Industry-less Economic Development of Northeast India

Article by Sagarmoy Phukan

Today, we are at the crossroads of economic development for Northeast India. Northeast is predominantly an agrarian society with around 65-70% of the population involved with it either directly or indirectly but only 16% of the area is under cultivation with total cropping area including all crops comes under 22% of the area. This is rather a small amount of area to provide a good living standard of the population of the area. But like all other transitioning economies with socio-economic demographic changes, Northeast India is also entering into a transition. We are trying to evolve ourselves into the next step of evolving society, i.e. an industry-based-economic society (industrialized society) but we can look at this as an opportunity to change ourselves into a service-based-economic society. 

So, to conclude, we have identified three types of society that are prevalent in the current times and there will be more societies which we shall discover as the human civilization will evolve. The current three types of economy-based society can be described as Agrarian Society, Industrial Society and Service Society (Post-Industrial Society). Most developed countries have passed through these phases where they transitioned from Agrarian Society to Industrial Societies and now slowly transitioning towards a Service-based economy (currently in a post-industrialized society) but Northeast India has a golden chance to transit directly to a Service-based economy without going through the hassle of putting up industries and damaging the fragile ecosystem of Northeast. 

Northeast India has a very vulnerable ecosystem and also houses a plethora of ethnic groups and flora-fauna. Industrialization will create a bag of problems starting with resources competition leading to terrorism and ethnic cleansing. It will also damage our Himalayan ecosystem leading to climate change, food insecurity and environmental degradation. But development especially focusing on living standards, equity and accessibility are important for the development of the region and its stability. 

In my opinion, Northeast India has the potential to host a combination of both agriculture and service sectors. In the case of industries, we can focus on small and medium enterprises (SMEs) that imbibes itself with sustainability. Though SMEs have been the focus of development for the Governments of Northeast India and India, a quick look into the service and agricultural sector as an economic module will help us to increase our living standards. Assam’s State GDP trend till 2000 shows that we have especially grown in the service sector with almost 50% contribution to it. Agriculture now contributes around 35-40% of the State GDP. 

Looking at these trends, we can observe that we have a high chance of developing these two sectors to create a healthy economic system for the region. Technically we have realized the opportunity, especially in the tourism sector. Organic farming has also started gaining popularity in several states of Northeast India. We should scale-up our agricultural produce, preferably using sustainable methods, to provide food and nutritional security. Villages and rural areas that share Panchayats or if they already have a cooperative for agriculture, it can be used as a common platform for selling the produce. In case they do not have a cooperative, it can be created within one Panchayat. Currently, we have several cooperatives for fisheries, dairy, etc. but a Panchayat level cooperative will represent the farmers effectively both individually and in common. These types of exercises will help the farmers access modern technologies, better qualities of seeds and access to new knowledge. On a philosophical note, the commons can be protected while keeping individual needs in mind. 

About the service sector, we can enhance once the region is accessible to a faster internet connection. As new technology has become more accessible slowly this barrier will be removed. In the meantime, we can take time to strengthen other service sectors such as the tourism and hospitality sector, education, medical tourism, etc. which have already been established but requires a new pathway to be economically more efficient. This step will be a low investment with high return. 

Education too can be taken as a service which can boost our economy. Good educational institutes provide a plethora of higher education options to students from the region, reduce passage of talent and currency to other States as well as attract students from across the country.  If we can sufficiently upgrade our research outputs and qualities, we can attract students from various parts of the country which in turn can increase our economic out-put. Another major opportunity for us is to enhance our medical tourism. Assam itself boasts about half a dozen medical colleges and hundreds of private hospitals. We can use these assets to develop and enhance our economy if we can attract people from all parts of the country. Investments in education and healthcare is essential for NE and it can act as a passage for our economic growth.

This essay is a short attempt to find a way for NE India’s economic development. We hope to conduct further studies to truly define sectors of potential growth. However, on a broader spectrum we can say with minimal investment we can enhance our agricultural, education and tourism sector (both medical and hospitality). However, the most important thing for low investment but high return in each of the sectors is the enhancement of quality and this can be done with the involvement of the people. People’s desire to provide quality work can be our Unique Selling Proposition (USP). In the coming days we can discuss further ‘in how many unique sectors’ NE India can develop itself especially making the region self-reliant to its population. Industries might seem a good way of development but I would rather say our delayed development has come as a boon where we can now directly invest in the service sectors rather than on harmful industries polluting the region and hampering the regional environment and climate.  

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