Some key challenges ahead in economies of Northeast states
I have been observing the trends of the economies of the Northeastern states for last few decades. The overall trend of industrialization is very lukewarm.
To comment on the economy of the northeastern states as a whole, mainly the PSUs which are based largely on the raw materials available locally deserve mention; and, except for them we do not have so many successful business units in the private sector so as to mention their names in the context of contribution to the economies of the respective states.
As mentioned, even in spite of the fact that the most basic requirement of these PSUs being availability of raw materials locally, the initiatives of the governments for growth of those PSUs are far from being satisfactory.
Resultantly, the central government has started viewing at a number of PSUs for privatization, and, the people of the northeastern states must realize that the government may not show great interest in spreading growth of those PSUs; rather, their failure to show satisfactory growth with resultant tapering of profit earning may invite the private sector for operation earlier than what the common people anticipate.
Satisfactory steps for increasing efficiency of those PSUs are not at all discernible; yet, the government’s claims of dividend at least three to four times a year from the PSUs is clear.
Nevertheless, I am not of the opinion that only the government must own major responsibility of such unsatisfactory performance of most of the PSUs, rather, time and again for last so many years, in a number of my published articles, I have been categorically emphasizing on necessity of improving upon the management of those PSUs in order to offer fierce competition to the private sector managements.
The PSU managements need to be reminded to forsake the played out idea that the main objective of the PSU management is to serve the people at large only, and, earning profit cannot be an objective of equal importance and significance.
I cannot reconcile with the principle of seniority being the most major reason of promotion: pushing efficiency on the backburner. That being the reality, having termed most of the PSU managements as far from being satisfactorily efficient, the private sector has made its presence felt with growing entry into the areas which were once the domain of the PSUs.
Time has arrived when unless efficiency and its progress in tune with requirements can be put to practice, one should be getting ready to quit before he is told to do so as not to embrace an unceremonious exit ensuring places only for the performers.
Resultantly, circumstances are leading to indispensability of the private sector’s role in economic progress of the northeastern region. The private sector enterprises know businesses and profit mainly because unlike the PSUs they are not having such government support and they have to earn profit on their own for their survival. This is the reality and it is high time to accept it!
More in the context of the prevailing economic condition of the northeastern region of the country, what has become very prominent to me is our failure to understand the gravity of the situation.
While I emphasized on essence of drastic actions for improvement of efficiency of the PSUs, at the same time in almost all of my already published articles on the economy of the northeastern region, I overwhelmingly emphasized on imperative and leading role of the private sector for rapid turnaround of the economy of the northeastern region.
How long shall we blame the COVID-19 pandemic and spells of lockdown for crippling industrial trend in the private sector in the northeastern region?
As I have noticed, even in the private sector, a great number of industrial units are not inclined to improve upon their performances and rather they nurture inefficiency within their organizations paying deaf ears and blind eyes to the growth of inefficiency entailing ascending losses year after year thereby counting on their imminent winding up by expediting the growth of NPAs.
I doubt how many of us have very seriously thought about the rate of employment generation in near future vis-à-vis the growth trend of employment in all likelihood.
I can tell for sure, that unless all concerned rise to the occasion forthwith, not only the picture even in the near future will be turning more serious but the steepness of ascendance of unemployment, even if may be at an arithmetic progression, the rise in employment is likely to be at a snail’s pace, thereby, further widening the gap between the figures of unemployment and generation of employment in the days to come.
The almost everyday increase in fuel prices for last so many days is leading to more and more sweating of the people. Crores of people have been left in the lurch consequent on the COVID-19 onslaught for being unable to get employment on their reverse migration.
Though some of those on reverse migration got some opportunities, loss of earning is almost commonplace in most of the cases requiring the government to take a relook into the matter for more pragmatic actions.
Therefore, the essence of replacing such a grim picture of the economy in the northeastern region with proactive measures for industrial progress is surely the call of the hour – being better late than never!
Improvement of GDP cannot lead to satisfactory economic progress if unemployment trend continues its rapidly increasing growth as is happening in the country now.
The real test of the region’s industrial progress is not lying on its contribution to the country’s GDP growth on the same footing with generation of employment, rather the most imperative consideration should be meaningfully more proactive actions towards alleviating the growing problem of unemployment and in this context I am fully in line with Pronab Sen, former Chief Statistician of India that “privatization of CPSEs is best done when the economy is booming… privatization in a recession time is a horrible idea”.
I am of the opinion that for the MSMEs (micro, small and medium enterprises) being a major role player in the northeastern economy, not much room for satisfaction is there in this year’s budget allocations. Such actions of the government moving towards rapid privatization at this crucial juncture of the economy, to me, will be disastrous to the economies of all the states in the northeastern region also. I am as such, not against predominant role of the private sector in the regional economy, but the juncture at which its overwhelming presence has been invited by the government is a matter of my dissention.
After all, it is a decision of the government. On one hand unavoidability of further lowering down of agricultural productivity under the current form and style and on the other hand failure to address the really vexatious problems of the MSMEs and resultant crippling trend of its progress, are likely to make the economies of the northeastern states suffer immensely.
The cardinal problem of most of our industrial concerns is visible in failure to tap substantial market. In fact a very great challenge lies in making an entry into the market and in going on expanding that.
I reiterate what I have said in my previous publications that market study to start with for determining people’s likes and dislikes in different segments of markets, options of people, quality of products and constant endeavour to improve upon qualities, together with determination of product features of the competitors’ products and efficient research and developments on sustained basis, prices of the products, and the effective promotion measures to mention a few only, must be ensured.
R&D must ensure proper support to the marketing people through input for availability of products as per customers’ choices. In all those respects, marketing must fulfill required degree of professionalism to ensure success in competition. In respect of some of the products, if online platform in addition to the prevailing channels of distribution can be taken to, should be explored- because that is the practice of the day.
The fact remains that the agricultural productivities of all the crops cultivated in the Northeastern region are very low. Also, to mention therewith, except for very regular publications of the actions contemplated by the respective state governments, no remarkable actions for improvement of the tourist spots have been noticed.
That being the position of tourism in the region, the impact on the hotel and transport businesses of the states is being very adverse. A professional outlook for rapid industrialization with emphasis on drastic improvement in agricultural produces and productivities, yields from poultry firming, livestock and fisheries and performance of tourism sector must expeditiously replace the prevailing inefficient practices.
Therefore, I shall urge upon strenuous efforts of our youths, first of all to be self-reliant without being dependent on the products from outside the region. Let us utilize our lands for as much time as possible in a year with constant endeavour for more and more production and productivity.
Economic progress is possible provided the common people enjoy more purchasing power. The real progress of the economy lies in the improvement of purchasing power of the people.
I emphatically reiterate that in our endeavor for economic turnaround through such improvement of purchasing power of the people, our northeastern states must ensure economic growth through meaningful improvement of the growing unemployment problem on sustained basis; otherwise, there is not an iota of doubt in my mind that the poor will become poorer with indulgence to operation of a K-shaped recovery.
(The writer is a Guwahati-based advocate. He can be reached at sksharmahthakur@gmail.com)