Rejuvenating the North-Eastern Economy
Dr. Gulshan Sachdeva

Today the economy of the region is highly imbalanced. It is mainly agricultural economy with very weak industrial sectors and inflated service sectors.

The North-Eastern region is a distinct illustration of the relative failure of past Government policies conceived to uplift economically backward and isolated regions like the NE. This policy framework has been implemented in the NE mainly through the Planning Commission and the North Eastern Council. However, the State and sectoral plans of the Planning Commission have not been able to provide enough impetus for local development, which would have led to self sustained growth. Instead, almost total dependence on Central funds has cultivated a trait of passiveness towards development. It has encouraged patronage and corruption. Besides, it has also created government monopoly on employment and destroyed the work culture. Moreover, instead of creating an efficiency oriented political process, this mechanism created a distribution oriented political process. Although significant development changes have taken place, yet the region is not able to exploit its initial resource endowments as well as its absolute and comparative advantages. And certainly, these mechanisms are inappropriate to face challenges presented by changing national and international economic scenario.

Today the economy of the region is highly imbalanced. It is mainly agricultural economy with very weak industrial sectors and inflated service sectors. Since the full potential of agriculture has not been exploited, the region is not even able to produce adequate food-grains to feed its population. State sponsored industrialization has failed to take off. In addition, most of the small scale industries are also in bad shape. Only the tea plantation industry employs a large labour force. Since agriculture and industry have not really taken off, the pressure for employment is on the service sector, which practically means government employment. Moreover, the largest economy of the region i.e. Assam is in a critical situation, both in agriculture and industry.

The land tenure system in the region is very complex. Although tribal population today constitutes about one-fourth of the population of the region, about two-thirds of its land is owned, controlled or managed by tribes, clans or village communities. It is almost impossible to transfer this land to non-tribals and outsiders. In addition, with the possible exception of the Brahmaputra valley and Tripura, the NE region is a labour scarce region. Because of Inner Line restrictions, labour movement is restricted in many areas. These features had far-reaching implications for the economy of the region.

Against popular perception, the region is not a financially neglected region. Between 1990-91 and 1997-98, the gross devolution and transfer of resources from Central Government to the region was more than Rs. 50,000 crore. Compared to that, the State of Orissa, which has almost the same population as the NER, received only about Rs. 20,000 crore during the same period. But in the area of institutional finance, the region lags behind most of the states in India.

Although an overwhelming portion of overall receipts of the governments in the region comes from the Centre, the present financial situation of many states of the region is unsustainable as very little efforts have been made to broaden the tax base.

In an increasingly integrated world economy, there is a good chance that the locational disadvantage of the region could be converted into an advantage. So far, major border trade activity with Bangladesh and Myanmar is “unauthorised trade”. These activities are functioning more or less smoothly through unofficial channels. China is also an important player in the border trade. But its activities are through Myanmar.

Way Out

Assam is the key to development of the NE. And within Assam, modernisation of agriculture has to be given top priority.

The role of private capital would be a critical component in any new economic strategy. To attract private capital some fundamental policy initiatives are required in the following areas:

i. Land Policies: changes in complex land tenure system and availability of land to investors for industry, plantation, horticulture, etc., either on lease or on ownership in a transparent manner.

ii. Labour Policies: because of labour shortage, the region has to open itself for outside labour. Due to sensitive nature of the issue, some control mechanism could be worked out.

iii. Infrastructure: improvement in power situation is must. There is also a great potential for private investment in power sector.

iv. Border trade: Converting unauthorised activities into legal trade, both at policy level and at the ground level; declaring certain areas as free trade areas; and creating growth quadrangle involving neighbouring areas.

v. Law and order: Serious efforts be made to improve the situation.

(Gulshan Sachdeva is Associate Research Professor at Centre for Policy Research, New Delhi. These findings are based on a recently completed draft study of NE by his organisation)

He couldn't resist the fist of fate
Sandeep Banerjee

As the evening starts drawing closer, the market gives a desolate look. Buses stop plying. By the time of sunset, one can't find even a stray dog on the road. Prevailing unrest in these parts of Lower Assam has dislocated normal life without end and there is always a lurking fear of insecurity. Kochugaon, under the Kokrajhar district, is one of the worst affected areas. Once known for its prospering timber trade and mixed culture, this place is now a picture of life at its whimpering best having lost all its business relevance and also being witness to mass exodus of settled people as they desert their homes to move to safer places across the State border. By the nightfall, there is only an occasional movement of the deployed forces. The common people are having sleepless night due to the overwhelming feeling of insecurity.

However, oblivious of the horrendous situation or the surroundings a solitary figure roams through these vulnerable roads of Kochugaon at the night. Although he moves out stealthily his very appearance does not defy his abnormal mental balance. His steps are unsure bereft of all certainty.
His lean body bends double in pain. He has not had a bath for ages. His eyeballs have sunk deep into the recesses of his socket. The eyes are expressionless. But sometimes they give a flicker of deep pain and anguish. Short in height, this peculiar figure in his early thirties or so (as can be still made out from this otherwise haggard face) is not even appropriately clad, taking it from the point of decency, what to talk of the night-time chill that this poor hapless Homo sapien braves with uncovered chest for 24 hours.

Strangely, during the daytime one finds him to be lot more calmer, sitting maybe in one corner of the marketplace. He survives on crumbs and titbits thrown to him by sympathetic old-timers of Kochugaon. They know what caliber he had and how fate dealt a cruel blow to him. The story that these locals tell about this man's life is a moving saga of injustice and humiliation which brings tears to listener's eyes.

'Soma Paglaa' or Mad Soma, as he is known to the locals now, was a very handsome and well-bred boy called Soumen. His father and uncle were occupied in the timber trade. They had their own house in Kochugaon. The boy had lost his mother in his early childhood. But this tragic loss didn't prevent Soumen from maturing into a bright young man. He was too sharp and good in his studies. Moreover, he was blessed with a very good physique. Being very strong and supple from his early youth, Soumen underwent a training in taekwondo. He mastered the sport in a short-time and went on to become a martial art trainer. He participated in many competitions and tournaments and brought laurels for himself and his region. However, his fame was short-lived. The turmoil in the region brought their family business to an abrupt end. Huge amount of money was demanded from his father and uncle. His uncle fled the place to never return again. The trouble-mongers then started threatening his father. When his father tried to put resistance, he was brutally done to death. Thereafter one day Soumen was also waylaid when he was returning from Guwahati after taking part in a tournament. He was mercilessly beaten by the goons and left unconscious. After recovering from physical trauma, Soumen couldn't control his anger and vowed to pay the hooligans in the same coin. A few days later, he came face to face with some of the culprits and the martial art expert in him began asserting for revenge. However, at that very moment a para-military van arrived in the
vicinity and saw the tussle.

The real culprits were quick to make their retreat through their well-known unconventional tracks. It was Soumen who was caught. He tried a lot to explain that he was innocent but his pleas fell into deaf ears. He was placed into the lock-up for days and beaten black and blue without end.