After the conclusion of the 68th plenary session of North Eastern Council (NEC), this month on September 9th the growth and development of North Eastern (NE) states have been brought to limelight which otherwise is quite neglected. The NEC is the nodal agency for socio-economic development of eight NE states- Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim (added in 2002) and Tripura. These states share the boundaries with Bhutan, Bangladesh, Myanmar and to leverage their geopolitical position as well as for creating inclusive India internal economic growth, development, and stability of these states are the prerequisites.  

Why these states need a special attention and an extra effort? 

The north-eastern states have only 3% of India’s population and 8% of the area. They fall back in terms of economic growth compared to the western states. Another grave concern is the unevenly varying rates of growth, poverty, and unemployment among these states. The ignorance towards issues and concerns of NE states over the years has aggravated the situation. 

Poor infrastructure is one of the biggest constraints in the economic growth and development of these states. Infrastructure can be classified into social or institutional infrastructure and physical infrastructure. The inadequate institutional or social infrastructure in NE states led to illegal migration resulting in political unrest, unutilized and under-utilized natural and human resources and low industrialization. Distant location and terrain plus a dearth of physical infrastructure i.e. lack of connectivity resulted in low investment, low growth, and also increased the disparity between NE region and rest of India. Ultimately, it is resulting in the imbalanced economic growth and development of India. Therefore, India needs to tap the unutilized and under-utilized natural and human resources in NE states. 

In order to develop the social or institutional and physical infrastructure in NE states, NDA-II government through the Ministry of Development of North Eastern Region (DoNER) and NEC has initiated various activities related to finance, social development, infrastructure, and industries. The funds amounting to Rs.1096.36 crore and    Rs.1156.00 crore have been allocated for financial years 2017-18 and 2018-19 respectively for development of NE states. Further, some sectors have been identified as priorities for development such as bamboo, piggery, regional tourism, higher education, tertiary healthcare, livelihood project in NER to name a few. 

These initiatives and agenda for the development were discussed in the plenary session of NEC where, Dr Jitendra Singh, Minister of State of DoNER also highlighted the achievements of the NEC. It was emphasized that NEC as a regional planning body and a resource centre should play a major role in guiding the states towards achieving the goal of development at par with the rest of the country.   

How can NEC as a resource centre steer the progress of NE states? 

It can be done by  learning from other countries who have successfully implemented policies to reduce regional imbalances and attained inclusive growth and development. 

Russia is the country from which NEC can learn policy to promote inclusive growth and the method is it’s ‘East Economic Forum’ (EEF), an initiative to encourage foreign investment in the far eastern region of Russia since 2015. A most important takeaway from EEF for NEC is that through EEF, the Far Eastern Federal District (FEFD) has grown twice the rate than the Russian national average of economic growth. Additionally, multiple targets related to economy, society, investment, infrastructure, etc. have been achieved over five years.

There are two points which should be taken into consideration. Firstly, the successful way of Russian Government to develop it’s the Far Eastern region and secondly, similarities of challenges and opportunities between Far East Russia and NE states. Other than regional imbalances and growth disparity between the west and east side of the countries, there are quite some similarities between Far East Russia and NE states such as very little attention is given despite their imperative geopolitical position, habitation of varied ethnic groups, illegal migration from China to Russia and from Bangladesh, Myanmar and some from Tibet to NE, areas rich in natural resources such as oil, coal and not to forget both have faced severe wars and attacks like World War II.  

By observing these two-point, one can infer that learning from the growth experience of Far Eastern Russia, NEC should initiate a similar kind of economic forum. For example, an ‘Octagonal Economic Forum’ to extensively focus on the development of social and physical infrastructure in NE states. The main office or resource centre should be in NEC office in Shillong and co-ordinated eight state centres in the capital of each state. Citizens from respective NE state should be hired in these offices for generating employment, understanding better local issues and involving the public in their development process.   

Under the umbrella of EEF, Government of Russia annually conducts panel sessions, roundtables, televised debates, business breakfasts, and business dialogues on numerous topics such as public-private sector, laws, governance and social and physical infrastructure to name a few.

Through discussions in EEF on numerous topics, such as laws, governance, infrastructure and so on have led to impressive developments in East Russia, including 40 legislations on easing investments, 20 advanced special economic zones, and 5 free ports. These have helped East Russia acquire 1,780 new investment projects worth over RUB 3.8 trillion, and 230 new enterprises. 

In order to receive policy pointers the ‘Octagonal Economic Forum’ should hold discussions on the pressing issues of shortage of infrastructure in NE states. It should conduct deliberations on a wide range of topics such as from irrigation, roadways, health centres, educational institutes, social security to advance technology such as AI, robotics, IoT and so on. Experts and practitioners from the respective fields should be invited to deliver the best possible solutions. Moreover, these discussions and deliberations should be open for students from schools, colleges in NE states to generate awareness and build capacities. 

After receiving the policy recommendations, raising the fund for investment would be the next challenge for NEC. And another lesson from EEF would come to rescue i.e. EEF’s strategy for attracting investment. EEF has been inviting various countries to participate in the forum. The result is that since 2014, nearly 32% of all direct foreign investment came to the Eastern region of Russia from 17 countries; some of them were China, Japan, the Republic of Korea, Australia, New Zealand, Vietnam. 

This year, President Vladimir Putin invited PM Narendra Modi  to be the Chief Guest at the recently concluded Fifth Eastern Economic Forum. India announced a USD 1 billion credit line for Russia’s far east. On the same ground, India had seek help from Japan to develop physical infrastructure in NE states. Some of the important projects in which Japan will collaborate with India include water supply, sewage, road connectivity projects, agriculture and irrigation, biodiversity and sustainable management projects. Similar to Japan who is going to invest in Rs. 13,000 Crore in several ongoing as well as new projects in India in Assam, Meghalaya, Sikkim, Mizoram, Tripura, and Nagaland; other countries should be invited through the forum to directly invest or collaborate with NE states, not only in physical infrastructure but in social and institutional infrastructure and across sectors to promote holistic development. 

Going a step ahead, for the Octagonal Economic Forum, NEC under Government of India should invite representatives of France, Israel, Singapore, Thailand, BRICS and ASEAN nations with our neighbours to discuss and contribute to NE states’ development. We have already initiated various infrastructure projects to tie-up with the ASEAN nations, and other neighbours such as Bhutan and Bangladesh. Excelling in strengthening relationships with eastern neighbouring countries, this forum will help India to propose a Free Trade Zone with Bhutan, Bangladesh and Myanmar – to leverage existing trade relations, to access markets of ASEAN nations, and with their aid, extend it to the Indo-Pacific region.  

To promote investment and boost the NE economy, industries from across the world must be invited to participate in the Octagonal Economic Forum. It should hold networking sessions and exhibitions and to maintain transparency and efficiency, each year’s investments and projects are undertaken through the same should be declared in the exhibition organised by the forum.  There can be an exclusive exhibition illustrating the diverse cultures of NE states, promoting cultural ties, especially with Southeast Asian countries. 

Annually organized Octagonal Economic Forum will expand NEC as a resource centre and also strengthen the ties with neighbours. It would help in attracting a large amount of foreign investment in NE states and attaining higher economic growth and development. This would definitely constitute a concrete step towards an Inclusive India which we should dream of! 

Vaibhavi Pingale

Vaibhavi Pingale is an independent economics researcher based in Pune. She holds the Masters in Economics from Symbiosis College and is pursuing a Masters of Development Studies from IGNOU. She has varied interests such as labour and development economics, macro and international economics, public policy and governance.

The views and opinions expressed in the article are those of the authors and do not necessarily reflect the official policy or position of The Tilak Chronicle and TTC Media Pvt Ltd.

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