Socio- Economic Ethos in Rural Development of Assam: Special focus on Agricultural sector

While most other states in India are gradually moving away from their traditional agriculture-based economy toward industry or service-oriented economy, Assam is still heavily dependent on the agricultural sector. Compared to most other states in India, Assam is considered a less developed state, which depicts a gloomy picture the economic condition of the state given that India is considered a less developed country (LDC). While the sociopolitical problems afflicting the state since the last few decades are partly to blame for a lack of conducive environment for economic development of the state, particularly in industry or service-oriented areas, there are various economic reasons (e.g., fragmented land) responsible for the lagging agricultural sector in the state. This paper has given special stress to examine the role of the agricultural sector in Assam's economy and its major problems as well as it will try to make a relative study on the Socio- Economic Ethos in Rural Development of Assam. The fact that Assam had slackened critically vis--vis the national average after being better-off than the rest of India in the year 1950 came as a shock to the then Prime Minister, Indira Gandhi. The criticality of this failure was to be understood in the context of 35 years of planned development. Consequent to the then Premiers special interest and the initiation of deliberations by Manmohan Singh, the then Deputy Chairperson of the Planning Commission, Assam was given more Central assistance an addition of approximately Rs. 100 crore in its annual plan. However, this initiative was never followed up and nothing at all was done to provide the level of investment required to increase the rate of economic development in the State, as postulated by the model. Meanwhile, insurgency and other problems of a political nature progressively complicated the scenario and governmental attention was consequently diverted to other aspects of the canvas.In the post-1995 phase, a re-working of the time series of PCI at constant 1980-81 prices indicated that there were no basic changes in the trends witnessed earlier. The newly constructed series showed that, while in 1950-51, Assams per capita income was Rs. 40 higher than the national average, by 1992-93, the figure had lagged behind so far that it was Rs. 271 below the national average.If one makes an inter-regional comparison in terms of PCI, the differences appear to be glaring. In 1998-99, for example, while Assam had a per capita income of Rs. 8,700, the national average was Rs. 14,712. The highest of all States was Delhi, at Rs. 27,693. Maharashtras figure was Rs. 22,763. According to the Human Development Index (HDI) of the United Nations Development Programme (UNDP), which is a better indicator of economic and social development, India was placed at 128 among 174 countries. The value of HDI for India worked out to be 0.563 against Canadas 0.935, where the latter was the highest of all countries. Among the Indian States, the highest was Kerala with an HDI of 0.603 against Assams value of 0.379.Similar is the case with poverty, although the figures provided by various agencies differ. According to Planning Commission estimates, only 26.10 per cent of the countrys population was Below Poverty Line (BPL) in 1999-2000. Assams figure was 36.09 per cent. This shows that poverty in Assam is worse than the average of all the States in India. The more unfortunate fact in this context is that there has not been any considerable improvement over the years, with the absolute number of people below the poverty line increasing consistently. Worse still, even the percentage has witnessed an increase in recent years between 1996 and 1999. According to a statement by an individual Planning Commission member, the BPL population in India has risen from 35.97 per cent in 1993-94 to 40 percent in 1999. In the case of Assam, an estimate prepared by the State government, on the basis of a BPL survey, has put the rural BPL families in 1998-99 at 59.43 per cent, which is up from the 45.01 per cent of 1993-94. No revised percentages for urban and combined BPL families were made in this estimate. Grinding poverty is writ large on the faces of the poor in Assam, particularly in the rural areas. Emaciated bodies and an anemic look, protruding bellies and thin limbs, worn out clothes and dilapidated shelters, are all common indicators of deprivation. Available figures indicate that the scenario has clearly deteriorated since Independence. Figures of infant and maternal mortality, life expectancy at birth, availability of safe drinking water and access to sanitation facilities, underweight children with stunted growth etc., as revealed by studies made by the UNDP, Food

and Nutrition Board, etc., reflect a really grim picture. Frequent natural disasters, particularly the several waves of floods each year, cause further deprivation among a large proportion of the States population, damage the landmass and also cause depletion of resources. The funds available for relief and rehabilitation are so meager that it becomes impossible to neutralize the losses. The situation is the same in the other States of the Northeastern region as well. Against the all-India PCI of Rs. 14,712 in 1998-99, as given in the Economic Survey for 2000-2001, Assams figure was Rs. 8,700, Tripuras was Rs. 9,187, Manipurs was Rs. 10,599, Arunachals was Rs. 12,929 and Meghalayas was Rs. 10,607. Mizorams figure for 1997-98 was Rs. 11,667. No official figures for Nagaland were available. These figures indicate that all States of the Northeastern region are placed below the national average in per capita income.The position remains the same even in terms of the poverty ratio. Against the Planning Commission BPL figure of 26.10 per cent for the country (1999-2000), Assams figure was 36.09 per cent, Tripuras was 34.44 per cent, Manipurs was 28.54 per cent, Arunachals was 33.47 per cent, Meghalayas was 38.87 per cent and that of Nagaland 32.67 per cent. Even in the context of the other indicators of economic and social well being, the seven States of the Northeastern region are worse off than most major States and in comparison with the national average. Only with respect to literacy is the situation different. However, except for Assam, the UNDPs HDI is not available for the other States of the Northeastern region. In the other six States, literacy alone would push their HDI higher than that of Assam and probably marginally higher than the national average. Importance of Agriculture in the State Economy: problems and prospects Assam's economy is fundamentally based on agriculture. Over 70 percent of the state's population relies on agriculture as farmers, as agricultural laborers, or both for their livelihood. A majority of state's population, almost 90 percent of an estimated 22.4 million in 1991, live in rural areas where the mainstay of business is production agriculture. In terms of the state domestic product (SDP), the agriculture sector contributed over 38 percent of the state income in 1990-91. Agricultural Census data (Economic Survey of Assam, 1989-90) shows that total land under cultivation was 2.59 million hectares in 1985-86, or almost 33 percent of total geographical land area of the state (compared to almost 50 percent for India). The average size of land holding (including non-cultivable land) per household was only 1.30 hectares during the same time period compared to an average size of 1.47 hectares in 1970-71. Such fragmentation occurred due to two principal factors:(i) inheritance-related, i.e., breaking down land parcels to distribute among heirs, and (ii) government land reform measures which set the ceiling for land holding per family (50 bigha s at present) thereby promoting and facilitating land fragmentation (1). Numerous studies have shown that small and fragmented land holdings are one of the principal causes of low productivity because such land holdings do not facilitate economic and efficient use of modern technology (e.g., agricultural machinery, chemicals, and hybrid seed). Assam is far behind in the use of modern agricultural technology to improve its agricultural productivity compared to the rest of the country. For example, the agricultural productivity index for Assam was 156 in 1989-90 compared to 183 for India. Another problem of land fragmentation is the hidden unemployment or underemployment which understates the true unemployment level in the state. Assam produces both food and cash crops. The principal food crops produced in the state are rice (paddy), maize (corn), pulses, potato, wheat, etc., while the principal cash crops are tea, jute, oilseeds, sugarcane, cotton, and tobacco. Although rice is the most important and staple crop of Assam, its productivity over the years has not increased while other crops have seen a slight rise in both productivity and land acreage. For example, while rice yield per hectare in 1970-71 was 1,022 kgs compared to 1,261 kgs in 1990-91, wheat yield jumped almost three-fold from 583 kgs per hectare in 1970-71 to 1,455 kgs in 1990-91. A similar increase was observed in jute, sugarcane, potato, and rape and mustard. Tea is the most important cash crop in Assam and the state is well known world-wide for its tea. The total land area under tea cultivation (gardens) was estimated at over 229,000 hectares in 1989, employing an average of over half-amillion people per day. In addition, a considerable number of Assam's population depends on secondary and tertiary sectors-related to the tea industry. However, the exploitation of both precious land and laborers (employees) by the

tea companies, most of which are either foreign-owned (non-Indian) or owned by Indian conglomerates (e.g., Tata), is well-documented. Bagchi (1997) reported that although such exploitations are going on for decades and even well-documented in the state government's own inquiry reports, the government (under both AGP and Cong-I periods) has failed to take any appropriate action to end such exploitations. Continuing to rely on the seasonal monsoon for the necessary water for cultivation is another characteristic of farming in Assam. As a result, potential exists for severe crop failure and consequent economic disaster. To avert such possible catastrophe, it will be necessary to equip the state with irrigation facilities, perhaps in selected areas first, due to the cost factor. Agricultural development problems and economic development problems go hand-in-hand in Assam. Thus, while most of the development problems discussed below is agriculture-related, some of these are also related to the economic development problems in Assam. In addition to some of the major problems already discussed in Section I above (thus will not be repeated here), such as land fragmentation, lack of modern technology, or continued reliance on rain for irrigation, there are several other problems that hinder the development of agricultural sector in Assam. Identification of such problems should facilitate finding their remedial measures. (1) Natural calamities: Floods and dry spells are the principal natural disasters faced by farmers in Assam every year. The principal source of floods is the Brahmaputra river and its tributaries. Although it has been decades since the proposal to dredge the Brahmaputra came out, its progress and impacts are unknown. The loss of crop, livestock, house, cultivable land, and human lives are common during the yearly flood, which also takes a toll on human spirit. It is estimated that such yearly losses amount to millions of rupees. Although current estimates of losses from these annual floods are not available, it cost over Rs. 400 million in 1978 (Dhar, 1994), which was almost 2.4 percent of the state income (SDP) during the same period. At that rate, such losses for the 1990-91 floods would be a conservative Rs. 2.04 billion (Assam's SDP in 1990-91 was Rs. 8492.3 crores or Rs. 84.92 billion). The question, then, is whether dredging in selected areas is beneficial, i.e., is the cost of dredging per year is lower than the estimated yearly losses from flood? If the answer is yes, then it is time to put the dredging plan into action. (2) Capital deficiency: Commercial capital, i.e., loans from banks or other credit agencies, is not generally accessible to farmers in Assam. As a result, borrowing from unscrupulous lenders, who are not regulated by the state, at an extremely high interest rate is common in the state. Tragically, In many instances some borrowers lose their livelihood, i.e., their cultivable land, to these unscrupulous lenders. Although the amount of commercial loan for agricultural purposes was over Rs. 77 billion in 1990-91, most of these loans went to tea gardens. In 1989-90, commercial banks spent only 40 percent of their agricultural-loan budget. Their main reasons for refusing agricultural loans were a lack of necessary collateral, mostly in the form of land. A lack of proper land inheritance documentation and a lack of adequate amount of land (due to land fragmentation) were two of the main reason for lack of collateral among many farmers in Assam. To fill the void left by commercial banks, the Integrated Rural Development Program (IRDP was designed to assist rural farming families with loans to expand and improve their agricultural production as well as to explore alternative avenues to increase income) used over Rs. 626 million in loans in 1990-91. However, the need for agricultural loan remains largely unfulfilled in Assam. (3) Marketing problems: Agricultural markets in Assam are under-developed. Farmers sell to the nearest dealer/buyers, mostly immediately after harvesting when the price is at the lowest, instead of trying to find the best market for their products. Geographical isolation, weak transportation and communication systems, poor marketing facilities, poor or non-existent market intelligence (e.g., information on price and place to sell) are some of the principal marketing-related problems. While most of the brokers/buyers have access to modern communication facilities such as telephone and regular and timely market reports, farmers in Assam are many years away from having such facilities to gauge the market and sell accordingly. In terms of the role of government, earlier studies have shown that government efforts are more focused on collecting revenue (in the form of tax in the daily or weekly markets or through check-gates) than facilitating the marketing of agricultural products in Assam (Bhuyan, 1990; Bhuyan, et al., 1990; Bhuyan, et al., 1988). A re-orientation of the government's focus from revenue collection to marketing facilitation will be necessary if farmers are to benefit.

(4) Research and development (R&D): The Assam government started allocating funds specifically for research and development only since the sixth five-year plan (1980-85), with an amount equal to 0.06 percent of the total outlay of Rs. 11.2 billion. It is encouraging to note that such outlays were increased to 0.2 percent in the seventh plan, and to 0.5 percent in the eighth plan. However, it is not known how much of this R&D outlay is spent to improve agricultural productivity in the state, or how much of the total R&D output has reached farmers. An assessment of the impact of past and current R&D in the state would provide answers to such questions. (5) Land reform: Although the intent of land reform may have been to distribute land to all eligible landless citizens of the state, it resulted in increased land fragmentation, discouraged use of modern and efficient production technology, and increased bureaucracy and corruption. It is perhaps timely to examine the real impact of land reform in last few decades in terms of its effects on the growth and development of the agricultural sector in the state. (6) Non-economic Factors: Lack of education, ignorance about the changing economic conditions, out-dated thinking, prejudiced cultural values, disturbed law and order situation, and lack of scrupulous legislative and administrative machinery are some of the principal non-economic factors that hinder agricultural development in Assam. While the first four factors are mostly socio-cultural, which may take time to change for the better, the later two factors are mostly political. All these factors adversely affect agricultural as well as economic development of the state. Political and administrative instabilities not only create an unstable economic environment which scare away entrepreneurial skills, capital necessary for growth, and induce brain-drain, they also adversely affect socioeconomic infrastructure, such as education, intellectual thinking, social and family structure. Obviously, the ongoing political unrest in Assam since the late 1970s is not helping the agricultural sector or the economy of Assam. The demographic pattern in Assam today presents a mosaic which is rich in cultural diversity and in the profusion of languages, music, dance, drama and fine arts. The tribal and ethnic groups of Assam have achieved various levels of progress in different spheres. The ethnic Assamese, including Hindus, Muslims, Christians and Sikhs, have fair to high levels of education and general prosperity. Similar is the case with the Bodos, who look healthier probably because of their genes and their protein rich food intake. The wealthiest, however, are the Marwaries or the Rajasthanis who control the wholesale trade, the tea industry and a sizeable number of private industrial units. The urban Bengali Hindus are as literate and prosperons as the Assamese. But their rural counterparts are not at all well off. Similar is the case with the large communities of immigrant Muslims and tea garden labourers. Both these communities have low rates of literacy, low land holding and generally low prosperity. Literacy and prosperity rates vary among the other tribal and ethnic groups. As a consequence of this spurt of tribal and ethnic aspirations a series of agitations, disturbances and destructions have rend asunder whatever cohesion or unity existed among different sections of society. With the object of quelling such disturbances a mind boggling political and administrative arrangement has been arrived at in the past two decades. This has resulted in a decentralization of power in a rather peculiar and haphazard manner. These arrangements came in several doses of ad hoc political decisions without any general debate or examination of the pros and cons. These decisions were dictated by political expediency. Their implications were not properly studied or discussed before implementation. As a result units have come up with overlapping jurisdictions and varied configurations of financial, legislative and administrative endowments. This has been done through constitutional amendments in some cases and statutory enactments in others. They demand more power and more money. Already media reports suggest rampant misuse of grants, nonmaintenance of accounts and siphoning off of funds by politicians, bureaucrats and contractors. Besides, the administrative control and decision making processes have been complicated by the existence of so many units of different types with varying powers and overlapping jurisdictions. This has adversely affected the delivery system for economic development. In fact, the system itself has become fragmented. The same set of officers work for the state government and the tribal and ethnic councils. They have different loyalties and are sometimes compelled to take different identities.

In this paper an attempt has been made to briefly describe the situation in its historical setting and to identify the factors which generated the mood of frustration and suspicion in the minds of the Assamese people. The major factors are the following: lack of homogeneity and cohesion, aversion to manual work, fear of outsiders, liking for public against private enterprise, preference to salaried jobs versus self employment and absence of an entrepreneurial culture. These factors are not mutually exclusive but overlapping. This is so because the situation is complex. It is not amenable to fully objective analysis. There is a lot of subjectivity in interpretation. The inconvenient factors cannot just be wished away. Change will take time. The feelings of neglect and frustration can be overcome only by examples of successful private enterprise providing investment and employment. The State Government seems to be trying hard to do that. The new industrial policy with substancial concessions, subsidies and tax exemptions has induced a few companies to set up units in Assam. Unfortunately, however, these units have not brought in much capital nor have they created many jobs for the local unemployed. They have set up only processing units which are foot-loose. This means that the units can be transferred elsewhere without notice. These industries have come to Assam only to reap the advantage of the concessions and specially the subsidies. Therefore, their contribution to real and sustainable industrialization is minimal. To bring about consensus in implementation of time bound action plan to strengthen PRIs, Union Ministry of Panchayati Raj organized seven Round Table Conferences, all across the country. The Seven R.T. Conferences were held between Julys - November 2004. The theme of all Seven R.T. Conferences has covered wide range of subjects. The consensus is arrived on 150 Action points (Resolutions) which comprise a time bound action plan for achieving full devolution of functions, finances and functionaries to PRIs in accordance with the letter and spirit of the constitution. In view of the urgent need of speedy implementation of 150 Resolutions, the Govt. of Assam has constituted a committee on the matter vide letter no. PDA.258/2004/229 dtd. 6th June 2005. The important recommendations of Seven Round Table are: a)Activity Mapping b) Opening of Panchayat window in the State Budget c) Constitution of DPC for grassroot level planning at the GP level d) Transfer of Fund e) Transfer of Functionaries f) Strengthening of the Gram Sabhas g) Constitution SFC h) Imposition of Taxes i) Merger of DRDA with Zilla Parishad j) Ensuring equitable representation of women and particularly members of the deprived class of the society i.e. SC and ST representation k) Decentralization of the planning and the execution of the development schemes l) Definite role of the PRIs in implementation of Major Flagship Programmes like NREGA, Bharat Nirman, SSA, NRHM, National Horticulture Mission, District Water and Sanitation Mission (Swajaldhara) and Mid day Meal etc. m)Capacity building of PRIs through regular training n)Linking of the PRIs through e-governance and Net working.

Concluding Remarks
Reflecting the characteristics of a typical, less-developed economy, the economy of Assam is acutely dependent on the agricultural sector. Various economic as well as socio-political factors are responsible for the continued lack of growth and development of this sector. In addition, ineffective or inefficient government programs also contribute to this sector's lack of growth. Amidst continued problems, there is hope for the future. There is potential for agri-food industries that use primary agricultural products as their raw materials, e.g., fruits and vegetable processing industry, sugarcane refining, tea industry, and jute industry. Such growth in the secondary and related tertiary sectors (e.g., packaging, shipping, transportation, etc.) will not only benefit the primary agriculture tremendously, but also reduce growing unemployment and provide the much needed revenue to the state government. In a market economy, private entrepreneurs generally would take the initiative to establish such secondary (and tertiary) industries, supported by commercial credit sources. However, a lack of entrepreneurial and managerial talent, a lack of adequate capital, poor economic infrastructures, government bureaucracy, and continued political-administrative unrest would discourage any would-be investor. It can be argued that the state should step in to fill the gap which is left unfulfilled by the private sector. However, given the poor performance of state-owned enterprises, the strategy of government involvement in business must be changed. For instance, instead of ownership and management of businesses using state-run corporations, joint Development enthusiasts often wonder why Assams economic growth has been slow, and sometimes stunted, inspite of possessing vast natural resources including oil,

natural gas, forest products, coal and other minerals as well as fertile land and plenty of water for agricultural production. Many causes have been identified and diverse remedies are suggested. However, nothing seems to work. Factors such as investment, infrastructure, markets and quality and skill improvement can be attended to if there is a political will. But it is not generally recognized that unless the socio-cultural ethos is tackled properly it is rather difficult to carry all the people together along the chosen path of economic development. Sustained and united effort is necessary for long term development and permanent asset creation without which growth is not possible. Again, growth has to be inclusive in the true sense of the term for every one living in the state irrespective of language, religion, caste, creed or ethnic origin. The most important fact to remember is that the geographical entity of Assam never had a homogenous population or society. From time immemorial different tribes and ethnic groups have lived in the Brahmaputra Valley and the hills surrounding it. Immigrants have come from outside the area throughout the past two millenniums. They brought their own culture and languages. Some retained these, albeit in modified forms, but others got merged into an already existing nebulous ethnic main-stream. It needs to be noted that economic backwardness is one of the significant causes fuelling insurgency in the Northeastern region, although it is not the sole cause and nor can it be said that insurgency is the consequence of the lack of economic development. In the larger canvas of the attempts being made to achieve material progress, it is also true that rampant corruption in the bureaucracy and the political class manning the delivery system stands as a stumbling block. In such a milieu, the only plausible option is to secure the efficacious participation of the populace at all levels and particularly through the Panchayati Raj and urban local government institutions and carry out all development work through these institutions. References 1. 2. 3. 4. 5. 6. 7. 8. 9. Human Development Report, 2000, United Nations Development Programme, Oxford University Press. India: The Road of Human Development, 1997, United Nations Development Programme, Paris: India Development Forum. H N Das, "Poverty Alleviation through Agricultural Growth in Assam" Rural Prosperity and Agriculture Policies and Strategies, Hyderabad: National Institute of Rural Development, September 2000. India: The Road of Human Development, 1997, Paris: India Development Forum, United Nations Development Programme. H.N Das, "Financing Disaster Response", India Disasters Report, New Delhi: Oxford University Press, 2000. Government of India, Ministry of Finance, Economic Division, Economic Survey, 2000-2001, February 2001, Government of India Press, New Delhi. Planning Commission Minutes, unpublished. "A New Paradigm of Development: Regional Imbalance and Assam", The Economic Times, October 23, 1985. Bhuyan, S., H. Demaine, and K. E. Weber. "Market regulation or regulated market? The case of Assam, India," HSD Monograph no. 19, Asian Institute of Technology, Bangkok, Thailand, 1990. Submitted by:

>>>>>Priyanku Narayan Baruah Ph.D research fellow,CMJ university,Shillong