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The Abysmal North East Economy

By   /  November 4, 2018  /  Comments Off on The Abysmal North East Economy

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With much fanfare and gung ho, the Central Government along with state Governments in the Northeast region, had organised an International Industrial Summit in Guwahati in February this year. The ruling NDA government had spared nothing to make it a grand success, inviting foreign delegates from neighbouring Southeast Asian countries to attend. Prime minister Mr Narendra Modi delivered the keynote address. The programme was seen as a major highlight of the government’s Look East initiative. A bigger promotional bash to showcase the immense economic potential of the NE region on this scale had never been tried before.

Both in terms of initial reactions as well as follow-up measures taken afterwards, the mission was lauded as a great success by attending industrialists, who included the Ambanis and other leading lights. Assam Chief Minister Mr. Sarbananda Sonowal was understandably buoyed up by the signing of some MOUs and instant promises from industry bigwigs, assuring an investment of INR 100,000 crore over the next few years. An agreement to connect the Guwahati airport with six Southeast Asian capitals was finalised.

However, a recent report published in a major Assam-based English daily on the actual progress made so far makes pretty sombre reading. It seems the promised millions intended to change the face of the economic face of the NE region and make it a powerhouse of regional development will not be available anytime soon. In stark statistical terms, up to September this year, altogether INR 300,000 crore was invested all over India in new projects and schemes. But the bulk of the investment has gone to Karnataka, which has received over INR 50,000 crore out of the total amount, followed by Gujarat and Maharashtra, both attracting investments upwards of INR 30,000 crore each (all figures approx).

Then what is the investment figure for Assam? A little over INR 250 crore, for one project. Even without the benefit of organising grandiose promotional efforts like ‘International summits’ etc, Assam usually secures more investment annually. As for other NE States, except for Sikkim, other states drew a blank.

This raises basic questions as to whether states and regions that have serious image problems and find it difficult to attract investments normally, should go through the elaborate and expensive ritual of organising big budget programmes to invite big ticket investors at all. As one cynic says, such elaborate conferences usually leave only some ‘contented contractors and suppliers in their wake,’ not investments!

What has happened with the NE summit is not just the problem of Assam and other NE states. It may be pointed out that similar annual conferences of industrialists organised by some other states, especially in Eastern India, have also failed abysmally. So have the much publicised foreign tours undertaken on behalf of such states by top leaders and officials with their loyal press corps in tow. So it is time now to redraw the strategy to make North-East investor friendly.

 

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