North-Eastern Region: Harnessing Potential Of Secondary And Tertiary Sectors [Part-1]

Posted on December 4, 2012

By Dr. Amrit Patel:

The North Eastern region [NER] comprising country’s eight States [Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Tripura, and Sikkim] has abundant resources, fairly large unexplored and unexploited local markets and it is close to one of the world’s fastest growing South East Asian countries’ markets. Notwithstanding the literacy rate in the region is relatively high the youths lack in skills that is most required in the secondary and tertiary sectors of economy. Agricultural sector is witnessing slow growth due to land tenure system and predominance of jhuming [shifting cultivation], among others. In 2002-03, the share of primary sector was 33.53% whereas secondary sector accounted for 11.85% and tertiary sector 54.61% of the region’s Gross Domestic Product.

Non-agricultural labourers: The concentration of poor is the highest in Tripura (51.6%) followed by Assam (22.1%) and Sikkim (15.5%) and in other states it ranges from 1.5% to 8.9%. The poor among the self-employment in non-agriculture comprises the rural artisans, the handloom weavers, small traders and businessmen, service providers etc. Assam has the maximum concentration (19.5%) followed by Manipur (17.1%) and Tripura (13.2%). The percentages in other states range from 2.4% to 6.1%. Rural artisans and village craftsmen have inherited skill that is responsible for poor quality of products which mostly satisfy local demand and have low market value. Significant enhancement of skills accompanied by modern tools and equipment can improve quality of products and fetch high value.

While poor among agricultural labourers can be productively engaged in by training them and commercializing various economic activities connected with agriculture, viz. crop farming, horticulture, sericulture, organic farming, livestock farming, poultry breeding, pig rearing and fish farming, forestry, bamboo cultivation etc. non-agricultural labourers can be gainfully employed in by improving their inherited skill and providing modern tools and equipment that can enhance productivity of micro and small enterprises viz. handlooms, handicrafts, village and khadi industries, rural industries, small and medium sized agricultural processing industries using raw materials from agriculture and animal husbandry etc. Youths, through skill enhancement program suited to specific manufacturing industries and business enterprises, can find employment in small and medium industries.

The unskilled workers have extremely limited opportunities for wage-based employment, hardly 20 to 30 days in a year. Policy initiatives to expand the scope of the Mahatma Gandhi National Rural Employment Guarantee Scheme can certainly help large number of poor among agricultural and non-agricultural labourers seek employment in creating economic assets in villages and bridge the income gap. Besides, the National Rural Livelihood Mission [NRLM] program can be redesigned with components, viz.

– social empowerment
– economic empowerment
– partnership management and development
– project management.

The NRLM should aim at:
a. Creating sustainable community institutions around women-SHGs, youth groups of men and women and Community Development Groups
b. Building capacity of community institutions for self-governance, bottom-up planning, democratic functioning with transparency and accountability
c. Increasing economic and livelihood opportunities
d. Developing partnership of community institutions for natural resource management, micro-finance, market linkages, and sectoral economic services.

Small Scale Industries: The third census of SSI unit reveal that while the region employs 3.11% of country’s total persons in the SSI sector, region’s share in the output does not keep pace with that of the country in terms of the number of units and the number of persons employed. This is evident from the fact that while the region accounted for 3% of the total SSI units and around 3% of the total employment in the country it has produced goods and services equivalent to 1.78% only. Region is importing 80% of its consumption of plastic goods and products. Consumption is expected to rise from 15,000 TPA to over 60,000 TPA during the next decade. Region offers competitive advantages for plastic based industries to meet growing local demand for products. The region has potential for labour intensive and low capital investment industries. Small Scale units can be established utilizing natural resources such as agro-horticulture, minor forest produce, medicinal and aromatic plants and bamboo. It is reported that medicinal and aromatic plants in the region can support drug manufacturing related investment to the tune of Rs.600 to 800 crores. The estimated turnover of bamboo based industries is around Rs.10,000 crores. Nearly 40 small and medium size fruit and vegetable processing units can be promoted in the region on the basis of projected available produces. The NEC may consider instituting feasibility studies in consultation with professional institutions.

Regional Research Laboratory, Jorhat has so far evolved more than 50 cost effective technologies for commercializing the utilization of natural resources plentifully available in the region. RRL in coordination with NEC and State Governments can identify local entrepreneurs, motivate and train them to establish micro and small enterprises [MSEs] on pilot basis for two years in each State and modify learning lessons before replicating them throughout the region. Success of pilot MSEs can be ensured if a single window approach is conceptualized and operationalised. Under this approach, entrepreneurs should be facilitated to receive under one roof all the supplies and services, viz. training, services for preparing financially viable project, financial incentives/subsidy, bank credit [investment and working capital] at affordable interest rate and hassle-free, supply of standard quality and reasonably priced inputs of production on time, access to RRL technology, marketing support, among others. RRL will need to offer technical assistance and guidance to make project viable and successful as what RRL has researched and demonstrated. RRL should be equipped with facilities to document all medicinal and herbal plants of NE. Farmers particularly youths and women can be trained and financially incentivized to raise medicinal and herbal plants scientifically that entrepreneurs can process to produce drugs for domestic and international markets.

Job oriented skill: Wide spread poverty in the region is, among others, attributed to people deprived of knowledge and skill-based education and training. Although, the region relatively fares well in literacy, it significantly lacks in skill required to specific jobs available in the modern market. In the process, lack of appropriate skill results in low output and inferior quality of goods and services. State-wise identified activities that need specific job oriented skills include
– Arunachal Pradesh: Fruit and medicinal and aromatic plant processing
– Assam: Textile and sericulture & handloom
– Manipur: Fruit processing and handloom
– Meghalaya: Ginger processing and strawberry cultivation
– Mizoram: Fruit processing and handloom bamboo based units
– Nagaland: Agro industries and cane and bamboo based units
– Sikkim: Large cardamom and orchid culture
– Tripura: Rubber production and cane and bamboo based handicrafts.

It is necessary to:
a. Develop one Growth Centre for establishing small and micro enterprises based on the identified activities in each State by 2015 in the first phase and two more in each State by 2020 in the second phase
b. Impart job-oriented skills to youths and women in particular in respect of these activities
c. Accelerating the process of establishing in partnership with public sector banks the Rural Self-Employment Training Institute [RSETI] one in each district in the region to provide skill development training of youths
d. Train the youths at the Financial Literacy and Credit Counselling Centres established by the banks in each district
e. To make the existing curriculum of Industrial Training Institutes more job oriented fitting to the present day needs.

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