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The greed-neglect nexus

The Northeast is not the spoilt child of the centre, but neither are its own people free of all blame for its backwardness

BURNING ISSUES: political instability and violence have made life tough for people
There are two very popular and convenient views in New Delhi about the Northeast. First, the region — comprising the seven states of Assam, Arunachal Pradesh, Mizoram, Nagaland, Meghalaya, Manipur and Tripura — is the country’s pampered child. And that the Centre has been pouring in disproportionate amount of money into the region which is ultimately misused. The second view holds that New Delhi alone is responsible for the economic backwardness of the region, and that the Centre’s neglect of the Northeast is huge.

The truth, as usual, lies somewhere in between. The Northeast has, indeed, suffered so much neglect and apathy in the past that it is next to impossible to catch up with other parts of India. Therefore to put it, as Mizoram Governor Amlok Ratan Kohli said at a recently-held seminar, that “the Northeast is a spoilt child of the Centre,” is also a bit rich.

It is true that all the seven states in the region are granted a ‘special category’ status by the government, which means they receive 90 percent of Plan assistance as a grant, and just 10 percent as a loan, as against the norm of 30 percent grant and 70 percent loan for other states. As the first minister heading the department for Development of Northeastern Region (doner), Arun Shourie was wont to remark: “Funds are never a problem. Proper and timely utilisation of the allocated money is.”
And yet every state in the Northeast is facing bankruptcy. Consider some more facts:
  • 57 years after Independence, six of the seven state capitals in the region are not connected by rail.
  • Itanagar, Kohima and Shillong (all state capitals) do not have a proper airport even now.
  • The entire Northeast has to import essential goods worth nearly Rs 2,500 crore annually since the states in the region have not modernised their agricultural practices.
  • Nearly 55 percent of India’s tea production, 60 percent of its plywood (till the timber felling ban was imposed) and a substantial part of its oil is produced in the region, but not even a tiny percentage of the profits is re-invested here.
  • Vital sectors like education, health care and communication are still in the primitive state in the region.
Nothing illustrates best the neglect of the Northeast than the figures of funds released by the All India Financial Institutions. Out of the Rs 72,000-crore-plus sanctioned by these institutions, Assam got a measly 221 crore, Nagaland received Rs 4 crore and the rest of the states went without a single penny. All the states in the region are today heavily in debt; Assam’s internal debt, in fact, stands at a staggering Rs 10,000 crore. Another development indicator, the credit deposit ratio of commercial banks for all the state’s in the region at 26.9 is substantially lower than the all-India average of 62.3

Who’s to blame for this? Not the Centre alone, surely. After all, 10 percent of each of the Central ministries’ budget is earmarked for the development of Northeast. Where does the money go? In reality, the isolation and backwardness of the region is as much to do with the Centre’s failure to monitor funds utilisation as with the failure of local leadership and the lack of initiative on the part of its own people.

August 07, 2004

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