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Address by Shri Tarun Gocoi, Chief Minister, Assam
49th N.D.C. Meeting
, 1st September 2001, Vigyan Bhavan, New Delhi.


Respected Prime Minister
Hon’ble Deputy Chairman of the Planning Commission
Hon’ble Members of the NDC
Members of the Union Cabinet
Distinguished Delegates

I deem it as a great privilege to take part in the deliberations of this highest National Body with Prime Minister in the Chair. This 49th Meeting of the NDC is of crucial importance to all of us since this will give a shape to the 10th Five Year Plan determining the growth and development of our economy to face the challenges of rapid globalization in the new millennium. In a way, it is going to be our tryst with the New Economy.

1.2 I am glad to find that the Prime Minister has set an ambitious target for the 10th Five Year Plan to double the income within five years. It is also a worthwhile proposition to accept 10th Plan as a document of reform instead of merely being a resource plan. Its emphasis on sectors with employment generation capability, particularly the service sector; its attempts for empowering women, tribals and underprivileged sections of the society is admirable. The promise to attempt an equitable development process which provides equality of opportunity is indeed encouraging. I fully agree that mere resource allocation is not enough. The productivity of capital is equally a crucial factor. Therefore, our scarce resources need to be carefully deployed in order to maximize the output. The approach document also puts emphasis to unleash the capability of the private sector to augment the investments under the Plan. In short, the broad parameters of the Approach Paper to the 10th Five Year Plan have been encouraging and at the same time ambitious.

1.3 Before I comment on specific issues raised in the document, I would like to make a few general observations. While we finalise our strategy for the crucial 10th Five Year Plan which will largely determine our place in the global economy, it would be of immense help if we closely analyse our achievements over the years through schematic planning: whether we have been able to achieve an equitable, harmonious growth of the economy; whether we have been able to provide basic minimum needs to our citizens; whether we have been able to reach the poor and the underprivileged adequately; or whether we have created islands of prosperity surrounded by oceans of poverty. Perhaps a hard look at this stage is as crucial as the market orientation of the economy. Economic growth should lead to a harmonious united society narrowing the gap between the poor and the rich, the rural and the urban, the mainland and the periphery. In other words, it should not prompt these divides which in the long run harms the process of national integration. I am surprised that the Approach Paper does not even make an oblique reference to one of the most underdeveloped areas of the country, the North-East. North East in general and Assam in particular has suffered the trauma of partition. North East became a totally landlocked region with circuitous connectivity with the mainland after partition. The only riverine trade route through the then East Pakistan was stopped. Then came the devastating earthquake of 1950. This was followed by the war of 1962 and the liberation of Banglaldesh in 1971. Thus Assam has been a victim of history. The only way to undo the wounds inflicted by history is to provide North East and Assam a level playing field with the rest of the country through a socio-economic package that works. Therefore. I suggest that equity be the primary concern along with growth and sustainability in the 10th Five Year Plan.

1.4 In this context, Sir I would like to draw your attention to some of the crucial indicators of development. Although we have made progress in bringing down the overall percentage of population below poverty tine yet poverty level has increased in many States. Similarly, although per capita national income has shown upward movement, the same has fallen in real terms in some of the States compared to national average. Assam is one of them. Unless this process is checked now, it will accentuate as the growth picks up. If we look at the map of India in terms of density of infrastructure, we will find several gaps and the North East India is one of them. We need to address ourselves to these crucial factors of growth if we were to ensure equitable growth of economy. With our trade barriers fast disappearing, an underdeveloped North East will be a ready market for inexpensive foreign goods in view of the developments across the border. We must see the writings on the wall. The economic incursion of North East from across the border may prove to be extremely worrisome in the near future like the cross border terrorism of today. Therefore, I would like to suggest that the 10th Five Year Plan should address these problems more adequately.

1.5 In the past, the Planning Commission used to have "Special Area Problem Approach" which used to take care of such critical requirements. I would like to suggest that this approach should be integrated into the 10th Five Year Plan in order to bridge vital gaps wherever they exist. So far as the North East is concerned, I would like to emphasise two such areas- infrastructure and connectivity. Without adequate development of infrastructure, it is impossible to achieve a breakthrough in the economy. Along with it, the geographical isolation has been a major handicap for the North Eastern States. Unless substantial investment is made at an accelerated pace, we will not be able to regenerate our economy in the near future. In this context, I would like to make a special mention about the devastating floods and erosion which happens every year in Assam. Apart from huge revenue loss to the tune of several hundred crores every year, the floods washes away vital infrastructure including the top soil. As a result, the whole of North East suffers from high prices and lack of essential commodities for several months a year. So, I would like to plead in this august House that it has to be recognised as a national calamity and national loss A permanent solution is called for, which involves treatment of catchment areas lying beyond the boundaries of Assam and management of river system which requires investment beyond the capability of Assam. On the other hand, if we do not recognize this problem for immediate attention, our efforts to develop the North East India will remain a distant target.

1.6 We broadly agree with the proposal envisaged in the Approach Document regarding the concept of a "core plan" and "project based support". In this context, let me point out that increasing trend over the years for project tied funds is leaving behind very little resource for development in large number of non-core sectors. A total project based plan support will make it more difficult for allocating resources to a number of important sectors. Therefore, some inbuilt flexibility would be required. Let me apprise you that this approach should also recognize the special handicaps a State might be currently having. In case of Assam, continued insurgency has eroded the productive capability of the economic and social infrastructure. As a result, the productivity of capital is low compared to other States. The Deputy Chairman of the Planning Commission, in spite of his best intentions for Assam, is bound by an overall formula based on internal resource generation for allocation of plan fund. Unfortunately, this formula does not take into account productivity loss due to insurgent activities. I, therefore, suggest, given such extraordinary situations, a compensatory formula should be adopted which will quantify the production loss in assessment of resource generation so that Assam can have an opportunity to achieve development in the face of insurgency. Otherwise, Assam will be perpetually caught in downward spiral of underdevelopment thus providing a breeding ground for insurgency. Sir, North East in general and Assam in particular is going through a very critical time. Therefore, I would strongly plead before you to ensure accelerated development of the region, which can be the only long-term solution to insurgent activities.

1.7 Coming to specific issues as outlined in the Approach Paper, we welcome the initiatives proposed in adopting agriculture and rural infrastructure as the main bedrock of development strategy. It is very encouraging to find that the document emphasises on increasing and diversifying agricultural production by extending irrigational facilities and better watershed management programmes. The Eastern India (which should also include the North East) and the rain-fed areas of central region have been identified as the thrust area for these programmes. This is a very welcome suggestion. Let me take this opportunity to congratulate Hon'ble Prime Minister for his decision to take up the mega Rural Road Programme. It is indeed a great initiative which, if fully implemented, will change the face of rural India.

1.8 Reform of Labour Laws, reform of judicial systems and administrative reforms are very desirable objectives. We welcome the inclusion of these vital areas of reforms in the 10th Five Year Plan document. I am sure, the details of these reforms will be finalized after due consultation with the States. Similarly, we also endorse the necessity for privatization as well as closure of non-viable PSUs for better health of the economy. We have started a detailed review of the functioning of State PSUs in Assam. We will rejuvenate those PSUs which have the capability to sustain, privatise others and close the rest if found totally unviable. But in a State where private capital and employment market have not developed adequately, these PSUs have also a social function to perform which cannot be easily ignored. Similarly downsizing of governmental organizations is also another area of attention. In a State like Assam where private sectors have not grown adequately to provide alternative to government sector employment, outright downsizing without corresponding growth in the employment market may cause social unrest and therefore, needs to be carefully executed in a properly phased manner in order to avoid any social fall out-Growing unemployment has been the root cause of social unrest in Assam. It can only be ignored at a great social and economic cost.

1.9 The Approach Paper outlines the phasing out of both direct and indirect subsidies which have not been able to generate desired economic impact. There is no doubt that those subsidies which have not helped the poor but only have benefited the rich should be done away with. This also will help us to redeploy the scarce resources in more critical areas besides making us compatible with WTO regime. But at the same time one has to take cognizance of the critical areas where an alternative method of funding will be required. For example, Assam has a substantial population of Tribals. In order to improve their quality of life and generate entrepreneurship, special programmes will be needed without which they cannot catch up with the rest of the population. Similarly, landlocked North East with poor connectivity cannot catch up with the rest of India without special programmes on transportation of goods. Similarly, SGSY programme is the only scheme of its kind which encourages self-employment for millions of rural poor. To eliminate subsidy in this programme may prove to be not only counter productive to development but also socially dangerous. Therefore, there is a need to distinguish between subsidy and developmental imperatives while we do away with the subsidy regime in a phased manner.

1.10 The Approach Paper has raised the issue of corruption and transparency in administration. Leakage particularly through corruption has been a national menace. It not only involves national loss in terms of resources but it also makes the output of development grossly inadequate both in quantitative and qualitative terms. Transparency and accountability need to be established to counter this growing malady. I am glad to mention here that I have institutionalized the office of the Chief Vigilance Commissioner to check such undesirable activities.

1.11 The Approach Paper very appropriately puts a premium on activisation of Panchayati Raj Institutions, It also has raised the debate regarding the necessity of a three tier system. In this context, I would like to mention that Assam was one of the very few States which had very successfully adopted a two tier system - Mahakuma Parishad and Gaon Panchayat. It was a very rewarding experiment. Unfortunately, over the years Assam did not have the benefit of these vital grassroot organizations for quite sometime. My Government has decided to hold Panchayat Election at the earliest, I would like to go a step further and see these institutions empowered by effective devolution of financial and planning process so that the "felt needs" are adequately integrated into governmental planning and implementation. I am determined to take the administration to the door steps of the villagers. 'Back to Village' is the initiative started by my government in Assam. I would iike to take this opportunity to suggest that the rural infrastructure which we create should be vested in Panchayats as community assets for their management, maintenance and development. I am glad to find that the Approach Paper is considering to create a fund for maintenance of crucial infrastructure which is very much a necessity.

1.12 Sir, before I move on to other agenda items, it will be worthwhile to mention about the fiscal discipline and reforms which the Approach Paper has very succinctly analysed. There is no two opinion that fiscal reforms and expenditure control are inescapable alternatives for regenerating the financial health of the economy. I fully endorse the view that the non-plan expenditure has to be curbed. Soon after my Government assumed office, I have appointed a high powered committee to specifically suggest a blue print for fiscal reforms. While we will be striving to achieve the desired results, we cannot be successful without the active co-operation of the Central Government. Let me pose some hard realities regarding the financial base of our State for the consideration of this august House. Sir, a situation has arisen, when we spend nearly 60% of the plan money for salary under plan projects. That is because we do not have the capability to pay the salary component for plan from non-plan resources. Therefore, our resource availability for actual projects is shrinking over the years. On the other hand, our resource base is becoming narrower and narrower every year. As you know, our main resources are Tea, Oil and Timber. Due to embargo put by the Hon'ble Supreme Court of India, timber harvesting has been completely stopped. Tea has been having a difficult international market for the last few years. Due to persistent adhocism followed by the Ministry of Petroleum, we are not getting our due as royalty from the precious oil that the State produces for the rest of the country. We had been representing on this issue for a long time. I would like to request for the intervention of the Hon'ble Prime Minister in this issue. Our financial base has been completely eroded. We have not been able to attract both domestic and foreign capital due to inadequate infrastructure at facilities. On the other hand, there has been flight of capital from out of Assam due to adverse law and order situation for a number of years. We had brought this to the notice of the 11th Finance Commission. For reasons best known to the Commission, we got a raw deal; in fact the lowest non-plan revenue grant amongst the Special Category States. We got a meagre 110.68 crores grant compared to J and K got 11,211.19 crores, Himachal Pradesh 4549.26 crores, even in North-East Nagaland got 3536.24 crores and Meghataya 1572.38 crores. We certainly feel deprived and pushed to a very difficult position. Unless the situation is retrieved with a suitable dose of grant to tide over the current revenue deficit, it may not be possible to achieve fiscal reforms in a time bound manner and transfer the salary component to non-plan in order to make planning process a viable exercise.

2.1 Sir, a point has been raised in the agenda regarding criteria for allocation of funds under poverty alleviation programmes. Poverty is an anathema to development. It has to be eradicated wherever it exists in our country. We should rise above partisan interests to eradicate poverty as a national mission. Therefore, I would suggest that the findings of the Expert Group (1993-94) may be taken as the base data for allocation of resources. It seems that an adjustment formula has been adopted to compensate for some States. We agree to this adjustment as a one time measure till the next evaluation takes place.

3.1 Sir, with regard to the NDC Sub-Committee Report on transfer of centrally sponsored schemes, we have no objection provided the schemes are transferred with full funding including the salary component. As I had mentioned little earlier, because of the transfer of a number of centrally sponsored schemes over the years, the State Government is over burdened with both plan and non-plan salary. We are not in a position to undertake any more salary burden. Moreover, such transfer of schemes would also involve additional administrative costs. While we agree to the rationalization of these schemes, we will not be able to accept them without full funding. In this regard, the Planning Commission had categorized Centrally Sponsored Schemes into four groups and recommended variable funding pattern for each category. Probably this suggestion can be further examined in the emerging scenario,

4.1 Sir, I have the pleasure of welcoming Uttaranchal to the group of Special Category States. I hope there will be a proportionate increase in resources set out for this category as new States are added to the list, Sir, I wilt also like to mention here that when a decision was taken in 1969 to create this category, there were only three States: Assam, Nagaland and J and K. Unfortunately, Assam was given the benefit of special category funding only from 1.4.1990 although it was declared as a Special Category State in 1969. We would like to submit that we may be given retrospective benefit of 90% grant and 10% loan as a Special Category State from 1969. The Planning Commission currently allocates 30% of the balance of central assistance for State plans after setting apart funds for externally aided projects and for special area programmes. As the allocation for externally aided projects and special area programmes are becoming larger and larger, the actual allocation for Special Category States in real terms is becoming less and less. This is a matter of concern which need to be examined.

5.1 Finally Sir one last point before I conclude. All of us come here with great expectations. This is an unique opportunity to apprise the highest committee of the country regarding our developmental needs. Therefore, this opportunity should not be wasted. I would like to make a suggestion that whatever substantive issues we raise here, the Central Government may like to examine them and convey to us within a timeframe, say in six months, the views of the respective Ministries. This will make our effort much more meaningful. Probably, it will be a worthwhile idea for the Planning Commission to prepare an action taken report on the major issues raised in this forum.

5.2 Sir, let me conclude by saying that we are confident that under your dynamic leadership which rises above the partisan interest, the 10th Five Year Plan will be suitably fine tuned in the light of the deliberation of this august House. Let this document be a strategy for growth without disparity. Let it establish one of the most fundamental rights of every Indian citizen - the "Right to Development".

Jai Hind