Economy of the Northeast

The North East India or simply the North East as usually referred to in India is a region as interesting and varied as India itself. It comprises of the eight States of Assam, Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim and Tripura. It is hilly, it has plains on both sides of the mighty Brahmaputra and then the mighty Himalayan range around it.  

The pace of development in the hilly areas and plains differ considerably. The valleys are economically active areas of the region, the Brahmaputra valley being the most active. Tribal population forms only one fourth of the population of the North East, despite the fact that in four States i.e., Mizoram, Meghalaya, Nagaland and Arunachal Pradesh, tribals are in majority and in Mizoram, they constitute as high as 95% of the population. Though the region is diverse and heterogeneous, it is also homogeneous in the sense that the social stratification found in other parts of the country is not present in the North East. There are differences among the eight States in the North Eastern region with respect to their resource endowments, level of industrialisation as well as infrastructural facilities. The industrial sector has mainly grown around tea, petroleum[crude], natural gas etc. in Assam and mining, saw mills and steel fabrication units in other parts of the region. The economy of the region is still primarily agrarian but its full potential is yet to be exploited. Since agriculture and industry has not really taken off in spite of the potential in the form of vast unexploited resource base available in the region. The pressure for employment is on the service sector. The contribution of agriculture to State domestic income is much higher in this region, except for Meghalaya and Nagaland. Mining in case of Meghalaya and forestry and logging in case of Arunachal Pradesh and Nagaland are important contributors to NSDP. The contribution of construction is also high in this region. Growth in per capita income is almost stagnated in Assam since the 90’s, was better than the national average in Meghalaya, an increasing trend in case of Arunachal Pradesh, Manipur, Nagaland, Sikkim & Tripura. Despite being rich in natural resources, development in the North Eastern region has lagged behind the rest of the country. The region’s economy is generally characterized by low per-capita income, low capital formation, in-adequate infrastructure facilities, geographical isolation and communication bottleneck, inadequate exploitation of natural resources like mineral resources, hydro power potential, forests etc., low progress in industrial field, lack of private and foreign direct investment and high un-employment rate among the relatively high literate people.

The per capita income in the North Eastern region on an average is Rs. 12,918/- as compared with the national average of Rs. 17,947/- at current prices of 2001-02.

The population growth in the NER is largely responsible for this low per capita income. CARG in NSDP shows that Manipur, Meghalaya, Mizoram and Tripura have been doing better than national growth rate. Interestingly, Assam the so-called most developed State in the Northeast has the lowest per capita income and lowest growth in NSDP.

Data source : Directorate of Economics & Statistics of all NE States.