About Us  :  Online Enquiry


Chapter # 36. The North-East Region


The North-East Region (NER) should:

  • Have adequate road, rail and air connectivity, waterways, internet connectivity and financial inclusion. This will form the platform upon which suitable interventions for all sectors where the North-East Region has a comparative advantage (for e.g., tourism, hydropower generation, handicrafts, organic agriculture, etc.) can be effectively implemented.
  • By 2022-23, the region should also be developed for enhanced trade, particularly for the export of products made in the NER, to the Association of Southeast Asian Nations (ASEAN) region and other neighbouring countries (Bangladesh, Bhutan and Nepal).

Current Situation

North-East Region- The NER consists of eight states, namely Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim and Tripura. The region accounts for 3.78 per cent of India’s population and covers 7.98 per cent of its total geographical area. Its contribution to national GDP is 2.5 per cent.1 the per capita net state domestic product (NSDP) for the year 2015-16 (base year 2011-12) for the North-Eastern states.

The figure clearly illustrates the disparity in development within the region. While five out of the eight states have a per capita income below the national average, Sikkim enjoys a per capita income level that is 2.5 times the national average.

A comparison of the per capita incomes in these states in 2015-16 and 2004-05 indicates that the ranking within the NER has also changed over the years.

Arunachal Pradesh and Sikkim have shown the most significant improvement in per capita incomes. Per capita income in Arunachal Pradesh, which was below the national average in 2004-05, rose to 1.3 times the national average in 2015-16. Sikkim’s per capita income, which was on par with the national average, increased to 2.5 times the national average in 2015-16.

States like Nagaland and Tripura, which were on par with the national average in 2004-05, have fallen behind. The heterogeneity among the NE states is noteworthy and calls for a state specific development approach.

The North-East states have performed well in different aspects of human development. For e.g. according to the Sikkim Human Development Report 2014,3 Sikkim increased its social sector spending from 23 per cent of total expenditure in 2001 to 37 per cent in 2012-13.

The female labour force participation rate in Sikkim is 40 per cent compared to the national average of 26 per cent. Furthermore, according to the National Family Health Survey – 4,4 all states in the North-East Region except Assam have a lower mortality rate for under-fives than the national average. Lastly, Sikkim was recently declared India’s first fully organic state.

This area is strategically important for India both for its geographical location and the resources found there. Some of the key strengths of the North-East Region are given below:

  • North-East Region shares about 5,437 km of international boundaries with Bangladesh, Bhutan, China, Myanmar and Nepal.5
  • Total coal reserves in the NER is estimated at 1,597 million tonnes.6 These were exported in the past.
  • Limestone deposits are found extensively throughout the North-East Region .
  • Petroleum, natural gas and uranium are other natural resources to be found in the North-East Region .
  • According to the India State of Forest Report 2017,7 some of the North-Eastern states have the highest forest covers in the country. The total forest cover in the region is 1,71,306 sq km, which is 65.3 per cent of its geographical area, which is thrice the national average of 21.5 per cent.
  • Hydropower potential for the NER has been estimated at 58,971 MW,8 which is 40 per cent of India’s total hydropower potential. However, only 2.1 per cent of this vast potential of clean energy has been utilized.

Despite the region’s strengths and the government’s focus on developing the NER, a lot of challenges remain. These are highlighted below.


North-East Region -While the NER has all the ingredients needed to become prosperous, it could not achieve the expected level of economic growth mainly due to inadequate road, rail and air connectivity. A lot of its resources remain untapped. For e.g.

  • Despite abundant rainfall, the irrigation coverage in this region is less than the national average of 46.35 per cent.
  • The NER’s natural scenic beauty and distinct ethnic heritage offers great attractions for mountaineering, trekking and other tourist activities. However, the tourism industry remains underdeveloped.

The major constraints hampering economic growth in the NER are:

  • Inadequate infrastructure in terms of limited air, rail and road connectivity.
  • Under-utilization of available natural resources.
  • Safety and security related issues.
  • Difficulties in transfer of land on lease to entrepreneurs.

Way Forward

  • A targeted strategy needs to be devised, in consultation with representatives from all eight NE states, to disseminate information on the various central government schemes that are already in place for the development of the NER.
  • All central ministries and departments should consider sharing their targets and vision for the NER and spell out modalities for spending the stipulated 10 per cent of their budget for the NER. The Ministry of Finance should formally acknowledge the availability of funds under the NLCPR.
  • Each state within the NER may be encouraged to draw up their development blueprint in consultation with the NITI Aayog and the North-East Council (NEC).
  • As noted earlier in this chapter, different states in the NER have achieved success in different aspects of human development. The Ministry of Development of North-Eastern Region (MDoNER) should document such best practices and disseminate its findings within the region so that the learning can be implemented suitably in other states.
  • The NER Vision 20209 noted, “responsive governance and planning from below require significant augmentation of capacity”. It is recommended that mechanisms like project management units be considered to augment the capacities of state governments.
  • To address the issue of inadequate connectivity in the NER, the following measures need to be taken:
  • As a general point, transit treaties for the NER and its neighbouring countries need to be put in place. India could consider initiating a regional multi-modal transit agreement between the NER and the four neighbouring countries.
  • It is necessary to monitor closely on-going transport projects with focus on projects that boost inter-regional connectivity and help transform the region into a major trade hub with South East Asia. It is recom-mended that a high-level committee be set up in 2018 (possibly as a sub-committee under the “NITI Forum for North-East”) to focus on expediting such projects, includ-ing the Kaladan Multi-Modal Transit Trans-port Project, the India-Myanmar-Thailand Trilateral Highway, the 5-km road stretch between the border city of Zokhawthar in Mizoram and Rih in Myanmar and the rail link from Imphal to Moreh and further from Moreh to Kalay (in Myanmar)
  • One of the projects that will boost connectivity within India and significantly benefit the NER is the Agartala-Akhaura rail project. This project, 15 km in length, has already been sanctioned and will reduce the distance between Kolkata and Agartala by 1,200 km.10 The Ministry of Railways needs to fast track the project.
  • UDAN III may be launched. Its international component could connect Guwahati to ASEAN capitals.
  • The viability gap funding (VGF) required for UDAN III could come from the Government of Assam or could be met from the NLCPR. It is envisaged that VGF requirements would not be large and demand will rise in response to improved air connectivity.
  • The Government of India and the NER should work together to create an environment to attract more private investment into the region. On March 21, 2018, the Union Cabinet approved the North-East Industrial Development Scheme (NEIDS) with a project outlay of INR 3,000 crore up to March 2020, to incentivize new industrial units in manufacturing and services sector in the region.11 Indicators of development in the NER should be monitored closely and taken up in mission mode.
  • A few other measures that could also be considered over the next few years are:
  • Set up industrial estates/parks in the region.
  • Focus on sectors such as organic agriculture, tourism, renewable energy, etc, in which the NER has competitive advantage.
  • Accelerate skill development as suitable for the region.
  • One of the most pressing issues hampering the progress of hydropower projects in the region is rehabilitation and resettlement (R&R). Attractive R&R packages should be devised for hydropower projects in the region.
  • NER is endowed with natural beauty, rich flora and fauna and a unique culture. Tourism, particularly eco-tourism and adventure tourism, should be promoted by identifying suitable sites and creating supporting infrastructure at these sites through the PPP mode.
  • Water management is a major issue in the NER. Early completion of ongoing irrigation projects, particularly Borolia, Dhansiri and Champavati in Assam, and Thoubal and Dolaithabi Barrage in Manipur under the Accelerated Irrigation Benefits Programme, should be accorded high priority. It is expected that the establishment of the North East Water Management Authority will help address the issue.

NITI AYOG - New India @ 75