The Union Budget and the North-East - a quick look

The Union Budget passed recently has been subject to intense scrutiny in the North Eastern states, with political reactions from hostile state governments like Assam and Tripura being largely on expected lines. Bodies like Federation of Industries and Commerce of North Eastern Region (FINER) have not only hailed the budget as a step in the right direction, but have also come up with some suggestions of their own. Organizations like North Eastern Students’ Organization(NESO) have expressed mixed feelings about the budget, expressing happiness over some key decisions, but serious indignation at ignoring certain problems like flood and erosion.

The Union Budget has allocated Rs. 56,706 crore for the North East. We go through some of the salient features of the budget announcements, and look at the impact they might have on the ground. The attempt is to examine the possible influences on the actual working conditions in the North Eastern states as well as the symbolic and concrete gestures expected to have tangible influence on the ground.

This is not from the point of view of an economist, and does not aim to discuss whether specialized allocations for certain regions are justified or not. This is an attempt to analyze the budgetary promises and allocations from the point of view of the region.

One of the key positives of Mr. Arun Jaitley’s budget speech has been the budgetary allocations and estimates of key infrastructural fields like roadways and railways. He has identified the loopholes of implementation of many railway projects in the region, and has allocated an additional Rs. 1000 crores over the interim budget presented by Chidambaram.

Many key railway line conversion projects in Assam are still not complete, and many projects of building new lines have also not moved at a fast pace. Apart from the impressive budgetary allocation, a bureaucracy with confidence to move forward along with a decisive government, are expected to ensure that these schemes make a tangible influence on the ground.

A sum of Rs. 3000 crores out of the total Rs. 37, 880 crores have been allocated for Highways, which is another important step. Development of good roadways connecting important cities and trade centers of North East is the primary necessity as far as the roadmap of industrial and commercial recovery of the region is concerned. The target of building 8500 kilometers of roads in one financial year, that is more than 23 kilometers of roads daily is an impressive one, and seems commensurate with the allocation.

Security loopholes are also a major concern in the construction of certain stretches of highways. Security reasons have halted the speed of construction of highways in different regions within North East and slowed down the overall progress. A coordinated effort with the Home Ministry to identify high risk zones might just prove effective.

In one of his key 100 crore schemes, Mr. Jaitley mentions the development of organic farming in North Eastern region. While this seems too meagre an amount, some of the keys to starting such an exercise would be extensive study of the regions within the misunderstood monolith called North East that are conducive to such farming, and the potential crops that can be produced by such a process. Organic farming should also be linked to incentives to small and medium sized agro based industries to operate out of the region.

There should be a policy where as a break from the Nehruvian socialism, citizens find a ground to create a wide network of business, using their indigenous skills and honing them to lay the foundations of local entrepreneurship. This also requires a total uphaul of the policy of industrial development of North East which has largely been misdirected, and not ambitious enough to make citizens capable enough to take the region out of the rut that it is in. The focus on skill development is evident, but the details of such vague allocations have to be worked out very meticulously.

Talking about Assam in particular, one of the biggest misses by Mr. Jaitley could have been the neglect of health of the silk industry of Assam, which was not covered in the special incentives for textiles in this Union Budget. This industry has been the backbone of whatever little industry is present in Assam, along with tea industry. This, in addition to the lack of additional focus on repetitive floods in Assam caused disappointment in various quarters.

The State Government is partially responsible for this kind of a disaster, because instead of engaging with the new government at Centre, it was preoccupied with the worst infighting its modern history. Given her seniority and experience as Water Resources Minister, a proactive prod from the Guwahati BJP MP also might have eased things out. However, it seems that she was not as proactive as expected.

There is a provision for setting up of a 24×7 channel for the North East, which is hardly going to have any impact, unless some professionalism prevails and undue regard for cliches is shunned by Prasar Bharti. The FINER has made some relevant points regarding establishment or encouragement of new institutions. However, the key actually might lie in establishing centers of research in local industries and possible industries that can be established, in already existing IITs and IIMs. Manipur’s Sports University is also a step which can be useful in providing a kind of education to talented youth which matches their talent and interests. However, the success of such a concept needs to be observed periodically.

This overall has been a mixed budget for North East, with many incentives that can build a base for the future development of the region. In addition, there have been certain misses which might have been ignored or just lost in the absence of details. There are multiple problems of the North East, and the budget does well to endeavor to tackle some of the basic hindrances, especially infrastructure. Given the previous budgets as a metric, this budget shines out because of the focus on infrastructure, especially transport.

However, the government still has a lot to do, and hopefully, it becomes wiser and identifies a streamlined policy as soon as possible for the development of this region. A new comprehensive and holistic policy which puts impetus on infrastructure, ideas and innovation can put North East back on track. Tits and bits of projects will only cause a minor change and will be equivalent to nominal populism. The future budgetary allocations can only be streamlined based on the broad visions of a far more comprehensive policy than the one which exists on paper.