Reaching Out To The Seven Sisters
But this is a package in more than one sense. The states arent going to get much new money; Deve Gowda has essentially aggregated the funds that would have been flowing to the region in the normal course of events under various schemes and put a name on the package. Even officials find it difficult to segregate what is new in the package from whats old, though they all agree that merely by focussing attention on the package, the prime minister may actually get things moving faster.
Development in this region has always been hampered by its relative isolation, poor physical and institutional infrastructure, coupled with political instability. Given this dismal backdrop, Dr Jayanta Madhab, chairman of the North East Development Finance Corporation (NEDFi), is optimistic; It is for the first time that a prime minister has visited all the states in this region. This at least shows that he is serious. In early August, an advisory committee headed by Dr Madhab submitted a two-part report on the industrial development of Assam to the state government.
Similarly, B G Verghese who has recently authored Indias Northeast Resurgent, is singing paeans to the prime minister; It is a good package, which takes care of two important aspects. First, the psychological part of the problem is being tackled, as the issues involved are more emotional like in Kashmir. Perhaps, this is more important than the funds as it shows the PM cares. Second, it is a firm commitment that funds for the ongoing as well as new projects will flow in. Thus, it takes the projects forward.
This opinion is shared by L C Jain, former Planning Commission member and chairman of the committee formed to look into the implementation of Clause 7 of the 1990 Assam Accord. While the area may suffer from a lack of investments, it has suffered more from a crying lack of interest. Any first-hand exposure to the people and their problems is in itself a positive step.
Meanwhile, Professor Atul Sarma, of the Delhi-based Indian Statistical Institute, says, The package has taken into account the inadequate infrastructure and resource endowments of the region. If implemented it will provide a sufficient impetus to growth.
The north-eastern states share 98 per cent of their borders with neighbouring countries and only 2 per cent with mainland India. Taking this into account, if natural trade links are recognised and allowed to develop, then border trade could fill up the empty coffers of these states.
For instance, there is a flourishing illegal trade in cycle parts in Tripura. If this is legalised, small-scale cycle spare part industries can come up, as well as rubber plantations to produce badly-needed rubber for cycle tyres. Under Gowdas initiative the commerce ministry is now working out the feasibility of border trade with the north-eastern states.
However, Professor Sarma is sceptical about the actual implementation of Gowdas economic package. Implementation will not be easy, as all these states lack a responsible bureaucracy. Besides, the institutional infrastructure also needs to be streamlined. The working of the North Eastern Council must also be reviewed.
There is a growing consensus that the economic package will not lead to tangible gains. Lt Gen V K Nayar, former governor of Manipur, does not mince his words: The package is more of a perception of policy makers and politicians at the Centre and does not necessarily conform to actual ground realities. If past experience is anything to go by, then this could be just another ploy to gain political mileage.
How can bureaucrats discover what the actual requirements are within 15 days, when it took me more then six months to just identify the actual requirements of a tiny state like Manipur. Our process of economic development and strategy has failed to achieve the desired results in the north-east. There has been failure because of lack of orientation and bad implementation.
More pertinently, he believes that by allocating more funds to these states the Centre will fuel the growing insurgency in the north-east. Unless there is tight fiscal control and monetisation of funds it can become just another easy source of funds for the insurgents, warns the former armyman.
L C Jain also adds a note of caution. One is not taking a clerical view of the funding, but if it is meant to be an investment package then there has to be a guarantee that the resources required are located somewhere in the system. He adds, If this package merely sums up what exists in the Plan then that should be clarified or else it may create a wrong impression and raise expectations, which could eventually lead to a backlash.
Clearly, the package raises two pertinent questions. First, it highlights the absorptive capacity of the area in the face of all its difficulties. Second, the manpower requirements of large investments cannot be met by the region alone. It will require professional and technical expertise from outside; but given the insurgency problem, that may be a difficult proposition. The law and order situation needs to be under control for an investment package to yield results. L C Jain echoes a lot of peoples feelings when he says: Mr Gowdas initiative to hold talks with militant groups without any precondition is more significant than the funds offered.
One shouldnt lose sight of the fact that the PM has certainly made an effort to reach out to the people of this region. B G Verghese makes a telling comment: One should not be cynical; the package should be taken at its face value and the initiative should be applauded.