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Published in Luitor Pora Mississippi, Assam Association of North America, 2008, pp.23-25 - page 1 / 3

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Published in Luitor Pora Mississippi, Assam Association of North America, 2008, pp.23-25

On Economic Growth and Development of Assam

Hiranya K Nath1

There have been some dialogues on economic growth and development of Assam in recent years. As India stands to emerge as a global economic super-power, the discourse over issues as complex as national/sub-national identity – which, in Assam, has reached almost a surrealistic dimension with layers of identities – has to some extent drifted into a debate over economic possibilities. There are several factors responsible for this. First, a growing number of people in Assam, particularly the members of the intellectual community, have become aware of the economic miracle that India has achieved and, with that, the changing image in the outside world from being a poverty-ridden third world economy to being a technology savvy emerging market economy. Second, although Assam has made little contribution to this economic rise of India, and in fact has distinguished itself as one of the slowest growing states in last two decades, some of the benefits of this economic surge have trickled down to the middle class in Assam. Finally, there has been some exasperation among the majority of people over the socio-political movements that have been going on in the state for nearly three decades.

This debate is indeed a positive development. There have been suggestions and some initiatives to implement programs and policies for economic development of the state. For quite some time now, there have been efforts to establish manufacturing industries based on natural resources and to promote small-scale industries based on raw materials available in the state. Those who have travelled outside the state – in India and abroad – also believe that tourism can be a viable engine of growth for Assam. Some have gone to the extent of suggesting that there is great potential for ecotourism because it requires almost no infrastructure, which is lacking in the state. Lately, the ‘look east’ policy, originally proposed by the Narasimha Rao government in the early 1990s, has caught the imagination of those who are apparently concerned about the economic development of Assam and other northeastern states. Those who are overly optimistic tend to think that opening up of the eastern border to southeast Asia will be the panacea of all economic misery for the state of Assam. These are all good thoughts and initiatives, and represent some genuine concerns. But we need to do a few reality checks: because these good programs may not work, for good reasons.

Manufacturing industries require a well developed system of power, transportation, and communication infrastructure so that the production can be coordinated without any interruption with supply of inputs and distribution of output. This is important in a global economy where competition is intense and real. Although there may be over-enthusiasm about building highways, railways, airports, and supply of power (and we need all of them even without manufacturing industries), the severe climatic conditions of Assam may impair the ability of even the most well developed infrastructural facilities to help those industries achieve efficiency and withstand competition. Furthermore, industries based on natural resources have other limitations. If the resources are nonrenewable like oil and other minerals, the production in industries based on those resources cannot go on forever. If the resources are renewable such as forests, there need to be comprehensive efforts to ensure continued supply of those resources.

1 Associate Professor of Economics, Sam Houston State University, Huntsville, TX 77341-2118; e-mail: eco_hkn@shsu.edu

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