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Economic sluggishness in Assam: Urgency of more pragmatism
 

PART- I

By Satyajit Kumar Sharmah Thakur

S ince long, Assam has been finding hard to get rid of a place amongst the industrially backward states in the sub-continent. Some of my points here in this article may be recapitulation of my earlier publications since due to lack of proper actions, snowballing of the problems cannot be ruled out. Instead of considering that a variety of raw materials for industrialization are not available in Assam, I am inclined to assert that so many raw materials are available in Assam out of which  many are not readily available in some  industrially developed states of India. In a state like Gujarat, an environment for development of industries has been created, it has not fallen from the heaven; rather, there, the State government’s support has been the most remarkable feature. This of course, is only an example out of the many industrially developed states and union territories in India that I have seen. In India, in most of the states and union territories in economic progress, industrialization and agriculture have been taking the most pivotal roles for quite a long time. While in the Punjab, I saw substantial use of mechanical devices in the agricultural sector- right from ploughing  till  packaging of the output,  Assam is at a great distance away. In the Punjab I could hardly see a barren piece of land within the entire period of twelve months in a year; but in Assam in addition to the cultivation of rice, generally for no other earning purposes the same lands are used. How much serious we really are about such pathetic conditions of low productions and productivities on one hand and keeping agricultural lands unutilized on the other is a matter of concern so far as agriculture is concerned. Resultantly, dependence of the state on other states for a number of agricultural produces is the reality to the state’s economy.  It is high time that the agriculture sector rise to the occasion without further lapse of time. Let us not forget that first we must satisfy our own demand and only thereafter we can  think about exporting the residuary quantities. Thereafter, from the point of replacing imports with our own agricultural output the trend of contributing to our state’s economy will start ascending.  The day has come when every state and union territory has to generate substantially for its own developmental activities besides ensuring economic health of the people. It is time that we think seriously about utilizing paddy fields for more than one cultivation. Can we not think of fruitful utilization of the fields after the harvesting season of rice for cultivation of maize, potatoes and pulses as well as a good harvest of mustard?    

In the prevailing circumstances, for the state’s industrialization drive by the youths, I fully subscribe to the expressed view of Mr. Sundar Pichai, CEO Google :“Small and medium businesses are the backbone of the Indian economy and are powering the next wave of the country’s growth”, in his address at his alma mater, IIT Kharagpur.

The potentiality that I find in the fruit-based industries is also quite overwhelming. Locally grown fruits like pineapple, jackfruit, mango, litchi, banana and guava etc. can be commercially moulded for industrialization. Some of these fruits are not only abundant in production, but their quality is also very high. For the very reason that they are not used as inputs for industrial production, not only do the fruit-growers do not get proper sale proceeds but due to lack of provision of cold storage, substantial quantities of these fruits perish.

Another agricultural product is that of vegetables. Vegetables are grown in Assam without much foresight except for day-to-day consumption. Most of the vegetables can open up an avenue for the pickle industry in Assam. Not only will that be sufficient for consumption within the state- such an industry can be commercially lucrative even for export from the state. For want of such utilization, at the peak of the season, farmers are compelled to sell their produces even at throw-away prices.

The state of Assam has a great deal of barren lands. At the same time, Assam imports a lot of different varieties of fish from other states: the demand for which is ever on the rise. I am of the opinion that such lands should be utilized for fisheries. That, on one hand will help retain our money inside the state and on the other hand will pave the way for employment substantially. Poultry farming is another fertile area in view of growing local demands. There should be all out efforts not only to cater to the local demands but also to make room for exports. These a few, are only for instance.

Though Tourism can contribute to the state’s exchequer substantially, yet the present condition of it is very maladroit for attracting tourists in bulk. The Almighty has been quite generous in giving beauties in the form of floras and faunas to this region. Assam is famous for the one-horned rhino; the Royal Bengal tiger being another. Several other animals in the various forests in Assam are also very scarce in the world. However, can anybody contradict the increased frequency of the news of killing of the world-famous rhino? What is the present Government doing for protecting and maintaining them? In such circumstances, very often the Forest Minister of the state is found in a state of helplessness. I am too sure unless expeditious steps are taken in that regard, in the days to come, attraction of tourists to those sanctuaries will go down drastically.  (To be continued)




The floras of Assam are also capable of attracting people. Ancient temples of the state can also become a great tourist attraction, but not in the existing dilapidated conditions. It is high time the Government takes necessary steps for their improvement and upkeep so as to attract tourists which will not only contribute to the state’s exchequer substantially but give an avenue for employment on one hand and contribute to hotel and transport business on the other hand. While sectors like tourism can only contribute marginally and hence cannot be a substantial revenue earning avenue in the present position and status, the action of the state government in attracting tourists, is far from being satisfactory. I do not know why on priority basis with no colossal amount of capital infusion, the sector cannot be made a plum sector for contribution to the economic health of the state.



All said and done, industrial development no doubt, is the most focal point for economic progress of a state thus contributing to the country’s economic progress. While we speak about industrial development in the state, problems are a plenty-right from insufficient supply of raw materials up to problems of power supply and capital inadequacy, etc. resulting in lack of industrialization and losses sustained by the industries in place.



One glaring example will make it clear. It is quite commonplace that at regular intervals the Assam Power Distribution Company Limited makes  upward revision of tariff rates as if that is the only answer to do away with losses. What action has it taken for arresting power theft? Has it made proper analysis of manpower requirement? If the company has made it, can the company tell convincingly that it has no surplus manpower?  How much is the value of its stores it holds like extra fat? Has the co. responsible for  research and development come out with any pragmatic solution for revamping the sick units and opening viable units for increasing power production?  If those are the factors stumbling across industrial development in Assam, that will create a lot of other questions like – how long will we be living with such problems?, what actions have the respective parties taken to get rid of the problems and, are we having any time bound policies to tackle those problems which can be sorted out? Other reasons of the company’s colossal loss year after year are not the honest users of electricity. While there is any decision aiming at generating more revenue, instead of doing away with the loopholes responsible for such colossal losses, why the axe falls on those honest consumers? Peoples’ objection to such a decision of regular electricity tariff hikes also go to the deaf ears of the Government .Of course, the outcome of all those evils is harmonious- sluggishness of industrialization. However, is it that industrially developed states like Gujarat, Maharashtra, and the Punjab etc. are/were not having any problem in industrial development?  Problems one will find everywhere, only the nature and degrees are different: with some being on very sticky wickets for prediction such as government policies. What matters most is the outlook- including seriousness, sincerity, proper diagnosis, thorough study of practical and viability aspects and far-sightedness   of one and all concerned and involved. To take the most conducive and pragmatic decision amidst the uncertain variables is the greatest challenge to-day. In this context, the Nobel Prize  winning ‘Contract Theory’ in Economics in 2016 may be most pertinently and relevantly referred to for tackling those challenges amidst uncertainty for viable conclusion since in essence ‘Contract Theory’ is about giving each party the right incentives or motivations to work effectively together.

                      Creation of industrial environment is the cornerstone of industrial development:  Assam’s position is far from being satisfactory.  All concerned must feel it indispensable that they must join hands together for industrial progress. While the workers must consider that they can subsist provided the industries can earn profit, the management must also consider that without the benevolence of the workers no industrial progress is possible. In most of the cases the decisions of the government is far from being pragmatic- such decisions seem to tilt more towards scoring political goals rather than aiming at industrial progress. PSUs in Assam should contribute more to the state’s economy. Recently, we have heard that a decision has been taken to revamp the Jagiroad Paper Mill.  Apparently, such a decision is very heartening for employment generation. If consideration of all the factors like cost of sales, quality of the product, and demand for that product etc.  has underlied  the decision  of revamping the paper mill, I have every reason to rejoice; but if the decision of  revamping the unit is bereft of such a consideration, then I derive out of my circumspection, not at all to be a supporter of such a decision. The underpinning reason being that there is every likelihood of surfacing of another similar condition as it is today, if not worse.  Moreso, the money to be injected for revamping  the mill is the tax-payers money. Has the government ever asked itself that if Gujarat can be a paradise for industries, why Assam cannot invite industrialists into Assam? Industrial progress means overall progress of industries in private, public and joint sectors with the role of cooperative sector also being imperative.  We are very much an expert in finding excuses. If a government comes out with a plea that it has been in power for even less than a year, the previous one resorts to the sarcastic excuse of stumbling across some circumstances which to it were absolutely unavoidable.  In my a few previous articles published through this esteemed daily, I expressed my opinion without ambiguity that financial condition of Assam could not be materialized without industrial progress.  Industrial growth cannot be at the expense of ecological balance. Endeavour of the Government for a long-term strategy of afforestation in compensation of deforestation, is also pathetically poor. Had the Government taken a proper afforestation policy ensuring proper ecological balance without any compromise, perhaps, the fate of wood-based industries would have been altogether different.  Have we ever asked what are the present positions of the erstwhile employees of  the wound-up/closed-down units like Assam Syntex Limited, Assam Spun Silk Limited, Spinning Mill at Boitamari, The Prag Bosimi Synthetcs Limited and APOL etc.? I can remember very clearly that for a few years since it started its commercial production, APOL had been doing very well, but, it could not sustain that momentum even though those at the helm of the affairs were making all strenuous efforts. True, some of the industrial units in Assam have been doing quite well for quite some time. But they are mainly the industries in the private sector: like Star cement, Dalmia Bharat Cements etc. being a few of that category. But their success can be attributed mainly to the factor that they know it very well that they will have to do all by themselves, and will not get support of the government like an industry in the public sector. If a private transport company can earn profit, what is the reason of colossal loss of the Assam State Transport Corporation? Through rationalization, in the all the areas of its internal management,  why can ASTC not think about increasing the number of routes as well as increasing  the frequency of plying vehicles in the lucrative routes?  Can I know from the concerned authority how much is the value of its obsolete stores  that have not yet been disposed of, if inventories with very short lead times are abundantly stored, and does it have proper manpower planning, development and control?  Can it think about more rationalized usage of premises, etc. These are out of so many austerity measures that have scope in contributing to the financial health of the concern and are also the common areas by and large applicable to all the industries for betterment of their financial health.  

          It is not that only the government has to play its role for the industrial progress in Assam. For creation of industrial culture: duties, responsibilities and accountability of all the concerned parties must run together. These duties, responsibilities and accountability of both the employers and the employees must be transparent and honest. While employers must consider that the employees are their most invaluable assets, the employees must also justify their earning keeping in their minds that the organizations paying them salaries are not charitable organizations, instead, they can pay salaries provided the employees contribute in a bigger way. They along with a solid internal management with capability to cope with any challenge and congenial government policies form the real basis for facing any challenge professionally.  The people at large are one of the most concerned parties in this gamut as they may be stake-holders in different forms- like tax-payers and equity share capital-holders, etc.                            

         I am basically a believer of pointing out my ideas that I consider as the solutions of the problems that I dwell on.  The existing situation arising out of demonetisation  and echo for cashless economy has thrown a bigger and more critical challenge to the state. With a very well-founded and feared probability of a downward trend of GDP: at least in the short term, the people are suffering from their purchasing capability. It will be wrong if in such a situation we do not weigh the blue collar workers properly as well as other daily-wage earners considering that a mammoth size of that populace is illiterate. It is not irrelevant to mention here that they are the worst hit section in the society out of the paucity of notes in the market. Though the objectives of demonetization drive are quite praiseworthy,

 for customizing the use of debit card, credit cards, etc. the efforts of the Central government has been found to be hasty and without doing adequate groundwork.

          In Assam like other states in India, at present the industries in the small and medium sectors are bound to suffer without exception. How long that will exist is also not within easy predictability. After suffering for such a period till a turn-around happens what will be the condition of those industries, is also far from being visualized. Therefore, under the circumstances, I would rather be of the opinion that such ventures which are not very much capital-intensive should be the option of the young entrepreneurs/start-ups.

           At present, while demonetization has added to the suffering of most of the private sector industries, some of the costs of these industries are bound to continue besides losing market for want of customers with cash. The scenario to me, is not congenial for digital payment with the pervading illiteracy in the society.  Consequent upon the high rate of illiteracy, reluctance is also there to accept that mode of payment so quickly. But we seem to have forgotten that even a single day’s loss of production and loss of consumers and continuation of that agony for more than one and half month with uncertainty of an early turnaround may play such a havoc, that in all fronts including profitability of the entrepreneurs, salaries of the employees, earnings of suppliers of the raw materials, etc., the resultant impact of the same in the economy with far reaching impact even in future cannot be ruled out.

          Earlier also, I lamented the lackluster implementation of the Government’s much-hyped policies for industrial growth. I even came out with some of the problems specifically with actions which ought-to-have-been taken for redressal of the problems. Here in Assam the unemployment scenario is very grim and is aggravating by the day. If we are not serious about that trend and remedial actions are not taken forthwith, and, instead, if only the political demagogue goes on, far reaching negative impact of that with much more pain day by day will be quite inevitable to the suffering of all concerned in the society, because, while on one hand where there is sluggishness in industrial progress, on the other hand the number of educated boys and girls is very much on the ascending trend. A much-talked-about GDP growth in the third quarter of the financial year 2016-2017 that has been pegged around 7% is a matter of doubt for me. Whereas some renowned economists are of the view that there will be marked improvement of that trend in the first quarter of the financial year 2017-2018, yet with the jolt faced by the economy consequent upon the declaration of the demonetization move, to me, such a respite that will show a U-turn in the quarter immediately subsequent to the third quarter of the financial year 2016-2017 is unlikely. This apprehension of mine has arisen after observing the impacts on personal consumptions and expenditures, investments, net exports and government expenditures which have shown decelerating trends. The observation that there has been considerable downsliding of personal consumption expenditures such as in durable goods, non-durable goods and services, instruments in private housing purchases/residential investments, business investment in non-residential structures, durable equipments and net exports (i.e. exports minus imports)  show how GDP has been adversely impacted. Some of the Government expenditures and the Government policies in view of them are indispensible under the prevailing circumstances. Their threadbare discussions encompassing all the factors within will show how deep are the sufferings in all those aspects and an early turnaround seems to be not in sight. Even though such predictions of GDP figures and effects of demonetization are on all India basis, Assam being one of the states, is likely to be equally affected if not in a more aggravating way.      

         While there are problems, there are always solutions. We are at a very precarious crossroad. Problems from different fronts will keep on coming if instead of ensuring very pragmatic solutions, the Government sweeps them under the carpet. The present Government should desist from making comparison with the earlier Governments for such economic sluggishness in the state because one of the reasons of voting them to power was to put an end to economic sluggishness. We would like to see the present government in action towards meeting the challenges before it forthwith in a vigorous way so as to respect the purposes of the people’s mandate.  Needless to mention, towards capital availability, the role of the government should be in right earnest.            

                                                                                                                                                      Satyajit Kumar Sharmah Thakur

                                                                                                                                                               Contact No.: 9435118089(M)


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Assam
 
Assam is a northeastern state of India with its capital at Dispur located in the city of Guwahati.
 
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