During the course of the preparation
of the Seventh Five-year Plan for the State of Assam in 1984-85,
carried out considerable research with the objective of unraveling
the basic facts regarding the development process in Assam during
the preceding decades. The research endeavour included an indexing
of the time series data relating to the State Domestic Product
(SDP) and the Per Capita Income (PCI) with 1970-71 as the base
year. A significant component of this investigation was the development
of a planning model which could postulate the different rates
of growth per annum that would achieve corresponding reductions
in the gap between the State’s PCI and the national average, as
also project the period during which the gap could be bridged.
This research brought out, for
the first time, that (1) during the entire period of planned development,
the PCI of Assam grew at a much slower rate compared to the average
per capita income of India, and, (2) at constant 1970-71 prices,
Assam’s PCI was Rs. 50.04 higher in 1950-51 than the average per
capita income of India. However, it started lagging behind since
the late 1960s and by the year 1984-85, Assam’s PCI was Rs. 212.9
lower than the national average. This fact now appears obvious
and is often quoted by economists, politicians and social activists.2
The fact that Assam had slackened
critically vis-à-vis the national average after
being better-off than the rest of India in the year 1950 came
as a shock to the then Prime Minister, Indira Gandhi.3
The criticality of this failure was to be understood in the context
of 35 years of planned development. Consequent to the then Premier’s
special interest and the initiation of deliberations by Manmohan
Singh, the then Deputy Chairperson of the Planning Commission,
Assam was given more Central assistance – an addition of approximately
Rs. 100 crore – in its annual plan. However, this initiative was
never followed up and nothing at all was done to provide the level
of investment required to increase the rate of economic development
in the State, as postulated by the model. Meanwhile, insurgency
and other problems of a political nature progressively complicated
the scenario and governmental attention was consequently diverted
to other aspects of the canvas.
In the post-1995 phase, a re-working4
of the time series of PCI at constant 1980-81 prices indicated
that there were no basic changes in the trends witnessed earlier.
The newly constructed series showed that, while in 1950-51, Assam’s
per capita income was Rs. 40 higher than the national average,
by 1992-93, the figure had lagged behind so far that it was Rs.
271 below the national average.5
If one makes an inter-regional
comparison in terms of PCI, the differences appear to be glaring.
In 1998-99, for example, while Assam had a per capita income of
Rs. 8,700, the national average was Rs. 14,712. The highest of
all States was Delhi, at Rs. 27,693. Maharashtra’s figure was
Rs. 22,763. According to the Human Development Index (HDI) of
the United Nations Development Programme (UNDP), which is a better
indicator of economic and social development, India was placed
at 128 among 174 countries. The value of HDI for India worked
out to be 0.563 against Canada’s 0.935, where the latter was the
highest of all countries.6
Among the Indian States, the highest was Kerala with an HDI of
0.603 against Assam’s value of 0.379.7
Similar is the case with poverty,
although the figures provided by various agencies differ. According
to Planning Commission estimates, only 26.10 per cent of the country’s
population was ‘Below Poverty Line’ (BPL) in 1999-2000. Assam’s
figure was 36.09 per cent. This shows that poverty in Assam is
worse than the average of all the States in India. The more unfortunate
fact in this context is that there has not been any considerable
improvement over the years, with the absolute number of people
below the poverty line increasing consistently. Worse still, even
the percentage has witnessed an increase in recent years – between
1996 and 1999. According to a statement by an individual Planning
Commission member, the BPL population in India has risen from
35.97 per cent in 1993-94 to 40 percent in 1999. In the case of
Assam, an estimate prepared by the State government, on the basis
of a BPL survey, has put the rural BPL families in 1998-99 at
59.43 per cent, which is up from the 45.01 per cent of 1993-94.
No revised percentages for urban and combined BPL families were
made in this estimate.8
Grinding poverty is writ large
on the faces of the poor in Assam, particularly in the rural areas.
Emaciated bodies and an anemic look, protruding bellies and thin
limbs, worn out clothes and dilapidated shelters, are all common
indicators of deprivation. Available figures indicate that the
scenario has clearly deteriorated since Independence. Figures
of infant and maternal mortality, life expectancy at birth, availability
of safe drinking water and access to sanitation facilities, underweight
children with stunted growth etc., as revealed by studies made
by the UNDP, Food and Nutrition Board, etc., reflect a really
Frequent natural disasters, particularly the several waves of
floods each year, cause further deprivation among a large proportion
of the State’s population, damage the landmass and also cause
depletion of resources. The funds available for relief and rehabilitation
are so meager that it becomes impossible to neutralize the losses.10
The situation is the same in the
other States of the Northeastern region as well. Against the all-India
PCI of Rs. 14,712 in 1998-99, as given in the Economic Survey
for 2000-2001, Assam’s figure was Rs. 8,700, Tripura’s was Rs.
9,187, Manipur’s was Rs. 10,599, Arunachal’s was Rs. 12,929 and
Meghalaya’s was Rs. 10,607. Mizoram’s figure for 1997-98 was Rs.
11,667. No official figures for Nagaland were available. These
figures indicate that all States of the Northeastern region are
placed below the national average in per capita income.11
The position remains the same even in terms of the poverty ratio.
Against the Planning Commission BPL figure of 26.10 per cent for
the country (1999-2000), Assam’s figure was 36.09 per cent, Tripura’s
was 34.44 per cent, Manipur’s was 28.54 per cent, Arunachal’s
was 33.47 per cent, Meghalaya’s was 38.87 per cent and that of
Nagaland 32.67 per cent.
Even in the context of the other
indicators of economic and social well being, the seven States
of the Northeastern region are worse off than most major States
and in comparison with the national average. Only with respect
to literacy is the situation different. However, except for Assam,
the UNDP’s HDI is not available for the other States of the Northeastern
region. In the other six States, literacy alone would push their
HDI higher than that of Assam and probably marginally higher than
the national average.
The then Prime Minister, Indira
Gandhi, clearly concerned about the disparity of income distribution
stated in her concluding address to the National Development Council’s
meeting held on July 12-13, 1984: "We are acutely aware that
India as a nation cannot remain together if disparities in income
and living conditions of different regions, different States,
different communities, tribes and castes are not removed. We look
at the Centre-State relationship also in this perspective. Balanced
all-round development, irrespective of the resource capabilities
of the units has been one of the major objectives of our plan."12
Despite such a clear enunciation by the Premier, ground realities
showed no significant changes. Furthermore, disparities have accentuated
especially after economic reforms were initiated in the 1990s
and no compensatory steps appear to have been undertaken by the
Central government thus far.
It is also noteworthy that throughout
the planning process, the per capita plan expenditure in Assam
up to the sixth Five-Year Plan, was lower than the national average
except for the odd years when it was marginally higher than the
national average. It was only in the aftermath of the Seventh
Plan that the expenditure increased marginally. The scenario was
better in the context of the other States of the region.13
Another fact that is not appropriately
documented as also appreciated is that, during the 19th century,
Assam had witnessed considerable progress in the industrial sector
and it was only since the middle of the 20th century that Assam
started lagging behind. To quote the former Prime Minister Deve
Gowda, "Assam was in the forefront of the economic development
of the country 100-150 years ago. It was a pioneering State and
enterprising entrepreneurs invested in the development of tea-plantations,
oil, coal mining, forestry, railways and inland waterways. However,
in the recent years investors have shunned these areas, because
some of these States turned inward looking, while others have
been afflicted by militancy and terrorism. This has set in a vicious
cycle of terrorism, discouraging investments and economic development,
leading to growing unemployment, which in turn provided recruits
This was the first time that a Prime Minister made clear the Centre’s
intention to take up a concrete and comprehensive package of projects
for each of the seven States. These projects were identified and
State-wise lists were appended to the statement.
The emotional involvement in the
issues of development among all sections of the populace of these
States was brought out very clearly by L C Jain in his report
on clause seven of the Assam Accord. The report, in the very first
paragraph, said: "Our entire thinking has been influenced
by one major factor: a fairly well informed and fervent demand
for development for the people at large – students, political
parties, women’s groups, voluntary organisations, economists,
ministers, administrators, entrepreneurs – with whom we had the
privilege of interacting. This magnitude of popular awareness
and interest in development is a rare social force. Constructively
used, it can be the most precious capital for the development
Several other committees and studies
were commissioned on the same aspect and hundreds of valuable
recommendations made by them are currently gathering dust in the
cupboards of the North East Council and the secretariats of different
States. One principal study was that of the High Level Commission
appointed by the Planning Commission in 1996 under the Chairmanship
of S P Shukla, Member, Planning Commission, to critically examine
the backlog in respect of the basic minimum services and gaps
in the infrastructural sectors essential for the development of
the Northeastern States. In their 1997 report, the Commission
observed that there was a "two way deficit of understanding
with the rest of the country" and that "the development
of the tranquility in the Northeast is also a national security
interest and can offer regional solutions to national problems."
It then recommended that "the country must assist the Northeast
to realise its full potential and avail of the emerging opportunities
within and around it." The Commission further felt that "the
people of the Northeast cannot remain cocooned and wish to take
their places as full and equal partners, contributing to that
great enterprise that is Project India. It is right not to want
to be swamped by Indians from outside the region, even less by
an influx of foreigners. But the region does not need to fear
'outsiders' and lapse into 'localism'. Violence, insurgency and
easy money are no solution to any problem, real or imagined. These
eruptions and the bandhs, extortion, kidnappings, leakage,
and the sulking and cynical indifference they have engendered
in sections of the populace, can only delay and could even deny
the peace, progress and prosperity that everybody seeks."15
Furthermore, recommendations and
observations made by various commissions and studies have not
been implemented. Some funds were made available for a number
of schemes and projects by the Central government under the Prime
Minister’s package. Funds also flowed to the States through regular
schemes and programmes, particularly for rural development, in
addition to the other funds under the annual plans. But in every
State of the Northeastern region, a plethora of allegations and
complaints have surfaced regarding the misuse of funds and rampant
corruption. The ground level reality also does not indicate any
significant and effectual developmental activity. Media reports
have indicated that bureaucrats, politicians, bank managers, contractors
and their cohorts siphon-off major portions of the funds, consequently
leaving very little – and at times nothing – for the poor.
One use of such diverted funds
can be discerned in the exponential increase in the construction
and luxury businesses, particularly in urban areas. According
to a recent survey made by the Federation of Industries and Commerce
of the Northeastern Region (FINER), in Guwahati city alone 604
multi-storied buildings, which house residential and commercial
apartments, have emerged during the period 1995-2000. These involved
an investment of Rs. 1200 crores. The FINER survey also found
that 40 new restaurants, besides the ones that are part of the
larger hotels, had come up in Guwahati during the same period.
Indeed, ‘Guwahatians’ are estimated to spend approximately Rs.
13 million in a month on dining out. The FINER survey also indicates
that "sectors like transportation, hotels, tourism, greeting
cards, health-care, courier services, travel agencies and computer
education are growing at a phenomenal pace in Assam in the last
three-four years." There has also been a manifold increase
in "the sale of such items as colour televisions, music systems,
refrigerators and washing machines." This has largely been
due to a rise in the "disposable income, at least among the
urban population and a section of the rural population of the
State" in the recent years.16
This author contends that that such a high level of investment
and conspicuous consumption has been provisioned by the funds
siphoned-off from developmental projects and schemes. Besides,
as the FINER survey has found, the World Bank-assisted Assam Rural
Infrastructure and Social Project (ARIASP)’s Rs. 273.50 crores
and the funds flowing out of the Prime Minister’s package of Rs
10,271 crores have fuelled this boom.
Although there are varying estimates,
substantial amounts of funds have also been accruing to the insurgents
during the past 15 years or so. The channels through which these
funds flow are well known.14
Politicians, bureaucrats, bank executives, tea-planters, contractors
and others who handle money in government establishments as also
commercial and industrial houses have bought their own and their
colleagues’ security by transferring to the insurgents a portion
of their ill-gotten monies. In the past, many central leaders
had warned the State governments of the region against such payments
to insurgent organisations. On June 14, 2001, the Union Rural
Development Minister, Venkiah Naidu, consequent to a meeting of
the Rural Development Ministers of the Northeastern States at
Shillong, warned that "the Centre would stop disbursing rural
development funds to those States, where a bulk of the funds go
to the coffers of the extremist outfits."18
Prior to the imposition of President’s
rule and in the midst of Operation Bajrang, the Governor’s
report dated November 26, 1990, estimated the amount of extortion
till that date by the United Liberation Front of Asom (ULFA) at
approximately Rs. 4 to Rs. 5 billion.19
This phenomenon – corroborated by both media and official reports
– has since then witnessed an exponential growth. In fact, the
individual level payments are also reckoned to be on the higher
side. One tea company, for example, was found to have paid Rs.
13.5 million to the erstwhile Bodo Security Force, and the security
forces reportedly recovered a part of the money. Another tea company
had shown Rs. 1 crore as unexplained ‘expenditure on security’
– an euphemism for pay-offs to the insurgents – in their audited
balance sheet. The insurgent outfits demand and extract smaller
amounts from various small businessmen as also corrupt government
Furthermore, increasing security-related
expenditure has crucially constricted available levels of development
finance with the various State governments of the Northeastern
region. A recent report of a committee on Integrated Rural Development
Programme (IRDP) in the Northeastern States also mentioned "an
upsurge in insurgency in Assam" as responsible for "practically
no developmental activities in rural areas" and a simultaneous
"flight of capital from the rural areas to urban areas as
the former were less secured than the latter."20
Such an observation would also indicate that there has been an
added impoverishment of the rural areas and a greater lag vis-à-vis
developmental activity. The general belief that insurgency
is fuelled by economic backwardness, therefore, has some basis.
But it would be totally inappropriate to assume that there is
a direct linkage between insurgency and economic backwardness.21
As the Shukla Commission opined, "it would be simplistic
to believe that development by itself can end insurgency and restore
tranquility. Yet it constitutes a most important element in that
task and an effective entry point for dealing with complex problems
and historical neglect, rapid transition and social change. The
extra ordinary ethno-geographic and bio-geographic diversity of
the Region precludes uniform solutions as different communities
are at varying stages of growth."22
In Assam, the level of unemployment
due to a lack of developmental activity over an extended period
is reflected in the number of unemployed persons, which today
has reached the 2.2 million mark, constituting approximately a
tenth of the population. More than 70 per cent of these are educated.
These unemployed youth, to a large extent, also provide the reservoir
of manpower from which the various insurgent outfits easily recruit
their cadres. Reportedly, even the families of these ‘volunteers’
do not object because of the lure of financial compensation which,
though not handsome (as some sections of media tend to make out),
is not meager either. Furthermore, there also exists the added
attraction of the employment and rehabilitation packages in the
context of certain ill-considered surrender policies.23
This paper contends that each
of the insurgent outfits in the region was initially raised to
a large extent from among people who harboured feelings of neglect
and ‘colonial exploitation,’ or who strongly resented certain
perceived wrongs to the particular community or sub-region from
which they were drawn. The outfits later gained strength primarily
through clandestine support networks of politicians and over-ground
front organisations, as also with the ill-gotten monies acquired
mainly through extortion. The ULFA, for example, was able to become
a large outfit primarily due to the tacit support provided by
the first AGP regime under Prafulla Kumar Mahanta. The former
Assam Governor D D Thakur described it as "one of the classic
examples of culpable inaction on the part of a State government."24
Indeed, a parallel ULFA government was reportedly in existence
in Assam during this particular phase.
It needs to be noted that economic
backwardness is one of the significant causes fuelling insurgency
in the Northeastern region, although it is not the sole cause
and nor can it be said that insurgency is the consequence of the
lack of economic development. In the larger canvas of the attempts
being made to achieve material progress, it is also true that
rampant corruption in the bureaucracy and the political class
manning the delivery system stands as a stumbling block. In such
a milieu, the only plausible option is to secure the efficacious
participation of the populace at all levels and particularly through
the Panchayati Raj and urban local government institutions
and carry out all development work through these institutions.
||This article is a revised version of the author's
paper presented at the seminar 'Addressing Conflicts In India's
North East' organised by the Institute for Conflict Management,
June 25-27, 2001, New Delhi.
||Mr. H N Das retired as Chief Secretary to the
Government of Assam in February 1995 and is currently involved
in research and writing on issues concerning the Northeast
region. He is the President of the Assam Chapter of the Foundation
for Amity and National Solidarity. He is also associated with
several other socio-economic organisations in India's Northeast.
He has written extensively on issues of energy, the tea industry,
and socio-economic development. He has published two books
on disaster management and the Grameen Bank of Bangladesh.
author was then the Planning and Development Commissioner, Government
of Assam. This research investigation was undertaken with the
able assistance of his colleagues Dr. N K Barua and Mr. P B
New Paradigm of Development: Regional Imbalance and Assam",
The Economic Times, New Delhi, October 23, 1985.
then Chief Minister of Assam Hiteswar Saikia had shown the model
and the graphs to Mrs. Indira Gandhi.
author commenced re-work on the model on his retirement from
service in 1995.
Model for Assam’s Development", The Sentinel, Guwahati,
April 24, 1995.
Development Report, 2000, United Nations Development Programme,
Oxford University Press.
The Road of Human Development, 1997, United Nations Development
Programme, Paris: India Development Forum.
N Das, "Poverty Alleviation through Agricultural Growth
in Assam" Rural Prosperity and Agriculture Policies
and Strategies, Hyderabad: National Institute of Rural Development,
The Road of Human Development, 1997, Paris: India Development
Forum, United Nations Development Programme.
Das, "Financing Disaster Response", India Disasters
Report, New Delhi: Oxford University Press, 2000.
of India, Ministry of Finance, Economic Division, Economic
Survey, 2000-2001, February 2001, Government of India Press,
Commission Minutes, unpublished.
New Paradigm of Development: Regional Imbalance and Assam",
The Economic Times, October 23, 1985.
while announcing the famous package for the Northeastern region
after his seven-day tour of the seven States of the region in
a press statement on October 27, 1996.
Level Commission Report to the Prime Minister, Planning
Commission, Chaired by S P Shukla, 1997.
Economy: A Fresh Perspective, Federation of Industries and Commerce
of North Eastern Region (FINER), Guwahati, 2001.
for instance, Ajai Sahni, "The Terrorist Economy in India’s
Northeast: Preliminary Explorations," Faultlines: Writings
on Conflict & Resolution, Volume 8, New Delhi: ICM-Bulwark
Books, April 2001, pp. 127-148.
Money is not for Militants: Venkaiah", Sentinel,
June 15, 2001.
was placed under President’s rule on November 28, 1990. Operation
Bajrang was conducted between September 1990 and April 1991.
See South Asia Terrorism Portal; India; States; Assam; Backgrounder.
of the Committee on Credit Related Issues under IRDP (GSY) in
North-Eastern states, Ministry of Rural Development, Government
of India, 2000.
a lost World", Indian Express, New Delhi, May 11,
Level Commission, Report to the Prime Minister, Planning
Commission, Chaired by S P Shukla, 1997.
Ajai Sahni and Bibhu Prasad Routray, "SULFA: Terror by
Another Name," Faultlines: Writings on Conflict &
Resolution, Volume 9, New Delhi: ICM-Bulwark Books, July
2001, pp. 1-38.
Guwahati High Court Judgment in Civil Rule Nos. 23K, 2238, 2425
of 1990 and 11 of 1991, Report of Assam Governor dated 26.11.90
quoted in full.