of limestone in Meghalaya and Arunachal Pradeshcan be used for setting up medium-sized cement industries by using the deposits ofnatural gas in the region. It is also important to augment production by exploiting thehuge hydroelectric potential of the region, as the provision of power is an importantfactor in industrialisation of the region. The participatory approach to accelerate growth in the service sector will focus onthe development of non-governmental services and their interaction with agriculture andmanufacturing. The most important sector to be developed in the region is tourism, withthe most potential for generating income and employment. With a moderate climate mostof the year, scenic splendour, and robust and varied cultural attractions, the region is idealfor tourism. The focus, however, should be high-value tourism which will require closecollaboration with the private sector hospitality industry, building high-qualityinfrastructure and adequate promotion. Annual music and dance carnivals in differentparts of NER, with national and international participation could help promote tourism.Similarly, the Bihu festival in Assam and Dusshera festival in Manipur could beimportant tourist attractions that should be promoted. Hill tourism, skiing, river-raftingand adventure tourism are some of the important activities that need to be focussed on.Several tourist circuits could be developed in the region, depending on the attractions andexperiences they present. The expansion in tourism will be based on expanding capacityin the hospitality business. 9
  11. 11. (c) Building capacity for participatory development Capacity building is a critical part of participatory development. In general, asmentioned earlier, the literacy rate is high in the region, but this has not translated intoemployability in productive occupations. There also appears to be a reluctance to enterinto self-employment ventures, perhaps because of the absence of such a tradition in mostNER states, so that those who do are first-generation entrepreneurs. However, the regionhas a large base of very talented people who, with training, can be gainfully employed ina variety of areas including agro-processing, information technology, paramedical,biotechnology, aviation, and the entertainment and hospitality industries. Capacity building in the primary sector will have to focus on providing skills andtraining for improved agricultural practices. Adoption of improved agricultural practicesin the plains requires training through agricultural extension services to raise high-yielding short-duration crop varieties. In the hills, weaning the population away fromshifting cultivation and development of horticultural crops and organic farming requiresconsiderable capacity building. Skill development is extremely important for providing productive employmentopportunities in the manufacturing and tertiary sectors and creating a pool of employableskilled personnel which would be an attraction for private investments. Expansion in thehospitality industry which has great potential in the region requires a large number oftrained personnel. In fact, as the employability of people increases, the private sector willenter to provide the required skills. Proper regulation of the quality of education impartedand ensuring access to such vocational educations through proper financial support,particularly loans from the banking sector, could be a useful means of increasingemployment and incomes in the region. Focus on other aspects of human development such as basic health needs isequally important for capacity development, health indicators in the region showsignificant improvement over the years, nevertheless, there is considerable scope forraising the health and nutrition status of the region especially for children and women.The shortage of medical specialists and lack of tertiary facilities in several states needs tobe addressed, as well as the high incidence of AIDS, cancer, malaria, and other diseases,and the wide gaps in rural-urban provisioning of basic services. An important part of capacity building is increasing awareness in the rest of thecountry about people in the Northeast region, and within the region itself throughincreased social interaction. This would require promotion of sports and culturalexchanges within the Northeastern region as also between the region and the rest of thecountry. The rich cultural heritage of the region should be taken advantage of byengaging the youth in creative activities while promoting a two-way understanding withthe rest of the country. Organising annual music and dance carnivals in different parts ofthe NER with competitions at the district, state and regional levels would involve theyouth in creative activities. These carnivals could become important tourist attractions. (d) Strengthening infrastructure and connectivity The biggest constraint in the NER has been the poor state of infrastructure, inparticular, roads, railways and power. At 66 km/100 sq. km area, the road length in theregion is lower than that the average in the country (75 km/sq. km area) and the quality ofroads in the region is extremely poor. The total railway track length in the entire region is 10
  12. 12. 2,592 km, with broad-gauge track confined to Assam. The inland waterways inBrahmaputra and smaller rivers, such as the Kolodyne in Mizoram and Barak Valley ofAssam, have become non-functional after partition. Air connectivity to the region isextremely poor. Three of the state capitals do not have airports, and feeder services fromDelhi/Kolkata/Guwahati to the state capitals where airports exist are poor. Often, evenintra-regional movements have to be through Kolkata which is expensive in terms of bothtime and money. Realising the vision of peace and prosperity through participatory growth cannotbe realised unless significant initiatives are taken to improve connectivity. Given thedifficult terrain and strategic situation of the region, road density should be higher thanthe national average of 75 km/100 sq. km and the quality of the roads should be improvedsignificantly to make them motorable. The Central Master Plan for road connectivity inthe region should be completed by 2015, and sub-divisional headquarters should beconnected through all-weather roads. National highways must be upgraded to four lanes.Rail projects under construction must be completed by 2010 and more trains must beintroduced to the region. Extension of the railway line to Sabroom would provide betterconnectivity to the Chittagong port. A detailed plan should be prepared and implementedfor connecting all state capitals in the region with a broad-gauge rail line by 2020. Airconnectivity must be improved by shifting the hub to Guwahati. The nine old airstrips indifferent parts of the region should be developed for commercial use and subsidy may beoffered to airlines to begin operating regional air services between the different statecapitals, with a hub at Guwahati, until it becomes economically viable. Activating inland waterways and providing access to the sea port requiressignificant diplomatic initiatives with Bangladesh. The aim should be to have a commonmarket with Bangladesh. This would require a complete change in the mindset of bothcountries. It will not be easy to initiate the process, but both the sides should realise thatthere are significant gains to be had from a common market. Access to the Chittagongport and opening up of the inland water route could lead to economic resurgence of theregion. In fact, the Chittagong port is only 75 km from Sabroom in Tripura and couldbecome an important gateway for India to the East Asian countries. The construction of abridge by India across the 110-metre wide Feni River, and helping Bangladesh modernisethe Chittagong port, could go a long way in creating confidence and goodwill, and wouldpromote greater cooperation for the benefit of the peoples of Bangladesh as well as ofNortheastern India. Bangladesh will have access to Indian markets, which would mitigateits unfavourable balance of trade with India considerably. Besides, people-to-peoplecontact could bring in greater understanding and social harmony. Infrastructure and connectivity could support the ‘Look East’ (LE) policy andprovide an impetus to trade with the Eastern part of the globe. Although the policy hasbeen in place sine the mid-1990s, there has been little progress. The essential principle ofthis policy has been that the NER shares 98 per cent of its borders with the neighbouringcountries of Bhutan, Nepal, China, Bangladesh and Myanmar. Therefore, forgingeconomic links with these countries, particularly the larger countries of Bangladesh,China and Myanmar is important for the development of the NER. The Prime Minister of India, during the SAARC Summit in May 2007 announcedthe India would follow a duty-free policy with least-developed SAARC countries from2008. This calls for immediate follow-up to ensure its smooth implementation. The 11
  13. 13. immediate initiative required is the significant upgradation of infrastructure in the bordersto facilitate trade and ensure faster movement of goods to and from neighbouringcountries. Improvement in facilities such as approach roads, telecommunications,electricity, weighbridges, customs/immigration posts and bonded warehouses should betaken up on a priority basis. Initially, support should be given to private initiatives to startrestaurants, petrol bunks, repair stations, banks, cyber-cafes, convenience stores andrepair stations. In fact, this should be taken up on both sides of the borders in Bangladesh,Bhutan and Nepal through persuasion and assistance to these countries. (e) Raising resources for development Critical to implementing the development strategy to realise the vision of peaceand prosperity to the region is the issue of raising the required resources. Indeed, much ofthe investment will have to come from the private sector and the government will have tocreate the enabling environment for private initiative in economic activities. This willinclude controlling insurgency, improving governance, creating world-class infrastructureand developing people’s capacity to participate in economic activities. In creating the enabling environment, state governments will have to significantlyenhance the level of spending on development and also improve the efficiency ofdelivery systems. Meeting basic needs such as elementary and secondary education,primary healthcare, water supply and sanitation, anti-poverty interventions, and housing,and ensuring law and order, are important for this process, and state governments willhave to allocate the required resources for the purpose. Augmenting public services such as education, healthcare, drinking water,sanitation, and housing, and building a network of village and district roads and statehighways would require significant additional investment by state governments. Thiswould require them to mobilise significant additional resources from tax and non-taxrevenue bases assigned to them. Immediate measures to strengthen the tax administrationand institute a modern information system could enhance revenue productivity. Revenue increases from states’ own sources, though important and necessary, willnot bring in the large volume of resources to provide the required levels of publicservices. The central government has to augment infrastructure spending directly forbuilding national highways, a rail network, and airports and ensuring access to the searoute. It will have to allocate a much higher proportion of resources for strengtheninginfrastructure in the region. (f) Creating a responsive administration A responsive administration is fundamental to creating an enabling environment.Responsive administration has both proactive and reactive aspects. The protection ofproperty rights is the most important precondition for the development of markets.Creating a legal framework, the implementation machinery to maintain law and order andan effective and expeditious judicial system are essential components of this incentivesystem. Equally important for responsive administration is the appropriate policy andinstitutional environment in terms of having an expeditious mechanism to issue licensesand clearances, facilitating the availability of land for setting up enterprises, providingelectricity and water connections and granting necessary clearances, while ensuringcompliance with the regulatory system (such as environmental clearances). Another facetof good governance is providing a corruption-free administration. 12
  14. 14. The most important aspect of responsive administration is ensuring peace andharmony in the region. Peace and development go hand in hand and therefore, ensuringlaw and order should be the priority. For the last several decades, the Northeast (exceptfor Sikkim) has been under the shadow of ethnic violence and terrorism of numerousforms. Continuous violent upsurges and absence of law and order have adverselyimpacted on development and has created a sense of uncertainty and insecurity in theminds of prospective entrepreneurs. Insurgency and development have to be tackledsimultaneously. The strategy for realising the NER Vision 2020 should focus onestablishing peace in the region while simultaneously adopting strategies to accelerate thepace of economic growth, and making the growth process encompassing. Providing a corruption-free and responsive administration in the region is a majorchallenge. The media and non-governmental organisations will have to play an importantrole of diligence and vigilance in ensuring this. The Right to Information (RTI) Act is animportant instrument that can be used to demand accountability. Another important wayto improve governance is to increase decentralised public service delivery. The NER hasthe tradition of decentralised service provision and it is important to strengthen thetraditional institutions of local governance as well as Panchayat Raj Institutions (PRI) indifferent states of the region. V. Converting Dreams into RealityThe Vision of achieving peace and prosperity outlined above is eminently feasible but byno means easy. Realising the vision requires mobilisation of the people. Implementing apeople-based development strategy, infrastructure development, building capacity, andresponsive administration and governance will attract significant investment and open upavenues for the development of the region. Acceleration in the growth of the agriculturalsector will benefit over 80 per cent of the people who reside in rural habitations. Capacitydevelopment of the people should equip them to take advantage of the expansion inmanufacturing and services. The strategy of development outlined in the document, thus,can promote encompassing development of the region to realise the vision of achievingpeace and prosperity. The five components of the strategy described in the previous paragraphs areinterdependent and, therefore, need to be designed and implemented concurrently. Peacewill bring in development dividends and vice versa. Development requires infrastructureand capacity development. Similarly connectivity can dampen insurgency. All these canbe done only when there is an accommodating environment for which a responsiveadministration is necessary. The formulation of the five-year plans should take into account the overall visionoutlined in this document and adopt the development strategy to implement the plans. Wehave lost opportunities in the past and any further delay in adopting an integrateddevelopment strategy will only delay the development of the region further and alienatethe people more. It is hoped that this document will bring into focus the vision of peaceand prosperity to the Northeastern Region. It is hoped that the Eleventh Plan will initiateoperationalising the strategy to realise people’s dreams. 13
  15. 15. References o Barua, Alokesh (ed), (2005) India’s North-East: Development Issues in a Historical Perspective, Menorah Publications, New Delhi. o India, Government of, (1997), The Shukla Commission Report: Transforming the Northeast – High Level Commission Report, Planning Commission. o India (2006), Report of the Committee on Grass-roots Planning (Chairman: V. Ramachandran), Ministry of Panchayati Raj, Government of India. o Olson, Mancur (1993), ‘Dictatorship, Democracy and Development,’ The American Political Science Review, Vol. 876, No. 3 (September) pp. 567-76. o Sachdeva, Gulshan (2000), Economy of the North-East: Policy, Present Conditions and Future Possibilities, Konarak Publishers, New Delhi. o Sen, Amartya (1999), Development as Freedom, Oxford University Press, Oxford: Oxford University Press. o Thomas, Joshua, C., (2006), Engagement and Development: India’s Northeast and Neighbouring Countries, Akansha Publishing House, New Delhi o Verghese, B. G. (2004), India’s Northeast Resurgent, Konarak Publishers, New Delhi (Fourth Edition). o Verghese, B. G. (2006), ‘Unfinished Business in the Northeast’, in Joshua Thomas (2006). o Verghese, B. G. (2007), “Northeast Vision 2020: An Overview”, paper submitted to the Northeast Vision 2020 Steering Group. 14