Partition of India 1947 made the region backwards, it’s also a hurdles on economic growth


New Delhi, January 9, 2013 The Union Minister of State (Independent Charge) for Development of North Eastern Region (DoNER) Shri Paban Singh Ghatowar has inaugurated two-day 8th North East Business Summit here today. Addressing on the occasion, Shri Ghatowar reiterated that it is the most opportune time for North East to capitalize on the growing trade relation with the bordering nations and emerge as a crucial enabler to enhance economic and cultural tie-ups with these neighbouring countries. He emphasized that the time has come for an effective hand-holding from all the stakeholders so that North-East India can reach next level of growth and economic prosperity and the Look East policy find its true meaning.

The two-day Summit organised jointly by the Ministry of DoNER and the Indian Chamber of Commerce is likely to see participation from investors and experts from the North Eastern Region and neighbouring country.

On the occasion, Shri Ghatowar gave away third North East Excellence Awards to the Public Sector Undertakings, Departments and individuals for their outstanding performance in their respective fields of North East region. The Minister also released a book ‘India’s North-East – Diversifying Growth Opportunities’ prepared by Indian Chamber of Commerce (ICC) and PVC India.

Minister of Industry, Government of Nepal Shri Anil Kumar Jha, Chief Minister of Sagaing Region of Myanmar Mr. U Tha Aye, the Governor of Nagaland Shri Nikhil Kumar, the Secretary, Ministry of DoNER, Shri A.S. Lamba, representatives of ICC and investors were also present on the occasion.

North-East part of the country is a Region which is richly endowed with natural resources. Yet, troubled by history and geo-politics, the Region has become, since independence, one of the most backward Regions of the country. Partition of India in 1947 not only made the region backwards, but also placed hurdles on future economic growth. Infact, per capita income of undivided state of Assam was higher than that of country’s average. Partition isolated the Region, sealed both land and sea routes for commerce and trade, and served access to traditional markets and gateway to east and Southeast Asia and distanced approach of North East with rest of India by confining connectivity to narrow 27 km wide Siliguri corridor, making it remote and constraining access to movement of goods and services.


Rapid develop of NER is among foremost priorities Central Government. The States in North Eastern Region are Special Category States which get liberal central funding on 90:10 pattern and non-exempted Central Ministries / Department are mandated to allocate 10% of their Plan funds for development of NER. Large plan investments and focus on infrastructure development has helped growth in this region and recently approved 12th Five Year Plan document by National Development Council states that “there has been substantial improvement in growth rate in NER States, particularly in Eleventh Plan.

Growth rate of 5.3 percent in Ninth Plan in North East Region improved to 6.2 per cent in Tenth Plan, though less than National Average of 7.8 per cent and average GSDP growth of these States during Eleventh Plan improved to 9.95 percent against 7.9 percent at national level. This improvement in growth is due to concerted efforts of Centre and the States”.

During 11th Plan Primary and Tertiary Sectors have been main growth drivers in NE States. Major contributors of growth in 11th Plan in Assam have been Agriculture & Allied activities and Services Sector. Good performance in areas like Transport and Communication, Banking and Insurance, Trade and Commerce, Hotel and Restaurant, Real Estates and Business Services has been able to generate employment both in public and private sectors.

Same sectors are responsible for remarkable growth of 11% in Mizoram during 11th Plan which is good improvement over 10th Plan growth of 5.7% in Mizoram. Agriculture particularly Floriculture and Horticulture have done well in Sikkim. Commissioning of power projects in Sikkim during 11th Plan is also responsible for impressive growth in Sikkim. Tripura and Manipur have done well in Agriculture.

Above details only reaffirm the fact that economic structure of North East States during 11th Plan period continues to be Tertiary Sector and Primary Sector driven since Secondary Sector especially manufacturing sector remained subdued, with exception of Arunachal Pradesh, where higher growth in Industry Sector can be attributed to construction activity. As per Plan document for 12th Five Year Plan it is in the state of Meghalaya alone that industry sector performance has been remarkable.

Despite having large investment opportunities in sectors like hydropower, infrastructure & natural gas, health care, textile and handicrafts, tourism, horticulture and agro-based industries, minerals, and so on, NE States are yet to witness any major investments in these sectors by private investors. Special fiscal package under North East Industrial Policy (NEIP) has so far failed to trigger major investment flow in the region in the manner it was conceived.

NEIP did lead to some investment in industrial units in and around Guwahati in tea, coal, plastics, cement, cosmetics, metallurgy, and so on, but could not attract investors to other parts of the region. According to an assessment based on the financial investment intentions by private / public sector enterprises during Eleventh Plan period, 336 units expressed intention for investment in the North-East involving 38892 Crore (approximately). As per 12th Plan share of investment (based on letter of Intent) in NE was, however, only 0.58 per cent of total intended investment at national level.

A subdued industry sector is indicative of ineffectiveness of massive investment made by Central Government in Infrastructure projects in the Region. Since outcome in terms of development has not been commensurate with investment. North Eastern Region continues to be deficit in physical infrastructure viz. road, rail and air connectivity. Even telecommunication revolution that is changing lives of people in rest of the country has not adequately penetrated deep in NE States. Most of projects, specially relating to physical infrastructure, have long gestation period, resulting in time and cost overrun and hence top priority should be accorded to expeditious completion of incomplete ongoing projects especially in Roads, Rail, Telecommunications and Power Sector.

Progress in construction of roads especially national highways has been slow and needs to be hastened. Under SARDP-NE, a total of 10141 km roads is to be constructed which includes 6418 km of Phase A (including 2319 km of Arunachal Pradesh) and 3723 km of Phase B. Against this target only 892 km of National Highways have been completed, and another 3723 km has been sanctioned.

Apart from National and State Highways which will provide connectivity to North East State capitals, the region needs district and rural roads under PMGSY as also strategic border roads to improve connectivity to neighbouring countries. The roads which are life line of North East, since they deliver essential services for improving quality of life and livelihood – elements which are crucial for establishing modern and aspirational society. Hence it is very important that all categories of roads are constructed in a time bound manner with no slippages and time and cost overruns with cooperation from NE States and Ministries of Road Transport and Highways, Rural Development and MHA.

The Power Sector in NE States continues to plagued by problems such as: High T & D losses; under utilization of capacity, slow evacuation of power (due to lack of readiness of transmission / sub transmission lines and sub stations); inequality in power supply and consumption between districts; presence of very few rural households with even single point connections etc. The Ministry of DoNER is continuing discussions with Ministry of Power for holistic generation transmission and distribution plan for power projects in NER. Regular meetings in case of roads, railways and civil aviation sectors are held with State and Line Ministries to expedite implementation.

Given complexity of task, augmenting investment to accelerate growth in the Region is only a part of the story. The successful transformation of investments into development outcomes requires a variety of initiatives in every sector of the economy: primary, secondary and tertiary. It also requires flexibility in Schemes of Line Ministries being implemented in NER and a review of their cost and distance norms keeping in view sparse habitations especially in Hill districts of NER. An example is PMGSY where guidelines have to be revised for coverage of villages below 250 population and also for taking up modification of bridges under the scheme.

Some other important issues which require attention of the Centre are erosion due to frequent / annual floods, and rehabilitation of erosion affected people; disadvantaged groups and areas (autonomous councils); early operationalisation of road connectivity with Myanmar; items of intervention are per Indo-Bangladesh Joint Communique (flights and bus services between Agartala / Kolkata and Dhaka, access to Chittagong port); activation of the Kaladan multi model transit transport project between Mizoram and Myanmar; making land custom stations in Manipur and Mizoram on border with Myanmar etc. All of these will lead to larger investment and growth opportunities.

Above all improvement in peace and law and order across the region is crucial for business. Area specific problems need to be continuously addressed through negotiations and peace talks. (SP News)






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