Peace, Progress and Prosperity in the North Eastern Region:Vision 2020

National Institute of Public Finance and Policy, New Delhi

A SUMMARY

I. Introduction

India’s Northeastern region is home to several ethnic groups and has over 200 of the 635 tribal groups in the country with a strong tradition of social and cultural identity.

The developmental vision, if it has to be realized, should be based on the needs and aspirations of the people. People of the region are tired of insurgency, lack of governance and stagnation. They have an ambitious vision: by 2020, they aspire to see their region emerge peaceful, strong and confident, and ready to engage with the global economy.

The socio-economic gaps between the region and the country on the one hand and

within the region can be bridged if the hand on the other development strategy for the various people in the region are evolved in their own setting.

. A Five Pronged Strategy: (i) participatory development articulated through grass-

roots planning ; (ii) augmenting the capacity of the people to participate productively in economic activities, and developing the capacity of the institutions to design and implement developmental programmes; (iii) augmenting infrastructure; (iv) ensuring adequate flow of resources for public investments in infrastructure and creating an enabling environment for the economic development; and (v) transforming governance by providing a secure, responsive and market-friendly environment

.II. Northeastern Region: Economic, Social and Demographic Profile:

Richly endowed with natural resources, the region is identified as one of the world's biodiversity hotspots. The forest cover in the region constitutes 52 per cent of its geographical area. This limits the availability of arable land and enhances the cost of delivering public services.

The region has reserves of petroleum and natural gas constituting a fifth of the country's total potential.

The region is covered by the mighty Brahmaputra- Meghna river system and small rivulets. The floods and erosion of river banks have been an annual feature

with enormous loss of life and livelihood. Two-thirds area of the region consists of hilly terrain.

The standard of living of the people in the region as measured by per capita gross state domestic product (GSDP). At Rs. 18,027 in 2004-05, it is less than the all-state average of Rs. 25,968 by 31 per cent. At the time of independence the per capita income in the undivided state of Assam was higher than the national average by 4 per cent. In 1990-91. The region’s per capita income in current prices was lower than the country average by 20 per cent. This difference has increased to 31 per cent by 2004-05.

The region lags behind the rest of the country in several other development indicators as well. The incidence of poverty in the region is high and the official income-poverty measure may not accurately reflect the extent of deprivation. Planning process has failed to strengthen the backward/forward linkages.

III. Progress to Peace and Prosperity

The people of the Region aspire to achieve peace and prosperity, eradicate poverty, have a sense of belonging and harmony while maintaining their distinct identities.

By 2020, they would like to catch up with the rest of the country and contribute to its affluence by becoming a prosperous part of India.

They would like to see every family in the region receives sufficient food, clothing and shelter, and the abundant natural resources are harnessed in a sustainable manner for the welfare of the people.

They would like to see opportunities for the youth to participate in gainful economic activities.

(a) Catching up with the rest of the country

To reach all-India level of per capita income in 2020 (estimated at about Rs. 78,000 at 2006-07 prices or about USD 2,000 of the prevailing exchange rate), between 2006-07 and 2019-20, GSDP in the Northeastern region will have to grow at 11.8 per cent per year on an average, or at 10.5 per cent in per capita.

The realistic growth process is to phase in the acceleration in the three Plan periods to steadily increase the growth rate to achieve the target. The vision document presents a picture of how to phase it out.

The objective is to ensure that people receive adequate food, clothing, and shelter, and that every family is free from hunger, leads a healthy life and participates productively in the growth process.

An important component of the people’s Vision 2020 is to achieve a high level of human development, particularly education and health.

Human development contributes to welfare by enhancing ‘capabilities’, increasing productivity of the population and enhancing their incomes and wellbeing.

The vision of prosperity requires participatory development by harnessing the resources of the region.

IV. Realising the Vision: The New Development Strategy

(a) Components of the development strategy

The participatory development strategy calls for a complete shift in the planning process towards designing and implementing people-centric programmes based on harnessing the natural resources of the region. The five components of the strategy are:

(i) First, participatory development through grass-roots planning to harness the natural resource advantages of the region.

(ii) Second capacity development is critical to participatory development.

(iii) The augmentation of physical infrastructure is an important precondition for development and to attract private investment into the region.

(iv) The resources deficit and a considerable portion of requisite investment must come from Central and State governments.

(v) Transforming governance by providing a secure, responsive and market-friendly environment including protecting investors’ property rights and ensuring a corruption-free administration. Protecting the rights of tribal people to use the land and forest resources is particularly important to instil in them a sense of belonging and security.

(b) Participatory development

A paradigm shift in the planning process – from the allocation of investment from above to allocation determined by the needs of the people is called for. The centrality of local governments – panchayats in villages and municipalities in urban areas - is critical to planning at the grass-roots level.

The people-based approach to development in agriculture should adopt separate strategy of development in the plains and in hill areas. In the plains, the goal should be to increase crop intensity, by better utilization 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, expanding the area under high-yielding varieties (HYV) of seeds, a more balanced use of organic manure, chemical fertilizers and pesticides, and steps to balance soil conditions to reduce acidity in land.

Controlling the fury of floods in the Brahmaputra and strengthening embankments to control soil erosion for the development of agriculture in Assam and parts of Arunachal Pradesh.

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. There is tremendous potential for growing horticultural crops in the hills, but success depends on the development of an enabling rural infrastructure base.

The high fertility of virgin land in the hill areas of the region is conducive for the introduction of organic farming of horticultural crops under the National Programme for Organic Production (NPOP).

The people of the region are predominantly non-vegetarians and the production of meat and eggs is inadequate to meet the demand. There is potential for giving a big thrust to animal husbandry in the region.

The region is significantly deficient in fish production by 55 per cent. Marketing and storage infrastructure will provide a boost to pisciculture.

The participatory development approach requires the development of the manufacturing sector based on the resources of the region. Agro-horti processing industries will have to play an important role in the emerging scenario.

Similarly, there is considerable scope for expanding handlooms and handicrafts, particularly sericulture.

The significant deposits of limestone in Meghalaya and Arunachal Pradesh can be used for setting up medium-sized cement industries by using the deposits of natural gas in the region.

The most important sector to be developed in the region is tourism.

(c) Building capacity for participatory development

The literacy rate is high in the region, but this has not translated into employability in productive occupations. There also appears to be a reluctance to enter into self-employment ventures.

Capacity building in the primary sector will have to focus on providing skills and training for improved agricultural practices.

Skill development is extremely important for providing productive employment opportunities in the manufacturing and tertiary sectors and creating a pool of employable skilled personnel which would be an attraction for private investments.

Focus on other aspects of human development such as basic health needs isequally important for capacity development.

An important part of capacity building is the need for an emotional integration with the rest of the country.

(d) Strengthening infrastructure and connectivity

The biggest constraint in the NER has been the poor state of infrastructure, in particular, roads, railways and power.

Significant initiatives must be taken to improve connectivity. Given the difficult terrain and strategic situation of the region, road density should be higher than the national average of 75 km/100 sq. km.

The Central Master Plan for road connectivity in the region should be completed by 2015, and sub-divisional headquarters should be connected 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 be introduced to the region. A detailed plan is required for connecting all State capitals in the region with a broad-gauge rail line by 2020.

Air connectivity must be improved by shifting the hub of air services to Guwahati; the nine old airstrips in different parts of the region should be developed for commercial use and subsidy may be offered to airlines to begin operating regional air services between the different state capitals, with a hub at Guwahati; until it becomes economically viable.

Activating inland waterways and providing access to the sea port requires significant diplomatic initiatives with Bangladesh. The aim should be to have a common market with Bangladesh.

Infrastructure and connectivity could support the ‘Look East’ (LE) policy.

With the Prime Minister of India announcing during the SAARC Summit in May 2007 that India would follow a duty-free policy with least-developed SAARC

countries from 2008 significant upgradation of infrastructure in the borders to facilitate trade and ensure faster movement of goods to and from neighbouring countries is required.

(e) Raising resources for development

Much of the requisite investment will have to come from the private sector and the government will have to create the enabling environment for private initiative in economic activities.

State Governments will have to significantly enhance the level of spending on development and improve efficiency of delivery systems. Potential sources of revenue will have to be tapped for raising more resource.

The Central Government has to augment infrastructure spending directly.

(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 of property rights is the most important precondition for the development of markets.

Creating a legal framework, the implementation machinery to maintain law and order and an effective and expeditious judicial system are essential components of this incentive system.

Ensure corruption – free administration.

The media and non-governmental organizations will have to play an important role of diligence and vigilance in ensuring this. The Right to Information (RTI) Act is an important instrument that can be used to demand accountability.

Local/self governance has to be strengthened.

V. Converting Dreams into Reality

The five components of the strategy are interdependent and, therefore, need to be designed and implemented concurrently. Peace will bring in development dividends and vice versa. Development requires infrastructure and capacity development. Similarly connectivity can dampen insurgency. All these can be done only when there is an accommodating and enabling environment for which a responsive administration is necessary.

The formulation of the five-year plans should and would take into account the over all vision outlined in this document.