Introduction:
The present state of industrial development in NER is not up to the mark. Although the pace of industrialisation in NER originated during the British period with the growth of the tea and petroleum industry, the region could not attain the required progress in its industrial path even after completing more than five decades of economic planning. The economy of NER depends too much on agriculture. Despite having a rich potential for developing different types of resource-based industries, the region could not achieve much diversification in the industrial base, leading to restriction of its industrial activities, mostly into tea and petroleum. The industrial sector in the region had been centralized around some particular sectors like tea, petroleum, coal, jute and forests.
Importance of Industries in North East India:
The industries in NER can be broadly classified into – Organised and Unorganised industries. The organised industries include tea, petroleum, paper, cement, plywood, coal, jute, sugar, etc. The unorganized industries include the small and cottage industries, khadi and village industries, etc. Both organised and unorganised industries are playing an important role in the economy of the region. Tea and petroleum industries are the two important organised industries that have played an important role in sustaining the region's economic development process. Moreover, the other organised industries, along with unorganised industries like various small and cottage industries and the khadi and village industries, also play a vital role, especially in the region's rural economy. NER still possesses a huge volume of various types of mineral, forest and agro-based resources, which remained mostly unutilized. The utilisation of a huge volume of natural resources has become possible with the development of these various types of organised and unorganised industries in different states of NER. The development of organised and unorganised industries can play an important role in increasing job opportunities for the region's huge population. Agro-based industries and the unorganised industries being labour intensive are providing a huge number of employment opportunities in the region. The tea industry alone provides direct employment to more than 5 lakhs of persons daily. Organised and unorganised industries are also contributing a good portion of state income. Besides, organised industries like the tea industry of Assam contribute more than 55% of the country’s total sales abroad. The development of various organised and unorganised industries will help create an industrial climate in the region. The expansion of the tea industry in Assam has led to the growth of many small industries, namely industries producing tea machinery and implements, the plywood industry, etc.
Causes of Industrial Backwardness in North East India:
NER is lagging behind other regions regarding industrial development. This is due to the absence of large investments in industry and the region’s geographical isolation. Moreover, the volume of private investment in the region is meagre due to the heavy risk involved in the investment. These risks are both natural risks arising through natural calamities and political risks. The following are some of the main reasons behind industrial backwardness in NER:
1. The region is experiencing an abysmal rate of capital formation. As a result, the volume and rate of saving in NER are very poor.
2. Shyness of capital is another reason behind the slow rate of industrialisation in the region. Investors, whether from within or outside the region, are unwilling to invest their capital in NER.
3. The economic and basic infrastructural facilities, including power, transport and communication facilities, etc., are not yet sufficiently developed in the region. Without a sound infrastructural base, the region cannot develop various industries based on its natural endowments.
4. There is a lack of entrepreneurial motivation on the part of the region's local people. Local initiatives and enterprises are lagging behind the requirement necessary for the successful industrialisation of the region.
5. Due to various socio-political reasons, the law and order situation in the region is not always smooth; rather, it is often disturbed. Thus, the region's industrial development has suffered due to a lack of suitable law and order situations.
6. Credit facilities in the region are not easy. The problem is more complicated, particularly for the small and medium scale industries. Banks and other financial institutions in the region are not offering helping hands towards establishing small and medium scale industrial projects by offering credit on easy terms.
Measures to Promote Industrial Development in North East India:
Both central and state government has taken several measures to bring about industrial development in the region. The central government and state government have introduced several industrial policies to achieve industrial development in the region. These different policies are aimed to provide effective thrust for expeditious promotion and growth of all industries to create a strong industrial base and employment opportunities in various directions. Steps are also being taken to develop infrastructural facilities adequately, which will pave the way for industrial development in the region. The ongoing process of economic reforms undertaken by the government has also brightened the prospect of developing small, medium and large scale industries considering the huge development potential of the region. The establishment of North-Eastern Finance Corporation Ltd has also widened the scope of industrial development under economic reforms. Thus it is expected that a good number of large scale and medium scale industrial projects may be developed in NER in the near future, provided a suitable investment-friendly climate is created in the region. This requires active support from the central and state governments and the active participation of the region's local people.
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