The Present Politico-Economic Model

The present policy framework for the region is based on a centrally controlled political economy and a cultural approach, adjusted with a regional planning model. It is implemented mainly through the Planning Commission and the North East Council. In this model, the northeast states are required to submit project proposals to the North East Council headquartered in Shillong after taking aspects related to their culture and traditions into consideration. These are then considered at the Council headquarters and then placed before the Council, which consists of the governors, chief ministers, other relevant ministers and bureaucrats of all north-east states, who jointly take a decision on projects, which are to be submitted to the Planning Commission at Delhi. These are considered by the commission and submitted to the government for approval. Projects that will ultimately be executed are dependent on release of funds by Delhi. In reality, nothing goes as per the projections as the system gets short-circuited by states approaching Delhi directly and vested interests coming into play.

Benefits of the Model

All north-eastern states have been declared “Special Category States”, which entitle them to 90% of central assistance as grants and 10% as loan. Some public sector units have also been set up. Industrial licensing, concessional finance, investment subsidy, growth centres, and freight equalisation for some industries have been used to try and promote industrial development.