1. 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 a beautiful land. It stretches down from the foothills of the
Himalayas in the eastern range and is surrounded by Bangladesh, Bhutan, China and
Myanmar. It includes the eight states lying to the north and east of the narrow Siliguri
corridor 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, a
distant 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 of
social and cultural identity.
Troubled by history and geo-politics, the Northeast has remained one of the most
backward regions of the country. The trauma of partition of the country in 1947 not only
took the region backwards by at least a quarter century, but also placed hurdles on future
economic progress. It isolated the region by sealing both land and sea routes for
commerce and trade. It severed the access to traditional markets and the gateway to the
East and South East Asia – Chittagong port in East Bengal (now Bangladesh). It
distanced mainland India, made it inaccessible to the private investment with 98 per cent
of the boundary of the region connecting to international borders. It blocked the arteries
of transport and communication by inland water, and closed access to sea ports.
Development of the region has been further hampered by poor infrastructure and
weak governance. The governments have become ineffective and often remote from the
people. Inability to control floods and bank erosion has caused unmitigated disaster to
thousands of people every year. Seclusion, backwardness and a sense of alienation has
created frustration and a breeding ground for armed insurgencies.
The developmental vision, if it has to be realised, 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. They would like to march on the path of economic, social and cultural progress
towards prosperity and wellbeing. They would like to see every family in the region have
the opportunity to live a secure life with dignity and self-respect. Moving away from the
dependency syndrome, people in the region would like to acquire the capabilities and
self-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 and
income-earning and spending decisions, and political, economic and social freedoms
without fear, in the larger sense of the term. They would like to enjoy peace and achieve
sustainable progress and prosperity.

2. The challenges to ensuring peace and progressing towards prosperity in the region
are formidable. The gap between the region and the country in terms of various
developmental outcomes, productivities and capacities of people and institutions is large
and 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 development
strategy 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 the
region is only part of the story. The success of transforming the investments into
developmental outcomes requires a variety of strategic initiatives.
We have put forward a strategy for encompassing (inclusive) development of the
region and realising the vision of the people with five interdependent components which
are: (i) participatory development articulated through grass-roots planning to focus on
development of sectors and sub-sectors with comparative advantage; (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, particularly connectivity and transport to facilitate two-way
movement of people and goods within the region and outside, open up markets for the
produce, attract private investments, create greater employment opportunities; (iv)
ensuring adequate flow of resources for public investments in infrastructure and creating
an enabling environment for the development of the markets and flow of investments to
harness the resources of the region for the welfare of its people; and (v) transforming
governance by providing a secure, responsive and market-friendly environment.
II. Northeastern Region: Economic, Social and Demographic Profile
The 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 per
cent of the total population of the country. Over 68 per cent of the population of the
region lives in the state of Assam alone. The predominant hilly terrain in all the states
except Assam is host to an overwhelming proportion of tribal population ranging from
19.3 per cent in Assam to 94.5 per cent in Mizoram. It is home to over 200 of the 635
tribal communities in the country. The region is predominantly rural with over 80 per
cent of the population living in the countryside.
Richly endowed with natural resources, the region is identified as one of the
world's biodiversity hotspots; it hosts species-rich tropical rain forests and supports
diverse flora and fauna and several crop species. 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. Similarly, reserves of petroleum and
natural gas in the region constitute a fifth of the country's total potential, but the region
hardly 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 misery
rather than a resource. The floods and erosion of river banks has been an annual feature
with 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 and
Tripura, the remaining two-thirds area of the region consists of hilly terrain.
Driven by expanding global trade, the region was in the forefront of development
almost 150 years ago. The large river systems and small rivulets provided a means of
livelihood for the vast majority of the population in the valleys and plains. Global trade
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3. was conducted through the sea-route, a network of inland waterways, and land
transportation through road and railways. In fact, the railway network between Dibrugarh
and Chittagong was one of the earliest projects in India implemented by the British. The
rapid spread of tea gardens followed the first tea garden in 1835 and the first consignment
of tea export to London in 1838. The discovery of oil in Makum and establishment of a
refinery 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 economic
landscape of the region, virtually disconnecting it from the mainland. The only link that
remained was the narrow 27 km Siliguri corridor; almost the entire boundary of the
region (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 East
Pakistan from Bengal blocked the natural sea route through the port city of Chittagong.
Political fragmentation, a quest for ethnic and regional identity and nationalism fomented
a climate of insurgency in several parts of the region and this was exacerbated by
dissatisfaction with hegemonic domination and frustration with the lack of development.
Not surprisingly, the standard of living of the people in the region as measured by
per capita gross state domestic product (GSDP) has lagged significantly behind the rest of
the country. At Rs. 18,027 in 2004-05, it was less than the all-state average of Rs. 25,968
by 31 per cent. Interestingly, at the time of independence per capita income in the
undivided state of Assam was higher than the national average by 4 per cent. The
partition 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 in
1991, the divergence in income growth increased further. In 1990-91, the region’s per
capita income in current prices was lower than the country average by 20 per cent and
this difference increased to 31 per cent by 2004-05.
The aggregate picture presented above, however, hides vast differences among the
states. In the region, except for Mizoram, Nagaland and Sikkim, per capita income levels
were lower by varying magnitudes. Assam, the largest among the Northeastern states had
the lowest per capita income at Rs. 15,661 which was lower than the country average by
40 per cent. Furthermore, even in the three states with per capita income levels higher
than the national average, much of the income generated was in the public administration
sector. This underlines the overwhelming dependence of the population on the
government for generating incomes and lack of productive economic activities in
primary, secondary and tertiary sectors of the economy.
The region lags behind the rest of the country not only in per capita GSDP but in
several other development indicators as well. The development indicators such as road
length, access to healthcare and power consumption in the region are well below the
national average. The region generates less than 8 per cent of its 63,257 MW of
hydroelectric power generation potential and the per capita power consumption in the
region at 117 Kwh is less than a third of the national average (373 Kwh). The literacy rate
in the region is above the national average, the employability is low resulting in high rate
of unemployment and underemployment. The incidence of poverty in the region is high
and the official income-poverty measure does not accurately reflect the deprivation.
The partition of the region not only isolated it but also caused structural
retrogression. With poor penetration of the markets and development not based on the
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4. resources of the region, the planning process failed to strengthen forward and backward
linkages with the rest of the country. Low productivity, poor infrastructure and
connectivity combined with the climate of insurgency have created an inhospitable
climate for investments.
III. Progress to Peace and Prosperity
Given the rich endowment of resources and social and cultural heritage, the people of the
region aspire to achieve peace and prosperity, eradicate poverty and 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
Improving the standard of living of the people would require sustained increases
in 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 have
living standards comparable to people in the rest of the country. Given that income levels
in the region are lower than the national average by over 30 per cent and that the region
has lagged behind, catching up with the country by 2020 would require significant
acceleration in the growth performance of the NER. The task has been made even more
formidable 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 to
2020 would, on average, increase per capita income by about 6.5 per cent (Table 1). As
over the period, population growth is expected to decelerate, per capita income growth is
expected to accelerate from 6.5 per cent in the Eleventh Plan period (2007-12) to 6.8 per
cent during the Thirteenth Plan (2017-22). Thus, by 2020, per capita income in the Indian
economy is expected to be about Rs. 78,000 at 2006-07 prices or about USD 2,000 at the
prevailing 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 an
average, or at 10.5 per cent in per capita terms (Exhibit 1).
The process should be put in place to expeditiously accelerate the growth process
in the region. However, it would be unrealistic to expect that the growth rate of per capita
income will accelerate from 4.6 per cent recorded during 2000-04 to 10.5 per cent
immediately. The realistic path is to phase in the acceleration in the three Plan periods to
steadily increase the growth rate to achieve the target. An illustrative scheme of phasing
out is shown in Table 1, according to which the growth rate of per capita GSDP should
accelerate from the average of 4.6 per cent during 2000-04 to 7.9 per cent during the
Eleventh Plan (2007-12), 11.34 per cent during the Twelfth Plan (2012-17) and 13.31 per
cent during the Thirteenth Plan (2017-22). The growth rates required to catch up with the
per capita GDP of the country in different states is summarised in Table 2.
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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 2019-20
States 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 2007-20
Aru. Pradesh 8.15 10.75 12.75 9.93 6.88 9.51 11.62 8.69
Assam 10.00 14.90 17.25 13.21 9.61 13.54 16.01 11.86
Manipur 9.00 12.85 15.75 11.73 7.71 11.59 14.57 10.47
Meghalaya 8.0 10.75 12.0 9.86 6.73 9.51 10.88 8.62
Mizoram 9.68 9.68 9.68 9.68 8.40 8.45 8.57 8.44
Nagaland 8.52 8.52 8.52 8.52 7.24 7.30 7.43 7.30
Sikkim 7.80 7.80 7.80 7.80 6.51 6.60 6.73 6.71
Tripura 7.50 8.50 8.50 8.16 6.24 7.29 7.41 6.94
NER 9.25 12.65 14.50 11.78 7.90 11.34 13.31 10.47
India 8.0 8.0 8.0 8.00 6.52 6.68 6.81 6.65
Source: NIPFP Estimates.
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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. They
would like to banish poverty from the region by 2020. The estimated poverty ratio in the
region using the mixed recall period in 2004-05 was 17 per cent, but actual deprivation is
estimated to be much higher. Empowering people with capabilities ensures they 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. Raising the quality of education and health is as much a goal in
itself as it is a means to enrich the quality of life for people, and expand their life choices.
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7. Human development contributes to welfare by enhancing ‘capabilities’, increasing
productivity of the population and enhancing their incomes and wellbeing.
The vision of prosperity for the people requires participatory development by
harnessing the resources of the region. The people would like to see the large river
systems converted into a source of wealth, and the mineral wealth generates opportunities
to increase employment and incomes. They would like to harness the vast hydroelectric
energy potential and use the comparative advantage to expand economic activities in the
region. They would like to see that the global public goods they provide through the vast
forest cover is recognised and given adequate compensation. They would like to
overcome their saving-investment deficit by increasing the credit-deposit ratio through
the generation of economic activity in the region.
The people in the region envision having state-of-the-art infrastructure not only to
enhance the quality of life but also to dictate the pace of economic activity, and the nature
and quality of economic growth and ensure peace in the region. The lack of connectivity
has virtually segregated and isolated the region not only from the rest of the country and
the world, but also within itself.
The people would like the region to be economically and socially integrated so
that it becomes an important hub of trade and commerce and an economic bridge to East
and Southeast Asia. Opening up the trade routes will expand economic opportunities for
the region and accelerate the growth process. The region can regain its place as a centre
of flourishing trade with East and Southeast Asia through the land (silk) route to China
and 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 and
harmony, 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 tax
collections, random extortion and kidnapping has robbed the region of incentives to save
and engage in productive economic activities. The people of the Northeast would like
peace to return to their lives, leakages to cease and development to take precedence.
IV. Realising the Vision: The New Development Strategy
The challenge of accelerating development in the Northeastern region to realise the
Vision is formidable and the road to peace and prosperity is long and arduous. The
people’s vision requires a participatory development strategy. The High-Level
Commission appointed by the Prime Minister in its report submitted in 1997 has stated
that there are four basic deficits confronting the Northeast: a basic needs deficit; an
infrastructure deficit; a resource deficit and a two–way deficit of understanding with the
rest 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 and
strengthening governance.
(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. In agriculture, inclusive development will
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8. require increasing crop intensities, enhancing productivity and developing fisheries to
ensure food security and enable a transition to high-value agriculture, including organic
farming wherever feasible. In manufacturing, the focus will be agro-based processing and
other areas that draw on the resources of the region, or in which the region has a
comparative advantage. Similarly, an expansion of non-governmental service sectors will
be based on the comparative advantage.
(ii) Capacity development is critical to participatory development. Developing
people’s capacities will enable them to participate productively in economic activities
and strengthen institutions to design and implement developmental programmes as
desired by the people.
(iii) Given the poor state of transport and power infrastructure in the region, its
augmentation is an important precondition for development and to attract private
investment into the region.
(iv) An important deficit in the region, as pointed out above, is the resources
deficit. Augmenting infrastructure requires significant investment, a considerable portion
of which will come from central and state governments. This will require a large increase
in the central government’s allocation for infrastructure in the region, accompanied by a
more efficient use of funds. Ensuring adequate resources for public investment in
infrastructure, implementing a framework for private participation in augmenting
infrastructure and creating an enabling environment for the flow of investments to
harness the physical resources of the region for the welfare of the people are issues that
need to be addressed on a priority basis.
(v) An equally important component of the strategy is 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. Strengthening governance includes
putting an end to insurgencies and to leakages in the system – the widespread “roving
banditry” 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 the
planning process – from the allocation of investment from above to allocation determined
by the needs of the people. The centrality of local governments – panchayats in villages
and municipalities in urban areas - is critical to planning at the grass-roots level. The
detailed methodology of such grass-roots planning is spelt out in general terms in a recent
report of the Planning Commission (India, 2006).
Participatory development is based on harnessing the natural resources of the
region and so would give priority to the primary sector in the development process. Over
86 per cent of the population in the region resides in villages and therefore, encompassing
development is possible only with the development of agriculture and allied activities. At
present, of about 40 lakh hectares under cultivation, 39 lakh or over 97 per cent is under
foodgrains production. At about 1,520 kg/hectare, land productivity is very low in the
region. 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
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9. cultivation, widely practiced in the hills, has kept productivity low and contributed to
unsustainable agriculture.
The target should be to increase foodgrains production in the NER to 75 lakh MT
in 2010, 87 lakh MT by 2015 and 110 lakh MT in 2020, which would require
accelerating the growth rate to 2 per cent in the first phase, 3 per cent in the second and
4 per cent in the third. This implies increasing the productivity of land to 1,570 kg/ha in
the 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 separate
strategy of development in the plains and in hill areas. In the plains, the goal should be to
increase 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-yielding
varieties (HYV) of seeds, a more balanced use of organic manure and chemical fertilisers
and pesticides, and steps to balance soil conditions to reduce acidity in land are some of
the measures needed. It is also important to expand area under cultivation from the
current 17.8 lakh/ha to 25 lakh/ha by bring under cultivation, cultivable waste land and
areas developed under the command area development.
Controlling the fury of floods in Brahmaputra and strengthening embankments to
control soil erosion should be an important part of the strategy for the development of
agriculture in Assam and parts of Arunachal Pradesh. Floods and bank erosion in the
Brahmaputra river basin are annual phenomena and the elevated river bed in several
places caused by the Great Assam Earthquake of 1950 has increased over-bank discharge
and expanded the area under the fury of the flood, increased soil erosion in the river
banks. The various government schemes to control the fury of floods have been
constrained by embankment failures, bureaucratic apathy and technocratic arrogance that
has excluded people’s participation. Mitigative measures necessarily entail creation of
flood detention structures and that involves agreements between Arunachal Pradesh and
Assam. In this context, creation of ‘trusteeship zones’ or industrial growth areas in
disputed areas bordering the two states could provide an opportunity to harness the water
resource 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. There
is tremendous potential for growing horticultural crops in the hills, but success depends
on the development of rural infrastructure including marketing links, cold storages and
processing 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 ‘Mission
Mode,‘ with the provision of complementary infrastructure and services, by 2020 the area
under fruit cultivation could be increased by 50 per cent (from the present level of 4 lakh
hectares to 6 lakh hectares) and production of fruit crops could be raised from the
prevailing 40 lmt to 60 lmt. 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. Thus, there is a significant deficit and
the region has to import about 50 per cent of its milk consumption and over 87 per cent of
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10. the eggs consumed; as the population grows, this shortfall will increase over time. The
deficit indicates the vast potential that exits for giving a big thrust to animal husbandry in
the region which would increase productive employment as well as incomes. Similarly,
despite the network of large and small river systems, the region is significantly deficient
in fish production by 55 per cent and has to ‘import’ this from outside. Marketing and
storage infrastructure will provide a boost to pisciculture, which would create significant
employment earning opportunities.
A thrust to agricultural and allied activities requires significant governmental
initiative in terms of providing rural infrastructure and extension services. An extensive
rural road network is necessary to increase the mobility of people as well as the
movement of goods, while the electrification of the villages is necessary for increasing
crop intensity and spreading rural industrialisation. Extension services are critical both
for production and marketing, and need significant upgradation. Establishing a network
of cold storage facilities and information centres and organising marketing and financial
support through self-help groups will have to be initiated on a large scale.
The participatory development approach requires the development of the
manufacturing sector based on the resources of the region. Agro-processing industries
will have to play an important role in the emerging scenario. Horticultural crops need
processing support and it would be necessary to tie up with the corporate sector for the
processing and marketing of fruits and vegetables, including organic products. Similarly,
there is considerable scope for expanding handlooms and handicrafts, particularly
sericulture which currently employs the most people after agriculture. It is important to
modernise the sector and help producers with design inputs, financial support and
marketing assistance, including exports.
There are about 181 large and medium-scale industries in the region and over 70
per cent of them are in Assam. Most of the units are based on resources, such as oil, gas
and wood. 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. It is also important to augment production by exploiting the
huge hydroelectric potential of the region, as the provision of power is an important
factor in industrialisation of the region.
The participatory approach to accelerate growth in the service sector will focus on
the development of non-governmental services and their interaction with agriculture and
manufacturing. The most important sector to be developed in the region is tourism, with
the most potential for generating income and employment. With a moderate climate most
of the year, scenic splendour, and robust and varied cultural attractions, the region is ideal
for tourism. The focus, however, should be high-value tourism which will require close
collaboration with the private sector hospitality industry, building high-quality
infrastructure and adequate promotion. Annual music and dance carnivals in different
parts of NER, with national and international participation could help promote tourism.
Similarly, the Bihu festival in Assam and Dusshera festival in Manipur could be
important tourist attractions that should be promoted. Hill tourism, skiing, river-rafting
and 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 and
experiences they present. The expansion in tourism will be based on expanding capacity
in the hospitality business.
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11. (c) Building capacity for participatory development
Capacity building is a critical part of participatory development. In general, as
mentioned earlier, 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, perhaps because of the absence of such a tradition in most
NER states, so that those who do are first-generation entrepreneurs. However, the region
has a large base of very talented people who, with training, can be gainfully employed in
a 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 and
training for improved agricultural practices. Adoption of improved agricultural practices
in the plains requires training through agricultural extension services to raise high-
yielding short-duration crop varieties. In the hills, weaning the population away from
shifting cultivation and development of horticultural crops and organic farming requires
considerable capacity building.
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. Expansion in the
hospitality industry which has great potential in the region requires a large number of
trained personnel. In fact, as the employability of people increases, the private sector will
enter to provide the required skills. Proper regulation of the quality of education imparted
and ensuring access to such vocational educations through proper financial support,
particularly loans from the banking sector, could be a useful means of increasing
employment and incomes in the region.
Focus on other aspects of human development such as basic health needs is
equally important for capacity development, health indicators in the region show
significant improvement over the years, nevertheless, there is considerable scope for
raising 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 to
be 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 the
country about people in the Northeast region, and within the region itself through
increased social interaction. This would require promotion of sports and cultural
exchanges within the Northeastern region as also between the region and the rest of the
country. The rich cultural heritage of the region should be taken advantage of by
engaging the youth in creative activities while promoting a two-way understanding with
the rest of the country. Organising annual music and dance carnivals in different parts of
the NER with competitions at the district, state and regional levels would involve the
youth 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, in
particular, roads, railways and power. At 66 km/100 sq. km area, the road length in the
region is lower than that the average in the country (75 km/sq. km area) and the quality of
roads in the region is extremely poor. The total railway track length in the entire region is
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12. 2,592 km, with broad-gauge track confined to Assam. The inland waterways in
Brahmaputra and smaller rivers, such as the Kolodyne in Mizoram and Barak Valley of
Assam, have become non-functional after partition. Air connectivity to the region is
extremely poor. Three of the state capitals do not have airports, and feeder services from
Delhi/Kolkata/Guwahati to the state capitals where airports exist are poor. Often, even
intra-regional movements have to be through Kolkata which is expensive in terms of both
time and money.
Realising the vision of peace and prosperity through participatory growth cannot
be realised unless significant initiatives are 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 and the quality of the roads should be improved
significantly to make them motorable. 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. Extension of the railway line to Sabroom would provide better
connectivity to the Chittagong port. A detailed plan should be prepared and implemented
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 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. This would require a complete change in the mindset of both
countries. It will not be easy to initiate the process, but both the sides should realise that
there are significant gains to be had from a common market. Access to the Chittagong
port and opening up of the inland water route could lead to economic resurgence of the
region. In fact, the Chittagong port is only 75 km from Sabroom in Tripura and could
become an important gateway for India to the East Asian countries. The construction of a
bridge by India across the 110-metre wide Feni River, and helping Bangladesh modernise
the Chittagong port, could go a long way in creating confidence and goodwill, and would
promote greater cooperation for the benefit of the peoples of Bangladesh as well as of
Northeastern India. Bangladesh will have access to Indian markets, which would mitigate
its unfavourable balance of trade with India considerably. Besides, people-to-people
contact could bring in greater understanding and social harmony.
Infrastructure and connectivity could support the ‘Look East’ (LE) policy and
provide an impetus to trade with the Eastern part of the globe. Although the policy has
been in place sine the mid-1990s, there has been little progress. The essential principle of
this policy has been that the NER shares 98 per cent of its borders with the neighbouring
countries of Bhutan, Nepal, China, Bangladesh and Myanmar. Therefore, forging
economic 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 announced
the India would follow a duty-free policy with least-developed SAARC countries from
2008. This calls for immediate follow-up to ensure its smooth implementation. The
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13. immediate initiative required is the significant upgradation of infrastructure in the borders
to facilitate trade and ensure faster movement of goods to and from neighbouring
countries. Improvement in facilities such as approach roads, telecommunications,
electricity, weighbridges, customs/immigration posts and bonded warehouses should be
taken up on a priority basis. Initially, support should be given to private initiatives to start
restaurants, petrol bunks, repair stations, banks, cyber-cafes, convenience stores and
repair 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 peace
and prosperity to the region is the issue of raising the required resources. Indeed, much of
the 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. This will
include controlling insurgency, improving governance, creating world-class infrastructure
and developing people’s capacity to participate in economic activities.
In creating the enabling environment, state governments will have to significantly
enhance the level of spending on development and also improve the efficiency of
delivery 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 will
have 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 state
highways would require significant additional investment by state governments. This
would require them to mobilise significant additional resources from tax and non-tax
revenue bases assigned to them. Immediate measures to strengthen the tax administration
and institute a modern information system could enhance revenue productivity.
Revenue increases from states’ own sources, though important and necessary, will
not bring in the large volume of resources to provide the required levels of public
services. The central government has to augment infrastructure spending directly for
building national highways, a rail network, and airports and ensuring access to the sea
route. It will have to allocate a much higher proportion of resources for strengthening
infrastructure 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 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. Equally important for responsive administration is the appropriate policy and
institutional environment in terms of having an expeditious mechanism to issue licenses
and clearances, facilitating the availability of land for setting up enterprises, providing
electricity and water connections and granting necessary clearances, while ensuring
compliance with the regulatory system (such as environmental clearances). Another facet
of good governance is providing a corruption-free administration.
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14. The most important aspect of responsive administration is ensuring peace and
harmony in the region. Peace and development go hand in hand and therefore, ensuring
law and order should be the priority. For the last several decades, the Northeast (except
for Sikkim) has been under the shadow of ethnic violence and terrorism of numerous
forms. Continuous violent upsurges and absence of law and order have adversely
impacted on development and has created a sense of uncertainty and insecurity in the
minds of prospective entrepreneurs. Insurgency and development have to be tackled
simultaneously. The strategy for realising the NER Vision 2020 should focus on
establishing peace in the region while simultaneously adopting strategies to accelerate the
pace of economic growth, and making the growth process encompassing.
Providing a corruption-free and responsive administration in the region is a major
challenge. The media and non-governmental organisations 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. Another important way
to improve governance is to increase decentralised public service delivery. The NER has
the tradition of decentralised service provision and it is important to strengthen the
traditional institutions of local governance as well as Panchayat Raj Institutions (PRI) in
different states of the region.
V. Converting Dreams into Reality
The Vision of achieving peace and prosperity outlined above is eminently feasible but by
no means easy. Realising the vision requires mobilisation of the people. Implementing a
people-based development strategy, infrastructure development, building capacity, and
responsive administration and governance will attract significant investment and open up
avenues for the development of the region. Acceleration in the growth of the agricultural
sector will benefit over 80 per cent of the people who reside in rural habitations. Capacity
development of the people should equip them to take advantage of the expansion in
manufacturing and services. The strategy of development outlined in the document, thus,
can promote encompassing development of the region to realise the vision of achieving
peace and prosperity.
The five components of the strategy described in the previous paragraphs 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 environment for which a responsive
administration is necessary.
The formulation of the five-year plans should take into account the overall vision
outlined in this document and adopt the development strategy to implement the plans. We
have lost opportunities in the past and any further delay in adopting an integrated
development strategy will only delay the development of the region further and alienate
the people more. It is hoped that this document will bring into focus the vision of peace
and prosperity to the Northeastern Region. It is hoped that the Eleventh Plan will initiate
operationalising the strategy to realise people’s dreams.
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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.
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