NE economic potential challenges, policies & pathways forward

Ranjeet Luitel

Northeast India’s Economic Potential

Prime Minister Narendra Modi has time and again said that without the development of the northeastern states, India’s growth is incomplete. He keeps saying that this region has great potential to become India’s growth engine if peace and order are maintained. Today, it is hard for India to become self-reliant and achieve its goal of a five trillion dollar economy without the economic development of the northeastern states.

These days, modern infrastructure is being developed in the northeastern states. This will help revive old cultural relationships with East Asia. In the future, this region will have many opportunities for trade, travel, and tourism.


North East India’s Economic Lag

It is true that this region has fallen behind the rest of India in terms of development. This is due to politics, social issues, economic reasons, and lack of infrastructure. As a result, this region has not been able to use its full potential.

According to the Ministry of Statistics and Programme Implementation, during the financial year 2018-19, the eight North-Eastern states had a growth rate lower than the national average. In the financial year 2018-19, the 8 North Eastern States of India contributed only 2.8% to the country’s GDP. Most of this share came from Assam. Other states together gave 1/3 of the contribution. This region is behind other parts of India in many areas like power use, roads and railways, and social and economic development.

There are different views on why this region has low progress. Politicians think the area faces challenges because of conflicts and security problems. Sociolologists believe it is a clash between traditional ways and modern changes. There are people who say it is because of unfair policies from the government.


Northeast India’s Connectivity Challenges

The problems relating to connectivity in this region go back to when the British ruled India. They treated the North East as a place only for exporting raw materials. After India became free, transportation and communication were focused only in some areas with industries, mostly in the upper Brahmaputra Valley. This is where centers for tea and oil were found.

In the northeastern states, there are many problems like heavy rainfall, changing river paths, poor drainage systems, and narrow valleys which cause floods, erosion, and landslides. These problems makes it hard for these states to build good roads and infrastructure.

Even today, some areas in the region do not have good transportation because of the difficult terrain. There is not enough national rail network, highways or development compared to the rest of India.


Northeast India’s Development Challenges

Many people from the Northeastern Region of India move to other parts of the country for jobs and higher education. This is not good for local society. One reason for this is economic backwardness. There are many causes for this due to which Northeastern states depend on funds from the central government.

Some experts believe that the government’s centralized planning limits the participation of the indigenous population. Political instability and concentrated economic development in certain areas also affect the poorest people in this region.

One big cause of economic backwardness is money being wasted due to poor financial management. In agriculture, using old methods, low productivity, and not having enough irrigation stops the region from having enough food.

Other problems include poor governance, not using funds well, issues with land and forest clearance, a short work season, and weak law and order. These reasons make the Northeastern states fall behind other states in India when it comes to development.

The government is trying to take creative steps to help the region grow and become more successful.


Advancing North Eastern Development

The government has been proactively working to develop the North Eastern States. In 2001, the Central Government created the Ministry of Development of North Eastern Region. It works as a link between the Central Government and the eight North Eastern States. Its goal is to improve the social and economic lives of people in those states.

The government also started the North Eastern Region Community Resource Management Project (NERCORMP) through a joint initiative of North Eastern Council (NEC), MDoNER and International Fund for Agricultural Development (IFAD). It helps vulnerable and economically marginalized people from the region by creating sustainable livelihood opportunities.

The NITI forum for the North East helps find problems that slow down growth in the region. It suggests ways to fix these problems so the region can grow better. The forum is led by the Vice Chairman of the NITI Aayog and co-chaired by the Ministry of North East Region.

The government made the North East Special Infrastructure Development Scheme to help build water supply, power connectivity, schools and hospitals in the region. This makes life better for everyone living there.


Northeast India Policy Shift through MSMEs

The government is trying to help MSME (small and medium-sized businesses) in the Northeast region under the Northeast Industrial Development Scheme (NEIDS). This support aims to spread jobs and make sure people have good lives.

After Independence, North-East India focused on heavy industries. MSMEs were not seen as important until later. A report by the Confederation of Indian Industry (CII) says that small and medium industries make up more than 98% of businesses in most economies. They help with job growth, industrial production, and exports. In India, small and medium businesses have played a big role in the overall industrial economy.

MSMEs are important for growth, fairness, and including everyone in North-Eastern India. Over the past few years, the government has tried to support service sector growth to boost the economy in North-East India. Assam has done better at helping businesses grow.

Today, the government is moving away from policies that hurt the sentiments of people in the northeast. They want to focus on local models and growth. The government knows that each state in northeast India has its own needs and choices. They are trying to understand what people in the region want and make new policies for them.

The government is also working on projects like the National Bamboo Mission and Skill Development Mission. They want to help people learn new skills and use the region’s resources.


Infrastructure Growth in Northeast India

The government wants to invest more in infrastructure, like roads and railways, so it’s easier for people to get around.

In the last two years, 1900 kilometers of roads have been made better in the region. Recently new airports were also opened in some places. There are further new airports and power projects too.

In Assam, there are many road projects that are being finished. These will help the region’s economy grow. The National Highway and Infrastructure Development Corporation is working on highway projects worth 92,000 crores in the North East.

India is working on a plan for water resources management in the Northeast through the North East Water Management Authority. The government is also looking at ways to improve air travel, eco-tourism, cultural tourism, and tribal tourism in the region.


Northeast India’s Transformation

Today, the northeastern states are going through a big change. They want to become a place where many people invest their money and do business. Countries like Nepal, Bhutan, Bangladesh, and Myanmar surround these states, so they can help India work with other countries in the area.

Experts believe that if the northeastern states connect with East Asian countries, there will be an automatic flow of men, material, technology and ideas in the region. The government is working on many big projects to help this happen.

Foreign investment is very important for India’s growth strategy. Japan is helping India with projects like improving water supply in Guwahati and building new roads in the northeast. They are also working on projects for renewable energy and renovation and modernization.

India is trying to work closely with Asian countries to build strong relationships and improve business opportunities. This will not only help the region but also boost India’s GDP. India wants to make its connections with Southeast and East Asia even stronger through its policies.