Strength & weakness of North East
North Eastern Council in a report identifies major strengths and weaknesses of the North-East region.

North East News Agency

Despite having abundance of natural resources, the North-East region remains backward due to various reasons including lack of adequate infrastructure, while, the disturbances caused by the political problems often retards growth of development, said a report prepared by the North Eastern Council (NEC). The NEC, in the report on 35 years of its existence, identified the major strengths and weaknesses of the North East region. The report pointed out that the strengths of the region include large base of natural resources and potential for growth in agro-forestry, mineral deposits, particularly in the States of Assam and Meghalaya, vast bio diversity hot spots, water resources having hydropower potential, proximity to some of the words fastest growing economies in South East Asia, a highly literate population, potential for development of tourism, a rich heritage of handicrafts, handloom and tribal artifacts, etc.

However, the NEC admitted that the region is also suffering from some major weaknesses, which include inadequate development of basic infrastructure required for sustainable growth and development. The geographical isolation and difficult terrain, high rainfall and floods, lack of capital formation and poor climate for growth of entrepreneurship, slow pace of spread of technology, absence of supporting market structure and inadequate institutional finance structure, low level of private sector investment etc also regarded the growth of the North-East.

The NEC, constituted in 1972, has the financial power, even though in a moderate form, to assist various projects and schemes for economic growth and development of the NE states. The NEC can enter into collaboration with international funding organizations and public sector units on behalf of the region as a whole and this is vital because of the fact that the small states of the region are often incapable of doing so because of resource constraint. However, one major weakness of the NEC is that the processing time for proposals for projects is a long one as the Council is bound by the rules and procedures of the Government of India. To a certain extent, there is lack of awareness about the NEC among the people of the region. The report admitted that on its own, the NEC also failed to give adequate publicity to its achievements and efforts.

The report pointed out that the NEC is also suffering from shortage of trained manpower and staff. The committee for revitalization of the NEC recommended creation of new posts, but the recommendation is yet to be implemented. The NEC also admitted that there is lack of adequate supervision of the projects funded by the Council in the states of the region because of shortage of trained manpower.

The report pointed out that the NEC has to play a significant role in the Look East Policy envisaged by the Government of India and the Council is examining the feasibility of opening up of border trade with the neighbouring countries through this region. It is on the way to establish itself as planning and implementation agency, which would give it a greater foothold in the matters concerning regional development.

The NEC is also of the view that introduction of a kind of single window clearance system in the region would help in expediting issue of various clearances for new industrial projects, which, in turn, would enhance investments in the region. The Council said that such a single window clearance system could be implemented through the NEC, the report said.

Meanwhile, The North East Industrial Policy (NEIP) that expires in less than 10 days has failed to enthuse the investors and in a span of 10 years has managed to woo investments of only Rs 1067.28 crore only. The NEIP that came into effect from December 24, 1997 has little to show by way of industrialisation of the North-east, with the policy announced with much fanfare has led to setting up of only 681 units. Compared with the investments in Uttarakhand and Himachal Pradesh, where over Rs 18,000 crore of investments have been reported, North Eastern States have been left high and dry.

Union Minister of State for Industry, Ashwani Kumar said according to an impact assessment carried out by the Tata Economic Consultancy Services, the number of units set up in the North Eastern Region and the details of investment during 1999 to September 2004 is 681 and Rs 1067.28 crore, respectively.

Of the seven States, maximum investments have gone to Assam and Meghalaya. Out of the total industrial units that have been set, Assam alone has cornered the 520 with an investment of Rs 528.19 crore. In Meghalaya only 61 units have been set up at an investment of Rs 441 crore. The NEIP for various concessions like excise duty exemption, income tax exemption, investment subsidy, interest subsidy, comprehensive insurance. The North East Industrial Policy is currently under review and the Cabinet Committee on Economic Affairs is expected to clear the policy soon.

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