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Rural Development

Rural Development

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Issue on Rural Development
Issue on Rural Development

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Published by: Priyanku Narayan Baruah on Feb 24, 2013
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Socio- Economic Ethos in Rural Development of Assam: Specialfocus on Agricultural sector
While most other states in India are gradually moving away from their traditional agriculture-based economytoward industry or service-oriented economy, Assam is still heavily dependent on the agricultural sector. Comparedto most other states in India, Assam is considered a less developed state, which depicts a gloomy picture theeconomic condition of the state given that India is considered a less developed country (LDC). While the socio- political problems afflicting the state since the last few decades are partly to blame for a lack of conduciveenvironment for economic development of the state, particularly in industry or service-oriented areas, there arevarious 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 ofAssam.
 The fact that Assam had slackened critically
the national average after being better-off than the rest of Indiain the year 1950 came as a shock to the then Prime Minister, Indira Gandhi. The criticality of this failure was to beunderstood 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 investmentrequired 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 governmentalattention was consequently diverted to other aspects of the canvas.In the post-1995 phase, a re-working of the timeseries 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.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 socialdevelopment, 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. Among the Indian States, the highest was
Kerala with an HDI of 0.603 agains
t Assam’s 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
country’s population was ‘Below Poverty Line’ (BPL) in 1999
-2000. As
sam’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 isthat 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 BPLfamilies were made in this estimate.Grinding poverty is writ large on the faces of the poor in Assam, particularly in the rural areas. Emaciated bodiesand an anemic look, protruding bellies and thin limbs, worn out clothes and dilapidated shelters, are all commonindicators 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 tosanitation 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 State’s population, damage the landmass
and also cause depletion of resources. The funds available for relief and rehabilitation are so meager that it becomesimpossible 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, Assam’s figure was Rs.
8,700, Tripura’s wasRs. 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 allStates of the Northeastern region are placed below the national average in per capita income.The position remainsthe same even in terms of the poverty ratio. Against the Planning Commission BPL figure of 26.10 per cent for thecountry (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 Northeasternregion 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 
Statesof the Northeastern region. In the other six States, literacy alone would push their HDI higher than that of Assamand 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 onagriculture as farmers, as agricultural laborers, or both for their livelihood. A majority of state's population, almost90 percent of an estimated 22.4 million in 1991, live in rural areas where the mainstay of business is productionagriculture. In terms of the state domestic product (SDP), the agriculture sector contributed over 38 percent of thestate income in 1990-91.Agricultural Census data (Economic Survey of Assam, 1989-90) shows that total land under cultivation was 2.59million 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 1.30hectares during the same time period compared to an average size of 1.47 hectares in 1970-71. Such fragmentationoccurred due to two principal factors:(i) inheritance-related, i.e., breaking down land parcels to distribute amongheirs, and (ii) government land reform measures which set the ceiling for land holding per family (50
s at present) thereby promoting and facilitating land fragmentation (1). Numerous studies have shown that small andfragmented land holdings are one of the principal causes of low productivity because such land holdings do notfacilitate economic and efficient use of modern technology (e.g., agricultural machinery, chemicals, and hybridseed). Assam is far behind in the use of modern agricultural technology to improve its agricultural productivitycompared to the rest of the country. For example, the agricultural productivity index for Assam was 156 in 1989-90compared 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, andtobacco. Although rice is the most important and staple crop of Assam, its productivity over the years has notincreased while other crops have seen a slight rise in both productivity and land acreage. For example, while riceyield per hectare in 1970-71 was 1,022 kgs compared to 1,261 kgs in 1990-91, wheat yield jumped almost three-foldfrom 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 areaunder tea cultivation (gardens) was estimated at over 229,000 hectares in 1989, employing an average of over half-a-million people per day. In addition, a considerable number of Assam's population depends on secondary and tertiarysectors-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 evenwell-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 avertsuch possible catastrophe, it will be necessary to equip the state with irrigation facilities, perhaps in selected areasfirst, due to the cost factor.Agricultural development problems and economic development problems go hand-in-hand in Assam. Thus, whilemost of the development problems discussed below is agriculture-related, some of these are also related to theeconomic development problems in Assam. In addition to some of the major problems already discussed in Section Iabove (thus will not be repeated here), such as land fragmentation, lack of modern technology, or continued relianceon 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 everyyear. The principal source of floods is the Brahmaputra river and its tributaries. Although it has been decades sincethe 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 theseannual 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 aconservative 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 itis time to put the dredging plan into action.
2) Capital deficiency:
Commercial capital, i.e., loans from banks or other credit agencies, is not generallyaccessible to farmers in Assam. As a result, borrowing from unscrupulous lenders, who are not regulated by thestate, at an extremely high interest rate is common in the state. Tragically, In many instances some borrowers losetheir livelihood, i.e., their cultivable land, to these unscrupulous lenders. Although the amount of commercial loanfor 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 refusingagricultural loans were a lack of necessary collateral, mostly in the form of land. A lack of proper land inheritancedocumentation 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 farmingfamilies with loans to expand and improve their agricultural production as well as to explore alternative avenues toincrease income) used over Rs. 626 million in loans in 1990-91. However, the need for agricultural loan remainslargely unfulfilled in Assam.
3) Marketing problems
Agricultural markets in Assam are under-developed. Farmers sell to the nearestdealer/buyers, mostly immediately after harvesting when the price is at the lowest, instead of trying to find the bestmarket for their products. Geographical isolation, weak transportation and communication systems, poor marketingfacilities, 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 communicationfacilities such as telephone and regular and timely market reports, farmers in Assam are many years away fromhaving such facilities to gauge the market and sell accordingly. In terms of the role of government, earlier studieshave 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'sfocus from revenue collection to marketing facilitation will be necessary if farmers are to benefit.

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