This document outlines a basic plan to promote economic development in Northeast India. It proposes providing start-up capital and incentives to young immigrants to start businesses in the region. It also aims to improve internet connectivity to connect even remote areas and make economic progress more transparent. Key advantages of Northeast India include a more liberal culture compared to mainland India as well as a vibrant arts scene. However, the region faces challenges like low income, brain drain, and geographical isolation. The document argues for relying on free market principles and voluntary cooperation rather than government intervention to drive sustainable economic growth in Northeast India.

1. Coming home
engineering the rise of North East
India

2. Basic Plan Outline
 Ignite market-led growth in Northeast India by promoting grassroots level development efforts . The
main thrust would be providing start-up capital (and other incentives) to young immigrants from the NE
states who have completed at least one phase of higher studies outside the region, inside India.
 Connect up the region. Ensure an uninterrupted flow of information from the remotest of areas by setting
up Internet-enabled Information Bridges, managed by trained local residents and initial professional
supervisors and connecting the economy of each small, low-purchasing power towns (like, e.g. Dibrugarh
in Assam) to the national and global economy.
 Make economic development a more tangible, readily observable phenomenon to non-experts.
Economic development will be real-time web-updates: conception, planning, financing, implementation
and accomplishment of objectives
Leverage Factors:
 Social attitudes are much more relaxed and liberal compared to the Indian mainland, a reality frequently
acknowledged when evaluating the reported alienation of people from the Northeast in the mainland. The
respect of personal freedom is evident in the liberal lifestyles many families allow their children to have.
 A growing and vibrant art, literature and music scene – newly given impetus by young artists – points to a
society where creativity is valued and developed.
 A unique advantage, and one that is a cheerful spot in India’s current context, is the comparatively high
freedom and status women enjoy in the Northeastern states. Except perhaps Assam, most of the
northeastern states have liberal views on pre-marital sex, women’s equality in education and employment
and the woman’s right to choose partners.

3. Northeast India’s predicament
 Low per capita income compared to the rest of India
 Low HDI indicators
 Brain drain
 Insurgency, ethnic strife and civil unrest negatively impact investor attitudes
 Geographical isolation – NE India is connected to mainland India by the Chicken’s Neck, a narrow 22 km – wide
stretch that is hemmed in by three countries. Road, rail, electricity and internet connectivity is low
 Distinctly different culture from mainland India – makes adaptation of ‘outside’ entrepreneurs difficult. Alienation
from and hostility towards ‘outsiders’, both domestic and foreign, is not unheard of in the region.
 Blaming policymakers and government for mistakes is logical, but if the state has failed to bring results, it points to
a systemic deficiency (as opposed to the unlikely hypothesis that every successive administration was composed
solely of corrupt and incompetent officials).
 And ironically, despite a chronic complaint being ‘neglect from the centre’, critics should note that the NE enjoys
the highest per capita investment by the Centre, averaging INR 2,574.98, against the all-India average of INR
683.95. The Northeast’s per capita income o f around Rs.25,000 per year, making government investment a
staggering 10% of income.
 In a 2009 ‘Ease of doing Business’ Report by the World Bank and International Finance Corporation, Guwahati
(the closest definition to an economic and political capital the region has) was ranked 8th out of 17 Indian cities
studied. It was easier to do business in Assam’s capital than Mumbai.
 This hints that one of the government’s most relied on policy measures to uplift the NE, i.e. aggressively neoliberal
pro-investment and business-friendly policies may have started showing effects. The NE Industrial and Investment
Promotion Policy stipulates an environment encouraging for business, with extensive subsidies and tax
exemptions.
 But the extremely low human capital in the NE, worsened by migration due to lack of economic opportunities,
makes sustained improvement difficult.

4. The logical course of action
 What is proposed here is not a mere policy recommendation. Economic policymaking and
implementation in the North East suffers from structural flaws, beyond errors or corruption. The best policy
might be stated here, but relying on the state to authorize, enact and successfully implement it, from start
to finish, would be naive.
 The correct institution to rely on would be the free market, a fair, tough and efficient judge of value.
 A form of economic organization based on voluntary cooperation and the universal exchange of
knowledge is perhaps superior to any hierarchical structure, in terms of development.
Accurate
Information
Well-
placed
Incentives
Functioning
market
The solution would be to rely on a globally tried and
tested method of getting economic results, and the
core principle of free-market capitalism – the
combination of individual profit and social welfare,
by providing incentives for productive economic
activities.
Once a well- functioning market is put in place where individuals can profit from
providing solutions to economic challenges, innovation will accelerate.

5. Individuals
prosper and
connect, as they
create value for
society through
free market
exchange
Real Time
Processed
Information
Educated,
Skilled
resource pool
(with social
capital)
Efficient,
transparent, free
market process to
allocate capital
Inertia and
intelligent choice
architecture
Myanmar’s Rise,
complemented
by crucial
Infrastructure
improvements
Modern, free-market capitalism is said to have begun around
the industrial revolution. The system of innovation, wealth
creation, and social change has brought to billions of people
prosperity that was unimaginable to earlier generations of
human beings. The dawn of free market capitalism has
changed human civilization in a way never seen before.
Capitalism is about creating value, goods and services that
evolve innovatively to provide answers to each region’s
unique socioeconomic environment
Job creation” is not a suitable role of the state. For jobs to be
sustainable, they have to be created by the private sector.
Government-generated jobs are at the taxpayers’ expense
and amount to subsidized employment. Being
unsustainable, they have no positive economic
consequence. The private sector is the main creator of
wealth, and the state sector a consumer.
Humanity’s greatest institution – The free market

6. Crucial Regional Developments
 This is an illuminating and fortuitous time for the till-now remote and internationally neglected region,
because of an historic event: the liberalization of Myanmar’s economy. Myanmar is one of the few
notable countries in the world growing at breakneck speed, around 6%, and global investors – Chinese,
Indian, Western – are scrambling to invest in Myanmar, dubbed ‘Asia’s Last Frontier’. This brings much
attention to one of the world’s last obscure regions.
 This is a once-in a lifetime opportunity to circumvent the geographical limitations imposed on economic
development by the ‘Chicken’s Neck’. India shares a 1,643 km long border with Myanmar. As the rising
nation experiences rising levels of investment and consumption demand, the Northeast is uniquely poised
tmo benefit from this due to its extreme geographical proximity to the region (once, and perhaps still, a
frustrating fact to for the Indian state’s counter-insurgency efforts). It can be a supplier, consumer or both in
a new economic relationship.
Major Infrastructural developments
Internet Connectivity
The Bangladesh Government has granted in-principle
approval to India’s proposal to connect Tripura with
the international Internet gateway (South-East Asia –
Middle East – Western Europe 4 cable system) passing
through Cox’s Bazar in Bangladesh. Cox’s Bazar is 200-
250 km from Tripura. This measure will transform the
reach of high-speed internet in the NE states.
Urban Infrastructure
The Guwahati Water Supply Project, billed as one of the
largest interventions to improve urban infrastructure in the
region, will bring Guwahati, the capital of Assam, among
world-standards with 24x7 treated, piped urban water
supply. Guwahati’s role as the putative coordinating capital
of the region will require infrastructure worthy of any global
city.

7. Introducing Choice Architecture
 A new and extremely effective field of applied behavioral economics and public choice has the
potential to transform governance, welfare measures and market efficiency.
 Choice architecture seeks to affect outcomes through the manner in which the person or
organization presents the choice to the decision-maker, similar to the concept of "heresthetics," or
manipulation that changes outcomes without changing people's underlying preferences. Choice
architecture has been implemented in several public and private policy domains.
 As an example of the way choice architecture is applied, it is helpful to begin with a core principle
of human behaviour, and perhaps the fundamental starting rule of designing a good choice
architecture: if, for a given choice, there is a default option—an option that will obtain if the
chooser does nothing—then we can expect a large number of people to end up with that option,
whether or not it is good for them.

8. Organ Donation : The power of Inertia
 Organ donation is an activity which benefits society at no additional cost. The primary sources of
organs are patients who have been declared “brain dead,” meaning that they have suffered an
irreversible loss of all brain function but are being maintained temporarily on ventilators. The
main obstacle is the consent of the family members.
 An innovative policy that also serves as a key test of the ‘Default Rule’ is ‘Presumed Consent’.
Under this policy, all citizens would be presumed to be consenting donors, but they would have
the opportunity to register their unwillingness to donate, and they could do so easily, i.e.,
registering out is almost costless. The last policy is the crux of the design: preserving liberty while
nudging citizens towards better decisions. The authors dub it ‘libertarian paternalism’.
 The difference in consent rates between two countries, Austria and Germany - countries with a
very similar culture and economic development, is a testament to the power of simple behavior-
adjusted tweaks in governance. In Germany, which uses an opt-in system, i.e. people can
voluntarily sign up to be organ donors, but the default is not signing up.
 Austria uses a ‘Presumed Consent’ system, where citizens are by default organ donors, but can
easily opt out of it. (This may seem obvious, but it is worth pointing out that organ donation is
recognized in general as a noble and necessary to most people)
 In Germany, 12% of the citizens consented to be organ donors. In Austria, nearly 99% did.

9. Expected Human Resource Pool – Internal MigratedYouth
• Steady flow as prospering households send more students outside
for higher education
• Highly educated youth population. The literacy rate for the region
was 78.85 % in 2011 (Census). Mizoram has one of the highest
literacy rates in India at 91%. Around 66% of migrants migrate for
higher studies. in 2011, over 2,75,000 students from the North-East
had migrated to other cities of the country, particularly NCR.
Size
More than 2,00,000
students
• Understanding of local culture, language and social norms.
• Trained and educated under reliable standards
• Mostly middle class and above, economically and socially secure
Strengths
Personalised, well-developed
networks and considerable
social capital (in a society that
respects education
• Local networks exert strong influence on decisions, serving a
cause is lauded
• Have seen and experienced the results of development outside the
NE, realized backwardness
• They bridge the knowledge gap of local population with the culture
gap of capital investors, service providers and government officials.
Expected Consent

10. Information Bridges
 India has the world’s 3rd largest population of internet users (after the US and China), and this population is only
poised to grow. The success and significance of web-based businesses (Flipkart) and institutions (e.g. online RTI
petitions) reflects a considerable maturity of internet usage, market and penetration in India.
 A concept worth trying (in any remote area of India) is that of Information Bridges.
 In semi-urban areas with low television, phone, newspaper and internet connectivity, a helpful institution would be
a local-resident or community managed IT centre with 24x7 high speed internet and satellite connectivity.
 Managed by, say, a 60-40 ratio of migrated educated youth and local unemployed youth, trained in regional capitals,
the Bridges would mainly be a repository of real-time economic information.
 The core aim of the Information Bridges is simple – to make economic development a more tangible, readily
observable phenomenon to non-experts. Economic development will be real-time web-updated conception,
planning, financing, implementation and accomplishment of objectives. Most small towns have internet cafes.
 Areas with low purchasing power will update regular, detailed reports of specific economic requirements
online(buying generators, building sewers etc.) on the universally accessible web portals. This will boost
transparency and implementation – as economic growth will mean the achievement of tangible objectives. This also
opens up new possibilities for concerned citizens to directly get involved.
 It must be mentioned here that the Information Bridge project is slightly distinct from the simple start-up capital
push. The second will be decided purely on free-market terms: capital to the best idea. But the Info bridge scheme is
where the government must step in to ensure its actual role as the efficient allocator of resources in society.
 Basic statistics would come first – unemployment, population, income, upcoming projects etc. capital seekers can
then come forward with requirements.
 For rural consumers, online shopping could emerge as an option. The different InfoBridges would serve as
centralised gateways for diffused consumers. Orders could be accumulated over the course of a month or so, and
the deliverers could send special vehicles to deliver the accumulated orders, payment collected in advance.
 The operators would be trained together in the nearest large city, by companies or agencies specializing in
development and IT.
 The estimated costs would not be too high.
For example, 40 laptops, electrical generators, buildings, and internet connection. There are companies which provide
remote-area satellite internet services.

11. Operational Issues
Funding:
 Central and PPP funds might be redirected to providing start-up venture capital, in a transparent and free-
market evaluation process to for graduated youths who have ideas for startups back home, but no capital.
Alternately, the centre can provide incentives for global venture capital firms to invest in the NER.
 The Web Portals will include options for direct funding through online account transfers from surfers. Each
new objective can be studied in detail by prospective helpers online, regardless of location or time.
 A percentage of income of some particular income group may be made automatically deductible as a ‘NE
Venture Capital tax’ (Like the education cess). But to avoid political ramifications and preserve liberty, people
will be given the option of a smooth opt-out. If properly presented, people should stick with the default.
Implementation:
 A well-designed and cleverly paced advertisement-promotion campaign is almost essential to ensure public
attention, interest, transparency and to attract potential philanthropist and corporate sponsors. The campaign
will have to artistically appeal to emotional concepts - of home, reconciliation and development as a people’s
movement. A brilliant example would be the ‘Kony 2012’ campaign. That is why the target group is also
uniquely suited – first generation immigrants who can still return home. (This will resonate, we can state
from interactions with the target group over the last 3 years.)
 If this plan is to be truly implemented, the details of the campaign will have to be classified to ensure efficacy.
People might misinterpret the elements of choice architecture and lead to perverse outcomes.
 To implement the plan, we feel a transparent online competitive bidding process, coordinated through the
Bridges, would bring the most efficient results.

12. Challenges
 Target group reluctance to participate
This can be taken care of by structuring choices in a way which ‘anchors’ subjects to perceive the
socially desired result as the better option. Short-term rural stay incentives might be an option,
like the almost-compulsory short rural stint that MBBS graduates have to do under the NRHM
(just far more libertarian). If additional incentives are provided to Northeastern entrepreneurs
working in rural areas (not their places o,f residence), starting businesses will seem like a better,
default option.
 Rejection of request for Central Funds
This might not be so bad, given that government involvement often introduces rent-seeking in the
market. If transparency is maintained, this can actually be staged and leveraged to draw out
‘sympathy capital’.
 Security concerns
Because the most underdeveloped and remote places are the ones most likely to witness unrest,
security service personnel (private or state) might be required. But this is a method that might
remind the local population that this is an imposed, not participatory process.
However, the 60-40 mix of mainland educated (but state resident) and local youth should render
this unnecessary. The idea is to let the deprived and distrustful see and understand that the
efforts are being led by people they know and understand, their ‘own’. This arguably does sound
narrow, but it is essential at first. Besides, the free market does not a have the function of
cultivating tolerance.

13. Citations
(The original detailed list of citations was created in a separate word document, which
has been lost. Because of time limitations, the list is not yet ready for submission as on
6/9/2013.The citations listed above are not exhaustive in any way, but as stated earlier,
the list is still being re-compiled)
 Nudge (Thaler, R and Sunstein, C.), 2008
 India Grows At Night, (Gurcharan Das), 2012
 The Morality of Capitalism (Centre for Civil Society), 2011
 Public Choice – A Primer , Eamonn Butler(Centre for Civil Society), 2012
 Thinking; Fast and Slow (Daniel Kahneman), 2011
 http://www.law.harvard.edu/news/spotlight/public-service/related/cass-sunstein-nudge.html
 http://www.globalcomsatphone.com/hughesnet/remote_places.html
 http://www.doingbusiness.org/data/exploreeconomies/india/sub/guwahati/#resolving-insolvency

14. ThankYou