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India: Creating Opportunities For Poverty Alleviation In Northeastern Region: Economic And Geopolitical Perspective

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Legendary economist Amartya Sen was the first one to understand the complex nature of poverty. He considered poverty to be multidimensional in nature. Poverty does not mean living below a certain minimum income threshold, but rather means having an income level that does not allow an individual to cover certain basic necessities, taking into account the circumstances and social requirements of the environment. Hence, Sen terms poverty as a ‘capability deprivation’ as it impairs the capability of poor to not only fulfill their basic needs, but also to participate in the functioning of normal social life.

The developed world of today has upgraded its definition of poverty towards a more relative definition and leading institutions like UN, while estimating poverty take into account the Human Development Index, which clearly explains how deceptive income based poverty estimation is. Indicators like the UNDP’s HDI reflect the subjectivity of poverty as it is directly linked to social indicators like nutritional levels, Life expectancy, Infant and Maternal mortality rates.

The latest indicator to estimate the degree of poverty is the Multidimensional Poverty Index developed by the Oxford Poverty & Human Development Initiative and the United Nations Development Programme, which further breaks down HDI’s indicators of Health, standard of living and education into further sub-indicators to study the impact of each indicator in more detail.

The idea behind such measurements is to move beyond the monetary parameters and focus on other factors which are reinforced by the poverty. In this context, the case of India, particularly the Northeast India must be studied. Learning from above, the first step to be taken in this domain is identification of the factors which continue to ail the NER.

Subsequently, the policies addressed towards solving the poverty problem through education must first understand the geography and socio-economic situation of the region.

The NER constitutes 8% of India’s geographical area and 4% of India’s population. The region is characterized by relatively high poverty rate with the percentage of poor out of total population in the states of Nagaland and Manipur being as high as 31% and 47%. According to a report by Federation of Indian Chambers of Commerce and Industry, 34.28% of the population is below poverty line as compared to the national average of 26.1%. The most conspicuous indicator of poverty and underdevelopment in the region is the huge outmigration from the region into the metros. In fact, the Government of India’s “Northeast Vision 2020” terms the economic situation as “anarchic”1. The NER accounts for only 2.5% of India’s total Gross Domestic Product2.

The NER presents a very complex situation because of the following factors:

  1. A geographical disconnect from mainland India due to a narrow land corridor of 20-30 kilometers (Siliguri Corridor) which separated India from Northeast.
  2. Relatively underdeveloped region.
  3. Presence of untapped natural resources
  4. Secessionist movements
  5. A literacy rate higher than the national average.

The region is blessed with rich natural resources and accounts for 34% of the country’s water resources. It possesses almost 40% of India’s hydro power potential. Moreover, the lack of an industrial base also raises the need for a diversified industrialization to catch up not only with rest of India, but also with the South East Asian neighbors and tapping their markets.

The case for creating employment opportunities should be considered in light of the existing socio-economic factors as well as Geographical location of the region.

AGRICULTURE

The first and foremost focus in NER goes towards the Agricultural sector, which supports the livelihood of 70% of the total population of the region.

Agriculture, in NER too is characterized by the prevalence of “Disguised Unemployment”, which means that the number of people engaged in agriculture increase without adding to the total Output. This clearly states that the contribution of every additional member in agricultural production is zero.

Fertile land, abundant water resources, evergreen dense forests, high and dependable rainfall, mega biodiversity and agriculture-friendly climate characterize the region in general. Yet it has failed to convert its strengths optimally into growth opportunities for the well-being of the people. The low utilization of modern inputs in agriculture has further reduced the ability of the farm households to cope with high risks in production and income. Added to this, Share of low and marginal landholdings is very high thereby resulting in diseconomies of production.

Hence, the need of the hour is to add more Agricultural Research institutes imparting technical training to the local farming population, especially the youth. Given the prevalence of mono-cropping, technical expertise must also aim towards investing in the crop diversification. The negative impact of ‘Jhum’ (slash and burn) cultivation also needs to be addressed, a dominant mode of cultivation which directly contributes to lowering the yield, hence lowering the overall farm income.

The number of Krishi Vigyan Kendras imparting new and superior technical farming practices need to increase. The issue of agricultural credit also needs focus. Kissan Credit Card, which enables the farmers to avail concessional credit for investment and technical up gradation, at present covers low proportion of the total population engaged in agriculture. Increase in credit facility to more farmers in tandem with imparting knowhow of latest technologies is the road towards ending poverty in the region. Issue of marketing the produce, focus on supply chains are another key area. Government regulated microfinance involving the local communities needs be combined with technical training as well as imparting marketing skills and linkages which will enable the agricultural population to acquire a direct access to the market they cater to.

One example of the agricultural potential of NER can be given from the example of Tripura, which is India’s second largest rubber producing state of India. The magnitude of rubber output, if connected to market linkages and industries can attract industries using rubber as a major input, thereby generating a huge employment in the state and its neighboring regions. The other example is of Bamboo in Mizoram, “which possesses the maximum percentage of its geographical area under bamboo forests as compared to other states of the country”3.

Organic farming is also another field which has a higher value addition compared to conventional farming. Again, if combined with technical and marketing skills, Organic farming can prove to be the best source for fighting poverty in the region.

Lastly, rather than targeting individuals as beneficiaries, initiatives should focus on a community level approach due to the strong kinship ties which give the region a unique social identity.

Large investment outlays for capacity building of knowledge and skills centers aimed at preserving the ecology are required. The states are unable to address such resource needs. Planned outlays in training and awareness for imparting correct skills-set to the community for the states to preserve the biomass is also required.

INDUSTRAL ACTIVITY AND SERVICES SECTOR

Industrial activity, particularly the manufacturing accounts for just 6.84% of GSDP of NE States (2011-12) far lower than the national average of 15.7%(2011-12)4. There is a need to relook the Northeast Investment and Industrial Promotion Policy of 2007, which proposed tax exemptions, subsidies and interest subventions for new investments in the region. These benefits must be combined with more skill development schemes along with increasing and upgrading the Industrial Training Institutes (ITIs) and introducing other new industrial skill development schemes.

The Confederation of Indian Industries CII has institutionalized a few landmark initiatives in the region like Machinery mart to showcase new machinery and technologies available to increase awareness about technological innovations, roundtable conferences for skill development, energy conclaves and knowledge expos aimed at introducing programs on imparting professional and technical education5.

The Service sector which includes areas like tourism/hospitality, healthcare services, telecommunications, banking, legal services, management, consultancy and IT enabled services is the most promising area which can unleash the economic potential of the region due to high value addition. However, the prerequisite for this sector to flourish is the abundance of requisite institutions of professional education as well as physical cum digital infrastructure.

An ingenious way of utilizing the aesthetic beauty abundant in NER to alleviate poverty is to promote the concept Ecotourism, which hardly requires any investment in terms of physical infrastructure. The need is to introduce training programs aimed at empowering local communities to protect environment and imparting them with marketing skills to attract tourists. Fees charged from tourists can be a regular source for remuneration which will not only alleviate poverty, but also promote conservation of nature also. Professional training courses to become government certified guides and institutionalizing the knowledge of the nature are need for this.

A boon for this region is a literacy rate (over 70%) higher than the national average and huge number of English speaking population which is already a stage set for the region to emerge as a BPO and IT hub, given that the relevant skills and technical education is imparted among the youth6.

MAKE IN NORTH EAST INITIATIVE

Under the Make in India dream project endorsed by the Prime Minister, the Government of India announced ‘Make In Northeast’ initiative in January 2015. Involving Ministry of DoNER and Ministry of Tourism, the Government of India seeks to transform the economic growth story of NER. As of now, the initiative, in the long run seeks to promote exclusive Northeast expertise in areas like tea processing, organic farming, food processing, exploitation of wind power through wind mills, AYUSH, wellness therapies. In order to develop Northeast as a destination for investors, holiday seekers and tourists, mega circuit and mega destination projects of Tourism Ministry in the area will also be pursued7.

NORTHEAST INDIA: GATEWAY TO SOUTHEAST ASIA

The idea of NER as a gateway to the Southeast Asia came up after the India’s reorientation towards a multilateral diplomacy immediately after the end of the cold war. In 1992, the government of India announced its ‘Look East Policy’ through which it sought to engage with the economically successful Southeast Asian countries. The border of NER to Southeast Asia (Myanmar) earned it a sobriquet as a “gateway to the Southeast Asia”, thus making it indispensible to work on the need to link the region. The region shares international borders with China, Myanmar, Bangladesh and Bhutan summing up to a total length of 4,500 km. Benefits from the Trans border cooperation possess the potential to generate huge employment opportunities.

A recent initiative (2013) was the announcement of BCIM corridor proposing a transnational multimodal Infrastructure corridor linking Bangladesh, China, India and Myanmar. The economic advantages of the BCIM corridor are considerable, most notably: access to numerous markets in Southeast Asia, improvement of transportation infrastructure and creation of industrial zones. Another initiative, the Bay of Bengal Initiative for Multi-Sectoral and Technical Cooperation (BIMSTEC), established in 1997 (consisting of India, Bangladesh, Bhutan, Myanmar, Thailand, Nepal and Srilanka) has one of its aims to engage deeply with the South East Asian region. It has identified key sectors of cooperation like trade and Investment, transport and communication, energy and tourism. Besides this, the proposed infrastructure projects such as Asian Highway 1 and 2, connecting other Asian countries, will pass through the NE region of India. It is also proposed that a ring road should be developed connecting all the north eastern states. The road would cover a distance of around 4,000 km.

The whole issue behind the buzz about these highways and infrastructure corridors is that by the time these projects materialize, the youth of the region must be well equipped with industrial, Technical and market skills to be a part of economic transformation which awaits the region.

In 2014, the Government of India upgraded the Look- East policy to ‘Act East’ which naturally meant the growing focus on the NER as the next big economic success story.

India and the countries that share borders with the north east constitute a market of about 2.81 billion people which is roughly 40% of the world population.

CONCLUSION

The uniqueness of NER as discussed above demands a greater engagement to deal with the complex situation. Today, the region stands on a launch pad awaiting a push which can open the gates of prosperity. Not only the state agencies, but also the corporate sector needs to take a lead in designing a framework to start educational initiatives which do not target poverty in an abstract form, but in context of the factors that characterize the region. Given the huge outlay required in setting up the educational infrastructure, international partners also need to be involved in the development story of the NER, especially through the ASEAN. As discussed above, despite the odds which define the region’s backwardness, advantages like high literacy rate, abundance of natural resources, rich biodiversity and borders with Southeast Asia make the region a powerful case for rapid progress.

Poverty reduction through educational initiatives should not be an end in itself, but a defining moment for NER as a prosperous and a self sustaining economic base. The potential of the region, if realized will not only bring it on par with India’s growth but rather put the region among the leading economies of the world.

*Lalita Joshi, is an Assistant Director at All India Radio with research areas consisting of the ASEAN region and India’s Northeastern region.

Notes:
1. http://indianexpress.com/article/opinion/columns/make-in-the-northeast/
2. http://www.ficci.com/state/1011/Project_docs/ficci-north-east-council.pdf
3. http://mizobamboo.nic.in/bambooinmizoram.html
4. http://www.mdoner.gov.in/content/share-manufacturing-gsdp-ne-states
5. http://mdoner.gov.in/node/1346
6. http://www.ficci.com/state/1011/Project_docs/ficci-north-east-council.pdf
7. http://pib.nic.in/newsite/PrintRelease.aspx?relid=114811

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