[Assam] Industrial development in Assam-— KK Sen (The Assam Tribune,25.07.2008)

[Buljit Buragohain]

Industrial development in Assam
— KK Sen
India, which is considered as an industrially backward country despite its availability of huge reserve of natural resources was not stagnant during ‘pre-British period and was even more advanced as compared to west European countries. Most of the industries were subsequently destroyed by the British rulers dominated under colonial rule. Industrial revolution in England and Trade Policy followed by British rulers dealt a severe blow to the traditional Indian industries. During two hundred years of British colonial rule no effective effort was initiated by the British to develop the basic and heavy industries.

Since independence our country was striving to change this dismal scenario with an aim of building up sound industrial base and only during mid-nineteenth century much headway was made in developing tea, jute, textile and coal industries. Economic planning of the country envisaged a revolutionary attempt in developing various industries in post-independence period and the State of Assam played a prominent role through installation of first oil refinery, first tea plantation industry and first coal field in the country. Considerable improvement in the development of industries in the country is noticeable from the fact that Index of Industrial Production (IIP) of the country rose to 65.3 in 1970-71 from 18.3 in 1950-51 accelerating to the extent of 204.08 in general, 214.6 in manufacturing, 153.4 in mining and 181.5 in electricity during 2004-05 from 167,172.7, 131.9 and 159.2 respectively in 2001-02 against which IIP in the State moved up to 159.1 in
 2005-06 from 142.2 in 2004-05. Growth rate of 10.8 per cent in industrial sector at national level during April to December, 2006-07 as against 8.2 per cent in the corresponding period of 2005-06 is attributed mainly to the encouraging achievement of 11.5 per cent in manufacturing sector, moderate growth of 3.8 per cent and 7.3 per cent respectively in mining and electricity. Automobile Industry witnessed a significant performance through its growth of 18 per cent in 2006-07 as against 15 per cent in 2005-06. Impressive growth rate has also been revealed in basic metal and alloy industry (20.4%), transport equipment (16.3%), non-mettalic mineral product (13.7%), cotton textile (13%), machinery and equipment (14.1%).

On the contrary contribution of these sectors to state economy was not much encouraging as growth of manufacturing sector in Gross state Domestic product (GDP) has been estimated at only 5.4 per cent and 12.3 per cent at constant and current prices respectively during 2006-07 over the previous year. Public sector industries comprising units of coal, steel, light, heavy engineering goods, power, petroleum, mineral, fertilizer etc, are now functional parallelly with the private sector engaged in manufacturing of textile, metal products, electronics, leather goods, agro based industries etc. Except Maharashtra, West Bengal, Tamil Nadu, Gujarat and Uttar Pradesh no other States could dominate in establishing a strong industrial base. The state of Assam also failed to attain its predominance in industrial background as it possesses less than 2 per cent of country’s medium and large scale industries. However the state occupied a prominent place in the map of
 sericulture industry through its production of silk like Eri, Muga and Mulbery to the tune of 99 mt, 665 mt, and 9 mt respectively during 2006-07. Handloom, Khadi and village industries of the state also provided much scope for uplift of the rural economy. Tea being the traditional industry of the country took its birth in the state in 1933 and achieved a remarkable record throughout the world for its recorded production of 892.7 thousand tonnes in 2005-06 of which contribution of the state is more than 50 per cent. Much emphasis has been laid on development of tea industry during 5 year plan period in view of earning much foreign exchanges. Special package is now being announced for the uplift of ailing tea industry and to remove loss of state revenue. Assam Industrial Development Corporation (AIDC) and Industries and Commerce department of State are endeavouring their best for implementation of various promotional schemes.

Keen interest of investors from within and outside the state also throws light on significant improvement in industrial scenario of the State. A total of 27913 units of small scale industries in the State play a pivotal role in the network of industrialisation and generation of employment opportunities to nearly more than 1 lakh persons. Unemployed youths of the State have been encouraged by setting up SSI through PMRY scheme. Introduction of new projects like trade centres, extraction of bio diesel from jatropha plant, setting up of central research institute, setting up of national academy of construction for imparting training to develop skill, Udyogjyoti scheme and Chief Minister’s Swa-Niyojan Yojona to give exposure to college students and unemployed youths of the state assume a great significance in industrial development of the State. Assam Gas Cracker Project is a new milestone in the industrial scene of the State. Industrial policy by way of
 offering incentives like state capital investment subsidy, power subsidy, special incentive for agro food processing industries and export oriented units will obviously give a fillip in gearing up industrial activities. Industrial growth in our country was not uniform throughout the plan period as it experienced a steady growth of nearly 8 per cent during first three plan period with fluctuation subsequently. 

Positive growth rate has been achieved in the State in 2006-07 so far as production of jute, fertilizer, coal and natural gas is concerned while tea, petroleum, crude oil, cement, lime stone etc. witnessed negative growth during the same period. Index of mineral production accelerated to the extent of 95.3 during the same period as against 94.9 in 2005-06. With a view to give a face lift to industrial production it is much crucial to augment power sector and prioratise the infrastructural development. Per capita availability of power in the State recorded as 116 kwh in 2006-07 is not at all encouraging. Industrial development in the State is possible through harnessing the untapped sources which are available in abundance. Every effort is to be made for gearing up industrial activities by removing infrastructural inadequacies. Apart from these, improvement in credit delivery system is very crucial for the development of industrial sector of the country
 as finance is considered as the ‘life force’ of industry. Revival of sick industries of the country is also a crying need of the hour. Despite Government initiative to take over management of some industrial undertakings and to provide management support and financial assistance, sick industrial units of the country failed to revive effectively. Looking at this dismal scenario Industrial Reconstruction Bank of India was set up to revive potentially viable industries.

The entire north eastern region has been suffering from imbalance in industrial development which resulted in a widening gap between per capita income of the region and the country as a whole. Lack of development of North East is experienced from apathy towards much publicised North East Industrial Policy to which there was spontaneous response of entrepreneurs. So it is pertinent to review the industrial policy of the region which is trailing behind in all economic parameters. Economic development of Assam as well as entire North East is not at all possible without an accelerated development in industrial sector as agriculture sector alone cannot make an impressive breakthrough.
(The writer is former Director of Economics and Statistics, Assam).

(The Assam Tribune,25.07.2008)
 
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