Bridging the Gap: Northeastern states eye economic awakening

northeastern states
Rich in resources and brimming with potential, northeastern states chart a course towards economic prosperity.

Northeastern India, a region rich in natural resources, faces a paradoxical situation where its economic advancement lags despite its potential. The northeastern states – Manipur, Mizoram, Assam, Arunachal Pradesh, Meghalaya, Nagaland, and Tripura – have been historically marginalised, primarily due to its geographical isolation and limited connectivity with the rest of India. While there has been some economic growth in recent years, these states still significantly trail behind the national average, with stark intra-regional disparities.

The northeastern states are a treasure trove of natural resources, including fertile land, rich mineral deposits, and vast forest cover. This abundance presents a significant opportunity for economic development. Sustainable management of these resources can support agriculture, horticulture, mining, and hydropower generation. However, harnessing this potential requires robust infrastructure for transportation, processing, and value addition to ensure these resources translate into economic benefits for the region.

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Geographical and historical context

The northeast’s geographical challenges — rugged terrain, remote locations, and susceptibility to natural disasters — complicate infrastructure development and integration with the broader Indian economy. Historically, these states have faced neglect, leading to underdeveloped infrastructure, which hampers economic growth and development. The region’s strategic importance, bordering several countries, adds complexity to its economic narrative.

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The economic backwardness of the Northeastern region stems from a confluence of factors. Geographical isolation and challenging terrain restrict connectivity and infrastructure development. Ethnic conflicts and political instability in some states have disrupted economic activity and deterred investments. This complex situation has contributed to the backwardness of the northeastern states.

Northeastern states: Challenges to economic growth

Despite these challenges, the Northeast has witnessed some economic improvements. However, growth has been uneven, with certain sectors and states outperforming others. The region’s economy remains primarily agrarian, with significant contributions from forestry, handloom, handicraft, and tourism sectors.

Arunachal Pradesh has seen an impressive growth in per capita income, outpacing the national average. However, it grapples with multidimensional poverty, with a notable portion of its population facing challenges such as lack of access to healthcare, education, and adequate living standards. The state’s economy heavily relies on central grants and shares from Union taxes, reflecting a dependency that underscores the need for diversifying its economic base.

Tourism holds immense potential for economic growth in the northeast. The region’s natural beauty, diverse cultures, and rich heritage offer unique experiences for tourists.  Developing eco-tourism, adventure tourism, and cultural tourism can create employment opportunities, promote regional handicrafts, and contribute to infrastructure development. However, responsible tourism practices are crucial to ensure the conservation of the environment and the preservation of cultural integrity.

Agriculture forms the backbone of Manipur’s economy, supplemented by industries like handloom and handicraft. Recent ethnic conflicts have destabilised the state, affecting the economy and leading to uncertainty in its development trajectory. The informal sector, crucial for employment and livelihoods, has been particularly affected.

Mizoram stands out for its rapid economic growth and high forest cover, showcasing an interesting blend of environmental conservation and economic development. However, the state faces challenges in maintaining fiscal balance while ensuring sustainable growth, emphasising prudent financial management.

Assam enjoys better geographic and infrastructural advantages than its northeastern counterparts and has shown potential for industrial growth. Yet, it continues to battle issues like insurgency, which impede its development. The state’s economy heavily relies on agriculture, particularly the tea industry, but there are efforts to diversify into sectors like tourism, IT, and manufacturing.

With ambitious economic targets, Meghalaya is focusing on tapping into its natural resources to drive growth. The state has received recognition for effectively implementing central government schemes, which could serve as a foundation for achieving its economic goals.

Nagaland shows promising economic growth, with improvements in per capita income indicating a rise in domestic consumption. However, the state must address its fiscal management to ensure sustainable development.

Tripura’s economy is on an upward trend, with efforts to attract industrial investments. The state’s new industrial policies aim to stimulate the establishment of medium and large enterprises, contributing to economic diversification and growth.

Cultural diversity and policy implications

The rich cultural diversity and unique social fabric of the northeastern states necessitate tailored policymaking. The region’s development strategy must be multifaceted, addressing not only economic growth but also social inclusion, environmental sustainability, and cultural preservation. Policymakers must recognise the distinct identities and needs of each state to formulate effective development plans.

Limited infrastructure, including transportation networks, communication networks, and energy grids, is a major hurdle hindering economic growth in the Northeast.  Investing in infrastructure development is essential to improve connectivity within the region and with the rest of India. This will not only facilitate the movement of goods and people but also attract investments and create a more conducive environment for businesses to flourish. Upgrading transportation infrastructure will also open new markets for agricultural produce and handicrafts, empowering local communities.

While the Northeastern states show potential for economic growth, they face multifaceted challenges that require comprehensive solutions. The region’s development strategy should be inclusive, leveraging its natural and cultural assets while addressing its socio-economic challenges. With targeted interventions and sustainable practices, Northeastern India can achieve economic prosperity and contribute more significantly to the national economy.

The journey of northeastern states towards economic prosperity will necessitate collaborative efforts between the Union government, state governments, and local communities. By harnessing its natural resources, fostering tourism,  developing infrastructure, and promoting skill development, the northeast can not only bridge the gap with the national average but also emerge as a unique economic powerhouse within India.