Northeast rising: Assam as India’s new growth engine

Siddharth Roy

(siddharth001.roy@gmail.com)

The Northeast in today's context is being termed as the new engine of development in India. In the past, although people knew about the northeastern states, especially Assam, but their true potential was never harnessed or given importance to. In the last year, the kind of measures that have been taken by the government to make the Northeast the economic powerhouse, soon enough, we will see the Northeast, especially Assam, indeed becoming the new engine of development.

Northeast's first semiconductor fabrication plant is being set up in Assam's Jagiroad by the Tata group with an investment of around Rs 27,000 crore. This initiative would provide employment to around 27,000 people, especially the job-seeking youth of the Northeast. Northeast supply chain and logistic infrastructure is being strengthened, and in the recent past, it has been announced that two new Amrit Bharat trains will be started and six Gati Shakti terminals will be introduced. Moreover, over 60 railway stations across the northeast will be upgraded, which will include transforming the Guwahati railway station into a state-of-the-art IT hub. Also, a new railway coach and repair manufacturing hub will be established in Bodoland. All these initiatives are in line with bolstering the connectivity and logistic support system of the northeast, especially Assam. In a recent speech, our Prime Minister Narendra Modi said that Assam will soon turn into a lucrative destination for start-ups and will become a leading manufacturing hub for the Northeast and India as a whole. A lot of industries are coming to Assam to invest in manufacturing units and start-ups. Various key MoUs were signed to make the Northeast, especially Assam, the growth engine of India. The Essar Group invested Rs 2,100 crore for setting up a renewable energy project. The Vedanta group will be investing Rs 50,000 crore for oil and gas exploration, surveillance, infrastructure, and sports investment. Adani Total Gas Limited will be investing around Rs 5,000 crore for city gas distribution, EV charging infrastructure, biomass and LNG for trucks and mining. Tata Power Company Limited will be investing around Rs 30,000 crore for establishing a 5000-MW renewable energy project, which will consist of solar, wind, and hydropower storage. Last but not least, Numaligarh Refinery Limited (NRL) will be investing Rs 10,711 crore for establishing a sulfur plant, a multi-modal terminal, LPG bottles, and green hydrogen. Recently, Infosys has launched its first technical centre in Assam, which is a brand-new 500-seat BPO facility. This initiative marks Assam's rise as a business outsourcing destination. Infosys earlier had opened BPO centres in Gurgaon, Noida, Bengaluru, etc., but had never invested in cities apart from tier-1 cities. So this huge investment by Infosys shows the growing importance of Assam and is a sign of decentralising India's tech ecosystem. Union minister Ashwini Vaishnaw highlighted the potential that the Northeast holds and said that the youth of Assam are already working and excelling in tier-1 cities like Bengaluru and Hyderabad, and this success inspires the investment in Assam's IT and electronics sector. He also called the Northeast region the land of Ashtalakshmi.

The importance of the Northeast, and especially Assam, is increasing day by day, and the central government also understands this fact. The recent budgetary allocation for the Northeast speaks volumes of its growing importance. The central government's allocation for the Northeast in the year 2013-14 was Rs 24,000 crore, and now, looking at the potential of the Northeast, especially Assam, the budgetary allocation has risen to Rs 1.25 lakh crore.

Assam is blessed with abundant natural resource wealth, most importantly, its oil and natural gas reserves. The Digboi refinery was established in the year 1901 and is Asia's first and the world's oldest operating refinery. Assam has 13% of India's total oil reserves and is a hub for companies like Oil India Limited, which has its headquarters in Duliajan; ONGC, which operates in Sivasagar and Nazira; and Numaligarh Refinery Limited, strategically expanding under India's Hydrocarbon Vision 2030 for the Northeast. Moreover, Assam has a huge potential for renewable energy and contributing to India's sustainable development goals. Solar parks are being set up in Kokrajhar, Udalguri and Cachar districts. Bio-ethanol plants using bamboo and agricultural waste are developed under a project by NRL in collaboration with Finnish partners. Also, various MOUs were signed with companies like Electron EV, which signals Assam's ambition in promoting electric mobility and green hydrogen space. Assam already has its Electric Vehicle Policy in place, targeting 25% EV registration by 2026.

Assam is uniquely positioned, as it has both traditional energy like oil and gas for industrial foundations as well as renewable energy potential like solar energy and biomass for sustainable future growth. Also, Assam has abundant water and forest resources to support eco-industries like agro-processing, sustainable packaging using bamboo and banana fibre, eco-tourism, and biodiversity-based businesses. Another advantage that Assam has compared to tier-1 cities is the affordable cost of living. The cost of living in Bengaluru is 31.5% higher than in Guwahati, and the rent prices in Bengaluru are 139% higher than in Guwahati, which makes Guwahati a very affordable city to reside in and build businesses in. For these reasons, the cost of operations for any business set up in Assam will be less than that of any other tier-1 city. Moreover, the Northeast, especially Assam, has a huge talent pool with an educated and English-speaking workforce. Assam boasts a literacy rate of 72.19%, with a significant portion of the population being young and English-speaking, providing a ready workforce for IT and BPO sectors. In addition to this, the government, in collaboration with private entities like Infosys, is investing in skill development programmes to enhance the employability of the local youth in the IT sector.

For such a long time, the Northeast, with Assam as its fulcrum, had been sidelined in India's growth story, but it is now a significantly important region of investment and development. The region is not just an investment destination; it will be the most important development marker in the world because of the ongoing massive public and private investments, excellent infrastructure development projects, and a young, skilled workforce leveraging its demographic dividend. The region is becoming a hub for energy, technology, logistics, and startups. Assam has a combination of heritage resources and renewable energy opportunities that will make it something special in the days to come. The Northeast, especially Assam, has competitiveness in costs and has a strategic location that will appeal to industries and investors everywhere. With government support and global players vying for a piece of the pie, the Northeast is poised to create a new chapter of inclusive and sustainable growth, which will become a living reality in the days to come.