Ministry for Development of North Eastern Region

"When we see that the Central Ministry to spend 10% of their gross budgetary support in the North-East, it reflects that there is no neglect. In fact, it amounts to affirmative positive action." - Mani Shankar Aiyar, Minister

CMs SPEAK

"The NDC, the apex national planning body of the country, has to foster consensus building amidst diverse and varying perspectives to minimize these imbalances in a time bound manner" -Gegong Apang, Arunchal Pradesh

"A modified NEIP should be formulated exclusively for the North Eastern states so that the benefit of the policy can be reaped by the states of this region during Eleventh Plan." - Tarun Gogoi, Assam 

"During the five year period of Eleventh Plan, administration and physical infrastructure needs to be strengthened to enable the North Eastern States to respond appropriately to the liberalized polic." - O. Ibobi Singh,Manipur

"The idea of an economic zone for the North East Region may perhaps be a good idea, if sound economic policies, strategies & activities can be ensured in an integrated manner." - D.D. Lapang, Meghalaya

"It is necessary to have flexible norms and guidelines for implementation of the various Central schemes in order to cater to the peculiar requirements of the hilly States which still require special attention." - Zoramthanga, Mizoram  

"The northeast region could become an effective cultural and economic bridge between India and South East Asia. To achieve this objective infrastructure development must be stepped up." - Neiphiu Rio,Nagaland

"The Governments of North East have been, yet again have been advised to go for open marketing borrowing. As we are all aware, the financial position of the North eastern States is not healthy and the loan indebtedness is putting us on the road of debt trap. As such I would urge a reconsideration of this issue at the highest quarters". - Pawan Chamling, Sikkim

“The growing feeling of discontent and frustration and a sense of injustice is attributed to regional imbalance. We must make all efforts to dispel such negative and disruptive feelings, which can also drive the people, particularly a section of young and unemployed, to the path of extremism and other anti-national activities.” - Manik Sarkar, Tripura

North East Council (NEC)

NORTH EAST

Neglect no more; winds of change blowing

On a national scale, North East had long been virtually out of focus barring usual financial supports from the federal government for variety of reasons. It has been the North East Council which had been trying to do its bit within the limited capacity. The states on their turn tried what they can do within their extremely limited financial powers. The result has been quite worrisome. The sectoral performance of the region is far below the national average. While the GDP of the country as a whole is growing at 9.2% per annum, the growth rate in the North-East as a whole is under 4%. Nearly 98% of the frontiers of the North-East constitute the international frontier of India and the remaining 2% is connected with the rest of the country. Still North-East has virtually no trade relationship with those bordering countries. The region’s trade with other states is not worth mentioning either. A sense of ‘alienation and neglect’ had brewed over decades. The regional stability has been threatened by occasional insurgencies in some of the states.

But in last two-three years things have started changing for better. The federal minister for Development of North Eastern Region (DoNER), Mani Shankar Aiyar also sounds quite optimistic and very positive and forward-looking about the changing scenario. "For the last five or six years we had a policy in India, which says, that 10% of the gross budgetary support of almost all Central Ministry has to spend in the North-East. When we consider of the total surface

area of the North East, it is around 4% of India and their population is 8%. When we see that the Central Ministry to spend 10% of their gross budgetary support in the North-East, it reflects that there is no neglect. In fact, it amounts to affirmative positive action," he asserted. The government is planning massive investments in different sectors in the North-East in the 11th Plan. The most important task now is to create absorbing capacity of the region of such massive investments.

The Prime Minister Manmohan Singh has called upon the state governments in north eastern region to become more active in creating an environment conducive to investment. What the North-Eastern Chief Ministers have to say? They have opened up their minds at the 52^nd National Development Council meeting presided over by the Prime Minister that dealt with in details the 11^th Plan approach paper issues for the North-East region. 

“To tackle the problem of regional disparities and backwardness, the focus during 11th plan should be on recognition of backwardness of individual States as the main factor to be taken into account in the transfer of financial resources from the Centre to the States, encouragement of investment in backward States both through mobilizing more internal resources as well as ensuring a much larger flow of resources from outside through different mechanisms, said

different mechanisms, Gegong Apang, the Chief Minister of Arunachal Pradesh, area-wise largest state in the north eastern region. "The issue of orientation of working of the financial institutions has to be addressed to be effectively in favour of poorer States. Further, dovetailing of public sector projects with regional development plans by consciously developing regional linkages and implementation of special area specific development programmes would reduce the existing regional imbalances. The National Development Council, the apex national planning body of the country, has to foster consensus building amidst diverse and varying perspectives to minimize these imbalances in a time bound manner”, he said The State is lagging far behind in terms of development indicators in comparison to even other NE States. From the point of view of social indicators also, there exists among the N.E States a wide variation, Apang pointed out.

The Assam Chief Minister Tarun Gogoi voiced concern over “dilution” of the North East Industrial Policy (NEIP). The 1997 policy got diluted and become less attractive for the North Eastern states due to its extension to other states like Uttaranchal, Himachal Pradesh and Jammu & Kashmir, he pointed out at the NDC meet and said these three non-NE states have already attracted industrial investment of more than Rs. 17000 crore in nearly three years time as against Rs. 1300 crore only

by entire NE region during last nine years. “I therefore, strongly urge that various provision of NEIP should carefully be reviewed and a modified NEIP should be formulated exclusively for the North Eastern states so that the benefit of the policy can be reaped by the states of this region during Eleventh Plan,” he said.

While urging that the existing NEC scheme for promotion of small-scale industries in the state should be continued during the 11^th Plan. The Assam CM advocated for Special Economic Zones (SEZ) to promote such industries “even if it is not be as large as provided for in the rules at present”. Keeping in view the locational disadvantage of the state and the entire North Eastern Region, “the stipulated norms for the SEZ may be modified suitably and funded fully with central support till any private party is willing to invest,” he said.

About sharing of surplus power being generated by the mega projects in NE region  the Assam CM seeks first priority be given to the deficit states of the region for growth of industry there before its being evacuated to other states. “For this purpose policy intervention, if required, should be made on priority basis,” he added.

Mr. Gogoi has sought the Planning Commission’s financial and technical support in the field of Information Technology. "IT has enough potential for employment and income generation. To exploit this potential, necessary training and backup support will be required in the form of venture capital so that the youths can avail the benefit of IT revolution. I trust that the Planning Commission would provide required financial and technical support to the state in this area.”

The Manipur Chief Minister O. Ibobi Singh maintains that the federal government’s liberalized economic policy so far could not bring any positive results for the region. “The relatively backward North Eastern States including Manipur have not benefited under the Central Government’s liberalized policies. During the five year period of Eleventh Plan, administration and physical infrastructure needs to be strengthened to enable the

North Eastern States to respond appropriately to the liberalized policy. Central Government needs to evolve suitable mechanisms for directing investments into the less developed North Eastern States,” he told the NDC.

Pointing out that the north east is “a sub optimal option” to an investor, the CM attributeed this to locational disadvantage and highly unfavourable terrain impose high transportation cost which cannot be effectively offset through the usual package of economic incentives. The situation has been aggravated further by the problem of extremist activities. “ The factors impeding the integration of the Region’s economy with the domestic and foreign market far outweigh the integrating forces of liberalization and an open market economy. In this backdrop, development of intra NE trade assumes significance”, said Singh.  

Dr. Donkuparroy, the Deputy Chief Minister of Meghalaya, the state which is totally dependent on road transport except limited small aircraft flights between its capital Shillong and Kolkata, said that a “major problem faced not only by Meghalaya but also by other North eastern States is limited capacity for speedy and quality construction, with delays in road construction. It would be better if some important roads are taken up for construction by a central organization with the

help of qualified contractors and machinery so that road infrastructure can be improved quickly. A legislative framework to expedite acquisition of land other concomitant activities to facilitate infrastructure creation also seems to be necessary”.

Donkuparroy raised a burning issue of trade with Bangladesh. About 22 per cent of the land area and 23 per cent of its population leave in border areas of the state. The formal export to Bangladesh from Meghalaya (almost the entire export from the border blocks) is around Rs 200 crore but import from Bangladesh is very little. “ A complete policy framework is required to increase formal trade with Bangladesh including sizeable import at least to our state.”  The quantity of informal exports is not known but it is guessed it could twice or may be even thrice the formal export. Expressing serious concern over fencing being erected all along the Indo-Bangladesh border (so far Meghalaya is concerned) Donkuparroy said that such an action is likely to dry up informal trade “totally”. He also apprehends that even export through formal channels nosedive.”…we anticipate a severe economic crisis in the border villages when the fencing is fully in place. A special livelihoods, infrastructure and security based engagement of border villages is urgently required to be put in place”, the Dy CM emphasized.    

Referring to the role of country’s developmental planning in achieving balanced regional growth and development the Mizoram Chief Minister Zoramthanga said that “while implementation of the objectives and strategies of the 11th Plan will improve the national economy, we should also not forget that the same can bring about inter-State inequality leading to more pronounced regional imbalance thereby jeopardizing existing national economy. It is, therefore, necessary to have

flexible norms and guidelines for implementation of the various Central schemes in order to cater to the peculiar requirements of the hilly States which still require special attention.”  Zoramthanga however expressed satisfaction about the emphasis the 11th Plan approach paper has given on infrastructure in the region.

Stating that the northeast region could become an effective cultural and economic bridge between India and South East Asia, the Nagaland Chief Minister Neiphiu Rio said that to achieve this objective “infrastructure development must be stepped up”. He made a special reference to construction of a highway along the Indo-Myanmar border, which will “not only open up the area for trade and economic development, but will also serve as the

highway for patrolling international border, and for checking of illegal trafficking of drugs and arms through the famous Golden Triangle. Large sums have been invested in constructing roads and fencing along the Indo-Bangladesh border; but surprisingly, no tangible investments has been made along the strategic Indo-Myanmar border, which is equally important.”  The Nagaland CM urged to the federal government to work out special incentives to attract investments in the region, which should be different from, and more attractive as compared to the incentives available to other special category States in more advantageous locations in the mainland.

Urging the federal government to reconsider the directive regarding the state share under CSS, the Sikkim Chief Minister Pawan Chamling said that the north eastern states are finding it difficult to provide the state share under CSS from their “meager budgetary resources”. The North Eastern Council members at its 52nd meeting also expressed similar concern about the resource constraints of the states. “However, the Governments of North East have been, yet again have been

advised to go for open marketing borrowing. As we are all aware, the financial position of the North eastern States is not healthy and the loan indebtedness is putting us on the road of debt trap. As such I would urge a reconsideration of this issue at the highest quarters”.

Observing that the north-east region in particular has been been a victim of “misdirected policies and planning” of the federal government the Tripura Chief Minister Manik Sarkar said that “this region is now particularly backward in both physical and social infrastructure”. He attributed this “growing feeling of discontent and frustration and a sense of injustice” to this imbalance. “We must make all efforts to dispel such

negative and disruptive feelings, which can also drive the people, particularly a section of young and unemployed, to the path of extremism and other anti-national activities,” the CM pointed out.

Urging the federal government for new industrial policy for the region (as the 1997 policy has already expired) Sarkar suggested that the benefits which would be available under new NEIP (North East Industrial Policy) “should not be extended to other parts of the country, which can have their own special packages, as such extension only dilutes the benefits and rather discourages industry from coming to this region.” Referring to the “Look East” policy the Tripura CM observed that the region has natural and location advantage with NE States having international boundaries with as many as five South East countries. “We should exploit this plus factor and due emphasis should be given in the 11^th Plan to develop facilities and the where withal to promote international trade to and from this region,” he added.

But the single most inhibiting factor, as has been stated in the Gangtok declaration, is "the perception of NER as being ridden with insurgency, militancy and terrorrism. this perception is so much at variance with ground realities that projecting a true and nuanced picture of the vast swathes in NER of total peace and tranquility, impeccable law and order, and iron-clad security for the tourist is as essential for the development and promotion of tourism in NER as for investment in other sectors." 

DoNER    North East Council   Arunchal Pradesh     Assam     Manipur    Meghalaya  Mizoram     Nagaland     Sikkim     Tripura

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October 6, 2007

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