Regional imbalances in the development of the North-east have got little attention in the Union Budget. In this regard, however, Mizorams transformation could hold some pertinent lessons.

I t is unnerving to note that in the public discourse on the Union Budget, the issue of balanced regional development is hardly raised. This is somewhat unfortunate because till the 12th Five Year Plan, it was an important component of development planning. Therefore, policies and projects designed to remove or reduce regional imbalances were debated, scrutinised and the results evaluated.

Presently, the entire focus of the Budget debate is on macroeconomic issues and not on regional development issues of even, border states. The regional media in the North-east noted that in the budget speech of Union finance minister Nirmala Sitharaman there was no mention of the special development challenges of the North-east.

This was the case even though substantial increase in the allocations for the region was proposed in the Budget. There is a need to address regional imbalances in development as that is central to the inclusive growth strategy and the same can be executed by putting in place growthenabling policies, infrastructure and institutions in the region under a coordinated programme of the Centre and North-eastern states.

Now, let’s take a look at the budget figures. It hiked allocations for the North-east by Rs 12,282 crore across 55 central ministries, which is a substantial increase of 21 per cent from Rs 47,087.95 crore to Rs 59,369.30 crore. Looking into the details, one can see that while the allocation for road transport has been reduced to Rs 6,070 crore against last year’s provision of Rs 6,210 crore; that of water resources has been raised to Rs 440.65 crore from Rs 318.82 crore. The latter is a welcome step as flooding of the Brahmaputra is causing huge damages in Assam and the Garo Hills of Meghalaya where, in many areas, flood control structures need repairs and redesigning. The region’s unmet need for an integrated approach to river basin management — especially sustainable flood moderation of the Brahmaputra that the “2007 Strategy Report of the World Bank on Development and Growth of North East India” stressed — calls for urgent steps as there are definite signs of climate change and growing environmental insecurity.

While provisions for the Union ministry of development of North Eastern region is up from the 2018-19 revised estimate of Rs 2,629 crore to Rs 3,000 crore, the decrease in the North Eastern Council budget from Rs 1,010 crore to Rs 885.15 crore is an indication of its declining role in the region’s development. This is somewhat disquieting, however, as under the NEC Act, the council is mandated to “prepare a regional plan” for development of the North-east and execute projects of regional importance, which would benefit more than one state.

The NEC is based in Shillong and specialised agencies like the North Eastern Electric Power Corporation Limited, which it promoted, are in the know of the ground conditions more than the Doner ministry. Therefore the NEC is better equipped to appreciate the development needs and implement projects with full involvement of states in the region.

The Doner ministry on the other hand has been engaged, mainly since its inception, in managing the nonlapsable 10 per cent of central funds that the Union ministries and other agencies are required to spend in the North-east. This has made it primarily, a coordinating body.

Equally disquieting, though not unexpected, is the token allocation for the two Hindustan Paper Corporation Limited-run paper Mills in Assam, which are all set for liquidation. With this comes the end of Assam’s dream of large industries using jute and bamboo, as locating such plants far away from ports and the market involves high transport costs. This should be factored in while planning the interaction of the North-east with the Association of South East Asian Nations as part of the Centre’s “Act East” policy. That is because high surface transport costs for accessing the main markets might render most industrial products from the region uncompetitive.

However, physical progress of the centrally-funded infrastructural development schemes in the North-east has vastly improved since 2014. For example, completion of the BeloniaSabroom section of the Northeast Frontier Railway in Tripura will enable it to run trains across the entire 114.6 km Agartala-Sabroom stretch, which has been constructed over 10 years and at the cost of Rs 3,323.07 crore. Work on the Dimapur-Kohima rail link, Kaladan Multi-Modal Transit Transport Project to link the Sittwee sea port of Myanmar with Mizoram and the North-east, and other such connectivity, power and telecom projects has been accorded high priority. Once completed, they will remove the “transport bottleneck” for the movement of goods and services, which has for long been considered the main constraints on development of the region.

Development experience in a number of third world countries suggests that infrastructural development by itself doesn’t generate growth. For example, Nigeria had seen huge investment in physical infrastructure but much of it was unnecessary and mainly benefitted foreign contractors and suppliers and their cronies in the government. It didn’t create a self sustaining growth base and imposed a huge maintenance cost on the state. Hence its viability is established only when it generates sustainable growth and employment.

In the Indian context, growth has mainly been urban and technology driven, which has been eluding the North-east so far. Take the case of Assam with its urban population of 4.4 million out of a total population of 31 million. It has only one million-plus urban agglomeration in the form of the state capital Guwahati apart from 28 municipalities. It is the 12th least urbanised state and therefore, has a low potential for employment in the services sector, which explains the huge migration of its youth — both skilled and unskilled — to the southern states of India. It is also ranked 29th on the Net State Domestic Product per capita list among 33 states and Union Territories.

The picture is equally grim in the region as there are only 13 municipal towns in the rest of the North-east. The only exception is Mizoram, which is among the most urbanised states with 52.1 per cent of its present population of about 1.3 million in urban areas. Not unsurprisingly, Mizoram holds the 19th rank on the NSDP per capita list and is second in the region after Arunachal Pradesh.

This amazing transformation of a tribal and shifting cultivation (jhum)- based economy in less than half a century is an unexpected outcome of a decision taken in the wake of the outbreak of the Mizo insurgency in 1966. It was decided to “group” far-flung villages and relocate them close to the road network to provide security and comprehensive development. These “grouped” villages, designated as “Protected and Progressive Villages”, were organised from 1966 to 1968 under the dynamic leadership of R Natarajan, deputy commissioner of Mizo district, which covered the whole of today’s Mizoram. They have now developed into permanent, vibrant urban centres providing marketplaces and facilities for acquiring modern skills and activities under secondary and services sectors.

Serchip, once a PPV, is now a district headquarters. Mizoram also holds the third rank in literacy at 91.3 per cent and a high position on the Human Development Index. Aizawl, the state capital with a population of about 150,000, has the highest density of vehicles in the country. The tiny state is also a sports powerhouse.

What lessons could the “Mizo model” hold for other North-east states? It was “forced urbanisation” that triggered the modernisation of Mizo society and economy and not just growth of infrastructure. Thus, planned urbanisation geared to promote medium, small and micro enterprises and linked to skill and entrepreneurship development, backed by institutional finance, is the only way to generate employment within the region and a step towards inclusive growth. From this perspective, an Economic and Urban Corridor, through Gangtok, Siliguri, Bongaigaon, Guwahati, Shillong, Silchar and Aizawl, merits attention from planners of the North-east.

The writer is a retired IAS officer of the Assam-Meghalaya cadre and has served as a scientific consultant in the office of the principal scientific advisor to the Government of India