Dialogue  January - March, 2009 , Volume 10  No. 3

The Story of North East Vision 2020+

Jayanta Madhab*

Preparation of Vision or Long Term Plan is nothing new in India. Started with the Congress initiated Bombay Plan in mid forties of the last century, followed by the First Five Year Plan in 1951 and series of Plans thereafter produced short term visions. Scientist and Former President Dr. Abdul Kalam’s India 2020; A Vision for the New Millennium, published in 1998, had a twenty years perspective. The inspiration was to “convert developing India to developed India by 2020”. Thereafter, the Planning Commission constituted a Committee in 2000 to prepare a Vision 2020 document under the Chairmanship of Dr. S.P. Gupta, a member of the Planning Commission. The report of the Committee examined many issues but the ones “stand out most powerfully are employment and education.” Its central conclusion is that India has the opportunity to emerge as one of the worlds leading economies over the next two decades, provided her citizens have self confidence, the self reliance, the will and the determination to realise their individual and collective potentials. At the same time, a number of states had prepared Vision 2020. Assam is one of the states from the North East prepared a Vision 2025 document in 2002.

      On the North East, two important works need to be mentioned. The L.C. Jain Committee Report (1990) on Development of Assam and the High Level Commission on the North East popularly known as Shukla Commission’s Report on ‘Transforming the North East’ (1997) provided direction for the development. The later defined five basic deficits: a basic need deficit, an infrastructure deficit, a resource deficit, a two-way deficit of understanding with the rest of the country and a governance deficit.

     Soon after Dr. Manmohan Singh took over as Prime Minister of India, he felt the necessity of preparing a vision document for the North-Eastern region. While attending the full North Eastern Council (NEC) meeting on April 12, 2005, he defined the Council as “mini planning commission” and where plans should not just be made for the people but also by the people. Specific questions like “what should our village look like in 2020… what should our children be taught in schools and colleges…. what new means of livelihood they would like to adopt and what training facilities would they like to have…” are needed to be answered. With the blessings of the Ministry of the Development of North Eastern Region (DoNER), the NEC started the ball rolling by addressing an open letter to the people of the North Eastern Region urging them to join the effort “Let us dream, Let us think, Let us plan for the future.”                                                                                                                C-NES (Centre for North East Studies and Policy Research), a non-government umbrella organisation with bases in all the constituent states of NEC was chosen to prepare a 15-year perspective plan for the region based after ascertaining the views of the people from the grassroots level upward. After braining with civil society group leaders, intellectuals, professional of the region, C-NES developed a questionnaire. Fifteen villages from each district of eight states were covered with 40,000 questionnaires. Workshops were held in each state to present the findings to stakeholders and public and to seek responses. The focus of C-NES was on the process as much as on the product.                                       C-NES report called “Winds of Change, Hope for Renewal: Listening, Learning and Implementing” was submitted to NEC in 2006. At the same time NEC requested the National Institute of Public Finance and Policy (NIPFP) to prepare a Vision 2020 document for the region. The document would draw up a design and implementation strategy for progressing towards peace and prosperity. “The vision was to be based on the aspirations of the people of the region; it would set clear goals and identity the challenges and reform required in policies and institutions to reach the goals.” The Ministry of DoNER constituted a Steering Committee comprising eminent persons chaired by Shri B.G. Vergese, to guide the preparation of the vision document.                              A three volume report named “Peace, Progress and Prosperity in the North Eastern Region: Vision 2020” was prepared. Before finalising the draft, authors composed from the NIPFP and the Jawaharlal Nehru University visited and held discussions in all the North Eastern states. The Union Minister for DoNER, Shri Mani Shankar Aiyer, attending all the Steering Committee meetings provided valuable inputs.                                   After putting through a scrutiny amongst a number of reputed experts on the fields, the Minister felt that the document further needed to be enriched and required a strong North Eastern connection. Thus, another Committee constituting of six eminent economist, social scientist, journalist, university professors from the North Eastern states were constituted. One volume report was prepared by them leaving the second and the third volume of NIPFP untouched. Thus, what finally emerged is a composite exercise by C-NES, NIPFP and a Committee of experts from the North Eastern states.                                                                  On July 3, 2008 in the Prime Minister Dr. Manmohan Singh amidst the presence of Union Minister, Governors and Chief Ministers of North Eastern States, launched the Vision 2020, a compendium of various strategies, proposals and action plans for achieving peace and prosperity in the NE Region and for its people.                                                                                  In addition, the Union Minister of DoNER requested all the State Government of the NE region to prepare State Vision 2020 documents in line with the Ministry’s Vision 2020. Some States had prepared and others have sought assistances from consultants to prepare the document.                                                                                                            The whole process took more than three years. As a result, the effective years to implement the Vision 2020 got reduced to eleven years. It is an uphill task for the states to achieve the targets within the time span.

The Setting

     The North East composed of seven sisters, baring the two princely states of Manipur and Tripura, were part of Assam administration till the early seventies. Sikkim, as a part of North-East, was added only recently. Assam was industrialised fairly early amongst the states of India with tea, oil and forest products. Tea started in 1834 followed by the steamer services in 1847 and then by the railways. Oil refinery started in 1890; followed by the sawmills. Population density was low; there were ample resources. No wonder, therefore, Assam’s per capita was higher then the average of India’s and rice productivity was similarly higher in 1950-51. Successive events and disasters creqated havoc for the economies of the North East. First, the division of the country (1947) followed by the great earthquake (1950), the Chinese invasion (1962), Naga, Mizo, Boro, Manipuri and ULFA and other movements and insurgencies, some still ongoing; and lastly, closed border with rather inhospitable neighbouring countries led Assam and other North Eastern states to fall much behind the India’s economic growth race. Take the case of Assam, the biggest state in the North East, its per capita income was higher then that of India in 1950-51, but by 1980-81 growth rate had behind as a result there was a gap in per capita income of Rs. 749; it widened to Rs. 3776 in 2000-01 (1993-94 prices) and further increased to Rs. 7632 in 2007-08 (1999-00 prices). Some smaller states have done better in the last decade. The people of the North East are tired of stagnation; and aspire to see their region emerge peaceful, strong and would like to march on the path of economic, social and cultural progress towards prosperity and well-being. They would like to see every family in the region have the opportunity to live a secure life with dignity and self-respect. They would like to acquire capabilities and self-confidence to shape their own destinies they would like enjoy peace and achieve sustainable progress and prosperity.

The Challenges                   

      Though North East is geographically bound together, expect Sikkim, there is a great amount of diversity amongst the states. Except the two valleys, the Brahamputra and the Barak where bulk of the population lives, the rest is dotted with hills of various heights. The population density is low as 13 per sq. km in Arunachal Pradesh to 340 in Assam. The region is known to be the home of over 200 of India’s 635 tribal groups, speaking a variety of languages and dialects with strong tradition of social and cultural identity.

     The biggest problem facing the North East is the lack of adequate and reliable infrastructure. Building infrastructures like power, road, rail, river routes and airports in the fragile hills and in plains crisscrossed by innumerable rivers is both time consuming and costly. Lack of access to markets both within India and outside deters the producers and farmers to produce for surplus. While some progress has been made in social infrastructure like education, health, a lot more to be done.

     Just as in some others parts of India, improvement in governance,

from the grassroots level, Panchayats and Village Council or equivalent, upto the State level institution, is the key to successful implementation of any plans and projects. Equally, important is the creation of proper developmental climate. It is paramount that the State governments and its institutions including grassroots level organizations capacities to plan, to implement and to administer need to be augmented for successful implementation of the strategy.

The Strategy                                                                                                              

      The strategy propounded in the Vision document has six components:

·       Empowerment of the people by maximizing self-governance and participatory development through grassroots planning. This will help in creating conditions for development, in determining pattern of development based on the resources of the region according to the needs and aspirations of the people.

·       Rural development with focus on improving agriculture productivity and creation of non-farm employment opportunities.

·       Development of sectors with comparative advantage such as harnessing the enormous hydropower potential, tourism, agro processing, sericulture and investment in manufacturing based on available resources.

·       Improving skills to enhance their productivities to generate a class of entrepreneurs and to increase capacities to implement plans and programmes.

·       Augmenting infrastructure like road, railways, inland water, air transportation, power through hydro, coal, bio-fuel, and communication network. Connecting Myanmar and through it to China and South East Asia. Developing transit routes through road, rail and inland water cargo across Bangladesh to rest of India. Access to Sittwe port of Myanmar and Chittagong in Bangladesh will provide outlets to the outside world. Creation of a hospitable investment climate for private investment is an important element in the strategy.

·       All these will require huge investment and, therefore it is imperative that adequate fund flow for public investment needs to be assured. Most of the funds, at the beginning will have to come from the Central Government, and partly from State Government, and later, when congenial atmosphere is built up, private sector participation is likely.

The Plan 

      In simple term, to catch up with the India’s capita income, assuming that India’s GDP grows at 9 percent constant, the North Eastern States have to accelerate its collective Gross State Domestic Product (DSDP) growth rate from the present level of 5.34 percent to 12.95 percent during 11th to 13th five years plans, according to NIPFP estimate. The acceleration starts from 10 percent in the 11th Plan to 16.37 percent in the 13th Plan. By 2020, the average per capita income of the North Eastern States will equal to, that of India’s at Rs. 87,459 from the base level of Rs. 22,139 (2006-07) a rise of about 400 percent of the NE states, Assam has the toughest job to accelerate from 6.25 percent (2002-07) to 20 percent (2017-20).

     Obviously, the acceleration of growth rate at such pace would require massive increase in investment and significant improvement in productivity. NIPFP estimated that the acceleration process would require Rs. 2,11,613 crores during the 11th plan, Rs. 505,499 crores in the 12th plan and Rs. 6,12,779 crores in the 13th plan. The total cost works out at Rs. 13,29,891 crores at a constant capital output ratio of 4. However, if a declining capital output ratio is assumed, which is likely, the cost comes down to Rs. 11,56,785 crores.

     On the face of it, these are astronomical figures. During the Tenth Plan Period (2002-07) the plan expenditure of the NE States amounted to Rs. 75,464 crores comprising of State Plan, Central Ministries/Central Sector, DoNER and NEC Plan. This, however, excludes investment made by public sector enterprises and private investment. Comparing with the Tenth Plan investment, the Eleventh Plan requirement for achieving 10 percent growth rate is in the order of Rs. 211,613 crore estimated by NIPFP. This is more than 2.5 times the Tenth Plan investment.                                The proposed Eleventh Plan capital investment to be made by the NE States, as table-1 shows, has increased from Rs. 30,383 crores to Rs. 74,278, an increase of 144 percent. Central Minister and other Central Sector Schemes allotment has increased by 149 percent; and NEC’s allocation increased by 194 percent. Altogether an increase of 143 percent over the Tenth Plan expenditure.                                                      Admittedly, 143 percent increase in proposed expenditure is a big jump. If the Public and the Private sector enterprise investment in organised and unorganised sectors are added, the total investment, consisting of State and Central Government, Public and Private sector investment together, may not be far off the targeted expenditure of Rs. 211,613 crores during the Eleventh Plan. Table 2 gives a glance of Private investment in the organised industry in March 08.                                                 Prior to Independence, North Easts’ trade routes were through Myanmar for the South East Asia and Bengal (eastern part is presently Bangladesh) to rest of India. Both Chittagong and Calcutta ports were accessible for export. Rail, steamer and roads were used for transportation of goods. With the partition and successive political development in Myanmar and Pakistan, these routes had become unusable and uneconomical. Even after sixty years of Independence situation have not improved much. Talks have been going on for developing the Sittwe (Akyab) port in Myanmar and opening up more trade points on the Bangladesh-North East border for exports. None, however, could replace the economic benefits obtained from earlier routes. On the other hand, if however, North East concentrates on goods and services like IT related industry, tourism, petroleum products, high valued goods or unique products transportation cost may not be the deterring factor.

Inclusive Growth    

    The Eleventh Five Year Plan’s theme is Inclusive Growth. In its forward of the document the Prime Minister Dr. Manmohan Singh wrote: its “ultimate objective is to achieve broad based improvement in the living standards of all our people. Rapid growth is essential for this outcome…. However, it is not by itself sufficient. We also need to ensure that growth is widely spread so that its benefits, in terms of income and employment, are adequately shared by the poor and weaker section of the our society.” The NER Vision 2020 documents clearly states “the key component of the strategy of inclusive growth must be inclusive governance as the means of empowering the disadvantaged with the aim of enabling them to overcome their poverty: It is the effective empowerment of the disadvantaged through the effective devolution of functions.” Thus emphasis is given on investment in rural areas, on education and health care, urban renewal, backward regions. Lot of space has been devoted to the question of governance.

   The three hundred page NER Vision 2020 document focuses on development issues and on the strategies adopted for achieving a higher growth rte to equalise the per capita income with rest of India by the year 2020.

The Task Ahead 

    There is now a Vision for the North Eastern region. The Eleventh Plan has included most of the proposals and provided ample resources to implement them. If the States and the Centre can create an enabling environment, private investment will fill up the gap.

     The main constraint is the states capacity to spend meaningfully the huge amount of resources available for the Eleventh Plan. As mentioned elsewhere NE states own plan size increase by 2.5 times; and, equally the total size of the Plan inclusive of Centre, States, DoNER and NEC rises from Rs. 75000 crores to Rs. 183,000 crores. The internal capacity of the states to deploy fruitfully these kind of resources is in question. There are serious doubts that existing capacities will not be able to handle these resources unless efforts are made to increase the capacity of the state government organs are undertaken forthwith.

   The government financial rules and regulations need substantial revision. These were essentially control oriented and made long before the development era. While there must be control, the system need to be development oriented. Computerised file monitoring system could be introduced to increase the efficiency and reduce the time gap.

      Equally, implementing departments’ capacities to transform ideas into plan, plan to project and from project to design sketches with financial, resource and manpower planning is seriously questioned. In fact, the Controller and Auditor General of India has raised questions on the capacities of the state apparatus to handle meaningfully the vastly increased forthcoming resources.

     Further, that money has been efficiently used and for the purpose for which it has been allotted to must be very closely monitored and reported. Not only the Government, central, states and local level but the citizens are equally entitled to know how the money is being spend and the results thereof. After all, it is their taxed resources being spent by the governmental agencies.

      Both the centre and states need to engage themselves on this serious issue. One year of the plan is about to end. If the desired results are to be obtained, serious efforts need to be made sooner rather than later.

Table 1

Estimated NER Plan Expenditure for Eleventh Plan (Rs. Crores)

State Plan                    30383                74,278             144             19046

*Central

Ministries/                 39,441                 98,251             149             25193

NEC                            2511                    7,394              194              1896

NLCPR                     3129                    3,095               —                794

Total NER                75464                 1,83,018           143             46928

* These exclude PSU Expenditure

Information gathered from the planning Commission and other sources.

Table 2

Private Sector Live Investment From NER

(Cost in Rs. Crores)

Arunachal Pradesh                                                              5            22734.40

Assam                                       14           4640.00             38            10611,26

Meghalaya                                14             337.50             19              2257.10

Nagaland                                                                              1                         0

Sikkim                                                                               16              5666.86

Tripura                                       1                 2.50             10                588.44

North-East Total                      29           4980.00             89            41858.06

All-India                               2888       589566.74         8435        3614767.46

Total Project Costs                                         0.8                                       1.2    in NE as 5 of All-India

Note: Data for Manipur & Mizoram not available. No investment in Nagaland.

Source: CMIE Survey