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Insurgency and Development
The Assam Experience*
H. N. Das#

During the course of the preparation of the Seventh Five-year Plan for the State of Assam in 1984-85, this author1 carried out considerable research with the objective of unraveling the basic facts regarding the development process in Assam during the preceding decades. The research endeavour included an indexing of the time series data relating to the State Domestic Product (SDP) and the Per Capita Income (PCI) with 1970-71 as the base year. A significant component of this investigation was the development of a planning model which could postulate the different rates of growth per annum that would achieve corresponding reductions in the gap between the State’s PCI and the national average, as also project the period during which the gap could be bridged.

This research brought out, for the first time, that (1) during the entire period of planned development, the PCI of Assam grew at a much slower rate compared to the average per capita income of India, and, (2) at constant 1970-71 prices, Assam’s PCI was Rs. 50.04 higher in 1950-51 than the average per capita income of India. However, it started lagging behind since the late 1960s and by the year 1984-85, Assam’s PCI was Rs. 212.9 lower than the national average. This fact now appears obvious and is often quoted by economists, politicians and social activists.2

The fact that Assam had slackened critically vis-à-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.3 The criticality of this failure was to be understood in the context of 35 years of planned development. Consequent to the then Premier’s 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-working4 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, Assam’s 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.5

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. Maharashtra’s 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 Canada’s 0.935, where the latter was the highest of all countries.6 Among the Indian States, the highest was Kerala with an HDI of 0.603 against Assam’s value of 0.379.7

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 country’s population was ‘Below Poverty Line’ (BPL) in 1999-2000. Assam’s 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.8

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.9 Frequent natural disasters, particularly the several waves of floods each year, cause further deprivation among a large proportion of the State’s 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.10

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, Assam’s figure was Rs. 8,700, Tripura’s was Rs. 9,187, Manipur’s was Rs. 10,599, Arunachal’s was Rs. 12,929 and Meghalaya’s was Rs. 10,607. Mizoram’s 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.11 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), Assam’s figure was 36.09 per cent, Tripura’s was 34.44 per cent, Manipur’s was 28.54 per cent, Arunachal’s was 33.47 per cent, Meghalaya’s 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 UNDP’s 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.

The then Prime Minister, Indira Gandhi, clearly concerned about the disparity of income distribution stated in her concluding address to the National Development Council’s meeting held on July 12-13, 1984: "We are acutely aware that India as a nation cannot remain together if disparities in income and living conditions of different regions, different States, different communities, tribes and castes are not removed. We look at the Centre-State relationship also in this perspective. Balanced all-round development, irrespective of the resource capabilities of the units has been one of the major objectives of our plan."12 Despite such a clear enunciation by the Premier, ground realities showed no significant changes. Furthermore, disparities have accentuated especially after economic reforms were initiated in the 1990s and no compensatory steps appear to have been undertaken by the Central government thus far.

It is also noteworthy that throughout the planning process, the per capita plan expenditure in Assam up to the sixth Five-Year Plan, was lower than the national average except for the odd years when it was marginally higher than the national average. It was only in the aftermath of the Seventh Plan that the expenditure increased marginally. The scenario was better in the context of the other States of the region.13

Another fact that is not appropriately documented as also appreciated is that, during the 19th century, Assam had witnessed considerable progress in the industrial sector and it was only since the middle of the 20th century that Assam started lagging behind. To quote the former Prime Minister Deve Gowda, "Assam was in the forefront of the economic development of the country 100-150 years ago. It was a pioneering State and enterprising entrepreneurs invested in the development of tea-plantations, oil, coal mining, forestry, railways and inland waterways. However, in the recent years investors have shunned these areas, because some of these States turned inward looking, while others have been afflicted by militancy and terrorism. This has set in a vicious cycle of terrorism, discouraging investments and economic development, leading to growing unemployment, which in turn provided recruits to militancy."14 This was the first time that a Prime Minister made clear the Centre’s intention to take up a concrete and comprehensive package of projects for each of the seven States. These projects were identified and State-wise lists were appended to the statement.

The emotional involvement in the issues of development among all sections of the populace of these States was brought out very clearly by L C Jain in his report on clause seven of the Assam Accord. The report, in the very first paragraph, said: "Our entire thinking has been influenced by one major factor: a fairly well informed and fervent demand for development for the people at large – students, political parties, women’s groups, voluntary organisations, economists, ministers, administrators, entrepreneurs – with whom we had the privilege of interacting. This magnitude of popular awareness and interest in development is a rare social force. Constructively used, it can be the most precious capital for the development of Assam."

Several other committees and studies were commissioned on the same aspect and hundreds of valuable recommendations made by them are currently gathering dust in the cupboards of the North East Council and the secretariats of different States. One principal study was that of the High Level Commission appointed by the Planning Commission in 1996 under the Chairmanship of S P Shukla, Member, Planning Commission, to critically examine the backlog in respect of the basic minimum services and gaps in the infrastructural sectors essential for the development of the Northeastern States. In their 1997 report, the Commission observed that there was a "two way deficit of understanding with the rest of the country" and that "the development of the tranquility in the Northeast is also a national security interest and can offer regional solutions to national problems." It then recommended that "the country must assist the Northeast to realise its full potential and avail of the emerging opportunities within and around it." The Commission further felt that "the people of the Northeast cannot remain cocooned and wish to take their places as full and equal partners, contributing to that great enterprise that is Project India. It is right not to want to be swamped by Indians from outside the region, even less by an influx of foreigners. But the region does not need to fear 'outsiders' and lapse into 'localism'. Violence, insurgency and easy money are no solution to any problem, real or imagined. These eruptions and the bandhs, extortion, kidnappings, leakage, and the sulking and cynical indifference they have engendered in sections of the populace, can only delay and could even deny the peace, progress and prosperity that everybody seeks."15

Furthermore, recommendations and observations made by various commissions and studies have not been implemented. Some funds were made available for a number of schemes and projects by the Central government under the Prime Minister’s package. Funds also flowed to the States through regular schemes and programmes, particularly for rural development, in addition to the other funds under the annual plans. But in every State of the Northeastern region, a plethora of allegations and complaints have surfaced regarding the misuse of funds and rampant corruption. The ground level reality also does not indicate any significant and effectual developmental activity. Media reports have indicated that bureaucrats, politicians, bank managers, contractors and their cohorts siphon-off major portions of the funds, consequently leaving very little – and at times nothing – for the poor.

One use of such diverted funds can be discerned in the exponential increase in the construction and luxury businesses, particularly in urban areas. According to a recent survey made by the Federation of Industries and Commerce of the Northeastern Region (FINER), in Guwahati city alone 604 multi-storied buildings, which house residential and commercial apartments, have emerged during the period 1995-2000. These involved an investment of Rs. 1200 crores. The FINER survey also found that 40 new restaurants, besides the ones that are part of the larger hotels, had come up in Guwahati during the same period. Indeed, ‘Guwahatians’ are estimated to spend approximately Rs. 13 million in a month on dining out. The FINER survey also indicates that "sectors like transportation, hotels, tourism, greeting cards, health-care, courier services, travel agencies and computer education are growing at a phenomenal pace in Assam in the last three-four years." There has also been a manifold increase in "the sale of such items as colour televisions, music systems, refrigerators and washing machines." This has largely been due to a rise in the "disposable income, at least among the urban population and a section of the rural population of the State" in the recent years.16 This author contends that that such a high level of investment and conspicuous consumption has been provisioned by the funds siphoned-off from developmental projects and schemes. Besides, as the FINER survey has found, the World Bank-assisted Assam Rural Infrastructure and Social Project (ARIASP)’s Rs. 273.50 crores and the funds flowing out of the Prime Minister’s package of Rs 10,271 crores have fuelled this boom.

Although there are varying estimates, substantial amounts of funds have also been accruing to the insurgents during the past 15 years or so. The channels through which these funds flow are well known.14 Politicians, bureaucrats, bank executives, tea-planters, contractors and others who handle money in government establishments as also commercial and industrial houses have bought their own and their colleagues’ security by transferring to the insurgents a portion of their ill-gotten monies. In the past, many central leaders had warned the State governments of the region against such payments to insurgent organisations. On June 14, 2001, the Union Rural Development Minister, Venkiah Naidu, consequent to a meeting of the Rural Development Ministers of the Northeastern States at Shillong, warned that "the Centre would stop disbursing rural development funds to those States, where a bulk of the funds go to the coffers of the extremist outfits."18

Prior to the imposition of President’s rule and in the midst of Operation Bajrang, the Governor’s report dated November 26, 1990, estimated the amount of extortion till that date by the United Liberation Front of Asom (ULFA) at approximately Rs. 4 to Rs. 5 billion.19 This phenomenon – corroborated by both media and official reports – has since then witnessed an exponential growth. In fact, the individual level payments are also reckoned to be on the higher side. One tea company, for example, was found to have paid Rs. 13.5 million to the erstwhile Bodo Security Force, and the security forces reportedly recovered a part of the money. Another tea company had shown Rs. 1 crore as unexplained ‘expenditure on security’ – an euphemism for pay-offs to the insurgents – in their audited balance sheet. The insurgent outfits demand and extract smaller amounts from various small businessmen as also corrupt government personnel.

Furthermore, increasing security-related expenditure has crucially constricted available levels of development finance with the various State governments of the Northeastern region. A recent report of a committee on Integrated Rural Development Programme (IRDP) in the Northeastern States also mentioned "an upsurge in insurgency in Assam" as responsible for "practically no developmental activities in rural areas" and a simultaneous "flight of capital from the rural areas to urban areas as the former were less secured than the latter."20 Such an observation would also indicate that there has been an added impoverishment of the rural areas and a greater lag vis-à-vis developmental activity. The general belief that insurgency is fuelled by economic backwardness, therefore, has some basis. But it would be totally inappropriate to assume that there is a direct linkage between insurgency and economic backwardness.21 As the Shukla Commission opined, "it would be simplistic to believe that development by itself can end insurgency and restore tranquility. Yet it constitutes a most important element in that task and an effective entry point for dealing with complex problems and historical neglect, rapid transition and social change. The extra ordinary ethno-geographic and bio-geographic diversity of the Region precludes uniform solutions as different communities are at varying stages of growth."22

In Assam, the level of unemployment due to a lack of developmental activity over an extended period is reflected in the number of unemployed persons, which today has reached the 2.2 million mark, constituting approximately a tenth of the population. More than 70 per cent of these are educated. These unemployed youth, to a large extent, also provide the reservoir of manpower from which the various insurgent outfits easily recruit their cadres. Reportedly, even the families of these ‘volunteers’ do not object because of the lure of financial compensation which, though not handsome (as some sections of media tend to make out), is not meager either. Furthermore, there also exists the added attraction of the employment and rehabilitation packages in the context of certain ill-considered surrender policies.23

This paper contends that each of the insurgent outfits in the region was initially raised to a large extent from among people who harboured feelings of neglect and ‘colonial exploitation,’ or who strongly resented certain perceived wrongs to the particular community or sub-region from which they were drawn. The outfits later gained strength primarily through clandestine support networks of politicians and over-ground front organisations, as also with the ill-gotten monies acquired mainly through extortion. The ULFA, for example, was able to become a large outfit primarily due to the tacit support provided by the first AGP regime under Prafulla Kumar Mahanta. The former Assam Governor D D Thakur described it as "one of the classic examples of culpable inaction on the part of a State government."24 Indeed, a parallel ULFA government was reportedly in existence in Assam during this particular phase.

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.


* This article is a revised version of the author's paper presented at the seminar 'Addressing Conflicts In India's North East' organised by the Institute for Conflict Management, June 25-27, 2001, New Delhi.
# Mr. H N Das retired as Chief Secretary to the Government of Assam in February 1995 and is currently involved in research and writing on issues concerning the Northeast region. He is the President of the Assam Chapter of the Foundation for Amity and National Solidarity. He is also associated with several other socio-economic organisations in India's Northeast. He has written extensively on issues of energy, the tea industry, and socio-economic development. He has published two books on disaster management and the Grameen Bank of Bangladesh.
  1. The author was then the Planning and Development Commissioner, Government of Assam. This research investigation was undertaken with the able assistance of his colleagues Dr. N K Barua and Mr. P B Deb.
  2. "A New Paradigm of Development: Regional Imbalance and Assam", The Economic Times, New Delhi, October 23, 1985.
  3. The then Chief Minister of Assam Hiteswar Saikia had shown the model and the graphs to Mrs. Indira Gandhi.
  4. The author commenced re-work on the model on his retirement from service in 1995.
  5. "A Model for Assam’s Development", The Sentinel, Guwahati, April 24, 1995.
  6. Human Development Report, 2000, United Nations Development Programme, Oxford University Press.
  7. India: The Road of Human Development, 1997, United Nations Development Programme, Paris: India Development Forum.
  8. 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.
  9. India: The Road of Human Development, 1997, Paris: India Development Forum, United Nations Development Programme.
  10. H.N Das, "Financing Disaster Response", India Disasters Report, New Delhi: Oxford University Press, 2000.
  11. Government of India, Ministry of Finance, Economic Division, Economic Survey, 2000-2001, February 2001, Government of India Press, New Delhi.
  12. Planning Commission Minutes, unpublished.
  13. "A New Paradigm of Development: Regional Imbalance and Assam", The Economic Times, October 23, 1985.
  14. Quoted while announcing the famous package for the Northeastern region after his seven-day tour of the seven States of the region in a press statement on October 27, 1996.
  15. High Level Commission Report to the Prime Minister, Planning Commission, Chaired by S P Shukla, 1997.
  16. Assam’s Economy: A Fresh Perspective, Federation of Industries and Commerce of North Eastern Region (FINER), Guwahati, 2001.
  17. See, for instance, Ajai Sahni, "The Terrorist Economy in India’s Northeast: Preliminary Explorations," Faultlines: Writings on Conflict & Resolution, Volume 8, New Delhi: ICM-Bulwark Books, April 2001, pp. 127-148.
  18. "Centre’s Money is not for Militants: Venkaiah", Sentinel, June 15, 2001.
  19. Assam was placed under President’s rule on November 28, 1990. Operation Bajrang was conducted between September 1990 and April 1991. See South Asia Terrorism Portal; India; States; Assam; Backgrounder.
  20. Report of the Committee on Credit Related Issues under IRDP (GSY) in North-Eastern states, Ministry of Rural Development, Government of India, 2000.
  21. "Reclaiming a lost World", Indian Express, New Delhi, May 11, 1998.
  22. High Level Commission, Report to the Prime Minister, Planning Commission, Chaired by S P Shukla, 1997.
  23. See Ajai Sahni and Bibhu Prasad Routray, "SULFA: Terror by Another Name," Faultlines: Writings on Conflict & Resolution, Volume 9, New Delhi: ICM-Bulwark Books, July 2001, pp. 1-38.
  24. Honourable Guwahati High Court Judgment in Civil Rule Nos. 23K, 2238, 2425 of 1990 and 11 of 1991, Report of Assam Governor dated 26.11.90 quoted in full.





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