Rural development in the North-Eastern Region of India: Constraints and prospects

The rural subsystem of the NER economy consists of some 35 thousand villages inhabited by over 32 million people who constitute about 85 percent of the total population in the region. Of approximately 10.6 million main workers in the NER economy, about eight million workers are directly engaged as cultivators or agricultural labourers. The land-base of the rural economy in NER is not much promising. Infrastructure facilities in the region are inadequate. There is not much prospect for setting up of large-scale industries in the region. One of the reasons is the location of the region at the borders of the nation. The political economy of a frontier region is almost always quite complex and rather opaque. Investment is risky and it becomes more risky due to the location disadvantages and socioeconomic adversities. Tendencies of capital flight from the region have been observed Bandhs and disruption are a day-to-day affair and that too for trifling reasons, political gymnastics or petty pressure tactics at the most. Man-days lost and under-utilization of resources due to these bandhs and disruptive incidents ultimately escalate the cost of production due to which profitability of investment dries up. Sectoral composition of the economy is unbalanced. The structure of employment of work force in the region has a peculiar shape: much like a cone at the base supporting a smaller inverted cone at its apex - more or less "hourglass shaped". This is not indicative of a healthy and self-sustaining structure. The bottleneck due to the narrow scope of the secondary sector limits the development of the primary as well as the tertiary sector. The malady has its roots in the faulty educational and economic policies as well. A strategy for development of rural economy and employment in the region must be outlined in what follows: (a) a well thought out plan to develop the rural infrastructure (b) harnessing of the central non-lapsable pool for supporting projects to build up infrastructure and take up other economic development programmes, (c) harnessing of the Central grants for development of info-tech infrastructure and utilize them, (d) development of agro-based, horticulture based, forest based small scale industries, (e) development of floriculture and mushroom culture, (f) use of the export development fund for setting up marketing infrastructure, (g) change in the educational policy favouring larger outturn of technically educated manpower, and (h) deliberate attempt to train the educated manpower for entrepreneurial activities.