Realising the Vision: The New Development Strategy

The challenge of accelerating development in the North Eastern Region to realise the Vision is formidable, and the road to peace and prosperity is long and arduous. The people’s vision requires a participatory development strategy. The High-Level Commission appointed by the Prime Minister in its report submitted in 1997 (India, 1997) has stated that there are four basic deficits confronting the North East and these are:

 A basic needs deficit;

 An infrastructure deficit;

 A resource deficit; and

 A two-way deficit of understanding with the rest of the country.

 To this should be added the governance deficit.

Overcoming these deficits will call for a paradigm shift in development strategy, supplemented by reforms in policies and institutions, including capacity building and strengthening governance.

(a). Components of the Development Strategy

Inclusive development in the region requires participatory governance and planning, which calls for maximisation of self-governance. This requires the creation and activation of governance institutions right from the village level upward. There is a need for a complete shift in the

development strategy and the planning process towards designing and implementing people-centric programmes based on harnessing the natural resources of the region. Only such a strategy can ensure inclusive development, help alleviate poverty and ensure a reasonable standard of living for every family in the region. Participatory development requires capacity development of people as well as institutions, and here, education and skill development will be a cornerstone of the vision.

Another important element of the strategy will be the creation of an enabling environment for market-based development, the most important component of which will be the establishment of peace, law and order and an institutional framework for ensuring property rights. Equally important is the need to provide state-of-the-art infrastructure, especially connectivity both within the region and with the rest of the world, to open up markets and increase mobility. The fortunes of the people of the region are inextricably intertwined with those of the people of Bangladesh, and there is much to be gained by removing trade barriers to enable access to seaports and inland waterways. Many of the problems of the region stem from weak governance, which has contributed to the rent-seeking, ‘easy-money’ culture, and created a law and order situation which has deterred investment.

The six components of the strategy are:

I. Empowerment of people by maximising self-governance and participatory development through grass-roots planning. Decentralized governance from the village level onward, built with maximum participation of the people should ensure people’s role in decision making and help create a responsive system. Grassroot plans, prepared and implemented from the village and ward levels and consolidated at the district level should help in the provision of public services according to the needs of people and the building of infrastructure to harness the resources of the region for people’s benefit. Providing a secure and responsive environment is necessary for creating an economic climate for the development of the region which, apart from people’s participation in planning, involves creating a secure climate for investment including protecting investors’ property rights and ensuring a corruption-free administration. This would call for making the Panchayats effective governance institutions. However, the provisions of the Sixth Schedule of the Constitution apply to significant portions of hilly areas and here it is important to activate village development councils and undertake district planning exercises beginning from the villages. The State of Nagaland comes within the purview of Article 371-A of the Constitution and here planning should take cognisance of the prevailing system of communitization.

II. Creation of development opportunities for a majority of the people living in villages through rural development initiatives. This calls for a rise in agricultural productivity through an expansion in the area under cultivation and increase in crop intensity. In hilly areas, it is important to expand horticulture, floriculture, plantation crops and organic farming. An expansion in agricultural extension and the creation of cold storages and market infrastructure are necessary to link markets to agricultural producing areas in the region.

Even with improvements in agriculture, it would be difficult to provide productive employment to over 80 per cent of the population residing in rural areas of the region and therefore, expansion of non-farm economic activities in the rural areas is extremely important.

III. Developing sectors with comparative advantage so as to utilise the resources of the region productively for the benefit and welfare of the people. In particular, the focus on agro-processing industries and industries based on resources of the region are extremely important. Similarly, in the services sector, there is considerable potential for expanding tourism including high-value tourism such as hill and adventure tourism. Exploitation of the vast power generation potential could, in the short run, help to augment revenues and in the medium and long term could create cost advantages for making investments in manufacturing units.

IV. Capacity development of people and institutions is an extremely important component of the strategy. Human development increases capabilities and with it enhances political and economic freedoms of the people. Creating state-of-the-art hospitals and higher educational institutions in the region could also attract people from neighbouring countries to avail the benefits, besides improving education and health security to the people of the region. It is also important to develop people’s capacities to equip them to participate productively in economic activities. Capacity building of institutions should address both government and market institutions. Responsive governance and planning from below require significant augmentation of capacity. Similarly, large parts of the region are marked by severe market imperfections and non-existence of markets altogether. Considerable efforts are needed to create markets and improve them.

V. Creating a hospitable investment climate is equally important. An enabling environment for private investment in the region would require significant public investment to create state-of-the-art infrastructure, especially connectivity both within the region and with the rest of the country, translation of the Look East Policy to promote economic relationships with East Asian and Southeast Asian economies and beyond, and ensuring proactive governance. Augmentation of the transport and communication networks and ensuring adequate and stable power supply will improve the quality of people’s lives, and attract the private investment needed for development. The fortunes of the people of the region are inextricably intertwined with those of their neighbours, and there is much to be gained by removing trade barriers with the neighbouring countries to enable access to seaports and inland waterways.

VI. Realising the vision will require significant investment by both public and private sectors.

In the initial years, much of the investment required for strengthening physical and social infrastructure will have to come from governments—both the Centre and States, though with the passage of time and progress it may be possible to forge public-private partnerships.

Ensuring adequate resources for public investment in infrastructure, implementing a framework for private participation in augmenting infrastructure and creating an enabling environment for the flow of private investments to harness the physical resources of the region for the welfare of the people are issues that need to be addressed on a priority basis.

It is also important to ensure—for reasons of both efficiency and accountability—that States in the region do not depend entirely on outside capital, but also generate resources from their own tax and non-tax sources.

Implementation of the six components of the strategy will not be easy or straightforward, nor are these elements independent of each other. Their interdependence implies that they have to be calibrated simultaneously. Given the large number of stakeholders, the variety of groups demanding various concessions, and the international dimension mired in diplomatic tangles, various issues need to be addressed delicately, using both the carrot and the stick. The details of the five-fold strategy are spelt out in Volume II. In what follows, some essential elements of the strategy are laid out.

(b). Empowering people through inclusive governance

Establishing peace, security and responsive governance are essential prerequisites for development. An integral part of a vision of development is of peace and harmony, and free from violent confrontations.⁴ Armed conflict has taken a heavy toll on economic progress, goodwill and happiness in the region. Governance is weak and there are widespread leakages—of revenues that should have accrued to the public exchequer, of expenditures on various development schemes due to rent-seeking of various kinds, and of large amounts of funds through rigging of contracts, according to the NIPFP report. It is a fact that armed conflict, going back more than five decades,

‘has dampened private investment in potentially productive sectors’. The NIPFP adds, ‘Nor have initiatives by the Central and State Governments to accelerate development through various plans had the desired results. The system is full of leakages, perverse incentives towards economically productive initiatives and rent-seeking behaviour. In our view, added to poor governance, they create a situation of extreme tension and pressure, especially on the weak and vulnerable.’

It is therefore significant that ‘Inclusive Growth’ is both the title and the overarching goal of the Eleventh Five Year Plan. The key component of the ‘strategy of inclusive growth’ must be inclusive governance as the means of empowering the disadvantaged with the aim of enabling them to overcome their poverty. It is the effective empowerment of the disadvantaged through the effective devolution of Functions, Finances and Functionaries to representative institutions of local self-government such as Panchayats (where part IX of the Constitution applies) and Village Councils, Village Development Boards and similar such institutions elsewhere, on the principle of subsidiarity, which states that anything which can be done at a lower level should be done at that very level. This will pave the way to the effective implementation of other measures of inclusive growth such as:

 Stepping up investment in rural areas, in rural infrastructure and agriculture;

 Increased credit availability, particularly to farmers and others, and offering them remunerative prices for their crops;

 Increased rural employment, including the provision of a unique social safety net in the shape of the National Rural Employment Guarantee Programme;

4Excerpts from North Eastern Region Vision 2020 Volume I Peace, Progress and Prosperity in the North Eastern Region: Vision 2020, National Institute for Public Finance and Policy, New Delhi, 2007, pg 8, 17

 Increased public spending on education and health care, including strengthening the mid-day meal programme and offering scholarships to the needy;

 Investment in urban renewal, improving the quality of life for the urban poor;

 Empowering the Scheduled Castes, Scheduled Tribes, Other Backward Classes, minorities, women and children socially, economically and educationally; and

 Ensuring that, through public investment, the growth process spreads to backward regions and districts of our country.⁵

 Ensuring that, through public investment, the growth process spreads to backward regions and districts of the North Eastern Region.

 Three-fold increase in annual allocations to rural development and welfare, and the launching of new schemes like NREGA, BRGF and RTI require involvement and supervision of village communities and their elected representatives

 It is important that Panchayat Raj be brought centre-stage as the principal governance reform to reinforce economic reform in such a manner as to secure inclusive growth.

 Gram Sabhas to be made functional and all elected representatives at the grass-roots level involved to enable equitable access to rural development and welfare schemes.

 In keeping with the federal structure of India, the North Eastern States should be given flexibility to articulate policies for optimizing the use of natural and human resources within their states, without of course losing touch with the greater national imperatives.

 Activating and strengthening institutions of local self government calls for conformity to certain broad and generally well-accepted principles of institutional design.

· Village councils or Dorbars should be elected every five years and mandatory representation for women ensured as in the case of PRIs.

 For effective local self-government, major governance reforms are required as much in Panchayati Raj areas in the North East Region as in exempted areas. Governance needs to be strengthened by (a) laying out clear policy objectives (b) concurrent audit (c) post completion audit in all of which communities themselves play a role.

 A Review and Monitoring Mechanism to ensure transparency and time-bound implementation of all projects above Rs. 5 crore, with representation from the concerned government line department, independent technical and audit specialists as well as from the NGO sector (working in the specific field) and local government (Panchayat/Council etc.)

 Activity Maps to be prepared or activated to clearly delineate the attribution of activities comprised within each devolved function to the appropriate tier of the three-tier Panchayati Raj system so that there is no ambiguity at any level about the tasks entrusted to them nor any overlapping of duties between different tiers.

5Based on the foreword by the Prime Minister, Dr. Manmohan Singh, in Report to the People 2004 - 2007

 States with Panchayati Raj areas to clearly identify budgetary line items that ought to go to the Panchayats and separately earmark them through a Panchayat sector window in the budgets of the relevant State line departments to ensure the flow of funds for undertaking devolved activities to the Panchayats.

 By 2020 participative planning from the grassroots level upwards to culminate in the preparation of a district plan as a key step in the strengthening of Panchayats to be institutionalized as mandated in the Constitution. District Planning Committees (DPCs) are required to be elected to the extent of 80 per cent of the membership by and from amongst the elected members of the district level Panchayat (Zilla Parishad) and the Municipalities within a district. Most States falling under Part IX of the Constitution have now constituted DPCs, States like Nagaland, Mizoram and Meghalaya which have not begun this exercise need to expedite the process.

 Engagement of all stakeholders, particularly of historically discriminated and marginalized sections, including women, in participatory planning and implementation. This has to be done to assess the resources in the villages and towns, identify and priorities the needs and requirements and monitoring and evaluation of various projects, schemes and programmes.

 Devolution of adequate funds in an untied manner patterned on activity mapping of each level of governance. State Governments will need to undertake a detailed analysis of their annual budgets, both non-plan and plan, to separate allocations to be transferred to Panchayats in accordance with the activities devolved to them. The funds available under various schemes can be allotted to the projects selected and prioritized by the people.

 Streamlining and consolidation of schemes to ensure flexibility and a measure of autonomy.

This has to be done mainly at the State and Central levels.

 Assignment of significant revenue raising powers and building capacity of local governments to raise revenues from the sources assigned to them.

 Attention must be paid to the democratization of the functions of TIs (Traditional Institutions), especially with gender representation. These include systems such as the Syiemships, Dorbars and Rangbah Shnong of the Khasi Hills, the Dolois of the Jaintia Hills and the Nokmas of the Garo Hills of Meghalaya as well as other groups such as the Kuki-Impis, various clubs, associations and peoples’ organizations of Manipur, Nagaland and other States. TIs have varying levels of influence in different States although ally and their demand for such recognition may be considered if these institutions are democratized and representative of all groups, instead of being exclusive entities. The IFAD model described below as well as the Naga communitization process (for details see Volume II, Chapter One, Inclusive Growth through Inclusive Governance) are possible models to bring these into a greater democratic space, which protects their traditions but is respectful to other groups as well.

 The Autonomous Councils will have to become the harbingers of economic transformation and not merely be legislative, regulatory and administrative agencies. To effectively assume a central role in local development, they will need to adopt a more participatory approach.

Such a transition will need to emerge from within, as tribal communities themselves proceed to adapt their time-honoured traditional systems to the needs of inclusive participation and development. It may be desirable to consider the approach adopted in the Fifth Schedule areas, where democratic elections based on adult franchise and reservations to women in elected seats and leadership positions have been applied without reducing the importance of tribal customs and traditions.

 Para 4 of the Sixth Schedule makes a provision for village councils to be established by District or Regional Councils mainly for the dispensation of justice in disputes that involve two or more tribal persons. Examples of initiatives in communitization at the village level, aimed at harmonizing the ‘village community with the traditional tribal body’ which have shown significant success can be replicable models. The most celebrated example is Nagaland’s experience of communitization for effective public service delivery. Other examples include the NEC sponsored ‘North Eastern Community Resource Management Project’ (NERCORMP) in Assam, Manipur and Meghalaya involving the International Fund for Agricultural Development (IFAD). Examples drawn from the IFAD project have shown that unlike government schemes, the IFAD funded projects have not been afflicted by the malaise of extortion primarily because they are community-driven and people-owned. This vindicates the notion that many systems can co-exist if delivery mechanisms work.

 Meghalaya was granted Sixth Schedule status when it was a part of the composite State of Assam, mainly as a safeguard for customary laws and practices of tribal minorities. Now that the State is ruled by a tribal majority, there may be merit in examining whether the ADCs should continue in their present form. The continuance of an institution which is virtually a stand-alone body with few linkages either with the State Government or with village-based institutions merits reconsideration.