Meghalaya – On the Paths to Prosperity

meghalaya On the paths to prosperity

Bibek Debroy

acknowledgement I was born in Meghalaya - Shillong to be precise. I spent the first ten years of my life in Pynthorumkhrah and studied in St Peter’s School. That was a long time ago and Shillong was even more cut off than it is today. Nongpoh was, and still is, half way between Shillong and Guwahati. In that day and age, travelling to Guwahati itself was a bit of an expedition. At fixed times of the day, convoys of buses, vans and cars wound their way up towards Shillong, and down towards Guwahati, and crossed each other in Nongpoh. If you missed the “time”, you were stuck. It wasn’t the way it is today, when you just hop onto a private SUV. As a child, I didn’t like Guwahati. It was hot and there were mosquitoes. When you saw the reservoir of Umiam Lake in Barapani, you were comforted. You were back home. Shillong was home and Police Bazar was home, as you walked past Ward’s Lake and the Botanical Gardens towards school. I have no recollection of feeling particularly deprived because one had to walk that distance to school. I have no recollection of feeling particularly deprived because there was no electricity or tap water at home. There were kerosene lamps and wells. I have memories of trips to Sohra and Mawsynram and even Dawki, along which route, my ancestors migrated from Sylhet in 1948. As a child, I travelled extensively in the Khasi and Jaintia Hills, less so in the Garo Hills. That was a long time ago. Memories and nostalgia don’t change. Shillong and Meghalaya do change. Whenever I have visited Shillong thereafter, it’s been a bit like “Yarrow Visited”. That image hath perished and it fills my heart with sadness. But Shillong is Shillong and Meghalaya is Meghalaya and they tug at my heart-strings.

Therefore, when Kavita Datta of Aakhya Media Services broached this idea of a book on Meghalaya, I was interested and intrigued. Fair enough, it was a good idea to do a book on Meghalaya. But beyond the litany of problems on physical connectivity, trade constraints with Bangladesh and Special Category status, was there much to say? Hadn’t it all been said in Vision Documents and Human Development and State Development Reports? That was before I met Mr Ram Mohan Mishra, CEO, of the Meghalaya Basin Development Authority (MBDA) and Principal Secretary (Planning). And it was also before I met Mr Pankaj Jain, Resident Commissioner, Meghalaya and subsequently, the Chief Minister, Dr Mukul Sangma. Truth be told, I had a vague idea about the IBDLP (Integrated Basin Development and Livelihood Programme), nothing especially tangible and specific. Driving entrepreneurship in Meghalaya? Good idea, but would that really work? With that litany of problems? With the existing problems with government delivery and governance? IBDLP was specific. More generally,

what was communicated was a sense of enthusiasm and pride, dynamism and momentum. If this was ensured, much of the struggle would actually be over.

However, was this enthusiasm concentrated only at the top, or had it percolated down? There was only one way to found out and that was through field-trips, first in the Khasi Hills and later, in the Jaintia and Garo Hills. As it so happened, my first “host” so to speak, was Mr Aiban Swer, OSD with the Meghalaya Institute of Governance. Aiban not only seemed to know everyone in Meghalaya, and could therefore arrange meetings with whoever you wanted, he was also determined to expose you to everything about Meghalaya, culture, history, cuisine, sports, not just economics and entrepreneurship. Perhaps his enthusiasm might have had something to do with the fact that we discovered we shared an umbilical cord, in the sense that both of us were born in the same hospital in Shillong. On economics and entrepreneurship, it was fortuitous that one of my first meetings was with Mr B.K. Sohliya, OSD with the Meghalaya Institute of Entrepreneurship.

I think of him as the strawberry man, though he is not the famous headman of Sohliya village. That meeting was supposed to last for 30 minutes, it lasted for something like 3 hours. There were also Mr Sanjay Goel, DC, East Khasi Hills, Mr Pravin Bakshi, DC, West Garo Hills and Mr K.N. Kumar, Principal Secretary (Community and Rural Development). I shouldn’t convey the impression that this was only about meeting people from the government. It wasn’t. Patricia Mukhim, Editor of the Shillong Times, is one example. I learnt much from her and others like her. But this book isn’t about them either.

It is about Meghalaya’s citizens, many of whom, I met. It is about entrepreneurs doing their own little things, hoping for a better future. It is about people who invited me to their own homes and wouldn’t let me go without food. It is about people within the government and outside the government. Listing all those debts would have required another chapter. This book, and the photographs in it, became possible because of them. It is their story and I have merely tried to tell it, as best as I can. But what I told was only daal, interpreted as pulses. That it has hopefully become a sweet book, interpreted as cheeni, is because of Rupinder Kaur of Daalcheeni. I have no idea if I have been able to communicate the sense of pride and momentum. But I do hope you will become interested in Meghalaya and visit it. If you do, it is a State that will tug at your heart-strings too.

Bibek Debroy October 2013

First published in 2013-10-31 By AAKHYA MEDIA SERVICES PVT. LTD. A1/7, Lower ground floor, Safdarjung enclave, New Delhi Ph: 011-46405200

Disclaimer: The findings/views/opinions expressed in this book are solely those of the author and do not necessarily reflect the views of the publisher.

ALL RIGHTS RESERVED. No part of this book shall be reproduced, stored in a retrieval system or transmitted by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior written permission of the copyright holder(s) and/ or the publishers.

Photographs in the book have been provided by the author.

Book Design: DAALCHEENI, New Delhi.

Printed at PRINT WORKS, New Delhi.

Published by AAKHYA MEDIA SERVICES PVT.LTD ISBN 978-81-929512-1-8

CONTENTS 01 Meghalaya - Abode of the Clouds / 11 02 Where does Meghalaya stand on economic development? / 21 03 Districts Development & Deprivation / 33 04 The Public and the Private / 47 05 The Fiscal Side / 63 06 Cross Border Issues / 75 07 A Vision for Meghalaya / 89 08 Driving Entrepreneurship and the IBDLP / 103

1 Meghalaya

Abode of the Clouds

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01 Meghalaya - Abode of the Clouds

“Megha” and “alaya” are both Sanskrit words.

“Megha” means cloud and “alaya” means house or receptacle. Meghalaya (megha + alaya), “abode of the clouds”, is an apt name for one of India’s younger and smaller States. There is no escape from chasing the clouds, or the clouds chasing you, in Meghalaya.

It is one of the wettest places on earth. It rains all the time. Mount Waialeale and other places in Hawaii are often described as the world’s wettest places and marketed that way. It entirely depends on how rainfall is defined, as an average for the entire year, the average for a particular month, or the highest in a single day. The rain in Hawaii is evenly distributed throughout the year. In Meghalaya, in relative terms, it is concentrated in specific months. For example, there is Cherrapunji, in the East Khasi Hills district. The name is actually Sohra. The British mispronounced it as Chura or Churra. Punji means village. Cherrapunji still holds the record for the maximum rainfall recorded in a month (way back in July 1861) and the maximum rainfall recorded in a year (between 1 August 1860 and 31 July 1861). There is also Mawsynram, also in the East Khasi Hills district, and not very far from Cherrapunji.

Meghalaya became a State on 21st January 1972. It has 11 districts now and the capital is Shillong. There is Assam to the north and to the east and there is Bangladesh to the south. The Garo Hills are on the west, the Khasi Hills in the centre and towards the east, and the Jainita Hills on the east. There have been archaeological excavations along the Ganol and Rongram river valleys in the West Garo Hills, the Barapani and the Upper Shillong areas of the East Khasi Hills, Bhaitbari in the West Garo Hills and Syndai in the Jaintia Hills. The history of the region is still shrouded in mystery. According to Garo oral tradition, there is a history of migration from Tibet, across the Brahmaputra river, settlement in the valley of the Brahmaputra and then further migration and settlement southwards in the Garo Hills. There is recorded history of resistance against the invading Mughals and more importantly, against the British, particularly in 1872. There is no oral tradition or history of migration for the Khasis. They were descended from seven families, who descended to earth with the help of a ladder that can still be seen in Sohpetbneng peak in Ri-Bhoi district. By the time, the British took over most of Assam in 1826, the Khasi Hill States already existed. At one time, the Jaintia kingdom was a flourishing one, extending to parts of what is now Assam and Bangladesh. The name Jaintia may, though this is impossible to conclusively establish, have been derived from the name Jayanti Devi or Jayantishvari, Jayanti (at Nartiang village) being one of the 51 original “shakti pitha”s, associated with

goddess Sati’s self-immolation. But since the original capital of Jaintiapura is now in the Sylhet district of Bangladesh, just across the border, it is likely that the original temple is also the one across the border, the one in Nartiang being an after-thought.

The British defeated the Burmese king in 1826, leading to The Treaty of Yandaboo, thereby ceding paths of undivided Assam. Though resistance continued, the Garo, Khasi and Jaintia Hills became part of British India and incorporated into Assam in 1835. However, through the treaties, this was a special kind of relationship, with considerable amount of autonomy. Shillong became a civil station in 1864 and Tura in 1876. At the time of Independence, as part of the unified Assam, Meghalaya continued to have some degree of autonomy, formalized even more through the Assam Reorganization (Meghalaya) Act of 1969. Eventually, after the North-Eastern Areas (Reorganization) Act of 1971, Meghalaya became a fullfledged State. It is a north-eastern State, one of the so-called Seven Sisters.

Tradition and history have made administration and governance a trifle complicated. For example, Meghalaya is a Sixth Schedule State and this provides for Autonomous District Councils (ADCs), unlike the structure of panchayats.

There are three such in Meghalaya – the Garo Hills ADC, the Khasi Hills ADC and

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the Jaintia Hills ADC. Parts of Meghalaya such as the European ward in Shillong and a narrow strip in the Garo Hills are not part of the Sixth Schedule.

A longish quote from the Sixth Schedule is in order. “The Regional Council for an autonomous region in respect of all areas within such region and the District Council for an autonomous district in respect of all areas within the district except those which are under the authority of Regional Councils, if any, within the district shall have power to make laws with respect to — (a) the allotment, occupation or use, or the setting apart, of land, other than any land which is a reserved forest for the purposes of agriculture or grazing or for residential or other non-agricultural purposes or for any other purpose likely to promote the interests of the inhabitants of any village or town: Provided that nothing in such laws shall prevent the compulsory acquisition of any land, whether occupied or unoccupied, for public purposes by the Government of the State concerned in accordance with the law for the time being in force authorizing such acquisition; (b) the management of any forest not being a reserved forest; (c) the use of any canal or water-course for the purpose of agriculture; (d) the regulation of the practice of jhum or other forms of shifting cultivation; (e) the establishment of village or town committees or councils and their powers; (f) any other matter relating to village or town administration, including village or town police and public health and sanitation; (g) the appointment or succession of Chiefs or Headmen; (h) the inheritance of property; (i) marriage and divorce; (j) social customs….The Regional Council for an autonomous region in respect of areas within such region and the District Council for an autonomous district in respect of areas within the district other than those which are under the authority of the Regional Councils, if any, within the district may constitute village councils or courts for the trial of suits and cases between the parties all of whom belong to Scheduled Tribes within such areas, … to the exclusion of any court in the State, and may appoint suitable persons to be members of such village councils or presiding officers of such courts, and may also appoint such officers as may be necessary for the administration of the laws …The District Council for an autonomous district may establish, construct, or manage primary schools, dispensaries, markets, cattle pounds, ferries, fisheries, roads, road transport and waterways in the district and may, with the previous approval of the Governor, make regulations for the regulation and control thereof and, in particular, may prescribe the language and the manner in which primary education shall be imparted in the primary schools in the district…The Regional Council for an autonomous region in respect of all lands within such region and the District Council for an autonomous district in respect of all lands within the district except those which are in the areas under the authority of Regional Councils, if any, within the district, shall have the power to assess and collect revenue in respect of such lands in accordance with the principles for the time

being followed by the Government of the State in assessing lands for the purpose of land revenue in the State generally….The Regional Council for an autonomous region in respect of areas within such region and the District Council for an autonomous district in respect of all areas in the district except those which are under the authority of Regional Councils, if any, within the district, shall have power to levy and collect taxes on lands and buildings, and tolls on persons resident within such areas….The District Council for an autonomous district shall have the power to levy and collect all or any of the following taxes within such directives, that is to say — (a) taxes on professions, trades, callings and employments; (b) taxes on animals, vehicles and boats; (c) taxes on the entry of goods into a market for sale therein, and tolls on passengers and goods carried in ferries; and (d) taxes for the maintenance of schools, dispensaries or roads. ..The District Council of an autonomous district may make regulations for the regulation and control of money-lending or trading within the district by persons other than Scheduled Tribes resident in the district….In particular and without prejudice to the generality of the foregoing power, such regulations may—(a) prescribe that no one except the holder of a licence issued in that behalf shall carry on the business of money-lending; (b) prescribe the maximum rate of interest which may be charged or be recovered by a money-lender; (c) provide for the maintenance of accounts by money-lenders and for the inspection of such accounts by officers appointed in that behalf by the District Council; (d) prescribe that no person who is not a member of the Scheduled Tribes resident in the district shall carry on wholesale or retail business in any commodity except under a license issued in that behalf by the District Council.”

As this longish quote shows, ADCs have quite a few powers. They have legislative (land, forests, shifting cultivation, inheritance of property, management of villages and towns), judicial (courts), executive (primary schools, dispensaries, markets, cattle pounds, fisheries, roads, road transport, waterways, forests) and financial (taxes, tolls, licenses, leases, royalties) powers. The ADCs are elected for five years and each ADC has a Chief Executive Member (CEM). ADCs have existed in the Garo and Khasi Hills from 1952 and in the Jaintia Hills from 1964. They preceded Meghalaya becoming a State. From the perspective of administration and governance, a few questions do arise. First, are the revenue raising, licensing and natural resource allocation powers of ADCs applied transparently? Second, do ADCs deliver public goods and services efficiently? Third, though the Sixth Schedule does state that in cases of conflicts between legislation passed by the Legislative Assembly and those passed by District or Regional Councils, those passed by the Legislative Assembly will prevail, isn’t there an implicit overlap in jurisdiction? Stated differently, ADCs were thought of before Meghalaya became a State. With Meghalaya now a State, should there be a relook at the roles and

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responsibilities of ADCs? Fourth, especially from the angle of the young, women and non-tribals, are ADCs sufficiently inclusive? That question of inclusion also arises for the traditional institutions of governance, both from the point of view of gender biases and lack of elections. The Garo structure is 2-tier, with nokmas (village headmen) moving up to laskars (headmen over groups of villages). The 3-tier Khasi structure has rangbahshnongs (village headmen) moving up to syiems. The 3-tier Jaintia structure has wahehchnongs at the village level, dolois at the second level and syiems at the highest level. For planning purposes, there is a State Planning Board (SPB), District Planning and Development Councils (DPDCs) for districts. The DPDCs function efficiently, because the DC (Deputy Commissioner), the CEM of the ADC and the MLAs from the district are members of DPDCs. In the 2011 Census, Meghalaya had a population of 2.97 million, almost 3 million. There were 1.49 million males and 1.48 million females, with a sex ratio of 989. That sex ratio has improved a bit, from the 975 in the 2001 Census. The population has also increased, from 2.32 million in 2001. This is a decadal rate of population growth of 27.95%, a little lower than the decadal rate of population growth of 29.94% registered between 1991 and 2001. Since Meghalaya has a Meghalaya Population Density Map

Meghalaya Physical Map

geographical area of 22,429 sq km, the population density in 2011 is only 132 per sq km, up from 103 in 2001. However, this population is not evenly spread throughout the State. Population densities are far higher in the Garo Hills, East Khasi Hills and Ri Bhoi, the West Khasi Hills are relatively sparsely populated.

20.07% of the population is urban and 79.93% lives in rural areas, in 5,782 villages.

Urbanization is low and there are no really large towns, not to speak of cities. Even Shillong, the capital, registered a population of only 354,325 in the 2011 Census.

This population is for the urban agglomeration of Shillong. The population of Shillong municipality is lower, only 143,007. Other than Shillong municipality, the Shillong urban agglomeration also included Shillong Cantonment, Mawlai, Madanrting, Nongthymmai, Nongmynsong and Pynthorumkhrah. 45% of the population of Meghalaya is Khasi, almost 28% Garo and 18% Jaintia. Christianity is the dominant religion, with 70.3% of the population practicing it.

Shillong was described by the British as the Scotland of the East. Much of its development, and indeed the developments of Meghalaya, were due to the British. In 1864, the British chose Shillong as an administrative headquarters for the Khasi and Jaintia Hills and in 1874, Shillong became the headquarters of the Chief Commissioner’s Office for Assam. Shillong continued to be the capital of undivided Assam until Meghalaya became a State. Other than Shillong, Tura

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01 Meghalaya - Abode of the Clouds

and Jowai are the other municipalities. Tura is in the West Garo Hills and that name also resulted from the British mispronouncing Dura. Jowai is in the Jaintia Hills. There are municipal boards in Williamnagar (East Garo Hills), Resubelpara (North Garo Hills) and Baghmara (South Garo Hills). There are town committees in Nongstoin (West Khasi Hills), Mairang (West Khasi Hills) and Nongpoh (Ri Bhoi). Finally, there are also Cantonments in Shillong and Umroi.

History and British colonial policy have also made economic relationships messy. Meghalaya has a 443 km long land border with Bangladesh. There is a long history of trade between Meghalaya and Bangladesh, especially the Sylhet region of Bangladesh. The border haats that are now being energized go back to Mughal times and even earlier. For the North Eastern region as a whole, there is a long history of trade through Burma. Even before India became Independent, when Burma Province was separated from British India in 1937, these historical relationships started to get severed. The landlocked States of North-East India are connected to West Bengal through the narrow Siliguri Corridor, often known as the Chicken’s Neck. There is no railhead in Meghalaya. The nearest one, in Guwahati in Assam, is 103 km away. Not many people know that in 1886, there used to be a railway line known as the Cherra Companygunj State Railways, from Tharia (near Cherrapunji) to Companygunj in Bangladesh. A line was also laid from Tharia to Mawsmai, though it was never opened to traffic. That railway line was eventually closed down, towards the end of the 19th century. While a rail network through hilly terrain is an expensive proposition, some railheads are indeed possible. Nor does Meghalaya quite have an airport yet. There is Umroi (Shillong), but services from Umroi are uncertain and often unviable. This effectively means that air links are also through Guwahati. Road networks, leading out of the State, are also through Assam. Apart from transaction costs such inadequate infrastructure imposes, any agitation in Assam also means that Meghalaya is cut off. Economic relationships, which transcend trade and spill over into cross-border movements of capital and labour, have logic of their own, even though they may find it difficult to overcome constraints created by administrative and national boundaries. While such administrative and national boundaries cannot be rolled back, economic integration is a key to ensuring Meghalaya’s prosperity. Migration data are not yet available from the 2011 Census. The 2001 Census showed that 20,434 of Meghalaya’s citizens migrated out. With economic opportunities in Meghalaya, both the push and the pull for migration should become less. Simultaneously, the 2001 Census also showed in-migration of 33,710 into Meghalaya, of which, 1,154 was from other countries. Such in-migration has lead to socio-economic tensions.

But for the moment, the simple point is that with growth and development, resentment towards outsiders becomes less.

There is quite a bit to see in Meghalaya. There are national parks in Balpakram (South Garo Hills) and Nokrek (West Garo Hills). In 2009, UNESCO declared Nokrek as a Biosphere Reserve. There are red pandas and assorted primates there, including the Hoolock gibbon. Strictly speaking, the Hoolock gibbon is the only ape species that is found in India. Balpakram is also connected with Hindu myths. When Ravana knocked Lakshmana unconscious, a specific herb was needed to revive him. Not being able to identify the herb, Hanuman carried off the entire mountain of Gandhamadana. Gandhamadana is believed to have been in Balpakram and when the top of the peak was carried away, it left the canyon in Balpakram as a legacy. There is a Hoolock Gibbon Reserve in Selbagre (West Garo Hills). There are wildlife sanctuaries in Baghmara (South Garo Hills), Siju (South Garo Hills) and Nongkhyllem (Ri Bhoi). Siju and Nongkhyllem are specially known for birds. There are breathtaking caves near Mawsynram, Siju and Jowai. There are the famous living root bridges near Sohra and also the Mawphlang sacred grove. Mawlynnong village (East Khasi Hills) has been voted the cleanest village in Asia. Mir-Jumla’s tomb is near Tura, Aurangzeb’s famous general having died from malaria. There are festivals of dance and music. With so many rivers and such a lot of rain, there are bound to be beautiful lakes and waterfalls. One of these, in Jarain (near Shillong) has the carnivorous pitcher plant, nepenthenes khasiana. Foreign tourists no longer need a special permit to visit Meghalaya. But why don’t more tourists go to Meghalaya? The answers will have something to do with physical infrastructure or law and order and insurgency. For Meghalaya, the South Asia Terrorism Portal lists the Achik National Volunteer Council, the Hynniewtrep National Liberation Council, the Liberation of Achik Elite Force and the Garo National Liberation Army as active terrorist/insurgent groups. In general, the best antidote to terrorism is economic development and empowerment. This isn’t a book for tourists. Nor is it a book about tourism in Meghalaya. It is a book about the economic development of Meghalaya. It is about Meghalaya’s paths to prosperity. There is a role for the government in this pursuit and there is a role for private entrepreneurship. If the government provides an enabling environment and provides public goods and services where there is market failure, and if private entrepreneurship taps those opportunities, development takes over. While this book is about Meghalaya, that template is common to many North-Eastern States.

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19 Meghalaya PATHS TO PROSPERITY

Meghalaya

2 Where does

Meghalaya stand on economic development?

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02 Economic Development Where does Meghalaya stand?

Economic development isn’t a precise expression, though one understands it generally as an improvement in the average standard of living of citizens. One possible measure, though not the only one, of economic development in a State is per capita gross State domestic product (GSDP), the aggregate GSDP divided by the population.

GSDP is like GDP (gross domestic product) for a country. Because GSDP is the marketed value of goods and services produced in the State over a certain period, say a year, it isn’t quite per capita income. It doesn’t include net factor income, payments made to those outside the State, or payments received from those outside the State. For instance, if there are a lot of remittances from migration, inward or outward, and this is significant in net terms, per capita income can be different from per capita GSDP. However, no State has satisfactory data on per capita income. Hence, per capita GSDP will have to do as a surrogate indicator of per capita income. As with GDP, there are other problems with GSDP too. First, it is an aggregate measure and ignores the distribution. Second, it is the marketed value of goods and services produced. If there are non-market transactions, it won’t be captured in GSDP. Environmental costs are one example of this, though there can be other non-market transactions too.

Table: 2.1: Real GSDP growth rates (%) 1994-95

3.64

1995-96

10.54

1996-97

3.70

1997-98

6.13

1998-99

9.87

1999-2000

7.79

2000-01

5.45

2001-02

6.89

2002-03

3.79

2003-04

6.78

2004-05

7.11

2005-06

7.91

2006-07

7.74

2007-08

4.51

2008-09

12.94

2009-10

6.55

2010-11

8.72

2011-12

6.31

2012-13

8.90

Average for 2005-06 to 2012-13

7.12

Table 2.1 shows Meghalaya’s GSDP growth in constant prices of 2004-05.1 That average 7.95% growth for 2005-06 to 2012-13 compares with an all-India figure of 8.02% for that same period. Any performance can be evaluated in either absolute or relative terms. Even if one assumes a rate of population growth of 3% (at 2.8% the decadal rate for 2001-2011 was slightly lower), a per capita real GSDP growth of around 5% is not bad. Without getting into sophisticated measures of volatility, volatility of growth between 2005-06 and 2012-13 is also lower than that between 1994-95 and 2004-05. However, in relative terms, 7.95% is a shade below the all-India average of 8.02%. Within the North-East, for that 2005-06 to 2012-13 period, Arunachal Pradesh clocked real growth of 6.94%, Assam of 6.10%, Manipur of 5.84%, Mizoram of 9.40% and Nagaland of 6.79%.

With the exception of Mizoram, Meghalaya’s growth has been better than that of the other States in the North-East. While the precise share varies from year to year, in 2011-12, around 16% of Meghalaya’s GSDP originated in agriculture and allied activities, agriculture accounting for around 12%. Industry accounted for around 30.5%, mining and quarrying with 6.5% and manufacturing with around 8%. The remaining 54% originated in services. Over time, as a trend, the shares of agriculture and allied activities and agriculture have both been declining.

Industry’s share has increased, but because of manufacturing, and not because of mining and quarrying. The share of services has increased. As an average for the period 2005-06 to 2011-12, real growth in agriculture and allied activities was 3.28%, while that for agriculture was 3.09%. Sectoral shares in GSDP are a function of how other sectors are performing. However, in principle, agriculture should exhibit better rates of growth and with commercialization and diversification, so should agriculture and allied activities. For that same period, average real growth in industry has been a respectable 10.23%, while that for manufacturing has been an even more impressive 28.25%. Low bases can of course lead to such high rates of growth, which become difficult to sustain when the base increases. Finally, there is the services sector and in real terms, it grew at an average of 8.94%.

The growth should have had an impact on poverty. Poverty is a multidimensional concept. It is no one’s case that a minimum level of income or consumption expenditure is the sole criterion for identifying someone as BPL (below the poverty line) or APL (above the poverty line). However, the use of income or consumption expenditure is customary, because it is easier to get data on income or consumption expenditure. It is not just in India, but also in other countries, that such concepts of a poverty line based on income or expenditure are used. India was one of the earliest countries in the world to formulate and adopt the concept of a poverty line, way back in the 1950s. The methodology has evolved over time, through the Planning Commission. But since the Alagh Committee of 1979, the methodology has been something like the following, and this was

1. Planning Commission figures, http:// planningcommission.nic.in/data/ datatable/2504/databook_133.pdf

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02 Economic Development Where does Meghalaya stand?

2. See Abhijit V. Banerjee and Esther Duflo, Poor Economics, Rethinking Poverty and the Ways to End it, Random House India, 2011. “Most people living with less than 99 cents a day do not seem to act as if they are starving.

If they were, surely they would put every available penny into buying more calories. But they do not.”

3. http://planningcommission.nic.in/ data/datatable/2504/databook_72.pdf 4. http://planningcommission.nic.in/ data/datatable/2504/databook_70. pdf. There is a technical issue of uniform reference period (URP) and mixed reference period (MRP).

These are the MRP numbers.

also endorsed by the Lakdwala Committee of 1993. Let us fix a per capita daily calorie requirement of 2400 calories for rural India and a per capita daily calorie requirement of 2100 calories for urban India. This immediately suggests that the poverty line was primarily dependent on food, though a little bit was thrown in for clothing. In the late 1950s, this made eminent sense, because it was expected that items like education and health were public goods and would be provided by the government. Therefore, they need not figure in private consumption expenditure baskets. What is the optimal consumption basket that will guarantee people 2400 calories per capita per day in rural India and 2100 calories in urban India? It is a different matter that people, including poor people, need not be “rational” quite in that sense.2 Having determined the optimal consumption basket, we next try to figure out how much that consumption basket is going to cost in different States, using State-level prices generated through assorted consumer price indices (CPI), separately for rural and urban India. This converts a calorie-based poverty line into an expenditure-based poverty line. But prices change over time. Therefore, those price indices are again used to adjust the expenditure-based poverty line over time. Having done all that, one needs data. Data surface through surveys.

And that means the NSS (National Sample Survey) Organization. NSS doesn’t collect data on incomes, because data on incomes are felt to be unreliable. NSS collects data on consumption expenditure. Unfortunately, NSS doesn’t collect such data every year. More accurately, the larger a sample, the more accurate are the data. And NSS large-samples surface roughly once every five years. We had such large surveys in 1983, 1987-88, 1993-94, 1999-2000, 2004-05, 2009-10 and 2011-12. The Planning Commission faced criticism because of these caloriebased norms. Therefore, a Tendulkar Committee was appointed. If one sticks to the essentials and does not get into complicated details, this suggested moving away from calorie-based norms. That would ensure that one wasn’t bogged down by food items alone. Instead, separately for rural and urban India, let us work out monetary figures on the amount of expenditure required, per person per day and let us recalculate poverty ratios. And let’s use those surveys to get the price data, instead of using something like CPI. That’s the general idea.

Because of the change in methodology, there is not much point in comparing the earlier poverty ratios (also known as head count ratios) with current figures.

However, the temporal decline in poverty is a different matter. For Meghalaya as a whole, we know the poverty ratio was 50.20% in 1973-74, 55.19% in 197778, 38.81% in 1983, 33.92% in 1987-88, 37.92% in 1993-94 and 33.87% in 19992000.3 There has been a decline, but poverty is still high. In 2004-05, using the Tendulkar methodology, the figure was 24.7% for urban Meghalaya and 14.0% for rural Meghalaya. In 2009-10, it was 24.1% for urban Meghalaya and 15.3% for rural Meghalaya.4 For 2011-12, the determined poverty lines are Rs 888 monthly

per capita expenditure for rural Meghalaya and Rs 1,154 for urban Meghalaya.

Based on this, the poverty ratio for urban Meghalaya is 9.26%, while that for rural Meghalaya is 12.53%, a remarkable drop, especially for urban Meghalaya.5 Such numbers have often been misunderstood, not just for Meghalaya, but for all of India. That broader debate need not concern us, except to point out that monthly per capita expenditure of something like Rs 900 translates into daily per capita expenditure of something like Rs 30. While one doesn’t quite know what the PPP (purchasing power parity) conversion of US dollars to Indian rupees is right now, that Rs 30 per day is probably around the customary international poverty line norm of 1 US dollar per day. This is a minimal level of subsistence and nothing more. There are two additional points about these poverty numbers.

First, expenditure (and income) distributions are typically log normal. They are not symmetric. There is a thick part of the distribution on the left. When that thick part of the distribution passes above the poverty line, and a lot of poor people are bunched around the poverty line, it is possible for sharp drops in poverty to take place, even the kind one has witnessed for urban Meghalaya. Second, on the face of it, it isn’t obvious why such poverty declines have taken place. Growth and consumption may have increased. Since, under the Tendulkar methodology, price data are generated from the surveys themselves, any increase in food-grain off-take through the PDS (public distribution system) or own production will dampen any increases in prices and thereby also contribute to poverty reductions.

However, one should stress that regardless of what poverty line is used, there will be poverty reductions. It is just that the quantum will be different.

For 2009-10, though not yet for 2011-12, we know what the average consumption basket in Meghalaya is like.6 An average rural household consumes 10.57 kg of cereals per capita per month. 10.27 kg of that is rice, with a little bit of wheat thrown in. An average urban household consumes 9.98 kg of cereals per capita per month. 9.34 kg of that is rice and the share of wheat is a little bit more than in rural Meghalaya. Pulses and pulse products are 0.246 kg per capita per month in rural Meghalaya and 0.321 kg in urban Meghalaya. In rural Meghalaya, an average of Rs 468.56 per capita per month is spent on food products. If one leaves out cereals and pulses and pulse products, most of this is on eggs, fish, meat, vegetables, beverages and edible oils. An average of Rs 498.46 per capita per month is spent on non-food products, fuel and light, clothing and conveyance being the most important. In urban Meghalaya, an average of Rs 580.60 per capita per month is spent on food products. If one leaves out cereals and pulse and pulse products, most of this is on eggs, fish and meat, beverages and vegetables. The order between beverages and vegetables is different from urban Meghalaya and edible oils account for a lower share. An average of Rs 924.60 per capita per month

5. http://planningcommission.nic. in/news/pre_pov2307.pdf 6. These numbers are from Level and Pattern of Consumption Expenditure, 2009-2010, NSS, 66th Round, NSS Report No. 538, December 2011. The rupee figures are in 2009-10 prices.

There is a wealth of detail on consumption expenditure in this report, including consumption expenditure by decile classes. But those details are not relevant for our purposes.

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7. World Development Report 2009, Reshaping Economic Geography, World Bank, http://econ.worldbank.org/WBSITE/EXTERNAL/ EXTDEC/EXTRESEARCH/EXTWDRSXTW2009/0,,contentMDK:21955654~pagePK:64167689~piPK:64167673~theSitePK:4231059,00. html

is spent on non-food products, fuel and light, education, consumer services, conveyance and rent being the most important. The modal household size in rural Meghalaya is of 5 individuals, but the modal number for urban Meghalaya is 6.

This is the right place to mention two other points. First, there is the question of inequality. Poverty is an absolute concept, while inequality is relative. There is an impression that increases in inequality, real or perceived, are bad. There is a difference between inequality in access to inputs (physical and social infrastructure, financial products and so on) and inequality in outcomes (income). In addressing the question of inclusive growth, does one mean the former or the latter? This assumes additional significance because of the almost certain increase in income inequalities when an economy goes through structural transformations in the course of a rapid growth process. The issue is that, no matter what is said about balanced growth, growth is inherently unbalanced and linked to urbanization and spatial concentration. The World Development Report (WDR) for 2009 was titled, “Reshaping Economic Geography”7. This made out a case for integration and spatial concentration. Distilling the findings of empirical research, it stated, “Development seems to give a place the ability to reap the economic advantages of rising concentrations of production, and to obtain the social benefits that come from a convergence in consumption. Economic development thus brings with it the conditions of even greater prosperity, in a virtuous circle. Another stylized fact: neighborhoods matter. A prosperous city seldom leaves its periphery mired in poverty. A province’s prosperity is sooner or later shared with those nearby.”

Urbanization is good and desirable, because it brings with it economies of scale and scope and positive multiplier effects, both in production and in consumption.

The short point is that increased income inequalities are inevitable, especially in the urban parts of any region. This is the upshot of both theory and empirical research. But this leads to resentment at increased and perceived inequalities. It thus becomes even more important to address the issue of inequities in access to inputs. Perceptions about inequality are typically dynamic, not static. That is, one resents inequality less if one perceives one’s own standard of living, or that of one’s offspring, is improving over a period of time. If that doesn’t occur, one resents inequality more. As was stated earlier, NSS doesn’t collect data on income.

It collects data on consumption expenditure instead. Inequality in the distribution of incomes will be higher than inequality in the distribution of consumption expenditure. Therefore, any inequality that is computed on the basis of the distribution of consumption expenditure will tend to under-estimate inequality.

There are also a range of inequality measures to choose from. The most common one is the Gini coefficient. This takes a value of 1 when there is complete inequality and a value of 0 when there is complete equality. Thus, the higher the value of the Gini coefficient, the greater is inequality. Depending on the recall period used,

the Gini coefficient for rural Meghalaya ranges between 0.170 and 0.201 in 200910, while that for urban Meghalaya ranges between 0.239 and 0.2558 Though inequality in urban Meghalaya is higher than that for rural Meghalaya, these numbers are still low, a characteristic Meghalaya shares with other North-Eastern States like Manipur, Mizoram, Nagaland and rural Tripura. But because of what has been said about growth, it doesn’t mean that it will stay that way.

The second point concerns data about North-Eastern States like Meghalaya.

Data can originate in Censuses or they can originate in surveys, like the NSS. For example, till 2009-10, no satisfactory poverty ratios existed for the NorthEastern States. Instead, the poverty ratios for Assam were applied to the rest of the North-East, with the qualification that Assam’s rural and urban poverty ratios were differentially applied, depending on the rural and urban populations in any particular State. The Tendulkar methodology changed this. But before 2004-05 (the series was dragged back to 2004-05, though applied from 2009-10), any poverty ratios for Meghalaya have to be treated with skepticism. This has to do with the sizes of the samples in the North-East. For the NSS, an average of around 100 rural Meghalaya villages is surveyed, while an average number of 50 urban blocks is surveyed. Given the paucity of resources and capacities, a committee felt this was good enough, for purposes of the NSS.9 But in general, when one is confronted with data for Meghalaya, this problem with surveys is worth remembering.

This is one of the problems, though not the only one, in reacting to human development reports for Meghalaya. Economists have increasingly realized that economic development is not about growth alone. Once upon a time, economic development was regarded as synonymous with economic growth and implied an increase in per capita income, spliced with diversification of the economy, such as the shift from the primary to secondary sectors, the tertiary sector then being regarded as relatively unimportant. It is now recognized that economic development is more than increases in per capita income, or about percentages of population below the poverty line. That is, economic development is a more broad-based notion than that of growth. Other indicators of human development and human deprivation have therefore been developed. The standard source for making cross-country comparisons of human development now is UNDP’s Human Development Report (HDR), which followed earlier work on quality of life indicators. HDRs have been around since 1990. The argument for publishing something like HDR is obvious. Conventionally, economists have measured development through indicators like per capita income. Or even the percentage of population below a designated poverty line. But the percentage of population below a poverty line, known as the poverty ratio or head count ratio, is also based on income or expenditure. And income ought to be an input into the human

8. Ibid. Gini coefficients have not yet been computed yet for 2011-12.

NSS uses different recall periods, but the differences aren’t that important for present purposes.

9. Report of the Committee for Optimal Sample Sizes for North Eastern States, Ministry of Statistics & Programme Implementation, May 2011.

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27 Meghalaya PATHS TO PROSPERITY

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02 Economic Development Where does Meghalaya stand?

10. India, Human Development Report 2011, Towards Social Inclusion, Institute of Applied Manpower Research and Oxford University Press, 2011.

11. Meghalaya Human Development Report 2008, Government of Meghalaya.

12. Ibid.

development process and not regarded as an output. Instead, we should capture tangible improvements in indicators like health or education attainments. Having accepted the argument, problems arise. Data must be available and if cross-country comparisons are to be made, the cross-country data collection must be comparable.

Once one has decided on variables and obtained data on the variables, there is the question of constructing an index. This involves weighting the variables before aggregating them and subjectivity is involved in almost any selection of weights.

HDR has five such indices – HDI (human development index), HPI-1 (human poverty index for developing countries), HPI-2 (human poverty index for selected OECD countries), GDI (gender-related development index) and GEM (gender empowerment measure). HDI is the most commonly cited one and is based on three variables – a long and healthy life (measured by life expectancy at birth), knowledge (measured by adult literacy rate and gross enrollment ratio) and a decent standard of living (measured by per capita gross domestic product in PPP US dollars). The aggregation process is such that the maximum value of HDI is 1 and the minimum value is 0. The higher the HDI value, the better. GDI attempts to capture gender disparities. It follows the same methodology as HDI, but factors in male-female differences.

Following UNDP’s HDRs, India has also produced national level HDRs. The latest such national level HDR is the 2011 one.10 If one scrutinizes this, for purposes of computing HDI or GDI, it treats all of the North-East (with the exception of Assam) as a unified category. So it has limited use for us. However, States also have their own HDRs and Meghalaya published a HDR in 2008.11 As a qualification, in this, health outcomes are not captured by life expectancy at birth, but by the infant mortality rate. And per capita income is captured by per capita net State domestic product. The focus of State-level HDRs is not just inter-State comparisons and a State’s improvement over time, but also intra-State comparisons, such as that between the districts of a State. Inter-district issues will be considered in a later chapter. This is a quote from the Meghalaya HDR. “As per the National Human Development Report 2001...Meghalaya ranks poorly in level of Human Development. Meghalaya ranked 24th in HDI in 1991. Its position has deteriorated from a rank of 21st in 1981…The situation has further deteriorated in 2005…Out of the 35 states and Union Territories, Meghalaya ranks 26th in human development…A closer look at some of the components of the HDI suggests that there has been stagnation or no development in Meghalaya in some areas. For instance, the IMR of Meghalaya has remained more or less constant in the recent years.” For reasons that have been mentioned earlier, the scores and ranks for 1981 and 1991 are not comparable. What is pertinent is 2005 and the numbers are shown in Table 2.2.12 Instead of giving the numbers for all States, the figures are given for the North-East and all-India. To state the obvious, in terms of the ranks,

Meghalaya doesn’t do all that well – in rural Meghalaya, in urban Meghalaya, or in the combined. But so far as the scores are concerned, Meghalaya is a shade above all-India averages. However, the rural Meghalaya scores are far inferior to those in Manipur, Mizoram and Nagaland and the urban Meghalaya scores are also inferior to those in Arunachal, Mizoram and Nagaland.

13. http://planningcommission.nic. in/news/pre_pov2307.pdf. This is for the mixed reference period.

14. Meghalaya Human Development Report 2008, ibid.

Having said this, there are several problems with such numbers. First, there are time-lags in data. For instance, the infant mortality rates (IMR) are based on the National Family Health Survey for 2005-06. The literacy numbers are from the 2001 Census and the gross enrolment ratios are from the 2004-05 61st round of the National Sample Survey (NSS). The per capita monthly expenditure figures are also from 2004-05. Second, with small samples, there are problems with data Table 2.2: Meghalaya’s HDI, 2005 State

Rural HDI value

Rural HDI rank

Urban HDI value

Urban HDI rank

Combined HDI value

Combined HDI rank

Arunachal

0.557

23

0.877

1

0.617

22

Assam

0.505

28

0.740

25

0.534

29

Manipur

0.693

10

0.761

17

0.707

11

Meghalaya

0.547

24

0.757

22

0.585

26

Mizoram

0.724

6

0.872

2

0.790

4

Nagaland

0.750

4

0.823

8

0.770

7

Tripura

0.575

19

0.760

20

0.608

23

All India

0.509

0.730

0.575

on variables like IMR. Third, subject to this, while Table 2.2 provides a snapshot and permits some kind of inter-State comparison, it doesn’t allow us to capture improvements over time.

The growth and poverty declines (especially in urban Meghalaya) have already been mentioned. The GSDP numbers come through national accounts, while the poverty and monthly expenditure numbers come through NSS surveys, there being a gap between the two. While this is a problem that is characteristic of all countries, it is especially true of India. In 2011-12, the average per capita monthly expenditure in rural Meghalaya was Rs 1315.11, while that for urban Meghalaya was Rs 2293.82. These were respectively 102.2% and 92.6% of the allIndia numbers.13 In 2004-05, the average per capita monthly expenditure in rural Meghalaya was 123.8% of the all-India average, while that for urban Meghalaya was 116.2% of the all-India average.14 This suggests that if the HDI rankings were to be redone today, in those relative terms, though the average per capita monthly expenditure in Meghalaya has grown, because that growth has been lower than all-

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29 Meghalaya PATHS TO PROSPERITY

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02 Economic Development

India averages, the expenditure component would tend to pull down HDI ranks.

Where does Meghalaya stand?

15. http://nrhm.gov.in/nrhmin-state/state-wise-information/meghalaya.html

Subject to problems about data on IMR, in the Human Development Report, the IMR used for Meghalaya was 56, compared to an all-India figure of 55. In 2001, the National Rural Health Mission reports an IMR of 52 for Meghalaya, with an IMR of 44 for all-India.15 The IMR declines in Meghalaya have not been commensurate with the all-India IMR declines. If the IMR is an indicator of health outcomes, clearly Meghalaya should have performed better. Though there are differences across Meghalaya’s districts, and this is a point one will return to later, this is what the Human Development Report stated as a general description of the problem. “With difficult hilly terrain and poor road connectivity in the rural areas, the shortage of proper health infrastructure, manpower, and the trend of financial investment/absorptive capacity on health by the State government etc.., we cannot expect much about the improvement of health conditions of the people and about the accessibility of health care services to the people, particularly the remote vulnerable sections of the rural population of Meghalaya. Poor humanresources management and poor work culture of the service providers at different levels of the health systems, have further worsened the situation.� In delivering public goods and services, there is a point one often tends to forget. There is a certain minimum level, below which, diseconomies of scale set in and it is no longer viable to deliver public goods and services, irrespective of whether they are delivered by the public sector or the private sector. While the breakup for the 2011 Census is still not available, in the 2001 Census, Meghalaya had 5,782 villages. Out of these, 2,753 villages had population sizes that were less than 200 and 2,090 villages had population sizes that were between 200 and 500. Some of these villages are in difficult and hilly terrain. With economic development and urbanization, villages often disappear. Migration makes them uninhabited. They get absorbed into larger villages. Some larger villages are reclassified as urban.

Road and transport connectivity facilitates the transition. But in the interim, delivering public goods and services in such areas remains a problem.

This leaves the final set of variables used in the computation of the HDI, those connected with education, namely, the literacy rate and the combined enrolment index. The improvement in the literacy rate between the 2001 and 2011 Censuses has already been mentioned. In Meghalaya, the literacy rate increased from 62.56% in 2001 to 75.5% in 2011, an increase of 12.94 percentage points. For all-India, the literacy rate increased from 64.84% in 2001 to 74.04% in 2011, an increase of 9.2% percentage points. The improvement in Meghalaya was thus more than the allIndia average. However, within the North-East, in 2011, Mizoram had a literacy rate of 91.6%, Tripura of 87.8%, Nagaland of 82.9% and Manipur of 79.8%. Only Assam at 73.2% and Arunachal Pradesh at 67% were below the Meghalaya figures.

This leaves the gross enrolment ratio, another variable that is fraught with data problems, the Human Development Report having used the 61st round of NSS and a gross enrolment ratio for Classes I-XII. Gross enrolment ratios (GERs) for primary and upper primary levels are easier to obtain. For instance, for 2010-11, the Planning Commission gives a Meghalaya GER of 195 for Classes I-V and a GER of 91.0 for Classes VI-VIII.16 Such high GER numbers, especially for primary schools, and characteristic of all of the North-East, suggest that one is now getting children into schools. There is indeed a problem with retaining children in schools and with drop-out rates. In 2009-10, the drop-out rates were 57.6% for Classes I-V, 72.29% for Classes I-VIII and 77.89% for Classes I-X.17 However, if one tracks this over time, one finds that GERs have increased and drop-out rates have also declined. This is also confirmed by something like ASER (Annual States of Education Report), though that has a focus on rural areas.18 Consider the 2012 report as an example. This shows that in rural Meghalaya, in the 6-14 age-group, 45.1% of children went to government schools and 47.9% went to private schools.

The percentage of out-of-school children was 5.3%. For the 15-16 age-group, 39.4% of children went to government schools, 39.7% went to private schools and 18.8% were not in school. Enrolment in schools and enrolment in private schools have both been increasing over time. ASER also raises question marks about the quality of learning. But let’s ignore that for the moment.

16. http://planningcommission.nic.in/ data/datatable/2504/databook_193.pdf 17. http://planningcommission.nic.in/ data/datatable/2504/databook_194.pdf 18. www.aser.org. The latest report is for 2012.

19. Ibid.

Incidentally, in common with some other States of the North-East, gender disparity is low in Meghalaya, even when something like GDI is calculated.

This is a quote from the Human Development Report.19 “As far as the Genderrelated Development Index (GDI) is concerned, Meghalaya is in a better position compared to most of the states in India. The GDI rank of Meghalaya was 12th in 1981 and improved to 7th in 1991. However, the GDI could not be calculated in 2005 due to lack of data.” At the end of this chapter, what’s the sense one has on economic development in Meghalaya? Meghalaya hasn’t done that badly on growth, on increases in per capita consumption expenditure. But since most States in India have done well, that Meghalaya performance has been about average and should be better. Meghalaya tends to do relatively better in the education indicators, but lags in the health indicators. Obviously, this is an aggregate kind of sense and there were inter-regional variations. We will turn to those in the next chapter.

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31 Meghalaya PATHS TO PROSPERITY

3 DIstricts

Development & DEPrivation

chapter

03 Districts Development & DEPrivation

Spatially, no State or region has a pattern of development, or deprivation, uniform throughout the State or region. Geographically, some parts are more developed, others less so. Geographically, some parts are less deprived, others more so.

Today, Meghalaya has 11 districts – West Jaintia Hills and East Jaintia Hills in the Jaintia Hills; East Khasi Hills, West Khasi Hills, South West Khasi Hills and Ri-Bhoi in the Khasi Hills; and North Garo Hills, East Garo Hills, South Garo Hills, West Garo Hills and South West Garo Hills in the Garo Hills. These districts weren’t formed at the same point of time, which sometimes causes a bit of a problem if one is interested in generating time-series data. District formation, and State formation, decisions aren’t always based on economic considerations. To the extent that they are, one can interpret the decision as one of an optimal level at which public goods and services can be provided. Stated differently, there is an optimal level at which governance can be efficiently provided. Below it, diseconomies of scale set in. Above it, diseconomies of scale also set in. The answer does depend a bit on what we mean by governance. But let’s save that for later. For now, Table 3.1 gives a snapshot of these 11 districts and this is no more than a snapshot.

To repeat, four of these, West Jaintia Hills, South West Khasi Hills, North Garo Hills and South West Garo Hills, were only created in 2012. Therefore, data for Meghalaya is often available for 7 districts, not 11.

1. North Eastern Region Infrastructure Index, Ministry of Development of North Eastern Region, 2009.

For those 7 districts, we have some kind of ranking done by the Ministry of Development of North Eastern Region in 2009, based on Census data for 2001.

Though called a district infrastructure index, done for all of the North East, this had heads like transport, energy, water supply, education, health, communication and banking.1 If one leaves out the rest of the North East, Table 3.2 shows how Meghalaya’s 7 districts scored in that ranking. Table 3.2 doesn’t give data on all the variables that were used in the ranking, since the intention is to provide a flavor.

Table 3.1 has Census 2011 numbers on literacy. On the basis of those literacy numbers alone, one would have deduced, in general, that the Khasi Hills perform better than the Garo Hills and the Garo Hills perform better than the Jaintia Hills.

However, literacy is only one possible indicator of development. Table 3.2 has many more and there is also a composite index. The trouble with any composite index is that its ranking and value depend on the variables chosen, their weights and the method of aggregation. That is, rankings and values are not always robust, in the sense that different variables, weights and methods of aggregation can lead to different results. With that qualification, the overall score shows that the East

Table 3.1: Meghalaya’s districts

Name of district/capital

Year created

2011 population

Literacy rate

Administrative Blocks

West Jaintia Hills/Jowai

1972, as combined Jaintia Hills

395,124 (as combined Jaintia Hills)

61.64% (as combined Jaintia Hills)

Thadlaskien, Laskein, Amlarem

East Jaintia Hills/Khliehriat

2012

Khliehriat, Saipung

East Khasi Hills/Shillong

1976

825,922

84.15%

Khatarshnong Laitkroh, Mawkynrew, Mawphlang, Mawryngkneng, Mawsynram, Mylliem, Pynsursla, Shella Bholaganj

West Khasi Hills/Nongstoin

1976 (includes South West Khasi Hills)

383,461 (includes South West Khasi Hills)

77.87% (includes South West Khasi Hills)

Mairang, Mawshynrut, Mawthadraisan, Nongstoin,

South West Khasi Hills/ Mawkyrwat

2011

98583

76.84%

Mawykyrwat, Ranikor

Ri-Bhoi/Nongpoh

1992

258,840

75.67%

Jirang, Umling, Umsning

North Garo Hills/Resubelpara

2012

East Garo Hills/Williamnagar

1976 (includes North Garo Hills)

317,917 (includes North Garo Hills)

73.95% (includes North Garo Hills)

South Garo Hills/Baghmara

1992

142,334

71.72%

West Garo Hills/Tura

1976 (includes South West Garo Hills)

643,291 (includes South West Garo Hills)

67.58% (includes South West Garo Hills)

Baghmara, Chokpot, Gasuapara, Rongara Dadenggiri, Dalu, Gambegre, Rongram, Selsella, Tikrikilla

South West Garo Hills/Ampati

2011

170794

68.88%

Betasing, Zikzak

Resubelpara, Kharkutta Dambo Rongjeng, Samanda, Songsak

Khasi Hills are (or were in 2001) a long distance ahead of the other 6 districts.

The other 6 districts are kind of clustered together. The East Khasi Hills is far ahead on road length, but South Garo Hills does pretty well on surfacing of roads.

The electrification record is relatively superior in the East Khasi Hills, Ri Bhoi and Jaintia Hills. With the exception of the East Khasi Hills, tapped water is a problem. The school infrastructure is far better in the East Khasi Hills, though the West Garo Hills also do well. The post and telegraph infrastructure is especially good in the East Khasi Hills and especially bad in the South Garo Hills. With the exception of the East Khasi Hills, the health infrastructure is bad everywhere. As a bit of a generalization, Table 3.2 suggests that the Garo Hills are more deprived than both the Khasi Hills and the Jaintia Hills. One should perhaps mention that there is a BRGF (Backward Regions Grant Fund) programme, as a successor to the earlier Rashtriya Sama Vikas Yojana (RSVY). This is meant to address regional imbalances and provides untied funds to identified backward districts, as long as decision-making is based on a decentralized and participatory planning process.

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35 Meghalaya PATHS TO PROSPERITY

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03 Districts

Table 3.2: District rankings

Development District

Overall score

Road length /100 sq km

% road length surfaced

% villages electrified

% households with tap water

Schools per 100 sq km

Post & telegraph offices per 100 sq km

Hospital beds per 100 sq km

East Khasi Hills

248.68

63.41

72.68

71.85

62.60

68.37

4.79

55.57

Ri Bhoi

147.87

43.26

56.41

74.40

35.83

33.38

1.85

11.36

Jaintia Hills

129.61

38.81

64.58

74.73

16.54

28.15

2.09

10.74

West Khasi Hills

122.17

26.33

56.95

54.0

28.69

32.88

1.41

7.24

West Garo Hills

122.16

38.73

60.66

53.85

17.42

54.45

2.77

14.27

South Garo Hills

117.10

28.59

66.40

44.20

28.92

34.83

0.76

7.03

East Garo Hills

116.80

22.36

79.71

53.36

21.26

45.95

1.46

12.68

& DEPrivation

2. Meghalaya Human Development Report 2008, Planning Department, Government of Meghalaya, 2009.

Of the 250 backward districts identified under BRGF, 3 are from Meghalaya – Ri Bhoi, South Garo Hills and West Garo Hills.

Meghalaya’s Human Development Report (HDR) has been mentioned earlier and also the problems with data and time-lines.2 Nevertheless, Table 3.3 shows what the HDR tells us. On the health (IMR) indicators, the West Garo Hills performs remarkably well and the East Khasi Hills is also a relatively good performer.

IMR levels in all the other districts are far too high for comfort. The education indicators show a mixed picture. On HDI, the East Khasi Hills is far ahead of the others and there is a considerable distance between the West Garo Hills and the others too, all the remaining 5 districts clustered together on the scores. The GDI numbers require some explanation. On standard education and health indicators, gender disparity is not that high in Meghalaya. What then explains the low levels of GDI in the East Garo Hills and the West Khasi Hills? This has quite a bit to do with the way the GDI is calculated, with a variable that is based on differential male and female shares in the economically active population and the ratio of female to male rural labour wages. In the HDR, across those districts, the lower the female share in the economically active population, the higher is GDI. In very simple terms, in the words of the HDR, this is what has been happening. “The GDI values show the existence of gender inequality in all districts…Gender imbalance in Meghalaya is prevalent at a lower degree compared with most other states in India. This is because of lower gender gap in literacy and enrolment as well as higher female labour force participation….West Khasi Hills has the lowest GDI among all the districts. The reason lies in the disparity of wages between men and women.” Even if one ignores problems connected with data on rural wages, this is the crux of the problem. Finally, Table 3.3 also has some numbers on under-weight children. This is a variable that is fraught with problems. Having said this, the

Table 3.3: Human development

IMR/ thousand

Literacy (%)

Combined gross enrolment ratio

HDI

GDI

% children under-weight

East Khasi Hills

34.51

76.98

63.10

0.676

0.640

12.5

Ri Bhoi

18.13

51.03

65.99

0.571

0.550

9.3

Jaintia Hills

60.63

66.07

50.47

0.496

0.478

8.9

West Khasi Hills

102.01

55.82

85.52

0.484

0.477

11.1

West Garo Hills

77.34

53.00

43.31

0.469

0.437

11.1

South Garo Hills

86.17

65.64

79.13

0.405

0.321

6.0

East Garo Hills

90.60

61.70

60.91

0.396

0.392

7.7

District

percentage of under-weight children in Meghalaya is not that high.

The data given in Tables 3.2 and 3.3 are generally dated. Two obvious questions arise. First, have there been improvements over time? Second, what’s being done to improve matters? For both, the answer depends on the variable, that is, the indicator.

For some variables, data have already come out from Census 2011.3 Examples are the quality of housing, availability of drinking water, lighting, sanitation, fuel use and banking. Let’s consider drinking water first. Table 3.4 shows where Meghalaya stands on provision of drinking water.4 Tap water is typically regarded as a safe source of drinking water, though there is a fallacy in necessarily assuming that well water, for example, is unsafe. Typically, there is correlation between urbanization and economic development on one side and drinking water supply through taps on the other. For Meghalaya as a whole, 39.3% of households obtained their drinking water supply through taps, though only 27.8% was treated tap water.

However, there are significant variations among the districts. As expected, there is a very high figure for the East Khasi Hills, a moderate figure for Ri Bhoi and low figures everywhere else. This is true for both drinking water supply through taps and treated drinking water supply through taps. Understandably, if drinking water supply through taps is low, it will come through wells, hand-pumps and tube-wells, as in the West Garo Hills, the East Garo Hills, the West Khasi Hills or the Jaintia Hills. With the exception of the Jaintia Hills, a very low percentage of wells are covered. Even for the Jaintia Hills, this share is low. We don’t know whether treatment of drinking water through taps has increased over time, or whether, the percentage of wells covered has increased over time. That’s because those questions weren’t asked in the Census of 2001. However, we can ask whether the share of taps has increased over time, by comparing Census 2001 with 2011.

For Meghalaya as a whole, the percentage of households which obtained drinking

3. Tables on Houses, Household Amenities and Assets for Total, Scheduled Castes and Scheduled Tribes, Meghalaya, Series 18, Directorate of Census Operations, Meghalaya, 2012.

4. Ibid.

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5. For the South Garo Hills, the numbers are a bit strange. The percentage of urban households that obtained drinking water through taps was 52.6% in 2001 and this declined to 28.2% in 2011. Conversely, “other” sources increased from 34.3% to 50.9%. Though the “urban” classification of a habitation changes over time, this alone seems to be inadequate in explaining this.

6. Though, between the Censuses, there has been a sharp increase in the rural Jaintia Hills, the share is still very low.

water through taps was 34.5% in 2001 and this increased to 39.3% in 2011. That’s not an impressive increase over a 10-year period. If one disaggregates districtwise, a more interesting picture presents itself. There is no need to inflict a surfeit of statistics and numbers. But essentially, over that 10-year period, there have been improvements in the West Khasi Hills, Ri Bhoi, the East Khasi Hills and the Jaintia Hills. Not only have there been no improvements in the West Garo Hills, the East Garo Hills and the South Garo Hills, there have actually been marginal drops.

It is possible to slice this not only district-wise, but also in terms of rural-urban differentials. Consider urban Meghalaya first. Without reproducing more and more numbers, a large share of urban households obtain drinking water through taps in the West Garo Hills, the West Khasi Hills, Ri Bhoi, the East Khasi Hills and the Jaintia Hills and in these districts, tap water also tends to be treated. However, even for urban households, the share of drinking water through taps is low in the East Garo Hills and the South Garo Hills and the treatment numbers are also low there.5 For rural Meghalaya, the share of tap water is still low and is relatively high only in Ri Bhoi and the East Khasi Hills.6 These are the two districts where there have been significant improvements, there being a problem in the rural areas of all the other 5 districts. For districts like the South Garo Hills, the West Khasi Hills, Ri Bhoi and the Jaintia Hills, drinking water is typically not within the premises, or near the premises. Obviously, this has a rural/urban dimension. But even for urban Meghalaya, in a district like the South Garo Hills, the “away” from the premises figure is alarmingly high. In rural Meghalaya, the “away” from the premises figure is high in all the districts, but is especially high in the South Garo Hills, the West Khasi Hills, Ri Bhoi and the Jaintia Hills.

There is no denying that there have been improvements over time. But it is also true that these improvements haven’t been that remarkable, especially in some districts and in rural areas. Water supply is under the Public Health Engineering Department (PHED). On the urban side, this has so far meant pumping and treatment under water supply schemes, such as in Greater Shillong, Tura, Jowai, Mairang, Nongpoh, Williamnagar and Baghmara. The funding for such schemes has either been through a non-lapsable grant from the Central pool of resources or the Accelerated Urban Water Supply Programme (AUWSP), with a 50% matching grant from the State. The point however is that water is not a public good, as economists define public goods. An economist’s definition of a public good is one that is non-excludable and non-rivalrous. This means that no one can be excluded from consuming that good or service. Nor does one person’s consumption of that good or service reduce the availability to another person. Drinking water has neither of these characteristics. It is a private good, with some characteristics of a collective private good. For people who are identified as poor, it can also be

Table 3.4: Sources of drinking water, 2011

% tap water

% well water

% handpump/tubewell water

% treated tap

% covered well

% with drinking water within the premises

% with drinking water near the premises

East Khasi Hills

39.3

25.4

5.4

27.8

6.9

24.1

43.2

Ri Bhoi

17.1

33.7

16.2

13.7

3.9

28.2

37.0

Jaintia Hills

18.0

41.6

0.9

9.2

2.7

27.4

49.2

West Khasi Hills

26.8

13.6

0.4

15.0

1.8

11.2

45.7

West Garo Hills

35.7

26.3

2.3

22.4

7.2

8.8

50.2

South Garo Hills

47.9

18.7

2.1

24.6

4.6

13.9

45.7

East Garo Hills

70.0

11.3

2.5

54.0

5.2

35.1

40.8

25.5

38.4

3.8

18.2

24.0

12.9

46.1

District

subsidized, since it does have merit good characteristics. However, that still means that it is a private good and needs to be charged for. It is not something that can, or should, be provided free. It is one thing to seek funds for modernizing water supply and distribution through JNNURM (Jawaharlal Nehru National Urban Renewal Mission) and through its sub-components like UIDSSMT (Urban Infrastructure Development Scheme for Small and Medium Towns). It is another thing to not charge for drinking water. Indeed, the JNNURM guidelines state the following.7 “Levy of reasonable user charges by ULBs and Parastatals with the objective that the full cost of O&M or recurring cost is collected within the next seven years.

However, cities and towns in the North East and other special category States may recover only 50 per cent of O&M charges initially. These cities and towns should graduate to full O&M cost recovery in a phased manner.” The cess for water pollution is a different matter.

In fairness, the draft Meghalaya Water Act, which is not just about drinking water, does provide for this. For instances, the duties and obligations of users of water specifically mentions, “..Pay for services and associated costs for the delivery of water and disposal of sewerage/waste water.”8 It also allows for the outsourcing of State-owned water systems to private management. Such a water system manager shall have the right to “claim from water suppliers and/or water users the charge for the water provided by him/her at the established regulated rates”. In addition, there are provisions for establishing water user associations.

“The government may determine procedures from time to establish water user associations, and revise these procedures for equitable, efficient and participatory water resource management including by ensuring the adequate representation of

7. http://jnnurm.nic.in/wp-content/ uploads/2011/01/UIGOverview.pdf 8. This draft was circulated in 2012.

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9. Aquifer Systems of Meghalaya, Central Ground Water Board, 2012.

women, landless, share croppers and other vulnerable groups in the association” and these associations will “mobilize local resources and collect beneficiary contribution towards schemes investment and operation and maintenance cost”.

The Draft Meghalaya State Water Policy of 2013, which is also not about drinking water alone, mirrors this. For instance, it begins by stating that safe drinking water is a human right and a fundamental requirement for people to lead a healthy life, apart from clean water being required for hygiene and disease control. A few quotes will illustrate the point. “The local Durbars and Water Users’ Associations (WUAs) are to have an important part in the implementation and operation of the Schemes in order that the Schemes shall be implemented as per their need and that there is no obstacle while implementing the Schemes and that the Schemes will provide the intended benefit to the beneficiaries.” “According to Clause–12 of the draft Water Policy, Water Users’ Associations and the local bodies, such as District Councils, Municipalities and Headman/Nokmas/Dolloi should particularly be involved in the operation, maintenance and management of Water infrastructures/facilities at appropriate levels progressively, with a view to eventually transfer the management of such facilities to the user groups/local bodies/development partners. Capacity building for the different stakeholders is very essential.” “Private companies are contracted for constructing, operating and maintaining water supply structures. Small-, medium-, and large scale industries, mining operations, and commercial agriculture consume water in the production and discharge of wastewater. The tourism sector benefits from tourists visiting waterfall and engaging in water sports, and hotels consume household water and use sanitation facilities. Energy companies are involved in supplying and distributing hydropower. Mining companies use water and discharge water. The private sector is anticipated to play an increasing role as Government gradually shift from service provision to a regulatory function.” In urban Meghalaya, that transition hasn’t yet happened. But at least there is the recognition that water is a private good, not a public good, and that appropriate user charges have to be imposed. There is also recognition about the possibility of privatized supply.

In rural Meghalaya, unless it is tap water, the problem is one of negative externalities. On those externalities, it is worth quoting from an aquifer atlas that was brought out for Meghalaya, though at one level, it states the obvious.9 “There is a very high density of drainage network system in Meghalaya, but most of the rivers and streams have water only during the rainy season and many streams dry up or their flow dwindles during the summer leading to water scarcity. Groundwater is the largest accessible and yet underdeveloped resource in the entire State. The regional water shortages and water crises can only be met with a rational and sustainable use of this untapped freshwater reservoir….The rivers of the State are

rain-fed and therefore their discharge dwindles during summer. Important rivers in Garo Hills region are Daring, Sanda, Bugi, Dareng and Simsang. In the central and eastern part of the plateau are Umkhri, Digaru, Umngot and Myntdu rivers.

The surface water resource is tapped in a number of places by constructing dams across the rivers. The reservoirs, like the Umium and Kopili, so developed are not only used for irrigation and drinking water but also for generating electricity.

In spite of this, the area experiences shortage of water during the summer resulting in crisis for drinking water. This is mainly due to topographical and geo-morphological conditions apart from alterations of the natural land surface by way of development, mining and urbanization. Moreover, the characteristic hilly and steep sloping terrain condition in the area with localized small valleys results in very high surface run-off during the monsoon…The importance and contribution of ground water is felt in the recent years to cope up with development and scarcity situations, particularly to meet the drinking water needs. Of course, the physiography of the rugged terrain restricts development of groundwater, but areas with low gradients and valley areas are favourable areas for groundwater development…Springs play a major role of water requirement for the people in rural areas. The dependency of spring water for domestic and other purposes is worth mentioning. ..The spring water is of excellent quality and is suitable for drinking purposes as per BIS standard.”

There is an obvious difference between tap water and water that is safe to drink. Here is the Draft State Water Policy’s take on the status of rural water supply. “The majority of households have access to safe drinking water, but the proportion of households with tap water connections remains low, except in East Khasi hills. Under Rural Drinking Water Supply, as of April 2011, 5041 nos. of habitations have been fully covered (54%) while 4285 nos. of habitations have been partially covered (45%) both in terms of coverage and per capita availability, out of a total of 9326 nos. habitations in the state. Provision of safe drinking water supply to the remaining Partially Covered Habitations, including other Newly Identified Partially Covered Habitations (slipped back from fully covered category due to various reasons including drying up of sources etc.) will be taken up as per the guidelines of Govt. of India during the 12th Plan period. As of April 2011, there existed 102 nos. of Iron Affected Habitations in the State. Steps would also be taken for covering the Iron affected habitations and any newly identified water quality problem habitations during the 12th Plan period. The Main Thrust of the Department in the Rural Water Supply Sector during the 12th Plan period would be to cover all the remaining Partially Covered Habitations as well as Quality Affected Habitations with 40 Lpcd10 of potable safe water.” There is a reference here to habitations where drinking water is contaminated by iron. There are also problems with safe drinking water in coal mining affected areas. Clean drinking

10. Litres per capita per day.

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11. http://megphed.gov.in/tsc/Physical%20Achievement.pdf 12. A Decade o the Total Sanitation Campaign, Rapid Assessment of Processes and Outcomes, Ministry of Rural Development, 2010, http://www.wsp.org/ sites/wsp.org/files/publications/WSP_ India_TSC_Report_Vol_1_Press.pdf

water was one of the items under the 20 point programme, which was restructured in 2006. The relevant schemes were “Swajaldhara� and the Accelerated Rural Water Supply Programme (ARWSP), subsequently subsumed under Bharat Nirman.

ARWSP has a 50/50 sharing between the Centre and the States, though for iron removal, the share is 75/25. The original Bharat Nirman target was of providing safe drinking water to all habitations by 2012. Obviously, this has not happened.

The limited point for present purposes is that, notwithstanding State government interventions, the ownership of rural water supply schemes and community involvement is still limited, something that the Water Act and the Water Policy should hopefully eventually rectify. Before moving on from drinking water, one should mention that there are also drinking water schemes for Anganwadis, schools and health centres.

There were two reasons for this digression on drinking water. First, Census 2011 provided data on drinking water, including dispersion and variation across districts. Second, drinking water illustrates the problems with identifying a private good as a public one. Water is linked to sanitation and sewage treatment too.

Census 2011 also has data on latrine facilities and Table 3.5 shows the variation across districts, segregated according to rural and urban. To state the obvious, with the exception of West Khasi Hills and Ri Bhoi, latrines are less of a problem and in those districts too, it is more an issue of pit latrines, rather than the absence of latrines at all. While Table 3.5 doesn’t give the Census 2001 numbers, because it clutters up the table too much, what is interesting is that for urban Meghalaya, there have been sharp declines in the percentage of urban households with no latrines and also in the percentage of urban households with pit latrines. It is just that those declines have not been that sharp for the West Khasi Hills and Ri Bhoi.

For rural Meghalaya, the no latrine percentage of 46.1% is undoubtedly high. But it used to be 59.9% in 2001. Though the absolute levels are still high, across all the districts, there has been a decline in the percentage of rural households that have no latrines. There has also been a corresponding increase in the percentage of rural households that have water closets. As can be deduced from Table 3.5, without citing more numbers, open defecation is rare in urban Meghalaya, with the exception of the South Garo Hills, where 10.5% of households practice open defecation. However, 43.1% of rural households still practice open defecation.

With the exception of the East Garo Hills, and to a lesser extent, the South Garo Hills and Ri Bhoi, open defecation is very high in rural Meghalaya. The relevant programme here is the Total Sanitation Campaign (TSC). This has components of individual household latrines, both BPL (below the poverty line) and APL (above the poverty line), toilets in schools, Anganwadis (Balwadis) and community sanitation complexes, supported by rural sanitary marts and production centres.

The idea behind TSC is that this should be demand-driven, not supply-driven.

Table 3.5: Latrine facilities, 2011 % rural households with water closets

% rural households with pit latrines

% rural households with no latrines

% urban households with water closets

% urban households with pit latrines

% urban households with no latrines

Meghalaya

25.9

26.3

46.1

82.9

12.3

4.3

West Garo Hills

32.7

22.2

43.7

75.1

16.6

6.1

East Garo Hills

37.5

40.7

20.7

62.3

34.2

3.3

South Garo Hills

34.9

25.6

36.6

66.1

19.6

12.6

West Khasi Hills

13.5

25.0

59.2

48.4

41.8

9.5

Ri Bhoi

21.7

40.1

35.9

46.6

44.5

8.6

East Khasi Hills

22.8

20.1

55.7

91.3

5.3

3.1

Jaintia Hills

19.6

22.4

56.4

91.9

3.7

3.9

District

Table 3.6: Type of fuel used for cooking, 2011

% households using firewood

% households using kerosene

% households using LPG

% households using electricity

Meghalaya

79.0

3.7

11.8

1.6

West Garo Hills

88.0

0.8

8.2

0.1

East Garo Hills

95.6

0.2

3.2

0.1

South Garo Hills

94.8

1.0

2.0

0.2

West Khasi Hills

96.6

0.2

0.7

0.4

Ri Bhoi

90.3

0.7

5.1

1.6

East Khasi Hills

52.0

11.0

25.8

4.1

Jaintia Hills

83.3

0.9

56.4

0.8

District

Consequently, funds are to be shared in a 60/30/10 ratio between the Centre, the State and the community. Whatever be the timeline of the data, the actual achievements have been far below targets, especially for individual household latrines.11 This is partly because of the State facing problems in finding its share and more importantly, because the community or the individual contribution was not forthcoming. To make it a bit more specific, for individual APL category household latrines, the household’s contribution has to be 100%. And even for BPL households, there has to be a household contribution, with the share varying between 20% and 100%, depending on the cost of the unit. Stated differently,

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1. A Decade o the Total Sanitation Campaign, Rapid Assessment of Processes and Outcomes, Ministry of Rural Development, 2010, http://www.wsp.org/ sites/wsp.org/files/publications/WSP_ India_TSC_Report_Vol_1_Press.pdf

there are still question marks about the demand-driven aspect of the TSC, now renamed the Nirmal Bharat Abhiyan (NBA). But this is a general observation.

There are indeed villages, especially in the West Garo Hills, which have received Nirmal Gram Puraskar awards because they have become free of open defecation.

In an evaluation done of TSC in 2010, Meghalaya was classified as below average.12 During those ten years, for Meghalaya, 31% of the targeted individual household latrines were constructed. Indeed, only 20% of the TSC funds were spent. 25% of the targeted school sanitation was achieved. However, also interestingly, 63% of the Nirmal Gram Puraskar applications were successful. At those prices, this report also has figures on how much it costs to make a “gram panchayat” Nirmal and for Meghalaya, the figure is Rs 33 lakhs. Roughly, 1% of Meghalayas “gram panchayats” became Nirmal, though the figure was as high as 79% for Nagaland.

There are many more numbers in the report. Stated simply, while there have been incremental improvements, these indicators haven’t improved as fast as they should have.

The type of fuel used is more an individual household indicator of deprivation.

This has no characteristics of a collective good. Having said this, to conclude this chapter on development and deprivation across districts, Table 3.6, also from Census 2011, shows the district-wise usage of fuel used for cooking, excluding institutional households. To the extent that LPG and electricity are good surrogate indicators of development, with the exception of the West Garo Hills, Ri Bhoi, the East Khasi Hills and the Jainitia Hills, the other 3 districts are relatively deprived.

The point about such indicators of development or deprivation is that they tend to be correlated with one another. Therefore, all indicators tend to throw up the same clusters of development and deprivation. Both development and deprivation are functions of complicated patterns of development. While development is fundamentally a function of individual entrepreneurship and initiative, it also depends on an enabling environment, supported by public provisioning, or at least financing, of goods and services. A few of these have been touched upon in this chapter. In the next chapter we take the discussion further forward.

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45 Meghalaya PATHS TO PROSPERITY

4 The Public

and the Private

chapter

04 The Publi Development

What ensures development and movements away from deprivation?

& DEPrivation

At one level, per capita GSDP is nothing but the average productivity of Meghalaya’s inhabitants 1. To increase it, one needs to increase the efficiency with which Meghalaya’s natural (minerals, land, forests, water) and human resources are used.

1. Since per capita GSDP is GSDP divided by population (and not just the working-age population), per capita GSDP is more accurately the average productivity of Meghalaya’s working-age population.

2. There is a review of the theoretical and empirical literature in World Economic Outlook, The Global Demographic Transition, IMF, September 2004.

3. World Development Report 1994, Infrastructure for Development, World Bank and Oxford University Press, 1994.

World Economic Forum’s Global Competitiveness Index (GCI) analyzes competitiveness on the basis of 12 pillars – (1) institutions; (2) infrastructure; (3) macroeconomic environment; (4) health and primary education; (5) higher education and training; (6) goods market efficiency; (7) labour market efficiency; (8) financial market development; (9) technological readiness; (10) market size; (11) business sophistication; and (12) innovation. As one moves up the development ladder, successive pillars become increasingly important. While GCI is used for cross-country assessments, it is relevant for cross-State performance in India. Stated differently, at Meghalaya’s present level of development, growth impulses will primarily come from public institutions (improving property rights, reducing corruption, ensuring judicial independence, improving government efficiency, improving security), infrastructure (transport and energy) and health and primary education, though this should not be interpreted as a complete exclusion of the other pillars. In other words, apart from greater efficiency is use of natural and human resources, there is the matter of institutions.

This point about human resources needs to be underlined further. India has a young population, with declining dependency ratios and a demographic transition, variously referred to as a demographic dividend. Globally, there is a robust body of research about the positive correlation between per capita income growth and the relative size of the working population and there are several complicated forces at work.2 There is no automaticity about demographic transition leading to higher levels of income growth. That becomes a function of education and health outcomes and access to market-based opportunities, the latter dependent on availability of physical infrastructure too. With such a strong dependence on agriculture, labour productivity cannot be delinked from productivity of land, or even forests and mines. Productivity improvements are contingent on better infrastructure. The critical elements in physical infrastructure are roads, electricity and water, of the drinking and irrigation variety. In 1994, the World Bank’s World Development Report (WDR) had the theme of infrastructure for development.3 Using crosscountry estimates, this WDR found that a 1% increase in the stock of infrastructure is associated with a 1% increase in GDP. The Indian figures that float around

are higher. For instance, the National Manufacturing Competitiveness Council formulated a National Strategy for Manufacturing, where it argued that adequate infrastructure can improve GDP growth by a factor of 1.5%, with 1% accounted for by the power sector alone.4 The Twelfth Finance Commission grouped States into five categories, on the basis of an infrastructure index constructed by IDFC.5 Meghalaya was in the “low” category. Many of Meghalaya’s areas lack the connectivity that was talked about in the PURA (Provision of Urban Amenities in Rural Areas) concept – physical connectivity, electronic connectivity, knowledge connectivity and economic connectivity. With connectivity ensured, efficiency in use of inputs and higher growth is also ensured. Globally, a few developmental propositions are universal. First, economic development is correlated with urbanization. Second, economic development is correlated with a reduced share of employment in agriculture and even forestry. Instead, off-farm employment opportunities are created. Third, there is a switch from subsistence-level selfemployment to more productive wage employment. Such employer-employee relationships also make it easier to introduce social security provisions. Fourth, informal/unorganized enterprises and employment transit to formal/organized.

Fifth, there is an increase in female work participation rates.

4. National Strategy for Manufacturing, National Manufacturing Competitiveness Council, March 2006.

5. Report of the Twelfth Finance Commission (2005-2010), Ministry of Finance, November 2004.

Development occurs both because of private initiatives and because of State intervention. There is a role for the government and there is a role for the private sector, the latter does not necessarily have to be interpreted as the private corporate sector and includes MSMEs, micro enterprises, NGOs, not to mention individuals.

Despite the possibilities of unbundling and delinking public provisioning from public financing, there are instances where there are market failures. Rural roads, electricity generation, rural schools, drinking water, irrigation water, primary health centres are cases in point. In addition to physical and social infrastructure, one expects the government to ensure law and order, a critical element in fostering an enabling environment. Not everyone can access market-based opportunities and that raises the question of subsidizing and targeting the poor. Though not a public good, this can be interpreted as a merit good. Paraphrased a bit, Meghalaya’s untapped potential is largely linked to an inadequate and inefficient supply of public and merit goods. Reinventing the government also requires the prioritization of scarce resources, monetary and human. In that prioritization, other than law and order, one would include roads (more generally transport), electricity, water, health and education.

Roads are an important element in ensuring transport connectivity. In broad terms, the road infrastructure consists of (a) National Highways; (b) State Highways; (c) Major District Roads; (d) Other District Roads; (e) Urban Roads: (f) Village Roads; and (h) Rural Roads, the last being those that are covered

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49 Meghalaya PATHS TO PROSPERITY

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04 The Publi Development & DEPrivation

under PMGSY (Pradhan Mantri Gram Sadak Yojana), as opposed to village roads specifically. When Meghalaya became a State in 1972, the total road length was 2787 km. This included 174 km of national highways. By 2011, as Table 4.1 shows, Table 4.1: Road length in km, as of 2011

Type of road

Surfaced

Un-surfaced

Total

National Highways

795

-

795

State Highways

1110

24

1134

Major District Roads

895

326

1221

Other District Roads

2168

1332

3500

Urban Roads

194

Village Roads

913

1157

2070

Rural Roads

49

473

523

6124

3313

9437

Total

194

Meghalaya Road Connectivity Map

the road length has increased to 9437 km.6­­­­ Having said this, the problems are also sufficiently well known. Though the road density has increased and so has the surfacing of roads, the figures are still low. For example, the road density is around 42 km per 100 sq km, compared to a national average of 75 km per 100 sq km. As Table 4.1 shows, 35% of roads are still not surfaced. Many bridges across these roads are not permanent and not made out of reinforced cement concrete (RCC). Even national highways are sometimes single-lane and intermediate-lane. In general, none of the roads are equipped to handle the volume of traffic. There are spatial variations too. For example, the road density is relatively higher in the East Khasi Hills, but is extremely low in the East Garo Hills, the South Garo Hills and the West Khasi Hills. Though the figures are somewhat dated, around 50% of villages are probably still unconnected by all-weather roads. There are different means whereby road construction has been financed. There is a Central Road Fund (CRF), with 100% funding by the Centre, used primarily for bridges and maintenance and up-gradation of existing State Highways and District Roads, not new construction. Anything that represents inter-State connectivity also obtains 100% funding from the Centre.

National Highways are the domain of the Centre and there are four of these now – NH40, NH44, NH51 and NH62. A new highway has been notified - NH127B from Srirampur (Assam) to Nongstoin (Meghalaya). There is a transformational potential of NH 127B with a bridge over Brahmaputra.

6. Twelfth Five Year Plan 2012-2017 and Annual Plan 2012-2013, Draft Proposals, Planning Department, Government of Meghalaya.

There is a non-lapsable central pool of resources administered through the Ministry of DONER (Development of North Eastern Region), with 90% funding from the Centre and 10% from the State. There is funding through the North Eastern Council (NEC), also in that 90/10 ratio. There are also road projects that are funded 100% by the State. Finally, other than multilateral funding, there is PMGSY. On the PMGSY, one should note that it is meant for connecting habitations that have a population size that is more than 250. The Meghalaya State Development Report, with data now slightly updated, reported 2518 unconnected habitations in 2008, out of which, 1991 had population sizes below 250.7 While the number of unconnected habitations has declined since then, the problem of habitations with low population sizes remains, especially in the West Garo Hills.

Indeed, this is a problem everywhere other than the Jaintia Hills.

As is obvious, the road network is inadequate not just in terms of quantity, but also quality and capacity. The deficiencies are in the form of (1) inadequate road capacity (requiring widening); (2) insufficient pavement thickness (requiring proper designs); (3) poor riding quality (requiring resurfacing and partial strengthening); (4) congested city sections (requiring bypasses); (5) sub-standard

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National Highways Development Project

curves (requiring realignment); (6) imbalance in networks; (7) vehicle pollution; and (8) over-loading. New roads have to be built. Roads have to be upgraded. And indeed, there are issues about resources, lack of professionalism within the PWD, lack of a sufficient number of contractors, problems in the terms of contracts and lack of sufficient attention to operation and maintenance.

There are some issues worth thinking about, almost as rhetorical questions.

Should there be a Meghalaya State Road Development Fund, based on a cess on petrol and diesel? This is a cess, not a tax and should not feed into budgetary flows.

Additional funds can be generated through a special purchase tax on two-wheelers, cars and agricultural tractors. This should be used not only for construction of new roads and their up-gradation, but also for bridges. The positive externalities from construction of bridges are often more than that from constructing roads.

In the absence of bridges, blocks and villages are often cut off from each other.

Second, is it possible to tap external sources, not just the World Bank, but others too? Third, is possible to generate revenue from development activities that are carried out by private parties along roads? Fourth, are there PPP options? Fifth, in road construction contracts, is it possible to adopt output and performancebased long-term maintenance contracts for a period of say, 5 years? If developers are not always interested in operating, there can be an exit option for developers and an entry option for operators. In general, the main reasons behind bad roads are processing incapacity (regulatory clearances, bidding systems, dispute settlement); difficulties in land acquisition, resettlement and rehabilitation, removal of utilities, forest clearances; shortage of funds; lack of clarity about roles and lack of coordination; outdated business and management practices; serious staff shortages; poor implementation capacities; corruption (with a nexus between engineers and contractors); lack of maintenance; law and order problems; delays in finalizing core networks; poor designing; lengthy tendering procedures and consequent delays; lack of good contractors; and discontinuity in the supply of bitumen. These are not problems specific to Meghalaya. Nor are they always specific to road construction projects. A McKinsey identified poor quality of planning and engineering design, tendering of unviable PPP projects, use of inappropriate contracts, centralization and delays in pre-tender approval processes, delays in land acquisition, ineffective dispute resolution, weak performance management, insufficient skilled and semi-skilled manpower, weak risk management skills, below-par design and engineering skills, inferior procurement principles and low prevalence of lean construction principles.8 As that map from NHDP (National Highway Development Programme) illustrates, Meghalaya’s transport connectivity problems are not ones that the State can solve alone. They are contingent on connectivity improving with Bangladesh

7. Meghalaya State Development Report 2008-2009, Planning Department, Government of Meghalaya, 2009.

8. Prashant Gupta, Rajat Gupta and Thomas Netzer, Building India, Accelerating Infrastructure Projects, McKinsey & Company, August 2009, http://www.mckinsey.com/ locations/india/mckinseyonindia/pdf/Building_India_Executive_Summary_Media_120809.pdf

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9. Vol.II, Planning Commission, Government of India.

10. http://planningcommission.nic.in/ data/datatable/2504/databook_126.pdf

and connectivity improving within the North Eastern region, Assam being the most important. For instance, there will be a rail head and a railway line up to Mendipathar (East Garo Hills). There will also be one up to Byrnihat (Ri Bhoi), with a possible extension up to Shillong. Who knows? There might even be one from Jowai to Lamding or Silchar? There are also possible airports and air services from Umroi (Ri Bhoi) and Baljek (West Garo Hills). But all these are in the slightly longer haul and they also involve some cross-border issues, which we will talk about in a subsequent chapter. For the moment, road connectivity remains the most important constraint in hampering development and this also impedes the accessing of markets.

If roads, at least most of them, are instances of market failure, electricity is no different, especially generation and transmission. The electricity sector is an integral engine of economic growth. The correlation between per capita income and per capita power consumption is very strong. Consider this. The Twelfth Five Year Plan (2012-17) document gives aggregate technical and commercial losses for State power utilities. For Meghalaya, this was 39.74% in 2007-08, 35.27% in 2008-09, 43.19% in 2009-10 and an estimated 37.93% in 2010-11.9 The T&D losses fluctuate a bit from year to year and were 28.4% in 2011-12.10 The annual per Spatial Locations of Electric Transformers in Meghalaya

capita electricity consumption (KWH) figures are slightly old, since they relate to 2009-10.11 Meghalaya’s consumption was 613.36. This is the highest figure in the North East, but is below the national average of 778.63. The point is that, with development, the demand for electricity is bound to increase.

There are several angles to the power problem. A power policy was announced in 2007, subsequently amended. Though the figures cited in that power policy are slightly dated now, a few quotes are useful to understand the backdrop. “At present, Meghalaya is having only hydro generation (plant). During non-monsoon period, availability of power becomes low and even the restricted load demand of the State has to be met through import of power from the NE grid. This is mainly due to the new liberalized industrial policy of Meghalaya that has triggered an unprecedented load growth in the industrial sector of Meghalaya, coupled with identical growth in other sectors due to accelerated power development and reform process. …To meet the demand, Meghalaya has to import power but this too has a limitation due to transmission and transformation constraints, where MeSEB can draw only 120-140 MW and 60-80 MW during off peak and peak hours respectively…To meet the immediate shortage of power and to protect the State from probable collapse of power supply due to failure of monsoon, it is of utmost importance to immediately develop thermal power stations in the State. In Meghalaya there is not a single thermal power station and hence the prescribed thermal - hydro mix is not available at all. This over-dependence on nature is a very critical and dangerous position in view of vagaries of monsoon and in the event of drought in this part of the region. A thermal project of suitable capacity to provide base load is necessary. This would also provide an ideal thermal - hydro mix at 60:40 ratio which will provide better stability and security in the power system of Meghalaya throughout the year...Although 100% System metering was completed in November 2004, Energy auditing is still in its infancy stage due to lack of infrastructure for a fully computerized system of auditing and also due to lack of DT metering, absence of proper consumer indexing, and inadequate consumer metering and billing.” The power policy provided for private generation and was amended in 2007 to allow for greater employment of local power.

Stated simply, things haven’t quite worked out. “The power position in the State is reeling under tremendous pressure from all aspects due to an acute shortage of power. Presently, the State power utility is having a tough challenge ahead, in terms of capacity addition to bridge this gap. As on date, the unrestricted peak demand of the State is 610 MW…The existing power availability is 482.70 MW, including 210 MW from the Central Share. Therefore, the power deficit in the State is of the order of 200 MW.”12 In principle, demand can increase to around 1300 MW by the end of the 12th Plan. And again in principle, Meghalaya has a hydel potential of

11. http://www.pib.nic.in/newsite/ erelease.aspx?relid=84197 12. Twelfth Five Year Plan 2012-2017 and Annual Plan 2012-2013, Draft Proposals, Planning Department, Government of Meghalaya.

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13. http://powermin.nic.in/whats_ new/pdf/full_n_final_set_Rating_booklet_Mar2013.pdf

3000 MW and a thermal potential of another 1000 MW. But with the exception of the Leshka project in the Jaintia Hills, which also confronted cost over-runs, there hasn’t been much movement on generation, though an Umtru project is underway in Ri Bhoi. There hasn’t been much interest on the part of independent power producers (IPPs), compounded by controversies about bidding processes followed, and the handing over of power projects to private companies has run into problems. The Nangalbibra project in the Garo Hills is also stuck. Though there isn’t much point in saying this, at one point, Meghalaya used to be a power surplus State. While there has been some investment in transmission networks, there is still a huge backlog of renovation and modernization. Following the Electricity Act of 2003, under the Meghalaya Power Sector Reforms Transfer Scheme of 2010, the Meghalaya State Electricity Board (MeSEB) has been unbundled into the Meghalaya Energy Corporation Limited (MeECL) as a holding company, the Meghalaya Power Distribution Corporation Limited (MePDCL), the Meghalaya Power Generation Corporation Limited (MePGCL) and the Meghalaya Power Transmission Corporation Limited (MePTCL).

In March 2013, the Central Ministry of Power undertook a rating of State-level distribution utilities.13 This gave MeECL a rating of C+. In “key strengths”, this report listed “filing of tariff petition in a time-bound manner and receipt of tariff order as per regulations, satisfactory consumer metering of more than 80 per cent; implementation/steady progress in key reform initiatives for anti-theft measures, setting up of call center and consumer grievance addressal forum, etc; competitive power purchase mechanism in place with power procurement through long term PPAs covering over 90 percent of the total power purchase requirements”. But on the flip side, in “key concerns”, it also listed, “continuing weak financial position, with coverage of costs through revenues at less than 70%; AT&C losses of 49.6 per cent resulting in net loss over the last three years; non-availability of audited annual accounts for the last two years; entity continues to handle all the three functions namely generation-transmission-distribution; effective un-bundling has not taken place; funding of the asset base has been done through debt thus leading to an unfavorable capital structure; non-receipt of true-up order resulting in untreated revenue gap in the past; deteriorating trend of payable days”. That more or less sums it up. While many more villages have been electrified, including some through renewable and off-grid solutions, one has to be careful. Wires and poles in a village don’t amount to electrification. Rural electrification has to mean that households actually receive electricity, not merely an electric pole with a line going to BPL households, as specified under the Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY). More need not be said on the power sector. The bottom line is that in this area of public goods, Meghalaya has fallen short.

The next area of public goods is water and we have already talked about drinking water issues in an earlier chapter. This leaves irrigation water, important because a large percentage of the population earns a living from agriculture. In 2009, a Directorate of Water Resources was created to look after irrigation. In Meghalaya, the net sown area is 230 thousand hectares. The net irrigated area is 54 thousand hectares, that is, 23.48%. The Directorate itself estimates that only 13.40% of the identified irrigation potential has been covered. Some minor irrigation schemes are through the Accelerated Irrigated Benefit Programme (AIBP). Under AIBP, there Spatial Locations of Public Water Supply in Meghalaya

are 166 minor irrigation schemes, covering a command area of 16,578 hectares and 8894 beneficiaries, most of these schemes concentrated in the East Khasi Hills, the West Khasi Hills, the West Garo Hills and the East Garo Hills. Under NABARD’s Rural Infrastructure Development Fund (RIDF), there are some minor irrigation works where NABARD covers the bulk of the project cost as a loan, particularly for reconstruction and renovation. There is a Command Area Development Programme (CADP), where the Centre bears 50% of the costs, the State having to provide 50%. Similarly, there are water harvesting schemes, under the Centrally sponsored RKVY (Rashtriya Krishi Vikas Yojana). These are supplemented by State-level schemes for surface water based irrigation. A lesson from other States is that of community engagement and participatory watershed management.

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14. Jishnu Das, “The Quality of Medical-Care in Low Income Countries: From Providers to Markets,” PLOS (Public Library of Science) Medicine, April 2011.

15. Mapping Medical Providers in Rural India: Four Key Trends, the MAQARI (Medical Advice, Quality, and Availability in Rural India) Team, CPR Policy Brief, February 2011, http://cprindia.org/sites/default/files/policy%20brief_1.pdf

Meghalaya does have a Participatory Irrigation Management Programme (PIM) and several Water Users’ Associations (WUA) have been formed and registered.

In completed irrigation projects, the maintenance, operation and distribution is handed over to WUAs. Every State has limitations of resources and capacity for governance. There is thus a question of prioritization. The argument being advanced in this chapter is a slightly heretical and controversial one of focusing on roads, electricity and water and vacating, in a sense that will become apparent, the traditional social sectors of health and education. On health, before focusing on Meghalaya in particular, some general comments are in order.

The traditional government intervention has been through the National Rural Health Mission (NRHM), now to be supplemented by the National Urban Health Mission (NUHM). While NRHM’s focus was on improving the overall healthcare infrastructure in rural India, the emphasis was primarily on child-birth and pre-natal care. For example, the specific targets are about IMR (this includes vaccination), MMR, TFR (total fertility rate), under-nutrition among children, anemia among women and girls (this includes the provision of nutritional supplements), provision of clean drinking water and raising the sex ratio in the 0-6 age-group. That’s because the reproductive and child-care programme (RCH) was a key building block of NRHM. The core of the delivery problem is in rural India, where primary health-care is provided through a network of sub-centres (SCs), primary health centres (PHCs) and community health centres (CHCs).

There are population norms for such SCs, PHCs and CHCs. A sub-centre has a lady auxiliary nurse mid-wife (ANM) and a male health worker (MHW). There is a lady health visitor (LHV) for six such SCs. The PHC is a referral unit for six SCs and has a medical officer (MO) and other staff. The CHCs are supposed to have four medical specialists (surgeon, physician, gynecologist, pediatrician), with an anesthetist and eye surgeon eventually made mandatory. The focus, for both rural India, and for urban India through NUHM, is on public sector delivery. However, some empirical work shows that even in rural India, access is primarily through the private sector. “Typically, households can access multiple providers, ranging from fully qualified public and private sector providers to those without any formal medical training in the private sector.....In rural Madhya Pradesh—one of the poorest states in India—households can access 7.5 private providers, 0.6 public providers, and 3.04 public paramedical staff. Of those identified as doctors, 65% had no formal medical training and, of every 100 visits to health care providers, eight were to the public sector and 70 to untrained private sector providers.”14 The report in question is an important one, because it demolishes the proposition that there is a market failure of health workers in rural India and that the public sector

must fill the void.15 Contrary to a priori expectations, the four key trends are the following. First, the availability of medical providers in rural India is quite high, nearly 6 available per capita in rural India. Second, more than 50% of medical providers are private providers. However, third, the majority of medical providers have no medical qualifications. 65% have no formal medical training. Fourth, most households visit private doctors and doctors with no medical qualifications.16 92% go to private providers and 79% go to unqualified providers.Clearly a private market exists, i.e. there are individuals who are willing to fulfil a need for medical care. Thus, the problem is with its quality and lack of regulation. In contrast, the public sector provisioning may not have problems of regulation, but it continues to have problems of access and quality. It is because of this lack of service access and quality in public sector delivery – spliced with the non-availability of drugs – that patients resort to the private sector.

In ad hoc fashion, several States have also experimented with PPP models in delivering health-care, outsourcing and levy of appropriate user charges. The Ministry of Health and Family Welfare has a database that collated these and other reform attempts.17 Since the reforms of 1991, some States have experimented with user charges. Typically, such charges are imposed for diagnostic and curative services on patients above the poverty line, while those below the poverty line are exempted and continue to receive free and subsidised services. There is a fair degree of variation in the implementation of user charges across states, ranging from the specific services that attract user charges in different States (some apply them on primary services, others on secondary or tertiary), to the degree of cost recovery to the use of such recovered funds. Further, some States apply different rates to different geographical regions, and in some states the authority determining these charges is decentralised. In the course of formulating the 11th Five Year Plan (2007–12), the Planning Commission constituted a Task Force on Public– Private Partnerships (PPP) to improve health-care delivery.18 Three Developments on PPP has been initiated in health in the state. The PHCs has been running on the PPP mode with Karma Trust,VHAI etc. Secondly, PPP hospital cum Medical College shillong has been aided by the IFC,Washington. The Universal Health Scheme(MHIS) is also assisted by the IFC with their expertise and Technical Assistance. Instead of the classic obsession with increasing public expenditure and assuming that it must be equated with public provisioning, the task force’s report indicates how choice and competition can be introduced. The report begins by accepting the inevitable, instead of questioning it, namely, the importance of the private sector, both for profit and non-profit. This does not negate the point about lack of regulation, since the quality of health-care provided by the private sector varies. In general, private health-care services are also more expensive than public ones, more so for in-patient services. Experiments also include the levy of

16. The word “doctor” is being used in loose fashion. It does not imply the possession of a MBBS degree.

17. Ministry of Health and Family Welfare (MoHFW), 2007, “Health Sector Policy Reform Options Database of India (HS-PROD)”.

18. Government of India, 2007, Draft Report on Recommendations of Task Force on Public Private Partnership for the 11th Plan, Planning Commission, http://planningcommission. nic.in/plans/planrel/11thf.htm.

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19. Twelfth Five Year Plan 2012-2017 and Annual Plan 2012-2013, Draft Proposals, Planning Department, Government of Meghalaya.

20. Meghalaya State Development Report 2008-2009, Planning Department, Government of Meghalaya, 2009.

user fees and insurance schemes. While there can be no universal template, there are two propositions that are clearly myths – first, everything has to be delivered by the public sector; second, the poor are unwilling to pay. The usual approach to addressing health problems is one of increasing public expenditure on health, the argument being that out-of-pocket (OOP) expenditure on health-care is too high. While this is true, this seems to be more of an insurance issue, rather than one of increasing public expenditure on health. There have been governmentsponsored health insurance schemes, like the Rashtriya Swasthya Bima Yojana (RSBY). Despite this, insurance markets are not open enough and risk-pooling is still limited. That’s the primary reason why OOP expenditures are still so high.

How does this link up with Meghalaya? “The programme of the Department aims at a rapid transition and transformation in which efficient health systems will improve quality of life, well being of the people and reduce burden of diseases which in turn will increase economic productivity and growth. This will be achieved through (i) various health programme and parameters under NRHM; (ii) strengthen public health infrastructure; (iii) improve professionalization of health service delivery: (iv) improve convergence of health related activities of government; (v) increase public private partnership; (vi) improve monitoring accountability and transparency of the system; (vii) popularization of alternative medicine systems like AYUSH; and (viii) ensuring access to essential drugs in public health system.”19 The State Development Report also talks about improving the public health infrastructure, increasing the number of sub-centres, PHCs and CHCs and increasing the number of staff there.20 Meghalaya now has a State Health Mission and a State Health Society. And there is an alphabet soup of programmes – National Vector Borne Disease Control Programme (NVBDCB), National Leprosy Eradication Programme (NLEP), Integrated Disease Surveillance Project (IDSP), National Programme for Control of Blindness (NPCB), National Aids Control Programme (NACP), Adolescent Reproductive and Sexual Health Crash Strategy (ARSH), Weekly Iron Folic Acid Supplementation (WIF), Accredited Social Health Activist (ASHA), Universal Immunization Programme (UIP), Health Management Information System (HMIS), Mother and Child Tracking System (MCTS) and Janani-Shishu Suraksha Karyakram (JSSK).

This is not the place to have an extended discussion on health sector interventions. In any event, there are many dimensions to health sector interventions. Most improvements to health outcomes still come about through potable water, sanitation, sewage treatment, nutrition immunization and healthcare for the mother and the child. One can thus understand ICDS and MDMS. But so far as proper curative health-care is questioned, some points can still be raised.

First, even if there is a centrally sponsored scheme, the State does have to chip in

with resources. Are those better spent on the public health care infrastructure, or on insurance schemes, with additional State-level insurance schemes? Second, has enough use been made of Rogi Kalyan Samitis, Hospital Management Committees and the PPP mode? Third, as a generalization, the Kerala health intervention model is one of developing the public healthcare infrastructure everywhere. But the Tamil Nadu and Gujarat models are of improving the transport infrastructure and ensuring that patients are conveyed to hospitals, when necessary. 108 ambulance services are one extreme illustration of this. Fourth and finally, has there been a coherent plan to figure out what works best for Meghalaya?

Similar points can also be made about education, the Sarva Shiksha Abhiyan (SSA) included. But we will gloss over that, because we have already mentioned the education indicators and the fact that a large share of education delivery in Meghalaya is indeed delivered by the private sector. In sum, if the State government takes care of roads (transport), water and electricity, there is no evidence that there are market failures in health and education, as opposed to requirements of regulation. In that sense, these will be taken care of, as long as one ensures that BPL populations are not deprived of access. But that requires subsidization, scholarships and insurance, not public provisioning.

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The FISCAL SIDE

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To do various things one wants the government to do, be it law and order or physical and social infrastructure, the government needs resources.

Before zeroing in specifically on Meghalaya, some general comments are in order.

1. http://interstatecouncil.nic. in/ccsr_report_2010.htm.

2. Report of the Commission on Centre-State Relations, http://interstatecouncil.nic.in/volume1.pdf

To state the obvious, India is a federal country and this is set out in the Constitution.

However, one doesn’t often appreciate how centralized India is, and the extent to which the Centre impinges on the freedom of States. The use of the word CentreState relations is itself symptomatic. It is an expression that is invariably used and reflects a patronizing mindset, suggestive of a Centre and a periphery. The bedrock of the Indian policy is the Constitution of India and nowhere in the Constitution is the expression “Centre” used, in the sense of the Union government. For example, the Commission that was set up to study relationships between the Union and the States, as a successor to the Sarkaria Commission, with a report submitted in March 2010, was also called a Commission on Centre-State Relations.1 The point that India is excessively centralized, especially in comparison with a country like China, has often been made. In part, the reason was historical and colonial and this was reinforced by developments after Independence. “Looking back and as is well known, in the first three decades after the independence centralization of powers had been accentuated due to various factors such as the predominance of a single political party at the Centre as well as in the States; adoption of planning as a strategy of National development in which investment decisions determined by the Union, albeit through a consultative process, generally set the priorities for State budgets; the system of industrial licensing and control; and nationalization of major banks. The trend of judicial pronouncements during this period also tended to follow a similar spirit.”2 This is in contrast to a considerable amount of cross-country literature on the benefits of decentralization. One has to be careful in using the word “decentralization”, because it can be used to mean different things and not all of these may have anything to do with governance. Within the decentralized governance ambit, there are aspects of political decentralization, administrative decentralization, fiscal decentralization and economic decentralization. Some arguments in favour of decentralization are connected to efficient provision of public goods and services and optimal levels of governance, in the sense of economies and diseconomies of scale in providing these public goods and services. Others are linked to making decision-making participative. However, decentralization is not only about Union-State relations. It is also about decentralization and devolution

within the State and about empowering the third tier of governance.

There are some issues that are connected with what the Commission on CentreState Relations called Constitutional governance and the management of CentreState relations.3 First, it has often been the case that when subjects are in the Concurrent List of the Seventh Schedule, the Union has not effectively consulted States, such as before introducing legislation in Parliament. Second, the Inter-State Council has not functioned efficiently. Third, there is a strong case for moving nontax-related residuary powers from the Union List to the Concurrent List. Fourth, when a Bill has been passed by a State Legislature and sent to the Governor, and the Governor in turn refers it to the President, there are no time-limits prescribed and the system is completely open-ended. Fifth, there are issues connected with the appointment and removal of Governors, both of which have become politicized.

Sixth, discretionary powers of the Governor, including invoking Article 356, should be curbed.4 Seventh, extending the argument beyond the Inter-State Council, the National Integration Council, the National Development Council, the Planning Commission and the Finance Commission function as extensions of the Union government and have no representation from States. Eighth, the Rajya Sabha is meant to reflect the interests of States, but that territorial link between domicile and election to the Rajya Sabha was severed in 2003.5 This works against principles of federalism. Ninth, there are issues connected to the all-India services too. Hence, though India is a federation, there are strong unitary biases in this federation.

3. This was the title of the second volume of the report, http://interstatecouncil.nic.in/volume2.pdf

Irrespective of which State they live in, all citizens of the country must have equitable and equal access to private opportunities and public goods and services.

This requires sources of revenue and assignment of public goods to different levels of government. The primary responsibility of the Union ought to be the provision of public goods and services that cut across various States and resolve inter-State issues. For example, on the latter, it can set rules for horizontal competition among States. If one scrutinizes the tax and expenditure responsibilities assigned to the Union and States in the Seventh Schedule, one detects an imbalance. On an average, States raise 34% of revenue and incur 58% of expenditure.6 The 58% expenditure share is also slightly misleading. About 15% of State expenditure is on centrally sponsored schemes (CSS-s). This requires matching grants from States.

Consequently, the free and flexible share in State expenditure is lower than the 58% figure suggests. In addition, State expenditure on CSS-s has been increasing over time, so that flexibility in determining expenditure has progressively been declining. The ability of States to finance current expenditure through own revenue is low and has been declining, compounded by an inability on the part of the States to increase capital receipts. Therefore, there has been resort to borrowing

6. Political Economy of Federalism in India, M. Govinda Rao and Nirvikar Singh, Oxford University Press, 2005. The data in this book are dated, since they are from the late-1990s. However, though the numbers will change if updated, the thrust of the argument will not.

4. There are issues connected with Article 355 too. Article 355 also has implications for the deployment of Central forces.

5. Through an amendment to the Representation of the People Act.

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7. “A State may not without the consent of the Government of India raise any loan if there is still outstanding any part of a loan which has been made to the State by the Government of India or by its predecessor Government, or in respect of which a guarantee has been given by the Government of India or by its predecessor Government.”

and these, and reduction in capital expenditure, has been used to finance current expenditure. The simple point is that there is a “centripetal” bias in the assignment of tax responsibilities. Ostensibly, this should not matter. Since 2000, after the 10th Finance Commission, all Central taxes are treated as a common divisible pool.

However, this is a finite kitty and there are competing claims. This is the standard question of vertical and horizontal equity that all Finance Commissions have been concerned about.

States have different fiscal capacities. But the broader background must also be remembered. For example, as a result of post-1991 reforms, a sector that has grown fast is services, and to a lesser extent, manufacturing. Therefore, States that could tap these sectors have grown faster and this has also been reflected in their revenue generation. States that could not tap these have suffered relatively. There is no neat correlation between overall GSDP (gross State domestic product) growth, regardless of its composition, and revenue growth. Nor is the relationship linear.

Second, Central public sector enterprises have been used to push for regional economic development. However, this has not led to multiplier benefits. Third, bank nationalization was meant to spread banking throughout the country. While this has happened, the credit/deposit ratios are low for many poorer States. Fourth, the unit cost of providing public services varies from State to State and States that have difficult terrain and inaccessible areas bear higher costs. The citizens of such States cannot be made to suffer. Nor can they be expected to migrate out of the State. Fifth, more advanced States are in a position to tap private sources of funds, including capital markets. This is not an option easily available to relatively backward States. Sixth, many poorer States possess forests and minerals. If forests are to be preserved, that is a national public good. Environmental issues also crop up in global negotiations. The government of India’s standard reaction is that the premium placed on protection of the environment should bear some relationship to a country’s level of economic development. Yet, the same logic is not applied when it comes to protecting the environment in a relatively backward State. Seventh, the possibility of tapping private sources of funds has been mentioned and Article 293 of the Constitution does allow States to borrow. But this is circumscribed by Article 293(3).7 This effectively means that, without the permission of the Union, States cannot borrow from the market, as long as they are indebted to the Union. It is impossible to think of scenarios where States will not be indebted to the Union.

Thus, borrowing from the market is controlled by the Union. Eighth, after 1985, overdrafts with RBI are also controlled. These are points to be borne in mind when considering Union-State fiscal concerns.

Once the vertical share has been determined, one needs to ensure horizontal equity. Union-State fiscal transfers take place through the Finance Commission,

the Planning Commission’s flows according to the development plans and discretionary transfers through Central sector and Centrally sponsored schemes.

The Constitutional mechanism for transfers is through the Finance Commission.

Article 280 does not provide for any other channel to distribute the net proceeds of taxes to States. There is no provision in the Constitution for what are called Plan-transfers. These have been justified under Article 282, but the Constitutional legality of this is questionable. Even if this is Constitutionally legal, this cannot have been the spirit of Article 282. In any event, before 1969, such Plan transfers were on the basis of specific schemes. However, with these becoming broad-based and with the Planning Commission increasing in importance, the Finance Commission’s transfers are restricted to tax devolution and grants to cover non-Plan current expenditure, with grants-in-aid covered by Article 275 of the Constitution. In any event, the Plan versus non-Plan distinction is artificial and prevents one from taking an integrated view, even for the limited purpose of transfers to States. That apart, post-1991, the role of planning itself is questionable. To get back to the point, from the Fourth Finance Commission onwards, right up to the Ninth, grants for Plan expenditure and grants for capital expenditure have been excluded from the purview of the Finance Commission and its terms of reference have been progressively diluted.8 One therefore needs to abolish the Plan versus non-Plan distinction, drastically reduce transfers through the Planning Commission and restore the Constitutional mandate of the Finance Commission. Even when terms of reference haven’t explicitly excluded Plan and capital expenditure, as has been the case since the Tenth Finance Commission, these have implicitly been excluded.

Transfers through the Finance Commission are based on formulae, which vary from one Finance Commission to another. They are generally based on population, income, area, tax effort and fiscal discipline. There is a conceptual problem with this. Grants are meant to address the backwardness of a State. Why should backwardness indicators (population, distance, area) be included in the formulae for tax devolution? This confuses the objective of addressing backwardness and compensating States that suffer from low revenue and high cost (of providing public services). The intent behind Article 275 was to provide grants-in-aid to backward States. In other words, a gap-filling exercise should have been done for grants-in-aid. Meghalaya is of course a special category State. But there is a strong case for greater conceptual clarity on the distinction between transfers and grants-in-aid. Grants-in-aid should use gap-filling more comprehensively. The present indicators of backwardness used in transfers (population, income, area) are all imperfect. On population, one is stuck with the 1971 population figure and this punishes States that have high rates of population growth because of natural growth or in-migration. It may be desirable to have low rates of population growth. But why should tax devolution be used as an instrument for that? Current

8. That pressure from the Planning Commission was responsible for this dilution is evident from the account given about non-acceptance of the recommendations of the Third Finance Commission. See, Federalism in India, A. Chanda, George Allen and Unwin, 1965.

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population determines the need for public services. Income in all its variants is a bad indicator too, the moment something like GSDP is used. There are problems with area too. It is far better to move to output indicators. In addition, there are also question marks about the way Finance Commissions compute tax effort and fiscal discipline. No attempt is made to estimate the overall resource position of a State. Instead, base-year figures are used and normative projections are made.

In the case of no Finance Commission have the actual revenue figures of States matched up to these initial projections. This has also punished backward States.

Transfers routed through the Planning Commission have both discretionary and non-discretionary elements. For non-discretionary transfers, the Planning Commission uses the Gadgil formula, modified as the Gadgil-Mukherjee formula from 1991, though it was first used in 1969. 30% of available funds are reserved for special category States. This leaves discretionary transfers by the Planning Commission through Central sector schemes and Centrally sponsored schemes (CSSs). Central sector schemes are few. Most transfers are through Centrally sponsored schemes. Other than efficiency, delivery and focus, there are other problems with CSS-s too. They encroach on items that are on the State list. In 1996, at a conference of Chief Ministers, it was agreed that all CSS-s that impinge on the State List will be transferred to States. But that decision has not been implemented.

Because of the matching requirement, the financial burden on States increases.

Conditions are imposed on States, often in areas that are the legislative domain of States. CSS transfers are often made to autonomous bodies, bypassing the States. Some CSS-s require the creation of a fresh and new bureaucratic system of delivery. In any event, CSS-s amount to a unilateral decision by the Union to divert resources that would otherwise have been available to States.

9.

www.agmegh.cag.gov.in/Reoprt%20 No-1%20Sate%20Finance%20Inner

With this background, let us turn to Meghalaya. Meghalaya enacted the Meghalaya Fiscal Responsibility and Budget Management (MFRBM) Act in 2006. It also developed a fiscal reform path for the period 2005-06 to 2009-10.

However, the 13th Finance Commission required that such fiscal reform paths should be built into FRBM legislation. This was done through an amendment to the MFRBM Act in October 2011. The 13th Finance Commission’s award was for the period 2011-12 to 2014-15. The requirements are as follows. (a) During this period of the 13th Finance Commission’s award, there will be a revenue surplus. (b) During this period, the fiscal deficit/GSDP ratio will be reduced to 3% or less. (c) The outstanding debt, as a share of GSDP, will be reduced from 32.7% in 2011-12 to 31.7% in 2014-15. (d) There will be a three-year rolling plan, with targets on receipts and expenditure, stating out the assumptions behind these projections. A CAG report is available on the State government’s finances for the year 2010-11, not later.9 Despite it being a couple of years old, this report sets out the issues quite well.

Table 5.1: Revenue and fiscal deficits, 2004-05 to 2007-08, shares of GSDP (%)

Revenue account

Fiscal account

Debt

Own tax revenue

Revenue expenditure

Capital expenditure

2004-05

0.86

5.39

37.43

3.58

27.50

4.23

2005-06

-1.15

2.83

40.61

4.00

26.50

4.10

2007-08

-3.37

1.07

39.68

4.38

27.41

4.60

2008-09

-2.47

2.82

41.30

4.20

29.63

5.15

(a) The key fiscal parameters (revenue surplus, fiscal deficit, primary deficit) look respectable. (b) While revenue receipts have increased, that’s because of Central transfers, Meghalaya’s share in Central taxes and grants-in-aid. The State’s own tax and non-tax revenue have not increased and compared to all-India averages, too much is being spent as collection charges. (c) As a share of expenditure, revenue expenditure is too high and this leaves little scope to provide services or create assets. Most of revenue expenditure is on wages and salaries, pensions, interest payments and subsidies. (d) Capital expenditure is low. (e) The average return from statutory corporations, government companies and cooperative societies is low, far lower than what is paid as the average rate of interest on borrowings. There is also inadequate recovery on loans and advances. (f) There are thus concerns about Meghalaya being able to manage the debt. These are not new concerns. They have been flagged in both the Vision Document for Meghalaya and in the State Development Report.10 Table 5.1 shows Meghalaya’s public finances for the period 2004-05 to 2007-08.11 In the table, a negative number represents a surplus. As the table shows, the problem is not with the numbers per se, but with how these numbers have come about.

10. A Vision Document for the State of Meghalaya 2030, National Institute of Public Finance and Policy and Meghalaya, State Development Report, 20082009, Government of Meghalaya.

The 13th Finance Commission felt that Meghalaya was in a position to improve its tax/GSDP ratio by 0.5% by the terminal year (2014-15) of the award. For 201314 and 2014-15, the 13th Finance Commission set a fiscal deficit/GSDP target of 3%, while the State government’s own targets were 2.1% and 2.4% respectively. In 2010-11, 2011-12 and 2012-13, the fiscal deficit/GSDP ratio has been 2.4%, 2.6% and 2.1% respectively.12 The revenue deficit/GSDP ratio has been -1.8%, -4.0% and – 5.5% respectively. Measured purely in terms of those indicators, compared to Table 5.1, the fiscal consolidation is evident enough. But the own tax revenue/ GSDP ratio is still respectively 4.1%, 3.7% and 3.9%, fairly low. The point need not be underlined further. There have indeed been some positive developments.

A new pension scheme was introduced in April 2010. Ceilings have been imposed on guarantees. There is a consolidated sinking fund, though there is no guarantee

12. State Finances: A Study of Budgets of 2012-13, Reserve Bank of India, http:// www.rbi.org.in/scripts/AnnualPublications.aspx?head=State Finances : A Study of Budgets. 2010-11 numbers are actuals, 2011-12 numbers are RE (revised estimates) and 2012-13 numbers are BE (budget estimates).

11. Report of the Thirteenth Finance Commission.

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13. See, Strengthening Financial Systems, 14th report of the Second Administrative Reforms Commission, April 2009, http://arc.gov.in/14threport.pdf

redemption fund yet. Tax revenue has increased through hikes in VAT on tobacco and allied products and liquor and excise hikes on liquor. There has been mention of user charges and cost recovery from social and economic services and abolition of redundant posts.

Having said this, a substantive agenda of reforming government expenditure and revenue is still on the agenda. Reinventing the government also requires the prioritization of scarce resources, monetary and human. There are several government departments in Meghalaya, at a rough count, more than 53. If the focus is development, this suggests multiplicity and lack of coordination across these departments. All these departments need to be subjected to zero-based budgeting and streamlined, with mergers and consolidations. On the face of it, there should be no reason for Meghalaya to have more than 20 departments. This ZBB exercise will also identify staff requirements and redeployment possibilities for surplus staff, especially in the Group C and Group D categories. It will also identify where staff can be hired on contractual basis. The argument about zerobased budgeting also extends to schemes. There are several schemes. Not all of these are equally important, not even in terms of resources spent. Even if Central funding is available, that does not necessarily justify a scheme’s continuation. With the Central schemes, some Central schemes should be given special focus, because these are demand driven. Examples are Swajaldhara, MGNREGS, the Total Sanitation Campaign, NHM, NRHM, SGRY, SJGSY, ICDS, SSA, PMGSY, RGGVY, EWS/LIG housing in urban areas, IAY, MDMS and RKVY. This is only meant to be indicative, but it is also an agenda that should be there for something like the Meghalaya State Finance Commission or the Meghalaya State Planning Board.

That should also bring the 11 PSUs (9 companies and 2 statutory corporations) under its ambit. Of these, Meghalaya Government Construction Corporation Limited (MGCC) is the only one that earns a profit. However, more important than the notion profit or loss is the opportunity costs of the resources that have been locked in.

E-governance has become a buzzword which Meghalaya has already adopted through several e-forms & e-governance initiaives. For purposes of the present chapter, e-governance has G2C, G2B and G2E dimensions, but one should not forget its G2G dimension. Centralization is particularly evident in the case of financial powers. Budget sanctions and releases and approval procedures, even for continuing schemes, are inordinately time-consuming. More financial powers need to be delegated downwards, including for departments. Some financial management issues can only be addressed at the Central government level.13 But despite this constraint, there is much that can be done at the level of State governments and this longish quote highlights the several elements that can fit

into better financial management. “The extent of delegation of financial powers to Departments varies from State to State. It has generally been observed that since this delegation is quite limited, most of the financial proposals get referred to the Finance Department. Some States have created the mechanism of Financial Advisers in some major Departments, but their powers are also rather inadequate.

The same compulsion that made the Union Government implement the scheme of Integrated Financial Adviser for assisting administrative ministries in planning, programming and budgeting should now be the reason for State Governments to introduce the system of FA in various departments where FAs would be the representatives of the Finance Department. This should be coupled with greater delegation of financial powers to the Departments. Along with the introduction of the FA system, multi-year budgeting would help in bringing about better fiscal discipline and financial management. The present system of budgeting in the States for a year at a time suffers from a number of weaknesses. The most important is that full financial implications of projects, which are to be implemented over a number of years, are not brought out fully. A government decision may entail only a nominal expenditure in year one, but may call for sizable expenditure in the following years. States like Karnataka have implemented the Medium Term Fiscal Plan (MTFP) since 2001-02, a rolling document prepared annually. The MTFP is a medium-term statement of the governments, medium-term fiscal objectives and also provides projection of key fiscal variables for the current year and three subsequent years. Each MTFP also reports performance against targets.

The MTFP serves two purposes. First, it helps to put annual budget formulation within the medium-term context. Second, it serves as a communication channel to the people, of government’s fiscal intentions and strategy. Many other states have followed this practice. This needs to be followed by all States. There is need to have economic assumptions which are prudent and realistic in order to formulate budget estimates which are accurate and not overly optimistic. At the end of every financial year, the gap between the estimates and the actuals should be analyzed so that the underlying economic assumptions could be suitably calibrated for the future‌In States also, in spite of detailed instructions and guidelines in budget manuals, projects and schemes are announced on an ad-hoc basis during visits of high-level functionaries. Such announcements of large sums seriously distort plan allocations and disturb the faithful implementation of schemes already approved under the budget. This could also lead to announcements not being followed by formal approvals thereby resulting in discontent among people and financial indiscipline. The proper method would be to include projects that may be considered absolutely essential at the time of preparing the annual plans and budgets. The practice of announcing projects and schemes on an ad-hoc basis needs to be abandoned. A related practice is to make token provisions in the budget. This is resorted to facilitate announcement of a large number of projects.

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14. Ibid. Absence of internal audit wings is also an issue.

15. http://www.mp.gov.in/finance/index.htm

This can result in spreading limited resources thinly over a large number of projects and starvation of projects already under execution. Cost and time over-runs are consequences of this practice. It is therefore necessary that norms for sanction of projects should be rigidly adhered to. As in the case of Union government, the expenditure pattern of the State Governments is also highly skewed with the bulk of expenditure taking place in the last quarter and particularly in the month of March. Government of India has tried to overcome this problem by introducing the Monthly Expenditure Plan (MEP). A similar system should be adopted by the States.”14 Not just Karnataka, but other States have also reformed and decentralized financial management. 15 Through the CAG and Government of India, templates also exist. If such reforms are undertaken, despite Meghalaya’s special governance structure and special category status, there is no reason why sanctions cannot be issued by 15th April of every financial year.

In 1997, there was a Conference of Chief Ministers on Effective and Responsive Administration. The Action Plan, emerging from the afore-mentioned Chief Minister’s Conference, focused on three areas where administrative law reform was important – (a) making administration accountable and citizen friendly; (b) ensuring transparency and right to information; and (c) tackling corruption and motivating the civil services. There is also a Union government identification of departments where the citizen interface is the most. This Union government categorization mentions public grievances (electricity, water, telephone, ration cards, sanitation, public transport, police), rural services (land records, BPL cards), police (FIR registration, lost and found, missing persons), social services (pensions, land acquisition, rehabilitation and compensation, registration of licenses and certificates, ration cards, birth certificates, death certificates, domicile certificates, caste/tribe certificates, arms renewal, registration of documents, motor vehicle registration, driving licenses, school registration, university registration), public information (employment exchanges, examination results, railway, road and airline timetables, government notifications, government forms, government schemes, hospital/bed availability and services), agriculture (information about seeds, pesticides, fertilizers, crop diseases, weather forecasts, market prices), utilities (electricity, water, telephones), commercial (taxation and return filing) and government (electronic procurement). The intention behind this identification was to increasingly resort to e-governance.

The point about this quote is that, given Meghalaya’s special governance structure, quite a few of these functions vest with the District Councils. But as yet, there has been very little attempt to reform either the revenue, or the expenditure, of the District Councils. While the District Councils receive funds through the Finance Commission and from the State government, there is scope for increased

revenue generation through own resources – royalties from minerals, sale of forest produce, professional taxes, taxes on motor vehicles and other transport, land revenue, revenue from haats (markets), fisheries, cattle pounds and ferries, settlement premiums, house taxes, water taxes and new connection charges. As of now, this revenue generation seems non-transparent and sub-optimal, at least, no accounts are readily available for revenue and expenditure. This is worse on the expenditure side. A fiscal reform agenda cannot be limited to the State government alone, but must also encompass the District Councils.

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6

Cross Border issues

chapter

06 Cross-Border Issues

One must remember Meghalaya’s location. With neighbouring countries like China, Myanmar, Bangladesh and Bhutan, the North-East has an international border that is 4500 km long. With mainland India, through the Siliguri corridor, the connectivity is just over 20 km wide.

Different Indian States (West Bengal, Assam, Meghalaya, Tripura, Mizoram) have a border with Bangladesh that is almost 4100 km long. Of this, 443 km is with Meghalaya. Most of the border with Bangladesh is densely populated. It is fertile.

The Radcliffe Line was drawn without surveys and local information. It sliced through villages, leaving parts in India and parts in what was then East Pakistan.

It even sliced through buildings, leaving parts in India and parts in what was then East Pakistan. Instead of skirting densely populated areas, it went right through them. Transcending the immediate human costs of dislocation, this left painful and messy legacies. In a region that is criss-crossed by rivers, the boundary was sometimes in dispute, especially when rivers changed their courses. Even when there was no dispute, the boundary wasn’t clear. There were 111 Indian enclaves physically located inside Bangladesh and 51 Bangladeshi enclaves physically located inside India. An agreement to sort out these matters should have been signed in 1975. It was eventually signed in 2011, though it hasn’t yet been ratified by the Indian Parliament. So far as the Bangladesh-Meghalaya border is concerned, there are still some issues, involving completion of surveys in what are called adversely possessed lands, there being 12 such along the Meghalaya stretch. This becomes an issue when adverse possession is in dispute. But beyond the concern that the land boundary agreement has still not been ratified by Indian Parliament, it is probably fair to state that the problem is no longer as serious as it was 5 years ago.

1. Meghalaya State Development Report, 2008-2009, Planning Department, Government of Meghalaya.

The border with Meghalaya is a porous one, as is virtually India’s entire border with Bangladesh. Several districts of Bangladesh adjoin Meghalaya, it is not just Mymensingh and Sylhet. The Border Area Development Programme (BADP) has a list of 1566 Meghalaya villages that are in the border areas, covering an expanse of 4430 sq km.1 152 of them are in the Jaintia Hills, 383 in the East Khasi Hills, 208 in the West Khasi Hills, 367 in the West Garo Hills and 456 in the South Garo Hills.

For thousands of years, inhabitants of these areas have produced agricultural products like oranges, betel nuts, betel leaves, black pepper and bay leaves that were sold to markets in what is now Bangladesh. Markets might have existed in other parts of Meghalaya and Assam, but the necessary transport infrastructure

didn’t exist. These markets were cut off overnight. On the other side, essential items were also imported from what is now Bangladesh. These sources of supply were also cut off. This is not a problem that is specific to Meghalaya. It plagues all of the North East. British colonial policy cut off Myanmar in 1935 and Independence did the rest. Add to this Bangladesh, Bhutan, Nepal and China. Note the plethora of regional trade agreements (RTA) floating around in the region.

There is South Asian Association of Regional Cooperation (SAARC), with India, Pakistan, Bangladesh, Sri Lanka, Nepal, Maldives, Bhutan and Afghanistan as members and distant prospects of Iran eventually becoming a member. SAARC led to a SAFTA (South Asian Free Trade Agreement) and there is an in-principle idea of this becoming a South Asian Economic Union (SACU). There is quite a bit of literature on the potential for intra-SAARC trade, although present levels are low.2 However, there is also some scepticism, if SAFTA remains a classic FTA (free trade agreement) in manufactured products alone. First, the economies are complementary and scope for trade creation is limited. Second, liberalization

2. Quantification of Benefits from Economic Cooperation in South Asia, Asian Development Bank and United Nations Conference on Trade and Development and Macmillan, 2008, is an example.

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3. http://commerce.nic.in/trade/ Joint_Statement_India_Bangladesh_13_14_June_2013.pdf 4. Earlier, there was a restriction on building LCS/ICP within 150 yards of the zero line, but this has now gone.

will be circumvented by sensitive lists and rules of origin requirements. Third, liberalization will be circumvented by para-tariffs and non-tariff barriers. Fourth, there aren’t effective and efficient dispute resolution mechanisms. Fifth, there is inadequate cooperation and agreement on trade facilitation, transit and transport connectivity. Sixth, there are supply rigidities in the smaller economies. Eighth, dynamic efficient gains of RTAs occur only if cross-border investments and cross-border trade in services are also included. So far, SAARC as a whole has been relatively irrelevant because of such reasons, other than India-Pakistan problems. But other than SAARC and SAFTA, there is the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC), with Bangladesh, India, Myanmar, Sri Lanka, Thailand, Bhutan and Nepal as members. There is an Asia Pacific Trade Agreement (APTA), formerly known as the Bangkok Agreement, with Bangladesh, China, India, Lao, South Korea, Sri Lanka, Nepal and the Philippines. There is closer agreement between India and ASEAN (Association of South East Asian Nations), reinforced by India’s Look East policy. Within SAARC, India has special trade arrangements with Bhutan, Nepal, Bangladesh and Sri Lanka. Admittedly, much of this liberalization agenda is still in the future. And admittedly, much of this is constrained by infrastructure connectivity. Though progress has been tardy, in principle, there is the ambitious Asian Highway Project, pushed by ESCAP (Economic and Social Commission for Asia and the Pacific). In all these initiatives, the North East is at the Centre. And so is Meghalaya.

What’s particularly pertinent for Meghalaya is trade with Bangladesh. To state the obvious, relationships with Bangladesh aren’t merely a trade issue and cannot be. There are issues of security, energy, transport connectivity, infrastructure and transit. The India-Bangladesh Joint Working Group on Trade held a meeting in June 2013 and this is a brief listing of issues connected with trade.3 First, tariffs are high and additional duties are added onto basic customs duties. Second, there are sensitive lists. Third, there are export restrictions. Fourth, there is a mutual recognition of standards issue and this can act as a non-tariff barrier (NTB). Fifth, there are restrictions of exporting specific items other than through specific ports.

Sixth, there are problems with rules of origin and value addition requirements.

Seventh, infrastructure is bad at the land customs stations (LCSs) and they haven’t yet become integrated check posts (ICPs).4 In this context, a quote from the report is worth mentioning. “Indian side stated that Government of India is in the process of upgrading 7 LCS bordering Bangladesh to Integrated Check Posts at a cost of Rs. 467 crore. These LCSs are Petrapole, Hili, Changrabandha, Dawki, Sutarkandi, Agartala, and Oemagiri. Additionally, the Dept. of Commerce is upgrading Mahadipur, Gojadanga, Fulbari, Dalu, Borsora, Gasuapara, Srimantapur. Indian side also informed that the existing LCS at Sabroom is contemplated to be

converted into an ICP.” Also, there are restrictions on items that can be traded through LCSs/ICPs. Eighth, pre-shipment inspection often becomes a problem.

Ninth, there still isn’t a proper inland water transit and trade agreement, linked inevitably with the water-sharing agreement. Tenth, there are issues with passenger and cargo vehicular movement, railway networks and coastal shipping. Eleventh, since increased trade cannot be delinked from freer cross-border movements of both labour and capital, there are problems with both of these.

“Low quality of infrastructure, coupled with high logistics costs for India and Bangladesh, is derived from poor transport infrastructure, underdeveloped transport and logistics services, and slow and costly bureaucratic procedures dealing with bilateral trade. The opportunities for improving infrastructure facilities are immense given that India and Bangladesh offer the similar characteristics of high population growth and high incidence of poverty.”5 That more or less sums it up and there is both a hard and a soft part to this infrastructure constraint, hard meaning the physical infrastructure and soft meaning the procedures. Even if one leaves aside broader issues of transport and infrastructure, this isn’t a pretty picture.

Incidentally, there are issues of roads connecting the North-East to Myanmar, Bangladesh and southern China. Inter-connectivity of roads, access to Indian shipping through Bangladesh and regional energy cooperation have been talked about for a long time. So far, liberalization has fundamentally been restricted to trade and there too, circumvented by sensitive lists, rules of origin, standards, lack of customs standardization and so on. Table 6.1 is an interesting table, because it is an estimate of gains that are possible through improved trade facilitation alone.6 Given the litany of woes, it is remarkable that Bangladesh has now become India’s largest trading partner within the region, with a bilateral total trade turnover of 5 billion US dollars. This is partly because of diversion from Sri Lanka, and partly because of greater trade liberalization, though all that liberalization is still whittling at the margins, incrementally. Overall, and not specific to Meghalaya, India’s exports to Bangladesh are primarily cotton, vehicles, cereals, mineral fuels and sugar. India’s imports from Bangladesh are primarily fish, salt, fertilizers, vegetable fibres and made-up textile articles. All revealed comparative advantage exercises are static in nature. They don’t take into account dynamic aspects and supply-side improvements, the latter resulting also from cross-border investments. Having said this, revealed comparative advantage exercises generally flag food products, pharmaceuticals, rubber, paper, textile yarn, non-metal mineral manufactures, iron and steel and metal manufactures as potential exports from India. However, for items like fuel, yarn, fabrics, textiles, garments and related accessories, chemicals, footwear, machinery and transport equipment, two-way comparative advantage exists. For a country as large as India, aggregate revealed comparative advantage exercises often mean little, in the sense that trade between India and Bangladesh

5. “Prospects of India-Bangladesh Economic Cooperation: Implications for South Asian Regional Cooperation”, Prabir De and B. N. Bhattacharyay, ADB Institute Discussion Paper No.78, 2007.

6. Reproduced from South Asia Development and Cooperation Report 2008, Research and Information System for Developing Countries and Oxford University Press, 2008.

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is one thing and trade between Bangladesh’s East and North-East is another. It should be obvious that the potential for economic integration exists. At least so far as the trade part of it is concerned, before 1935 and before Independence, the flows also reflected this.

The figures given above are for formal trade. There is a substantial amount of informal trade. Estimates float around, suggesting that 75% or even 100% of the total volume of formal trade occurs informally. With porous and densely inhabited border areas, this is understandable and fencing has not yet been completed. Nor is fencing a complete deterrent. Some of this informal trade is clearly illegal and ought to be. Instances are cattle smuggling, drugs, narcotics and arms. However, there is no reason why trade in food products, spices, yarn, electronic goods and pharmaceuticals should not move from informal to formal channels. The reasons for the continued existence of such items in informal channels is threefold – imperfect and incomplete trade liberalization, evasion of duties and procedural costs through formal channels. Stated differently, even if trade is liberalized, duty evasion and procedures will still be a deterrent to formalization of trade.

7. http://www.mdoner.gov. in/content/map-lcss

For Meghalaya, the Land Customs Stations (LCSs) are particularly important.

These are developed by State governments through Central Assistance under the ASIDE (Assistance to States for Developing Export Infrastructure and other Allied Activities) scheme. Some of these LCSs are to be converted into Integrated Check Posts (ICPs), with immigration as well as trade included. LCSs are not only for Bangladesh, but also for Myanmar, Bhutan and China too. There are 38 LCSs now and 30 of them are with Bangladesh. Table 6.2 shows the status of LCSs between Meghalaya and Bangladesh.7 Of the 11 LCSs in Meghalaya, only 6 are functional and only one (Dawki-Tamabil) will become an ICP. In quantitative terms, in trading with Bangladesh, LCSs in West Bengal are much more important.

Within Meghalaya, the important ones are really Borsora, Dawki, Gasuapara and Shellabazar from the export point of view, with Dawki primarily being used Table 6.1: Expected gains from trade facilitation (million US $)

Port efficiency

Customs

Regulation

Service sector infrastructure

Total

Bangladesh

228

144

71

339

782

India

314

193

123

519

1149

Pakistan

74

29

42

191

336

Sri Lanka

97

63

41

175

377

South Asia

712

429

278

1224

2644

for coal. For 2006-08, some figures are available on how important these LCSs in Meghalaya are.8 In Meghalaya’s exports to Bangladesh, Borsora had a share of 42.93%, Dawki of 22.71%, Gasuapara of 16.95% and Shellabazar of 7.72%. In Meghalaya’s imports from Bangladesh, 94.32% was through Mahendraganj, Dalu following with 5.54%. Meghalaya primarily exports coal, limestone, sandstone, some cement, stone and chips, shale, raw hides and skins, oranges, ginger, tamarind and non-basmati rice. The imports are primarily betel nut, food and processed food products, fish, synthetic net fabrics, float glass and cotton waste. There is a clear difference in the product lines from the overall pattern of India-Bangladesh trade and Meghalaya’s exports are much more than Meghalaya’s imports.

Even though the study is slightly dated, we have some information on 4 LCSs in Meghalaya – Dawki (Jaintia Hills), Borsora (West Khasi Hills), Dalu (West Garo Hills) and Baghmara (South Garo Hills).9 Contrary to what one might think, these LCSs aren’t quite new. Had there been the intent, the infrastructure could have been developed. “Dawki in the Jaintia Hills District borders with Tamabil (Sylhet) in Bangladesh. As the district has rich deposits of coal for which there is a huge demand in Bangladesh, Dawki has become one of the important border point for coal trade. As the traditional Shillong-Sylhet road passes through Dawki, the place is known for centre of traditional hills-plain trade. The LCS at Dawki was notified in 1948. Although there are three authorized routes for trade, viz, (i) Piyan river, (ii) Shillong-Sylhet road, and (iii) Rangpani river which flows down to Bangladesh plain, trade basically flows through the Shillong-Sylhet road. Some trade particularly, during the rainy season also takes place through river routes. Traders from Meghalaya export coal, limestone, raw hides, citrus fruits and horticultural products. They import synthetic drinks, potato crackers, fruit juice and miscellaneous food products from Bangladesh.

Trade through Dawki is basically centered on the export of coal from Jaintia Hills, limestone and horticultural products of East Khasi Hills origin. As a result, trade is almost unidirectional as import is insignificant compared to export. …

Dawki is considered to be one of the widely used border trading port as the road connectivity across the border is better….Borsora in West Khasi Hills (Meghalaya) borders with Borsora in Sylhet (Bangladesh). The LCS at the Indian side was notified in 1951. There are five authorized routes for trade under this LCS. These are: (i) Cherragaon (India) to Cherragaon (Bangladesh), (ii) Borsora (India)— Tahirpur via Borsora (Bangladesh), (iii) Trolley track from Chalitacherra quary to Samsar in Bangladesh, (iv) Trolley track from Gauripur (India) to Samsar in Bangladesh, and (v) Jadukata river. All the land routes and trolley tracks are used for trade whenever these are fit for vehicular movement. The river route is also used for trade during the rainy season. Traders from Borsora export coal and limestones of West Khasi Hills origin to Bangladesh. Traders are reported to have

8. Expansion of North East India’s Trade and Investment with Bangladesh and Myanmar: An Assessment of the Opportunities and Constraints, RIS, Ministry of Development of North Eastern Region and North Eastern Council, October 2011.

9. Ibid.

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10. Ibid.

not imported anything from Bangladesh through this LCS…Dalu in West Garo Hills of Meghalaya (India) borders with Nakugaon in Bangladesh. The LCS at Dalu was notified in 1950. As the Garo Hills districts are rich in mineral resources like coal, limestone, clay, phosphorus, etc, the locally mined minerals are exported to Bangladesh across the border. The LCS has two authorized routes, viz., (i) Bhugai river and (ii) Dalu-Naltabari road. Currently regular trade flows through the land route and the river route is used for trade only during the rainy season.

Traders from Dalu exports only coal to Bangladesh. They import, although not significant, readymade garments, bleaching powder and synthetic net fabrics from Bangladesh. Trade at Dalu is also mainly centered on the export of coal from Garo Hills to Bangladesh. …Baghmara is the headquarter of the South Garo Hills District. It is situated on the banks of Simsang River on the Bangladesh border. The LCS at Baghmara was notified in 1950. It is connected to Bijoypur in Bangladesh across the border. There are two authorized routes for trade under this LCS, viz., (i) Baghmara-Durgapur road and (ii) Someshwari river. Traders from Baghmara export coal of Garo Hills origin to Bangladesh. No import is recorded at this LCS for last couple of years. Baghmara is not a widely used LCS through which traders export to Bangladesh. It is mainly used while the export routes in other LCSs in Garo Hills are choked particularly due to rain or other natural hazards. Although traders occasionally use Baghmara for export, they have not reported any import through Baghmara.”10 Yet, consider the fieldwork findings reported in the study. Borsora had no electricity. Only Dawki had telephones. None of the four had Internet, EDI or weigh-bridges. Only Baghmara had a warehouse. None of them had cold storages, parking places, transhipment platforms or transit sheds. Only Dalu had a dumping shed. None of them had secretarial assistance or rest rooms for drivers. Only Dawki had a rest room for passengers. None of them had health centres, hotels, restaurants, separate entry and exit gates, couriers, post offices, vehicle repair or service centres and food testing laboratories. Only Dawki had a bank. Transaction costs can be quite high, going up to Rs 2500 per truck in Dalu, transaction costs implying loading and unloading charges, parking fees, speed money and fees for clearing agents. “The field survey conducted across nine LCSs in the NER clearly shows the LCSs suffer from tremendous ‘infrastructure deficit’. Unavailability of electricity, bad road, manual handling of goods, unfriendly exchange rate and many such barriers are making the trade at border a costly affair. Undoubtedly, these are the barriers which are prohibiting the official trade to grow at the NER. As a result, unofficial (informal) trade is very much rampant. Although congestion at border is not a problem in the NER, unfriendly trading environment is making the trade expensive. The field survey shows transaction costs at LCSs are very high, which vary between Rs. 2500 to Rs. 500. The high transaction cost at border can

be mitigated through implementation of trade facilitation measures and policies, perhaps with a special focus on the NER…Our assessment is that trade creation can take place only if measures are taken, in particular to improve the quality of infrastructure at border, connectivity to the rest of state and the region and improvements in the supply capacities from the Indian side. Informal/illegal trade is a feature of border trade taking place with both neighbours. This trade is taking place through well-established trade points that have historically been used by the people of the region…India-Bangladesh trade can be increased manifold through production networks, provided appropriate investments are made on two sides of the border on activities that give rise to trade complementarities. For instance, the NER, which is a hub of fresh fruits and vegetables, can act as a source of raw materials for the upcoming food processing sector in Bangladesh.”11 Indeed, crossborder investments from Bangladesh are also possible, not just into Bangladesh.

Although this fieldwork on the LCSs is a couple of years old, there haven’t yet been any dramatic improvements.

11. Ibid.

To the list of LCSs, one should add border haats. There are two of these in Meghalaya – Kalaichar (West Garo Hills) and Balat (West Khasi Hills) and these were meant to be pilots, initiated in 2010. India has proposed another 22 more border haats along the Meghalaya-Bangladesh border. As symbols of reviving ageold haats, these border haats have been important. But because of the large number of constraints still imposed, they are unlikely to have significant quantitative impact.

On each side, a border haat is administered by a Haat Management Committee.

Table 6.2: LCSs between Meghalaya and Bangladesh.

LCSs in India

LCS in Bangladesh

Status

Borsora

Borosora

Functional

Dawki

Tamabil

Functional Being developed as Integrated Check Post by Department of Border Management

Gasuapara

Karoitoli

Non-functional

Shellabazar

Sonamganj

Functional

Bholaganj

Chattak

Non-functional

Dalu

Nakugaon

Functional

Mahendraganj

Dhanua Kamalpur

Functional

Baghmara

Bijoypur

Functional

Ryngku

Kalibari, Sonamganj

Not functional

Balat

Lauwaghar

Not functional

Kalaichar

Baliamari

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Here is a quote from the MOU signed between India and Bangladesh to illustrate the kind of constraints still imposed. “Following commodities will be allowed to be traded in the Border Haats: (a) locally produced vegetables, food items, fruits, spices; (b) minor local forest produce e.g. bamboo, bamboo grass and broom stick, but excluding timber; (c) products of local cottage industries like Gamcha, Lungi, etc.; (d) small locally produced agriculture household implements e.g. dao, plough, axe, spade, chisel etc.; (e) locally produced garments, melamine products, processed food items, fruit juice etc…. ‘Locally produced’ implies the produce of the concerned border district of the designated Haat…Keeping in view the objective of Border Haats, only residents of the area within five (5) km radius from the location of the Border Haat will be allowed to sell their products in the Border Haats. The number of vendors would be initially limited to about twenty five (25) from each country…Only residents of the area within five (5) km radius from the location of Border Haat will be allowed to buy products in the Border Haats…

Each individual will be allowed to purchase only as much of the locally produced commodities which are reasonable for bona-fide personal/family consumption.

Estimated value of such purchases shall not be more than respective local currency equivalent of US$50 (fifty) for any particular day.” Beyond the symbolic value, not only is this extremely limited liberalization, it is not enforceable. There is no way to enforce that products traded are locally produced within the district (or radius of 5 km) or that vendees (purchasers) are not traders. The informal cross-border trade, through border haats or outside them, will continue, because it makes economic sense.

What’s not legalized, perforce becomes illegal. This is also true of crossborder migration. There are all kinds of figures that float around on migration from Bangladesh to India and this is a controversial and contentious issue.

There is a difference between a stock and a flow. Given the high rates of growth in Bangladesh and opportunities there, it seems intuitive that push factors have become less there, though a future push because of climate change is a distinct possibility. In that sense, though a stock exists, the flow is probably much lower now, unless entry into India is a transit point for exit elsewhere in the world.

Migration figures from Census 2011 are still unavailable. Census 2001 gave a 3 million migrant population from Bangladesh, most of whom had migrated before 1971. The problem is that there isn’t a work permit system for legal and temporary migration to India. Low-end migration is often seasonal in nature. Had there been a legal work permit system, this would have also facilitated return after the season was over. Since there is no such system, cross-border migration becomes illegal and any return also becomes illegal. Illegal migration also imposes high transaction costs on relatively poor people. In 2001, Meghalaya had 33,710 inmigrants from other States, 20,434 out-migrants and 1,154 migrants from other

countries. Though these aren’t Census 2011 figures, migration from Bangladesh to Meghalaya directly is certain to be low. Even if there is migration from Bangladesh, beyond the marginal and the incremental, that’s certain to be routed through Assam and not directly from Bangladesh. There are figures of 50,000 that one hears as the stock of migrants from outside the State. Since one doesn’t yet have migration figures from Census 2011, one doesn’t know and Meghalaya’s high rate of population growth between 2001 and 2011 can be due to other factors too.

While migrant workers from Bangladesh and Nepal clearly work in the mines and perhaps even as construction labour, the problem is more one of not enforcing the legislation on inter-State migration. Stated differently, this is not an inner line permit system issue at all. The Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act was passed in 1979. This covers rights of inter-State workers, imposes regulation on contractors and principal employers and requires State governments to appoint inspectors. Unfortunately, enforcement has been extremely lax, despite the Inter-State Migrant Workmen’s Rules having been enacted in 1985. In the absence of registration, rights of workers are not protected and temporary migration becomes permanent. While the shock to labour markets is understandable, the socio-economic tensions can be avoided if existing rules and regulations are better enforced, though this is admittedly difficult in an economy that is still fundamentally unorganized and informal.

This is also a problem that plagues mining. Meghalaya possesses many minerals – coal, limestone, clay, kaolin and silimanite. The coal reserves are estimated to be of the order of 600 million tonnes, largely in the Garo Hills. This coal has low ash content and a high calorific value, though the sulphur content is high. But in terms of production, the Jaintia Hills is ahead of the Garo Hills, followed by the Khasi Hills. Reserves of limestone are estimated at 5000 million tonnes. Other than being used in cement plants within the State, this limestone is exported to Bangladesh, largely from the Khasi Hills. For both coal and limestone, the reserves are on private land. Beyond collecting royalties on sales, there is limited control the State government has. Coal mining is through burrowing, the so-called rathole method, though there are some open-cast mines. The point is that this is unsafe and leads to environmental degradation. Pits are abandoned after mining, without covering them up. Other than negative externalities on health and the environment, roads also suffer. While one can understand the special land tenure system in Meghalaya, that’s not an argument against absence of regulation.

Partly goaded by the High Court, a Meghalaya Mines and Minerals Policy was announced in 2012. This is still a preliminary statement of intent and is also silent on practices like rat-hole mining, though it does talk about a ban on child labour. But in principle, this allows for more modern mining practices and greater environmental protection.

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7 A VISION

FOR MEGHAlya

chapter

07 A Vision for Meghalaya

“Vision document” is an over-used and clichéd expression. Such a vision document already exists for Meghalaya in 2030. Such a vision document also exists for the North East, though that is for the year 2020.

1. A Vision Document for the State of Meghalaya 2030, National Institute of Public Finance and Policy, December 2012.

2. North Eastern Region Vision 2020, Ministry of Development of North Eastern Region and North Eastern Council, 2008.

3. Twelfth Five Year Plan (20122017), Faster, More Inclusive and Sustainable Growth, Planning Commission, Vol.1, 2013.

“Vision document” is an over-used and clichéd expression. Such a vision document already exists for Meghalaya in 2030.1 Such a vision document also exists for the North East, though that is for the year 2020.2 The North East vision document talked about a strategy that had six inter-dependent components – (i) Empowerment through self-governance and participatory development; (ii) Rural development, with improvements in agricultural productivity and creation of non-farm employment; (iii) Development of sectors with comparative advantage; (iv) Capacity development of people and institutions; (v) Augmenting infrastructure; and (vi) Ensuring adequate resources for the development of infrastructure. At that generic level, one can’t complain about these components of the strategy. Those components were meant to partly address five deficits – (i) A basic needs deficit; (ii) An infrastructure deficit; (iii) A resource deficit; (iv) A twoway deficit of understanding with the rest of the country; and (v) A governance deficit. Specifically for Meghalaya, this North East vision document talked about a real GSDP (gross State domestic product) growth rate of 10.96% between 2007 and 2020 and an implied real per capita GSDP growth of 9.72% during that same period. These are really ambitious targets and somewhat implausible. The background is real growth rates of 4.0% during the Eighth Plan (1992-97), 7.2% during the Ninth Plan (1997-2002), 6.7% during the Tenth Plan (2002-07) and 7.8% during the Eleventh Plan (2007-12). In fairness, for the Twelfth Plan (201217), the State government proposed a real GSDP growth rate of 11%. But the Planning Commission’s take is 8%, decomposed into 2.8% for the primary sector, 8.5% for the secondary sector and 9.2% for the tertiary sector.3 For the period 2012-13, the vision document for Meghalaya mentioned a possible real GSDP growth rate of 9.02%, with an implied real per capita GSDP growth rate of 7.92%.

The current baseline rate of GSDP growth can thus be assumed to be 8%. With limited reforms, this can increase to 10%. With more substantial reforms, it has the potential of approaching 15%. But that’s only the potential. For instance, if human development outcomes can be improved, the potential increment to GSDP growth is of the order of 2%, if not more. If physical infrastructure can be improved, the potential increment to GSDP growth is also of the order of 2%, of which, more than 1% is on account of the power sector alone. If public delivery of services is

improved, there is an additional increment of at least 1%. And if the governance function improves, there is an increment of more than 1%. Admittedly, these are back-of-the-envelope kind of numbers and lack any robustness in quantification.

However, they are indicative and underline the slack in the system. That potential 15% isn’t doable. But purely as back of the envelope, 10% seems possible. 11% seems unlikely, but it need not be 9% either. In broad terms, regardless of the economic indicator used, the post-1991 lesson has been that backward States have begun to catch up, because of the slack that exists in the system. This is true of both the North East and of Meghalaya. Many of Meghalaya’s areas lack the connectivity that was talked about in the PURA (Provision of Urban Amenities in Rural Areas) concept – physical connectivity, electronic connectivity, knowledge connectivity and economic connectivity. With connectivity ensured, efficiency in use of inputs and higher growth is also ensured. Globally, a few developmental propositions are universal. First, economic development is correlated with urbanization. Second, economic development is correlated with a reduced share of employment in agriculture and even forestry. Instead, off-farm employment opportunities are created. Third, there is a switch from subsistence-level self-employment to more productive wage employment. Such employer-employee relationships also make it easier to introduce social security provisions. Fourth, informal/unorganized enterprises and employment transit to formal/organized. Fifth, there is an increase in female work participation rates. Though these transitions can be facilitated, they tend to happen as growth picks up.

But at one level, GSDP is like putting the cart before the horse. Since growth and income are not ends in themselves, what does this mean in terms of human development? Growth or income are not ends, they are the means to an end. They are the means to providing prosperity and betterment of lives. How does one reduce poverty? How does one reduce deprivation? How does one ensure development?

How does one increase employment? How does one ensure that development is inclusive? How does one improve human development outcomes? These are essentially the developmental concerns. Growth must be accompanied by targets and improvements in human development outcomes that can be monitored. The numbers is Table 7.1 are no more than indicative. But for what they are worth, they illustrate the kind of indicators that should be monitored. Such monitoring at the level of the State is too aggregated and dysfunctional. To have utility, it should be disaggregated downwards, to the level of the districts, and even further below, to the level of the blocks.

To return to the core questions, they are the following. How does one tap the human resource potential? Specifically, what should one do in education, skills and health? How does one tap the natural resource (land, forests, minerals, water),

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Table 7.1: Human Development Targets till 2030

for Meghalaya Indicator

2020

2030

Literacy rate

85%

95%

Infant mortality rate

35

20

% below poverty line

20%

100%

South Asia

1224

2644

without sacrificing the cause of the environment? What is the road map for developing agriculture, forestry, mining and industry? How does one improve the physical infrastructure, specifically, roads, water and electricity? In each of these, how does the State vacate areas that the private sector will step into? When public expenditure is necessary, is it possible to separate public expenditure from public provisioning? Are there best practice lessons from other States? To the extent public expenditure is needed, how does one generate the resources? How does one devolve downwards and improve governance in villages and municipal areas?

How does one improve administrative delivery? How does one attract investments and create an enabling environment for entrepreneurship development? These questions focus on the endogenous problems of the State. This is not to deny that Meghalaya is constrained by infrastructural and other issues that concern other States in the North East and neighbouring countries. That is, it suffers from negative externalities, though the externalities should be positive.

We have used the word reform, without explaining what it means. Often, reforms are defined in sectoral terms – the primary sector, the secondary sector, the tertiary sector and so on.

4. Meghalaya, State Development Report, 2008-2009, Planning Department, Government of Meghalaya.

Let’s begin with the primary sector, agriculture and allied activities. After all, a large percentage of the population is still dependent on agriculture. The problems with the agricultural sector are also known. Here, for example, is a quote from the State Development Report.4 “Out of the total geographical area of 2249000 hectares, total cropped area is only 2.62 lakh hectares. Pattern of land holdings and the myriad land tenure systems, extensive practice of ‘Jhum” cultivation (‘Shifting’ Cultivation), other traditional agricultural practices including aspects of production for consumption rather than creating marketable surpluses for profitable returns, high cost of inputs and production are some of the realistic dimensions of agriculture in Meghalaya.” Agriculture and allied activities can mean crop production, but it can also mean, floriculture, aquaculture, poultry and animal husbandry. One way to interpret that quote is that because of topography and forest cover, the area available for cropping will never be more than say 10%

of the total geographical area, though some cultivable wasteland has not yet been reclaimed and some available fallow land has not been utilized. Therefore, the available land must be used more efficiently and its productivity must be increased.

Because of land tenure systems, most land holdings are small. Almost 50% is less than 2 hectares and slightly less than 15% is larger than 4 hectares.5 Despite possibilities of leasing, as opposed to change in ownership, that pattern isn’t likely to change significantly either. Are there economies of scale in production? That is, is a minimum size of land holding necessary to stimulate productivity increases?

Empirically, the answer isn’t clear. That depends on what is being done with the land holding. For example, if rice is being produced, there may be economies of scale in production. But if the land is being used for floriculture, it is by no means obvious that there is an economy of scale in production. This is not to deny that there may be significant economies of scale in processing, transportation, distribution and marketing.

What agricultural crops does Meghalaya have a comparative advantage in? This can only be answered through revealed comparative advantage kind of exercises and the problem with these is that they are static in nature, almost by definition.

Using these, it is impossible to predict what sectors Meghalaya might have a comparative advantage in the future, in a dynamic sense. Having said this, we have some kind of an identification, based on the North Eastern Vision Document, the Vision Document for Meghalaya and the State Development Report. This identification is shown in Table 7.2. Every district has a comparative advantage in some agricultural crop or the other. Why isn’t this being tapped? Beyond what has been said about land, there is almost a generic set of problems. First, there is the irrigation and water management problem. Second, modern agricultural practices (mechanization, seeds, fertilizer, micro-nutrients, plant protection, integrated pest management and integrated farm management) are still limited.6 Third, this suggests that extension services still do not work very efficiently. Fourth, there is an agricultural credit and insurance problem, somewhat also hindered by the land tenure system.7 Fifth, there are issues about transportation infrastructure, soil testing laboratories, storage facilities and processing centres. Sixth, markets are inefficient. By this, one doesn’t mean the regulated markets under the 1980 Agricultural Produce Market Act (APMC) and the subsequent 1982 rules.

Those are set up the State Agricultural Marketing Board and Meghalaya has administratively relaxed the APMC Act. The point is that most markets are outside the State Agricultural Marketing Board system and there are a variety of these, managed and controlled by different agencies. Other than multiplicity and lack of an integrated structure, this means that fees collected are not necessarily used for the up-gradation of markets. Had the State Agricultural Marketing

5. Ibid.

6. Meghalaya’s soil is high in nitrogen, but low in phosphorus.

7. A little over 95,000 kisan credit cards have been issued in Meghalaya, mostly by commercial banks.

Some are by regional rural banks and only a few by cooperative banks.

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Table 7.2: Comparative advantage in crops Regional comparative advantage?

Crops

National comparative advantage?

Rice

Yes

Maize

Yes

Yes

Ri Bhoi, West Khasi Hills, Jaintia Hills, South Garo Hills

Small millets

Yes

Yes

West Garo Hills, South Garo Hills

Wheat

Yes

Coffee

Yes

Yes

Natural rubber

Yes

Yes

Bananas

Yes

Yes

Potatoes

Yes

Yes

Chillies

Yes

Yes

East Khasi Hills

Ginger

Yes

Yes

Ri Bhoi, East Garo Hills, South Garo Hills, West Khasi Hills

Turmeric

Yes

Yes

South Garo Hills

Pineapples

Yes

Yes

West Garo Hills, Ri Bhoi, South Garo Hills, East Garo Hills

Sesamum Sugarcane Cotton Jute Citrus fruit Papaya

Districts with special advantage in that crop Ri Bhoi, Jaintia Hills, East Garo Hills, West Garo Hills, South Garo Hills

West Garo Hills

West Garo Hills, Ri Bhoi, West Khasi Hills, East Garo Hills

Yes East Garo Hills, West Garo Hills, South Garo Hills East Garo Hills South Garo Hills East Khasi Hills, West Khasi Hills, Jaintia Hills East Khasi Hills, Ri Bhoi, East Garo Hills, West Garo Hills, South Garo Hills

Board been in charge of all markets, these markets would not only have possessed better infrastructure, they would also have been more efficient in bringing buyers and sellers together, though a possibility of bypassing markets through direct links between buyers and sellers always exists. While these comments are about agriculture and horticulture, they also apply to horticulture, poultry, fisheries and animal husbandry. Stated differently, the requisite commercialization and diversification hasn’t yet happened in the rural sector.

Purely, from a national accounts point of view, commercialization and diversification of the rural sector will not show up in an increased share of agriculture and allied activities in GSDP, but in an increase in the share of the primary and even tertiary sectors. Meghalaya announced its first industrial policy in 1988 and the second one in 1997. Subsequently, the Meghalaya Industrial and Investment Promotion Policy (MIIPP) was announced in 2012 and it stated the following.8 “The 1st Industrial Policy of the State of Meghalaya was framed in 1988 and the 2nd Policy in 1997.....During this period 15 years or so, the State could attract quite a substantial investment and becoming one of the leading States of N.E. Region making a mark as prominent investment destination. The State could attract investors from Jammu & Kashmir, West Bengal, Jharkhand U.P and Assam etc. A number of power intensive industries like Steel & Ferro Alloys, Cement Industries etc have also been set up and some more are in the pipe line capable to meet the demands of entire N.E. Region as well as neighboring countries. However, due to inadequate infrastructural facilities for drawing power from the National Grid, the power situation in the State began to affect the industrial production since 2005, which demanded a policy-shift to address the crisis and bring back steady rate of growth in manufacturing sector.” The following also deserves a quote. “State Government will strictly monitor the transfer/lease of land to the units on need based and actual requirement so as to avoid alienation of the tribal land. Government will provide land under lease basis for initial requirement and one time expansion. Such land, if not available within the industrial areas/parks, will be provided on 30 year lease basis, on payment of appropriate premium, for which Government will acquire the same. ..State Government recognizes that improvement and upgradation of industrial infrastructure is essential for accelerated growth of industries. Emphasis would be on creation of New Industrial Areas/ Estates for manufacturing and service enterprises, early completion of Growth Centre, Industrial Infrastructure Development Schemes and Export Infrastructure, improve communications and power supply with other connected facilities. Government would like to promote PPP mode projects. Government will also examine the need and feasibility of setting up of SEZ in the State.” Among the potential areas identified were agriculture and horticulture processing, processing of plantation crops, development of traditional handlooms and handicrafts, tissue

8. http://megindustry.nic. in/MIIPP_2012.pdf

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9. State Development Report, op.cit.

10. http://www.dcmsme.gov.in/publications/Final%20Report%20 of%20Fourth%20All%20India%20 Census%20of%20MSME%20Unregistered%20Sector%202006-07.pdf

culture and bio-technology, spices and essential oils, animal husbandry and meat processing, mineral-based industries, electronics and information technology, bamboo and wood-based products and hotels, nursing homes and captive power generation.

It is necessary to mention the organized versus unorganized sector dichotomy.

There are indeed three different definitions of organized/unorganized, although they do overlap. First, there is the labour law kind of definition, the Factories Act of 1948 being the obvious example, although this only applies to “factories”.

Registration is required if a factory employs 20 or more people and doesn’t use power or if it employs 10 or more people and uses power. Registration is equated with organized and everything else is unorganized. Second, there is a definition of small-scale industry (SSI), in terms of threshold levels of investment in plant and machinery. SSI is often equated with unorganized manufacturing. Third, there is a threshold level of turnover below which, excise doesn’t have to be paid. Excise exemption constitutes yet another definition of unorganized. SSI is an old definition, subsequently overtaken by the Micro, Small and Medium Enterprises (MSME) Act of 2006. As has been mentioned earlier, self-employment is high throughout India and there is a large share of what are called own account enterprises, typically in rural parts. Having said this, there are an estimated 116 large and medium units in Meghalaya, concentrated in steel, cement and processing of food and with an estimated employment generation of 5417. “Majority of the population is involved in the unorganized sector of the industry…Out of the 2653 small scale manufacturing enterprises operating in the state, 1902 are located in rural areas and 751 in urban areas. Similarly for construction related enterprises, 971 are located in rural areas and 635 in urban areas…Nearly 80% of the manufacturing units and 66.8% of the construction units come under the category of “Establishments’.

The greater share of ‘Establishments’ compared to the ‘Own Account Enterprises’ implies increasing trend of hired employment both in rural and urban sector.”9 Therefore, while large-scale and organized sector manufacturing and industry aren’t unimportant, Meghalaya’s industrial development is fundamentally a function of small-scale and rural sector development, integrated with agriculture.

Incidentally, the 4th MSME Census, conducted in 2006-07, reported 47,000 MSME enterprises in Meghalaya.10 87.94% of these were in manufacturing and processing, 11.63% in services and the remainder in repair and maintenance. The estimated employment in these was 1.04 lakhs.

It’s not as if manufacturing and industry is in great shape everywhere in the country. Some of these again are generic and concern credit and direct problems, procedures, clearances, infrastructure and the skills deficit. For example, the strategy document of the National Manufacturing Competitiveness Council

stated, “Power supply remains the main physical infrastructure bottleneck to industrial growth on account of chronic shortages, high cost and unreliability. The average manufacturer in India loses 8.4 per cent a year in sales on account of power outages as opposed to less than 2 per cent in China and Brazil. The adverse impact on similar units in the unorganized sector could be higher. It is estimated that power shortage alone contributed to a production loss of at least one per cent of GDP.”11

11. The National Strategy for Manufacturing, 2006, http://nmcc.nic. in/pdf/strategy_paper_0306.pdf

One need say no more on infrastructure and the need for reform. But one should perhaps mention attempts to ensure skill formation and develop physical infrastructure by focusing on clusters. There are two related strands that feed into the notion of developing growth poles. First, there is quite a bit of cross-country evidence that shows that small firms thrive and prosper, despite economies of scale and scope and technological advantages associated with large firms. Italy is not the only example. Small firms exhibit flexibilities that large firms are unable to match.

Hence, there are also diseconomies of scale. However, small firms also suffer from disadvantages. There are asymmetries in the capital market, imperfect knowledge about demand conditions, lack of marketing information and marketing resources and inadequate access to technology and skills. All these involve fixed costs that are difficult for a small firm to bear alone. But when clusters or hubs develop, there are external economies of both scale and scope and both fixed and variable costs can be spread over a broader base. Small firm flexibilities are thus best exploited when such clusters and hubs develop. Second, there is the recognition that the quality and quantity of rural employment generation has been unsatisfactory.

The idea of cluster formation isn’t new. Ever since the Industrial Policy Resolution of 1948, successive Five-Year Plans and promotional schemes have tried to push growth poles. Before undertaking a fresh cluster development exercise, one therefore needs to ask, why have earlier attempts not succeeded? And why will new efforts be different? There are two possible reasons for earlier failures. First, there are clusters and clusters. At a conceptual level, there are three kinds of clusters one can visualize – relatively modern, small-firm dominated industrial clusters that often tend to be located in relatively urban areas; artisan and rural industry based clusters; and clusters that are based on the agro-economy. Arguably, most policy interventions have focused on the first of the three, rather than the last two. Second, policy interventions and developmental programmes have tended to be ad hoc, rather than taking a holistic view of what is necessary. For instance, if infrastructure is not developed and development of skills remains a question mark, it is doubtful that marketing interventions alone will suffice. Stated differently, policy interventions alone won’t be sufficient to ensure that clusters develop. Nor should one forget that industrial clusters often tend to be located in the relatively

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12. However, Meghalaya has cumulatively only spent 76% of the funds available under SJSRY, http:// mhupa.gov.in/programs/upa/ nsdp/statewise_progress.pdf

more advanced parts of the country. In contrast, artisan-based or agro-based clusters are more evenly distributed spatially. Having said this, Meghalaya does have schemes for industrial estates in Shillong, Nongstoin, and Khliehtyrshi, an industrial area in Umiam, a growth centre in Mendipathar, an export promotion industrial park (EPIP) in Byrnihat, a weaving cluster in Ri Bhoi and a cane and bamboo cluster in the Jaintia Hills. The idea is to provide better quality physical infrastructure. While the idea behind tapping positive externalities is laudable, inter-State comparative studies do tend to show that fiscal incentives do come pretty low down in determining location of investments. They matter only at the margin, only if everything else is the same. More important determinants are law and order, the availability of physical infrastructure, the availability of skills, labour market conditions and the extent to which procedures and clearances have been simplified. While one understands land-related problems, the singlewindow clearance system should be flagged and this has links with the governance and administrative delivery problems mentioned earlier. There is indeed a Single Window Agency, but it’s not obvious that it has been working particularly well.

In the context of that integration between agriculture and industry, one should mention the Centrally sponsored scheme known as HMNEH (Horticulture Mission for North East and Himalayan States). Its mini missions are not only on production and productivity, but also on research, post-harvest management and marketing and processing and value addition. For instance, this has been used to identify cashew clusters in Meghalaya. Part of the issue is synergizing across several schemes. As an example, there is the Swarna Jayanti Shahari Rojgar Yojana (SJSRY), launched in 1997, after subsuming earlier schemes, and designed to push both wage employment and self-employment and now converted into a National Urban Livelihoods Mission (NULM), routed through the Ministry of Housing and Urban Poverty Alleviation.12 That apart, there is a non-lapsable Central pool of resources for the North Eastern States. Through the Ministry of Rural Development, there is the Swarnajayanti Gram Swarojgar Yojana (SGSY) and of course the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) of 2005.

A few quotes will illustrate the nature of the problem. “Pradhan Mantri Gram Sadak Yojana (PMGSY) was launched on 25th December, 2000 with the objective of providing All-weather roads (with necessary culverts and cross-drainage structures, which is operable throughout the year), to the eligible unconnected habitations in the rural areas....Since inception of the scheme and up to the year 2012-13, a total of 215 habitations have been cleared for connecting with an Allweather road by constructing 1,206 km of road length including upgradation.

Against this, the State has connected155 habitations by constructing 1,012 km

of road length.”13 Under the National Rural Livelihood Mission (NRLM), in 2011-12, the achievement was 47% of the target.14 The intention is not to criticize Meghalaya’s performance on this programme or that. Given the objective and the context, one is asking a different kind of question, one that has been posed before. In this alphabet soup of programmes and schemes, is one missing out on the synergy across these? Is there the governance capacity to handle so many of these? Or should one prioritize the ones that are important?

Again, given the objective and the context, one should flag the role of SHGs (self-help groups), part of the SGSY template, though SGSY isn’t the only trigger for forming SHGs. “The SGSY Scheme is operative from 1st April 1999 in rural areas of the country. SGSY is holistic Scheme covering all aspects of self-employment such as organization of the poor into Self Help Groups, training, credit, technology, infrastructure and marketing. The scheme will be funded by the financial institutions, Panchayat Raj Institutions, District Rural Development Agencies (DRDAs), Non Government Organizations (NGOs), Technical institutions in the district; will be involved in the process of planning, implementation and monitoring of the scheme. NGO’s help may be sought in the formation and nurturing of the Self Help Groups (SHGs) as well as in the monitoring of the progress of the Swarozgaris. Where feasible their services may be utilized in the provision of technology support, quality control of the products and as recovery monitors cum facilitators….The scheme aims at establishing a large number of micro enterprises in the rural areas. The list of Below Poverty Line (BPL) households identified through BPL census duly approved by Gram Sabha will form the basis for identification of families for assistance under SGSY. The objective of SGSY is to bring assisted family above the poverty line within three years by providing them income generating assets through a mix of bank credit and Government subsidy. The rural poor such as those with land, landless labour, educated unemployed, rural artisans and disable are covered under the scheme.

The Self-Help Groups shall be organized by Swarozgaris drawn from the BPL list approved by Gram Sabha. The Scheme provides for formation of Self-Help Groups (SHGs), nurturing and their linkage with banks. Group activities will be given preference and progressively majority of the funding will be for Self Help Groups.

Half the groups formed at block level should be exclusively women groups….SHG under SGSY may consist of 10 to 20 persons belonging to BPL families. In case of minor irrigation and in the case of disabled persons this number may be a minimum of 5 persons. The group shall not comprise more than one member of the same family. A person should not be a member of more than one group. SHG may be an informal group or registered under Societies Act, State Co-operative Act or as a partnership firm. The assistance (loan cum subsidy) may be extended to individuals in a group or to all members in the group for taking up income

13. http://rural.nic.in/sites/downloads/ monitoring/State_Briefs_August_2012/Meghalaya/PMGSY.pdf 14. http://rural.nic.in/sites/downloads/ monitoring/State_Brief/Meghalaya/ NRLM_Meghalaya_07_12.pdf

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generation activities.”15

for Meghalaya

15. http://megcnrd.nic.in/ scheme-sgsy.htm 16. http://megselfhelp.gov.in/table-2.htm 17. megcooperation.gov.in -Website of Department of Cooperation,Government of Meghalaya.

The official data on SHG formation are somewhat old and gives a total number of SHGs of 4,843.16 The State Development Report has slightly later numbers, where the number of SHGs is given as 9,395. The bulk of SHGs are in the West Garo Hills and the smallest number is in the South Garo Hills. SHGs are essentially about micro-credit, though there is no automatic link between SHG formation and access to formal lines of credit. Most SHGs in Meghalaya are in animal husbandry, trade and petty business, horticulture, agro-based activities, skilloriented activities and service-based activities, in decreasing order of importance.

While there have been successes involving SHGs and we will revisit this in a subsequent chapter, SHGs, by their very nature, are limited in scope. Hence the need to integrate them with cooperatives. “During 1971-72, there were a total of 953 Cooperative societies in Meghalaya with a total membership of 57 thousand, Rs. 32 Lakhs of share capital and 133 Lakhs of working capital. Historically the societies were not in good health due to poor management, lack of supervision, absence of full time trained secretaries, absence of linkage of credit with marketing, low yield from traditional method of cultivation, absence of marketing facilities of farm produce and lack of co-operative education and vested interest etc. A master plan was formulated by the Reserve bank of India in 1974 in consultation with the Registrar of Co-operative Societies and Meghalaya Co-operative Apex Bank for re-organization and revitalization of base level primary co-operatives, which resulted in the emergence of 180 re-organized Service Co-operative Societies (popularly known as PACs) in the whole State of Meghalaya. All the reorganized Service Co-operative Societies were having full time paid secretaries and they were designed for multipurpose activities, such as dispensation of credit, distribution of fertilizer, improved seeds and other inputs, supply of consumer goods, marketing of surplus agricultural products etc and are for the purpose of rural credit termed as PACS (Primary Agricultural Credit Societies). Besides the above, the State of Meghalaya has many other types of Co-operative societies like Housing, Handloom, Industrial, Fisheries, Consumers, Labour Contract, Transport Poultry, Women, Joint Farming, Processing, Dairy, Piggery and other type of co-operative societies…. There are 1319 Co-operative Societies as on 31st March 2009 registered in the state.”17 The Department of Co-operation operates as administrative department in the Secretariat and the Office of the Registrar of Co-operative Societies as head of the department to administer the co-operative societies.

Beside, the state has Apex Level Co-operative Societies namely :

Meghalaya Co-operative Apex Bank Ltd. – its function is to provide credit to the farmers who are the member of Co-operative societies in short term, medium term and long term period etc.

Meghalaya Co-operative Federation and Marketing Societies Ltd. – its function are to market the agricultural products of its affiliated societies, to distribute Fertilisers and other inputs to the farmers and also for distribution of consumer goods and other essential commodities to the urban and rural areas.

Meghalaya State Housing and Financial Co-operative Society Ltd. - At the base level together with the Primary Housing Co-operative Societies has been organised and registered with an object to provide Housing Loan and House Construction facilities to the weaker section of the people in urban as well as rural areas.

The Meghalaya Apex Handloom Weavers Co-operative and the Handicraft Federation Ltd. is the Apex Level Society. This society is supplying quality of yarn to the primary handloom and markets the finished products. Handloom occupies a very important role in the small-scale industries and village cottage industries in the State.

The Meghalaya State Co-operative Union was established in the year 1978. The union has to conduct a number of training courses to make people fit to participate in the affairs of Co-operative societies for their own benefit. Besides the above, the union is to conduct short training courses either in the District as well as in the sub-divisional level at least 15 days in a month throughout the State. Â Meghalaya Supervision and Cadre : In the past through the Meghalaya Supervision and Cadre Management of Co-operative Society Ltd. assistance for secretaries (179), training and education programme for the Co-operative societies was being implemented in the State through this Apex Level Society. On national level recommendation this has been done away with and the control and direction of the secretaries have been left to the societies who are their pay masters. Some financial assistance is being provided to the societies in this respect.

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8

Driving Entrepreneurship and the IBDLP

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08 Driving Entrepreneurship for Meghalaya

Throughout this book, there has been a refrain about the government performing an enabling role and improving the efficiency of public expenditure, by harmonizing, unifying and converging schemes. Given that enabling environment, growth and development are also about driving private entrepreneurship.

The Integrated Basin Development and Livelihoods Promotion Programme (IBDLP), started by the Meghalaya government in the course of the 12th Five Year plan, is also about that. The first question to ask is, what’s the “basin” doing there in the name of the programme? What does that mean?

“Considering the fact that water as a resource has attained increasing significance and since the 12th Plan also gives more focus on water, Integrated Water Resources management has been assigned the central focus in this programme. The state of Meghalaya is blessed with bountiful water resources that need to be harnessed.

Hydrologically the State comprises of two basins, viz., the Left bank of Brahmaputra Basin (11220.1 km2) and the Brahmaputra Tributaries Basin (11208.89km2), three catchments viz., Kalang to Dhansiri Confluence (about 4499.61km2), Bangladesh Meghalaya Physical Map

Border to Kalang Confluence (about 6720.0km2) and South Flowing Drainage of Meghalaya (11208.89km2). eight sub catchments with a size range of 2.08 to 2.46 lakh hectares 35 watersheds with a size range of 0.05 to 2.67 lakh hectare and 179 watersheds with a size range 0f 0.03 to 0.22 lakh hectare. However, the hydrological units in the state are under stress as evident from the drying of springs and water sources, declining water storage capacities and reduced depth of flow of streams and rivers due to excessive human use, and sedimentation. This trend would call for urgent measures to arrest failing which the social, economic and ecological development of the state itself could be adversely affected. Therefore, the thrust areas of IBDLP include Integrated Water Resources Management, creation of Small Multipurpose Reservoirs (SMRs), generating water centric livelihoods such as Fisheries, Aqua tourism, etc. The objective is not only to capture surface runoff and water along the drainage lines, reduce erosion, but also to formulate water policy and aim at better river governance. The SMRs will be used for various productive purposes like aquaculture, drinking water supply, mini-hydel (<100 KW) irrigation, aesthetic value, tourism, eco-system promotion etc. Another thrust area under the Programme is to address the issues and challenges arising out of Jhum and Bun cultivation with appropriate interventions under the aegis of Integrated Natural Resources Management and with active involvement of all the concerned stakeholders. The success of effective basin management primarily rests on community mobilization, capacity building of the stakeholders, convergence, creation of flexible and modern institutions, better delivery of services, and overall improvement in Governance.â&#x20AC;?1 One thus gets the general idea. The word â&#x20AC;&#x153;basinâ&#x20AC;? has multiple usages, but is being used here in the hydrological sense of a watershed and catchment area. Meghalaya has multiple natural resources and these are functions of the different basins or catchment areas. The idea is to tap these, to promote livelihoods.

1. http://mbda.gov.in/about_IBDLP.html

IBDLP is an effort at ushering in a facilitating ecosystem for sustainable growth.

The basic strategies of IBDLP revolve around strengthening the hands of the majority rural population through a basin approach rather than a Department centric approach, building up the necessary platforms for delivery of the required inputs for different productive activities. Under the programme, the stakeholders are being exposed to practical knowledge, which would enable them to exploit proven technology, through the entire value chain, right from the input up to the marketing stage. Proper and sustained use of our water resources and mobilization of required energy support at various stages of the value chain are also the key components of the programme, the prime goal of IBDLP being to substantially improve the State on most of its growth indicators, and result in a more equitable and inclusive growth.

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The programme works in mission mode and is people-centric. It brings about a complete paradigm shift in the development strategy as it veers away from the traditional ‘Beneficiary’ approach and promotes alliances with ‘Entrepreneurs’ and ‘Development Partners’ in taking the State to a higher trajectory of growth, prosperity and well being.

It endeavours to focus more on the less developed areas, under privileged sections of society, women and youth, thereby aiming to harness the vast untapped creative potential of the people, and particularly the mass of creative energy exemplified in the industrious youth, who need opportunities for growth and a more secure future. The entire programme is pitched on a platform of good governance, wherein the whole process is done transparently.

The focus on complete value chain management of different production sectors coupled with a thrust on thematic and institutional convergence of developmental initiatives is meant to mitigate business risks and also enhance comparative advantage of the State in gaining greater market access.

In terms of a governance structure, there’s the Meghalaya Basin Development Council (MBDC), headed by the Chief Minister and with the Chief Executives of Autonomous District Councils as members. Below that, there’s the Meghalaya Basin Development Authority (MBDA), headed by the Chief Secretary, set up in March 2013. Further down, there are District Basin Development Units (DBDUs) in every district, in the office of the Deputy Commissioner. Below that again, there are the Enterprise Facilitation Centres (EFCs) in the blocks. Tangentially, one can add to these the Meghalaya Institute of Entrepreneurship, the Meghalaya Institute of Governance and the Meghalaya Institute of Natural Resources, perhaps even the Meghalaya Trade Promotion Organization. There are known problems with using natural and human resources efficiently and constraints in infrastructure, institutions and governance. How does IBDLP help in easing the problems and the constraints? At a conceptual level, there are three ways one can respond to this question. First, with MBDC and MBDA at the top and DBDUs at the bottom of the government hierarchy, this is decentralized and participatory planning, with feedback loops going back and forth. Second, there is plenty of public money and resources floating around in the system and no dearth of schemes and programmes. MGNREGS (Mahatma Gandhi National Rural Employment Guarantee Scheme), RKVY (Rashtriya Krishi Vikas Yojna), ATMA (Agricultural Technology Management Agency), NWDPRA (National Wasteland Development Project in Rainfed areas), IWDP (Integrated Wasteland Development Project), IWMP (Integrated Watershed Management Programme) , WDPSCA (Watershed Development Project in Shifting Cultivation Areas), PMGSY (Pradhan Mantri

Gram Sadak Yojana), BRGF (Backward Regions Grant Fund), AIBP (Accelerated Irrigation Benefit Programme), SGSY (Swarnajayanti Gram Swarozgar Yojana), IAY (Indira Awaas Yojana), TSC (Total Sanitation Campaign), JFM (Joint Forest Management) and RIDF (Rural Infrastructure Development Fund) are examples.

Typically, these are spent by line ministries and departments working in silos, with no synergy and convergence across them. With synergy and convergence, it is possible to get better bang for the buck and IBDLP is meant to achieve this.

Before the third response it is worth mentioning the ten missions of IBDLP, namely: (1) Apiculture; (2) Aquaculture; (3) Forestry and Plantation Crops; (4) Horticulture; (5) Livestock; (6) Rural Energy; (7) Sericulture; (8) Tourism; (9) Water; and (10) the recently launched Mission Green. Each of these missions has a vision and one can’t quarrel with the objectives set out in the visions. These narrate the statement of purpose in substance and present the end goal of each mission.

Seen holistically, the amalgamation of the visions brings forth the objective of IBDLP. What’s important to be understood is how the objectives set out in those visions are going to be attained and how IBDLP interventions are going to be different from traditional government institutions. IBDLP talks about five clusters of interventions – (1) knowledge management (2) financial inclusion (3) market access (4) climate change adaptation and (5) convergence. Under the knowledge management head is one of the more interesting aspects of IBDLP, the third conceptual difference that was mentioned earlier. This is the Enterprise Facilitation Centre (EFC) which coverts supply-driven government intervention into a demand-driven one. These are one-stop shops, manned by two enterprise resource persons (ERPs) each and are meant to hand-hold entrepreneurs through the entrepreneurial process, instead of becoming a channel for subsidies and doles.

EFCs were meant to be set out in all the 39 blocks. But as far as one can make out, they have only been set up in the blocks indicated in table 8.12 In districts like the West Garo Hills, there is also something called a MobileMulti Facility Centre (MMFC), a bit like an EFC working out of a mobile van. Tied to knowledge management is the financial inclusion agenda, with a component of one-time margin money for those who go through a formal entrepreneurship development programme. IDFC Foundation is a partner in market access interventions. There is detailed product flow information for 169 markets and 6 markets (Smit, Umsning, Wahjajer, Garobadha, Ampati, Gokulgre) have been identified for upgrading infrastructure, creating warehouses and cold storage and strengthening transportation logistics. While climate change is important, one can ignore it for present purposes, beyond pointing out that 64 vulnerable villages in

2. http://mbda.gov.in/Accompanying_Measures.html

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Table 8.1:Enterprise Facilitation Centres Sl. No 1 2

District South West Garo Hills

EFC Centre Zikzak Betasing

3

Rongram

4

Selsella

5 6

West Garo Hills

Gambegre Dalu

7

Dadenggre

8

Tikrikilla

9

Baghmara

10 11

South Garo Hills

Gasuapara Chokpot

12

Rongara

13

Pynursla

14

Laitkroh

15

East Khasi Hills

Mawphlang

16

Mawryngkneng

17

Mylliem

18 19 20

East Garo Hills North Garo Hills

21 22

West Jaintia Hills

West Khasi Hills

33

Nongstoin Mawthadraishan Mawshynrut

South West Khasi Hills

31 32

Saipung Mairang

29 30

Laskein Khliehriat

East Jaintia Hills

26

28

Kharkutta

Thadlaskein

24

27

Resubelpara Amlarem

23

25

Samanda

Mawkyrwat Umling

Ri Bhoi

Umsning Jirang

the state have been singled out for assistance. Finally, on convergence, it is best to give a quote. “Guidelines have been issued by the MBDA to the DBDUs for conceptualizing projects in a convergent mode under which gap funding wherever required will be provided by the MBDA. All the BDUs have come with imaginative projects, which are at different stages of sanction and implementation.”3

3. http://mbda.gov.in/Accompanying_Measures.html

APICULTURE

The Apiculture mission covers the entire scope of management of honeybee resources, bee products, traditional and introduction of modern beekeeping technologies, pollination services, bee floral resources and their interface with socio-economic, business and ecological agenda ensuring sustainable livelihood, natural resource use optimization and environmental integrity.

The mission is designed to spur initiatives which are integrative with Meghalaya’s biophysical attributes to confer livelihood improvement through gainful employment of the local populace. It has been conceived as a mission mode apiculture development strategy underpinned on intensifying honey production, expanding domain of honey product development, creating market linkages for profitable marketing of honey and honey products, and community engagement for creating effective and sustainable income source through infrastructural and human capacity development. Technical assistance along with innovative financing and market linkages under institutionalized management are the key vehicles for implementing the strategy for up scaling and promoting apiculture as an organized industrial enterprise.

The vision of the mission is to upscale and promote Apiculture as an organized industrial enterprise that will provide livelihood, gainful opportunities, improve rural economy and enhance the ecological system of the State.

Beekeeping is innately woven with the socio-ecological ethos of Meghalaya and has been carried across many generations through indigenous means. In the past two years, the activities undertaken broadly seek to promote, coordinate, sponsor and support the value chain process (production, collection, processing and marketing) of different bee products and integrate pollination of useful crops through training, outreach and infrastructure development.

Specifically the mission works towards involving traditional beekeepers and unemployed youth in the value chain. It seeks to: •

Intensify honey production and profitability in the State

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• • • •

• • • •

Expand the demand of honey in the merging social matrix Motivate traditional bee keepers for adoption of modern beekeeping practices to increase productivity of honey Motivate unemployed youth to take up beekeeping enterprise as a means of self-employment and sustainable economic development Engage the community into the modern beekeeping enterprise by mobilizing the support of local community leaders in the promotion of beekeeping enterprise for improvement of livelihood and preservation of environment Upgrade the skills of beekeepers by conducting educational and motivational workshops Expand the domain of honey product development and other hive products Motivate entrepreneurs towards establishment of value-added honey product development and market linkages Develop institutional system involving bee farmers and government functionaries to effect better coordination production, management and marketing of products

Exposure visits to different parts of the country have been organised for entrepreneurs to be trained in modern techniques of beekeeping. Entrepreneurs are also being trained in packaging and marketing of products. The Orange Honey of Cherrapunji for instance is an example of mono floral honey which has a distinctive niche.

AQUACULTURE

Meghalaya with its vast inland fishery resources has tremendous scope for developing the fisheries sector but lags behind in harnessing the potential of the natural resources. Though the State is predominantly a fish consuming State, the supply of fish is inadequate to meet its growing demand. Hence, the launch of the Meghalaya State Aquaculture Mission, under IBDLP, seeks to: •

• •

•

Develop existing water bodies and create additional water area for large scale fish production, including reclamation/rehabilitation of marshy and swampy lands Conserve native, endangered and traditional species of Meghalaya and developing breeding farms of commercially potential species on a large scale Create mass awareness, capacity building, exposure training and skill development of all the stakeholders and technical support for the long term sustainability of the fishery sector Capture emerging opportunities in the fisheries sector

Given the wide canvas, the mission is divided into six mini-missions for the ease of functioning. Mini-mission I is related to “Area and Productivity Expansion” and is being achieved through individual pond construction, community pond construction, reservoir fishery development etc. Mini-mission II is for “Critical infrastructure development” whose components are fish seed production, fish feed production, fish disease management, creation and strengthening of multipurpose and co-operatives and pre and post harvesting infrastructure.

Establishing sanctuaries for conserving indigenous and endemic species of fish is the focus of mini-mission III. For this purpose, surveys for identifying the endangered species, orientation workshops and media campaigns have been organised. “Capacity building” of farmers, officials, programme managers, cooperators, multi-service providers etc is the objective of mini-mission IV. Mass mobilization campaigns and skill trainings for unemployed youth have been organized as a part of this mini-mission. Mini-mission V titled “Mass media campaigns, documentation and outreach” takes care of two prominent activities, viz., awareness building and publicity amongst the public. It also focuses on process documentation of the implementation and preparation of success stories.

Mini-mission VI is a visionary component envisaged for tapping the emerging opportunities and addressing them scientific grounds. “Emerging opportunities in the fisheries sector” looks at ornamental fisheries, trout farming, introduction of fresh water species and so on.

The Aquaculture mission seeks to balance the demand and supply of fish in the State thus achieving self-sufficiency.

FORESTRY & PLANTATION CROPS

With forests occupying more than 70% of the total geographical area of the State of Meghalaya, the Forest mission becomes an inevitable one to focus on, not just to nurture one of the prime natural resources but to also help maintain ecological balance and ensure sustainable development. Forestry includes afforestation, forest nursery, and quality planting material through tissue culture inter alia. Of the total forest cover, a major chunk is open and moderately dense forest. The quality of forests needs enhancement through afforestation intervention. Improvement of quality of forest will eventually lead to enhancement of the ecosystem to absorb pressure. Immediate spinoff will enhance water yield.

The State Forest Department has taken up afforestation activities through the Central Sector Scheme called the National Afforestation Programme, State

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Plan Scheme called the Afforestation of Critical Catchment Area and IBDLP Programme in a convergence mode. The Joint Forest Management Committees have raised 2920 hectares of forest plantation during the first quarter of the year 2013-14 through the National Afforestation Programme. Under the State Plan Scheme for afforestation of critical catchment areas, 1125 nurseries have been raised and 420 hectares of forest land have been afforested during first quarter of 2013-14.

Under the Mission, 725 forest nurseries and 420 hectares plantations have been raised. It is vital that quality planting material be generated to improve productivity of plantation. This will go a long way in increasing production and meeting the need for forest produce.

Accordingly, the establishment of Plant Tissue Culture Laboratory at Sohra and Tura has been sanctioned. Thus, a beginning has been made to increase availability and resilience of natural resources in the context of providing livelihood and inclusive growth within the framework of sustainable development under the umbrella of Basin Development.

In due course, the Forestry and Plantation mission: •

•

• • •

• • •

Elicit people’s participation in protection, regeneration and up-gradation of forests. Association with civil society activists for campaign against illegal and unscientific denudation of forest areas Ensure integrated and multidisciplinary participatory planning and formulation of schemes involving activities such as agriculture, apiculture, horticulture etc; and implementation through FDAs and JFMCs Provide livelihood opportunities to people staying in and around forest areas by way of sustainable use of forest resource Provide alternative sources of energy on a subsidized basis to reduce pressure on the existing forest for fuel wood collection Treat Catchment areas through preservation of very dense forests and increasing forest cover in moderately dense and open forest irrespective of ownership of the forest land Set up permanent nurseries under all the social forestry divisions of the State (9 districts) Increase tree plantation alongside of roads, rivers, streams, irrigation channels and other unutilized land irrespective of ownership Contain jhum cultivation in the already affected areas by propagating improved agricultural practices and rehabilitate such areas through social forestry and energy plantations

• • •

• •

Strenghten the organizational structure of the State Forest Department, which includes both manpower and infrastructure.

Build capacity of all the agencies who would be involved in implementing schemes/projects under the Mission Build Traditional and Professional Knowledge Base and Trade facilitation at the ground level to provide informed options to farmers enabling them to make rational choice Develop research infrastructure for local species and creating gene bank Promote holistic approach to conservation, enhancement and sustainable utilization of biodiversity, ensuring benefit sharing with all sections of society, in particular the economically poor, who are directly dependent on them, thereby ensuring inter- and intra-generational equity

HORTICULTURE

Out of the 3.36 lakh hectares of crop land, horticulture covers 1.79 lakh hectares and agriculture 1.57 lakh hectares. The share of horticulture in cropped area increased from 42.2 per cent in 1999-2000 to 53.3 per cent in 2010-11 and the sector moved from second position to first position. It should be noted that the scope for the development of horticulture has not reached saturation stage because a huge extent of cultivable waste and fallow land is available and it can be productively used for horticulture development.

Pineapple, Khasi Mandarin, banana, a variety of temperate fruits like peach, plum, pear and indigenous fruits like sohiang, satkura, passion fruit, corombola are grown in different parts of the State. Potato is the most important crop with an area of 17.6 thousand hectares, the largest area among horticultural crops. Cashew, areca nut, tea, ginger, turmeric, black pepper are also widely grown in the State.

The Horticulture Mission has the following goals to achieve: •

• •

•

Expand area under horticulture by about 36,000 hectares in five years covering nearly 90,000 farmers. This will add 20 % to the existing area under horticulture Adopt holistic approach for the development of horticulture by providing support for irrigation, technology transfer and post harvest management Improve the productivity of existing orchards by rejuvenation of senile plantations, introducing proper management practices and replacing the low grade varieties with high grade Develop farmers’ organisations to derive the benefits of higher prices through export to other States and outside as well as convert some of the crops into

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•

• •

organic Develop cold chain for high value and perishable crops and provide access to the cold chain through development of collection centres at appropriate locations Develop entrepreneurship in processing and marketing of horticulture products Strengthen the existing horticulture farms to produce adequate planting material and convert them as hubs so that they can create spokes and link to the cold chain

The Mission employs a cluster approach to strengthen the existing concentration of crops. Post harvest and value chain management are given emphasis to bring in additional income and employment in the State.

New technologies in post harvest infrastructure like grading, packaging, ripening chambers are being introduced for major crops in areas of concentration.

As it is difficult to attract huge private investment to start large scale processing units, emphasis is on small scale. Farmers’ associations will be formed to take care of the management of the storage go downs and other infrastructure.

The Mission is being implemented in a convergence mode for optimising resource use. MGNREGS, Water Resources Department and Department of Commerce and Industry are the major players in convergence.

In order to attain the achievement of the goals that have been set out, the department has set out three prime areas that need work – augmentation of area under spices, fruits, vegetables, aromatic and medicinal plants, procurement and development of Planting material to sync the advantages of modern technology and traditional knowledge as well as implement thorough post-harvest management to increase shelf life of the produce.

LIVESTOCK

The Livestock mission has been identified as one which can promote selfsustainability and gainful employment to the people of the State. Therefore the vision is to have a more efficient and sustainable production and marketing of livestock and livestock products for domestic and export markets. The broad objectives of this mission are as follows: •

To develop infrastructure and create conditions to increase production of food products derived from cattle and livestock like milk, meat and eggs as

• • •

• •

well as to generate self-employment and enhance livelihood options To improve production and protection of livestock and poultry as well as to ensure better practices in management, breeding and feeding To build up adequate technical expertise with broader training facilities to communities, extension workers, SHG/Societies/NGO To create facilities for marketing of livestock and poultry and their products through SHG/Society near the producer’s place so as to provide flow of sale at better prices To strengthen the existing fodder production farm under State government and to encourage community fodder/forage farms To provide full support for capacity building of officers, stakeholders and farmers on various aspects of management, healthcare, etc.

Major interventions proposed under the Mission include production enhancement - transfer of technologies: promote crossbred and improving genesis of animals and poultry birds along with better feeding and health care management; infrastructure development: establish and develop cattle, pig and goat breeding farms and poultry hatcheries at different strategic locations in the State to cater to the needs of improved breed by the farmers, development of clean and hygienic slaughter houses, chilling plants, etc.; processing and value additiontransfer of technologies: promote collection, chilling, processing and packaging of milk for providing quality milk and milk products, marketing interventions: promoting simplified collective marketing and transportation system for milk and animal products, expanding marketing network and improve accessibility to financial institutions.

TOURISM

Meghalaya has vast potential to develop the tourism sector in a big way in the State. The vision is to promote this potential as an organised industry which will help promote livelihoods, provide gainful employment opportunities and help improve rural economy. It is expected that more tourists would visit the State and the flow of tourist traffic both domestic and foreign would increase rapidly in the near future as Meghalaya is considered to be one of the most picturesque states in the country and the State has enough tourism content and potential to attract tourists of different interests.

While increasing the tourist inflow, care is also being taken to develop the facilities in a sustainable manner. Further there is a need for capacity building

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of various stakeholders, marketing, publicity, greater investments in the sector and linkages with financial institutions. Meghalaya has a lot to offer in terms of natural scenic beauty, adventure, eco tourism and a large pool of educated human resources which can support the delivery systems. It was with this background that the Government decided to develop tourism in a mission mode so that this sector can evolve as a major engine of economic growth for the State.

To harness the potential of tourism as an organized industry which will go a long way to promote livelihood and gainful employment opportunities and improve rural economy, the broad objectives of the mission have been enumerated as: • • • • •

To organize tourism as an industry To facilitate the promotion of ecological hotspots as tourism destinations To promote traditional arts and culture of the State To facilitate marketing of the indigenous produces and products of the state To provide opportunity for livelihood and employment through tourism.

The Tourism Mission aims at projecting Meghalaya, as the most preferred tourist destination within the country and abroad. With a view to achieve the aims of the mission the major activities undertaken are training, capacity building, skill development and strengthening of infrastructure.

The Tourism sector has a great potential for employment generation provided the right skill building is done. The training partners for the department under the mission are IL&FS Education, B-ABLE, Avenues, ETPL India, and IHM & FCI etc. These partner agencies have a huge reservoir of knowledge and experience, providing the tourism mission the right kind of support.

Training has been conducted in the areas of grooming and building of life skills in hospitality and service, front office work including communication skills, housekeeping, food and beverage service, food and beverage production, outdoor and adventure activities and skill development of masons and electricians. About 1410 youth have been trained in these skills over the last few months out of which 574 have so far been placed within and outside the State at different capacities by the training partners.

The target for the current year is to train 2000 youths. Basin Development Unit at Tura, West Garo Hills has organised a trip to Mumbai and Goa for ERPs. The exposure trip was undertaken basically to acquaint the ERPs with various opportunities in the tourism and other allied sectors.

Inadequate facilities for stay and accommodation is impeding the growth of the sector, hence the scheme â&#x20AC;&#x2DC;Meghalaya Tourism Development and Investment Promotion Scheme 2012â&#x20AC;&#x2122; was launched. This scheme provides assistance to entrepreneurs for creation of Home-stays and Resorts to the tune of 30% of project cost of Rs 16 lakh and Rs 100 lakh respectively.

Under this scheme, during the last financial year four numbers of home-stays were sanctioned out of which disbursement of the assistance has been made to two entrepreneurs who have fulfilled all the criteria. Another two home-stays and one resort is under process for sanction. The mission also focuses on brand building and convergence with other departments. After the successful convergence with Horticulture Department for Ghasura Park in South West Garo Hills, similar convergence projects are being undertaken at Kongthong Village with the Cooperation Department. Publicizations of Sohra, festivals like Monolith festival, promotion of fossil tourism, eco tourism are all components of the Tourism initiatives of the State.

WATER

Meghalaya is endowed generously by nature as far as the water resources are concerned. The replenishable ground water is estimated to be 1.15 billion cubic meters (BCM). Though, the ground water in the state has not yet been over exploited to its highest extent, but water stress is building up in urban areas due to high rate of extraction of ground water for domestic purposes. The annual gross dynamic ground water recharge in Meghalaya has been estimated as 1.234 BCM. Annual allocation for domestic and individual requirement up to 2025 is estimated to be 0. 096 BCM as per census 2001 which was 1.014 BCM. (Source: Central Ground Water Board, CGWB).

Out of 9326 habitations only 5041 are fully covered for drinking water supply at 40 litres per capita daily (LPCD) and remaining 4285 partially covered habitations yet to be covered with drinking water supply. Similarly, merely 25 per cent of the cropped areas in the state are covered under irrigation, while remaining 75 per cent are still under rain fed cultivation. Water supply to habitants for their livestock remains almost un-organized in the State.

The Meghalaya Water Mission is one of the core missions under IBDLP. The Mission aims at promoting Integrated Water Resources Management (IWRM) in the State with a vision to ensure availability of adequate water resources for drinking purposes as well as for different economic activities particularly the ones promoted under the aegis of Integrated Basin Development & Livelihood

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Promotion Programme.

for Meghalaya

The Water Mission under IBDLP became necessary to address challenges which were unique to the State. Meghalaya grapples with the irony of scarcity amidst plenty. Although the State receives the highest rainfall in the world, it is one of the driest places in the region during winters wherein people face extreme shortage of water for drinking and irrigation. Agriculture in Meghalaya is mainly dependent on monsoon in the kharif and cultivation in rabi is carried out with soil moisture retention.

After implementation of the Water Mission under IBDLP, it has been possible to grow two or even three crops in a year in regions where only one-two crops were being grown. Also, the additional water harvested and stored shall also be used for other livelihood generation activities such as fishery, live stocks etc.

The objectives are: • • •

• • •

• •

•

Promote water conservation and preservation mechanism, and judicious uses of water resources, available through surface, ground and rain sources, Ensure adequate capacity building and training to different stakeholders, and department personnel, Prepare comprehensive mapping of water resources at village/ community level and estimate the demand for and supply of quality water for various uses-drinking, irrigation, livestock, fishery and other purposes, Integrate water resources in to village development planning for inclusive economic growth and prosperity of rural households, Identify eco-sensitive zones (vulnerable zones) and promote water use efficiency in water sectors, Develop and improve water bodies including rejuvenation of springs for enhancement of water storage so as to preserve water for adaptation and mitigation of climate change effect.

Develop small multiple reservoirs and micro-hydro power units and strengthen existing State Water Resources Council and District Water Council, and integrate their activities for betterment of water resources in the state, and Enhance investment through public-private partnerships and community mobilization in conservation and management of water resources.

As part of the State Water mission it was thought important to undertake the following interventions to conserve and enable judicious use of water: awareness and sensitization programme for efficient water use, development of multipurpose

reservoirs, knowledge sharing, convergence of various schemes for effective infrastructure creation and management, support linking to social, economic and ecological development, legislation and policy framing, water quality control, monitoring, evaluation (including social auditing) and learning.

Successful implementation of the Water mission policies has been carried out in the Umiam upper river basin, Mawlyngbna to name a few. These are perfect examples of convergence of community and State effort for conservation of water resources.

SERICULTURE

Sericulture is an agro-based industry with considerable employment potential.

A very significant characteristic of this industry is its ability to provide gainful occupation for a sizeable section of the rural mass without dislodging them from their homesteads. The industry qualifies well as a cottage â&#x20AC;&#x201C; based rural industry, which can be practiced keeping in view economics, technology as well as specialization based on small working units, community ownership and common working place, utilizing local labour and resources.

Sericulture is ideal for weaker sections of the society as it can provide enough income to a family with a small extent of 0.75 per hectare of land for growing food plants for Silkworms. It is an effective tool for empowerment of women as it can be carried out as a supplementary activity by women without moving out of their houses and while carrying out their domestic activities.

The waste from silkworms rearing can be re-cycled as inputs for the garden.

Dried mulberry twigs and branches are used as fuel in the place of firewood, reducing the pressure on forests. Usually those experiencing abject economic conditions take up this activity. It is an effective anti-poverty intervention.

Meghalaya produces three types of silk out of the four varieties available in the world. Eri is produced extensively in almost all the areas of the state. It is reared not merely for silk production but also for its food value. The temperate climate of the state is suitable for the production of Bi-voltine Mulberry silk which is in great demand.

Meghalaya and Assam are the only places of Muga Silk production in the world.

Meghalaya is highly suitable for Muga seed production. This can be extended to value addition by encouraging commercial cocoon production and value addition through silk production.

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The main objectives of the mission are:

for Meghalaya

• • •

• • • • • • •

Additional coverage of plantation in the private land, for all sectors i.e new plantations of Mulberry, Eri and Muga food plants To increase the quantity of rearing for more production of cocoons To improve the quality and quantity of production of seed cocoon and reeling cocoons with financial support for construction of rearing houses, cocooning sheds and rearing equipments To increase supply of disease free laying to the farmers To encourage scientific practices in rearing, reeling, spinning and twisting of yarn To strengthen Muga production in the State by encouraging value addition To strengthen Eri silk by popularizing natural dyeing To strengthen silk weaving sector by providing training and diversification To bring technology upgradation among the sericulture farmers through capacity building and input support To develop silk tourism in the State in convergence with the Tourism Mission

Implementation of the mission consists of two distinct components namely sericulture and silk weaving. The first component consists of Eri culture, Muga culture, Mulberry culture. This addresses the problem of technology induction and human resource development in Sericulture and focuses on establishment of silk villages by providing infrastructure from development of nurseries for food crops to reeling and weaving. These villages are to eventually become tourist hotspots and market centres. The second component focuses on development of handloom sector, installation of modern looms and training in weaving fabrics, designing products, diversification and garment making.

The past year has seen the State concentrate on Sericulture mission activities aim to achieve a host of ends: creation of silkworm host plan for Eri, Muga and Mulberry i.e increase in acreage in private sector, establishments of Eri and Muga grainages in private sector, capacity building of entrepreneurs, strengthening of Sericulture Training unit and research section, renovation and upgradation of Reeling unit, assistance to the reeler and spinner, rain water harvesting, assistance to weavers groups.

The State is in the process of creating nurseries for Eri, Muga and Mulberry, revival of potentially viable of Muga and Eri including identification of new areas, product development etc, Weavers Mass Registration Programme.

In association with GIZ, the Department of Sericulture also started the Eri Silk

and Slow Fashion Programme. The programme on Eri silk, also known as Peace or Non-violent silk aims at improving livelihoods of rural people, especially women, by preserving traditional spinning, dying and weaving techniques of Eri silk and adding value through the introduction of improved silk processing techniques which has increased benefits. The programme works closely with communities comprising of entrepreneurs using mechanized production and Eri silk weavers & spinners, farmers raising silk worms and producing feed for the worms. So far 50 Eri silk spinning women from 5 villages have been trained in improved degumming process which has resulted in transforming the initial rough texture of the Eri silk fabric into silk which has become softer, whiter and with more shine.

This process has led to improved efficiency of spinning and higher quality of yarn.

ENERGY

With the fast depletion of conventional energy sources along with growing demand for power the future of conventional electric power systems is getting uncertain. This has led to worldwide thrust on development and use of nonconventional energy sources for electric power generation & use.

Extending electric power grids to villages located in isolated places deep inside the forest zone remains unfeasible. Lack of access to clean cooking fuel in such areas adds to misery by causing respiratory & other ailments, especially to women and children.

The Meghalaya Government over the past year has initiated a few projects for tapping the renewable energy of the State. IBDLP has helped formulate projects to cater to the energy needs of small local communities in the State: Chikgitchakre and Banderkona Energy Sufficiency Project and the Bhaitbari Primary Health Center Energy Project.

In Chikgitchakre, IDFC Foundation has worked on an Integrated Energy Sufficiency project which aims to address both the power problem and cooking fuel problem in the village. Electricity is generated by a Biomass Gasifier based power plant that utilizes abundantly available wood at Chikgitchakre. The project is eligible to avail Central Financial Assistance (CFA) from Ministry of New and Renewable Energy under its off-grid Biomass-Gas scheme. Central Financial Assistance under the National Biomass & Manure Management Programme (NBMMP) is up to Rs 16,700 per unit per household.

The Chikgitchakre and Banderkona project is entitled to a CFA of Rs. 10,98,000 and Rs. 6,55,200, respectively. Chikgitchakre Power house has a combined capacity

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of 35 kWe (23 +12) and the Banderkona has an installed capacity of 15 kWe. Both of them generate electricity for the entire village, divided in two clusters for operational ease.

Similarly, the Primary Health Center (PHC), Bhaitbari is a key healthcare facility in the Phulbari block. At present, there is no such facility in a radius of 10 km. Its importance can be gauged by the fact that the second highest number of childbirths occur here amongst all other such facilities in Meghalaya.

Due to highly unreliable supply and very poor voltage levels, the PHC faces a steep challenge in securing electricity for with most essential & critical services.

A rooftop solar PV power plant, situated on the roof of the main building of PHC proved to be a reliable solution for this problem.

The Rooftop Solar PV power plant benefits hundreds of residents in and around Bhaitbari, enabling access to better medical care by virtue of the reliable energy supply to the PHC. The project cost has been estimated at Rs 18,01,800 based on the benchmark price set by MNRE with a central subsidy of upto 90% and promoter equity of 10%.

GREEN

The Government of Meghalaya has been primarily concerned with the conservation & protection of forests and other natural resources of the state.

Though the extent of forest cover is well above the national average in the state, yet, in recent years, a trend of reduction of green cover is being recorded. This reduction of the green cover in the state is due to the indiscriminate felling of trees and other plant species both in the community forests, private forests, reserve forests as well as severe destruction of ‘green cover’ along the roads and the water catchments.

Due to the heavy rainfall that the state receives and considering the nature of the roads in the hilly terrain, protection and enhancement of road-side green cover is of utmost importance to protect the roads from landslides, slips, sinking and to maintain the aesthetic beauty. Maintenance of the green cover also reduces land, water, air and noise pollution.

There is a need to have avenue plantation along all the road sides, generate good green cover in the government and institutional vacant lands, development of ‘city/town lungs’ to contain the air pollution in and around the urban areas at a low level and develop vacant pockets as small recreation parks. The State

Government, under the ‘Meghalaya Green Mission’ (MGM) has proposed to take up initiatives to enhance the ‘sustainable green cover’ throughout the state at a massive scale by using the resources & manpower in various departments of the government, traditional institutions, community based organizations, voluntary organizations, SHGs and nature lovers.

Under the Meghalaya Green Mission a significant component will be development & dissemination of sustainable Green Technologies, especially in the sectors of construction & architecture. Promotion of Green’ building material & state-of-the-art technology will strongly be emphasized under the Green Mission.

Some other important aspects of the Green Mission are to promote green agriculture and green energy in the state of Meghalaya. Following this, the Green Mission has set out a list of objectives crucial to be achieved to protect and preserve the green cover of the State: • • • • • • •

Conservation & protection of land, water, flora and fauna resources Maintenance and management of the catchments of water sources as also the quality of water Conflict resolutions through social resolutions and agreement Good governance initiatives particularly with respect to conservation of the natural resources and protection of the water bodies and catchment areas Grooming of the local entrepreneurs at mini – watershed level or confederations to promote nurseries, breeding and hatchery farming, etc Documentation of biodiversity which will help in planning as well as monitoring of any ecosystem centric projects Knowledge sharing, empowerment and skill development to facilitate taking up of green enterprises.

To collectively implement the objectives of Meghalaya Green Mission, the Government of Meghalaya has launched the Green Campaign. The Green Campaign would be a meeting of minds to see how the Government, traditional institutions, local institutions and stakeholders can come together and prepare an action plan so as to act and secure the future of Meghalaya’s green cover.

The Government has undertaken steps in order to ensure the achievement of the objectives set out: awareness & sensitization programme on green concepts, conservation of forest & natural resources, roles of traditional institutions in conservation, departmental schemes available on conservation aspects etc. throughout the state at mini watershed level, mass propagation of fruit tree plantation along the streams and water catchments and introduction

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of economically important creepers like betel vine, black pepper etc. on it and introduction of bio-fuel species on waste lands.

Raising of nurseries of ornamental plants suitable for avenue purpose is also seen as essential for citizens to realize the necessity of a thick, healthy green cover.

The State administration has taken notice of the danger to the green cover and has immediately taken action to set it right. Although launched recently, the green cover aims at active participation of the youth to widen its outreach. The implementation phase of the mission has already begun with the government and the masses joining hands for the benefit of the State.

How successful has IBDLP been? At one level, it is unfair and premature to ask the question. IBDLP hasn’t been there long enough. It is impossible to measure and quantify IBDLP’s success.

Suspension bridge across the Simsang

Some quotes will help to illustrate how the districts themselves perceive success.

East Khasi Hills4 - “Two Entrepreneurs Facilitation Centers (EFCs) are functioning at Pynursla and Khatar Shnong Laitkroh C&RD Block sand a total of about 150 partners have registered themselves at these centers….A three-day workshop on Apiculture was organized in August 2012 in collaboration with the Nagaland BeeKeeping & Honey Mission (NBHM) and Meghalaya Rural Development Society (MRDS-IFAD). As an outcome of the workshop, a draft policy document on apiculture was prepared and submitted to MBDA for consideration. ..A detailed mapping of about 1000 households has been done and they are proposed for support under the programme. Proposals for exposure visit of about 365 numbers of partners/ entrepreneurs to various national and regional institutes have been finalized and sanction has been accorded by the BDU. Convergence mode projects involving departments of soil and water conservation, rural development, fisheries and water resources have been identified and submitted to MBDA for gap funding. Under the Women Empowerment through Financial Inclusion scheme, Mass mobilization workshops were conducted in all eight C&RD blocks. A total of 12,800 women entrepreneurs from all the eight C&RD blocks were selected and approved by the District Level Committee. The sanction has been accorded and the modalities for transfer of margin money have been finalized with the concerned designated bank. As a pilot, Integrated Village Development Plans (IVDP) is prepared for 3 villages through Participatory Rural Appraisal (PRA) exercises. A total of 114 villages were identified to scale up the efforts.”

East Garo Hills and North Garo Hills5 – “Integrated Village Development Plans (IVDP) prepared for 35 villages through Participatory Rural Appraisal (PRA)

exercises - learnings being used to scale up the effort to the other villages progressively.

50 entrepreneurs sent on exposure visit to Assam Agriculture University (AAU), Jorhat. 500 entrepreneurs/partners selected for sending on exposure visits to various national institutes across the country. Project under convergence mode identified and submitted to MBDA for gap funding. Convergence Matrix has been defined and DPRs preparation of the various projects is under way. Exposure visits have been linked with projects. Enterprise Facilitation Centre (EFC) is set up at Williamnagar. Proposal for setting up a Mobile Multi facility Centre (MFC) finalized. 1740 number of partners sanctioned margin money support under the ‘Women’s Economic Empowerment through Financial Inclusion Scheme’.”

4. http://mbda.gov.in/Districts_EastKhasiHills.html

West Garo Hills and South West Garo Hills6 - “Basin Week was organized in the first week of April 2012 on the themes - Financial Inclusion, Governance and Infrastructure with large participation from various stakeholders. Entrepreneurs Conclave was held at Ampati in April, 2012 with a participation of 3000 aspiring entrepreneurs. Four EFCs have been inaugurated and are functioning. About 2500 partners visited the centers and are at different stages of engagement in the Enterprise Facilitation process. Strategic partners from amongst the civil society, academic institutions other institutions of excellence identified and partnerships finalized with BAKDIL, NIRD- NERC, Indian Institute of Entrepreneurship etc.

Consultation with Nokomas organized in November 2012 with the Hon’ble Chief Minister as the Chief Guest. A total of 400 Nokomas participated and expressed their keenness at partnering with the government in the implementation of the programme. IEC and publicity material are created in Garo and widely disseminated to create understanding about the programme. A workshop was organized in October 2012 with the contractors and established entrepreneurs of the Garo Hills region to elicit their partnership in building enterprises and facilitate business diversification. About 200 contactors participated in the workshop and actively contributed to the deliberations, which are being used for the finalization of the strategy for business diversification.”

6. http://mbda.gov.in/Districts_ West&South-Garo-Hills.html

West Jaintia Hills and East Jaintia Hills7 - “Multi stakeholders’ meets were held in April 2012 to enlist partners for the implementation of the programme. In November 2012, the Enterprise Facilitation Centres (EFCs) were inaugurated in three blocks in three blocks Thadlaskein, Amlarem and Laskein. About 100 partners enrolled at the centres and momentum is picking up. As part of the Outreach programme, block level workshops on IBDLP programme were organized in all the five blocks, which received a very positive response with about 400 people attending the workshops. PRA exercises for Integrated Village Development Plan (IVDP) were conducted in four villages in consultation with the traditional heads and the communities. Identification of convergence projects and finalization of

5. http://mbda.gov.in/Districts_EGHand NGH.html

7. http://mbda.gov.in/Districts_ West&East-JaintiaHills.html

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partners for exposure visits is underway. The District Committee approved 1427 entrepreneurs for support under the ‘Womens Economic Empowerment through Financial Inclusion’ program for the three blocks of Thadlaskein, Laskein & Khliehriat. Teams are working on value chain development, market access and setting up of Mobile Multi facility Centers (MMFCs).”

West Khasi Hills and South West Khasi Hills8 - “Four Hydrological Basins Kynshi, Rilang, Wahblei and Mawthadraishan were identified in September 2011. Integrated Village Development Plans (IVDP) were made for the villages of Mawphanniaw, Mawten, Mawlangwir, Jakrem, Ngunraw, Kynshi and Laitkseh in November 2011. The following schemes are proposed to be taken up Under Climate Change Adaptation Programme (CCAP) - Proposal for creation of Mini Park and construction of Thwei Wanniang Sanctuary over Umnamlang river of Markasa cluster. Proposal for pilot project under CCAP for Markasa Cluster to be implemented by soil and water conservation department. DPRs are being prepared for creation of critical road infrastructure for market access- Rangthong -Ngunraw Road and Markasa - Mawphanlur Road.

EFC at Mairang inaugurated in December, 2012.”

8. http://mbda.gov.in/Districts_ West&South-Khasi-Hills.html 9. http://mbda.gov.in/Districts_South-Garo-Hills.html 10. http://mbda.gov.in/Districts_South-Garo-Hills.html

Ri Bhoi9 - “A mass awareness campaign was held at Umsning for Aquaculture Mission where more than 5000 potential entrepreneurs registered. A special drive was organized for registration of weavers along with Health Camp under Sericulture Mission to understand their challenges, and elicit their partnership under the mission and other activities of the programme. Nearly 3000 weavers from across the district participated in the programme. Value Chain Analysis was done for the different products and three products were developed for value chain development under the programme - pineapple, ginger and strawberry. Project proposals under gap funding are being finalized. A proposal for expanding the existing units of the Ginger Processing at Mawpat village under Meghalaya Rural Development Scheme (MRDS) is also finalized. EFC to be inaugurated in the first week of January, 2013. Partners have been mobilized under the ‘Women’s Economic Empowerment through Financial Inclusion’ Programme.”

South Garo Hills10 - “EFCs inaugurated and functioning in all the four blocks of the district. About 3000 partners registered themselves at the centers and are at different stages of the enterprise facilitation process. An entrepreneur’s conclave was held at Dabat Wari, Siju where 500 youth participated and expressed their desire to partner with the government. 200 unemployed youth from Simsang valley of Baghmara-Siju area were identified for imparting training on Eco-Tourism. Five products have been identified for value chain development- Cashewnut, Arecanut, Orange, Jackfruit and Pineapple. 118 individual villages under 17 Clusters of the

District have been identified to conduct the Participatory Rural Appraisal (PRA) exercise with climate change adaptation perspective. Out of these 118 villages, Participatory Rural Appraisal (PRA) Exercise for 30 Villages is completed.”

The difference in reportage, and perhaps understanding, of what IBDLP is meant to achieve, is perceptible across the districts. There are four components so to speak – decentralized and participatory planning, convergence across schemes, additional funding through MBDA and driving of entrepreneurship. In a demand-driven framework, the emphasis should be on the last, not so much the third. Though these are early days, it is by no means obvious that this is the case.

Stated differently, there is variance across the districts. Even more importantly, there is variance across the blocks. There is variance in the functioning of EFCs. For some blocks, the integration between EFCs, BDOs and DCs is greater than for others.

However, there are a few instances where the convergence idea has already worked. Mawylyngbna village is towards the southern part of Mawsynram block, about 75 km from Shillong. It has 340 households and most of them are small and marginal farmers. Through IWDP and convergence across departments like Soil and Water Conservation, Fisheries, Rural Development, Tourism and Water Resources, a small multipurpose reservoir was created there, for irrigation, and extending benefits of irrigation to villages outside Mawylyngbna village too.

Consequently, crop yields of betel leaf, black pepper, areca-nut, citrus, bay leaf and coffee increased by between 25 to 30%. Straddling several departments, the reservoir was improved. The villagers constructed a road under MGNREGS. The tourism department plans to set up a fossil park and build tourism infrastructure.

There is potential for fisheries, a mineral water processing unit, bio-diesel plantations and a mini hydel project. Ghasura Park is in the South Garo Hills, on the banks of the Daru River and 1 ½ km from Ampati. The departments of Tourism and Horticulture combined to build a Japanese garden there. The rivers Simsang and Damring cut through the East Garo Hills. However, there is no bridge across the Simsang river and the 15 villages in Samanda block, along the river, suffer, because they are cut off from Williamnagar. A suspension bridge is being constructed across the Simsang river, using MGNREGS, additional funding through IBDLP and contributions from those 15 villages, the IBDLP contribution being 18.5%. These three examples, cited as instances of convergence success, differ in nature. In the case of the suspension bridge across the Simsang, the interest and the request clearly came from the villagers. In the case of Mawylyngbna village, using the convergence idea, government interventions resulted in the creation of an asset and this triggered demand on the part of villagers. In the case of the Ghasura Park, there is no evidence yet of interest on the part of the

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11. “How micro-entrepreneurs could change the world,” Rajesh Chandy and Om Narasimhan, London Business School, http://innovation. london.edu/resource/99/index.html

local community. It has essentially been a top-down idea, convergence across departments notwithstanding. Convergence across departments is desirable, but that’s only one element. The more important element is decentralization and participatory planning, with public interventions also being an outcome of demand.

This is true of entrepreneurship too. Entrepreneurship is variously defined, but is fundamentally about taking risk. Studies show that while the social and economic context does influence entrepreneurial decisions and skills can be taught, there are psychological elements that also come into play. A quote from a piece written

by Rajesh Chandy and Om Narasimhan is relevant not just for Meghalaya, but all of India.11 “Many in the West are used to hearing scholars, practitioners and policy makers extolling the virtues and benefits of entrepreneurship. A listing of the world’s top hotspots for entrepreneurship therefore comes, quite often, as a surprise. Entrepreneurship, traditionally defined as the activities associated with the starting and owning of one’s own business, is, in fact, much more prevalent along the alleyways of a poor country than along the highways of Silicon Valley. ..Each of these vendors is a micro-entrepreneur, in that he or she owns and operates a business with five or fewer employees. ..For most of the world’s poor, micro-entrepreneurship is the only way to eke out a living. ..In India, one estimate puts the number of urban poor who are self-employed at 40 per cent.

Most rural farmers in developing countries also fall within the definition of micro-entrepreneurs….Entrepreneurs in low-income countries are mostly small, and they often operate informally…We see three key obstacles to the economic advancement of micro-entrepreneurs: They lack basic business skills. They lack access to adequate information. They lack access to money.” IBDLP is about driving this micro-entrepreneurship.

There is no dearth of micro-entrepreneurship in Meghalaya, except that it is still fragmented and scattered. The most fascinating story is that of strawberries in Sohliya village in Ri Bhoi district. Sohliya became a village in 1966 when 7 families settled there and the village is named after the ‘sohliya” fruit which grows there. There are 68 households and 427 inhabitants in Sohliya now. The present headman, Ostander Lyngkhoi, introduced strawberries in Sohliya in 1998 and also requested the Department of Horticulture to start trials. This was done in 2003, with plants from the University of Florida, in the Dewlieh Horticulture Farm. Subsequently, this became a larger project under the Technology Mission.

A Centre of Excellence in strawberries was created, using 1 hectare from the Dewlieh Horticulture Farm and 1 hectare from adjacent fields that belonged to farmers. The Centre of Excellence established the initial market linkages and large-scale strawberry cultivation began in Sohliya village in 2004-05. 99% of the

villagers (66 out of 68 cultivating households) in Sohliya have adopted strawberry cultivation and there are major producing clusters not just in Sohliya village, but throughout Umsning block, where Sohliya village is located. New technologies like drip irrigation, mulching, post-harvest grading and management practices were adopted. A Ri Bhoi Strawberry Growers’ Association (RBSGA) was established in 2007 and it took over the task of marketing strawberries in Shillong, Guwahati, Chennai, other parts of the North East and even Bangladesh. Almost the entire East Indian market has become a RBSGA market now and even Chennai no longer imports strawberries from Sri Lanka. RBSGA established credit linkages for its members with SBI. In 2009, RBSGA even started an English medium school in Sohliya village. In 2012, SBI adopted Sohliya village under the Aapna Gao scheme.

By-products and processed products have been developed for strawberries and RBSGA is now building on the strawberry USP to position Sohliya village as a centre for eco and adventure tourism. Living standards have gone up not just in the village, but also in the surrounding region, an outcome of the horticulture revolution that started in Sohliya village.

“The effects of this commercialization of the fruit is visible in the daily lives of the strawberry growers of the state and nowhere else is this effect more pronounced than in the village of Mr. Lyngkhoi, or Bah Os as he is affectionately known. Starting with him, Bah Os has expanded his cultivation of the fruit from a small patch of a few square meters five years back to his present area of little more than an acre and the income generated from his strawberries has enabled him to construct houses for his four children as well as his own and recently enabled him to buy a Maruti 800…In retrospect it was the formation of the RBSGA and the untiring efforts of its General Secretary that witnessed the rise of the Association from a conglomeration of farmers to a marketing force that now negotiates markets for its growers nationally as well as internationally….The hard work put in by the General Secretary and the members of the Association is paying dividends in more ways than one and Sohliya village is a model demonstration of the benefits that can accrue to a community through working together in the cultivation of low volume high value crops. With 66 households out of 68 cultivating the fruit, Sohliya plays a major part in the total production of strawberries in the state and as a result many of the families have now been able to afford TV sets to extending or building houses, better schooling and healthcare, opened bank accounts and finally have a chance of improving their quality of life. It is indeed heartwarming to see mothers like Wistina Lyngkhoi, whose son secured first class in his Matriculation Exams with distinction. Ordinarily his career would have ended there and as so many village boys, he would have had to work as an agricultural laborer like his father in others’ fields. However his mother had a sum of Rs. 14,000 which were the proceeds from the sale of her strawberries in the Association’s account. With this

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12. http;//megagriculture.gov.in/PUBLIC/achievements/sohliya.aspx

money her son has now obtained admission in a reputable institution and so also another seven of his brothers and sisters in different classes and schoolsâ&#x20AC;ŚMany more small but significant successes and examples of improvements in the lives of the people of Sohliya abound which are too numerous to cite here. Even the village church has benefitted with Sunday collections now touching Rs. 5000 per week as compared to Rs. 2000 per week during the pre-strawberry years. However as in any real life story there has to be a victim and in this case it is the village school which has seen attendance drop by almost half as parents could now afford to send their children to better schools in Umsning town and Shillong.â&#x20AC;?12 Unfortunately, there is a question to which there is no satisfactory answer. What did it take to bring about this success in Sohliya village? Yes, there was a supportive government that reacted fast and efficiently. But in the last resort, it was about one person, O. Lyngkhoi, who possessed the foresight and the drive.

There are others too. There is Ben Myrboh from Pohkseh, in Mylliem block of the East Khasi Hills district. He started a small enterprise for imparting value addition to bamboo in 2007. That bamboo processing plant has extended to other products and now employs 30 people in Umiam Industrial Estate. There is Neprin Sangma from Daritgre village in Gasuapara block of the South Garo Hills district. He started an enterprise for areca-nut processing and has also started to aggregate areca-nut production from other farmers of the area. There is Motchin Sangma from Dimagre village in Gasuapara block of the South Garo Hills district, who took to fisheries. There is Rothell Khongsit from Khadarshnong in the East Khasi Hills district, who has got into marketing and value addition of honey.

In such cases, the trigger has been the individual entrepreneur. By definition, entrepreneurship means taking risks and not every venture succeeds. The role of an enabling government is to enhance the probability of success and cushion the risks, thereby encouraging other entrepreneurs to take risks.

In some instances, the trigger has come from outside, the Mendipathar Multipurpose Cooperative Society in the East Garo Hills being an example. It was started in 1998, with the intention of freeing marginal farmers from the clutches of money-lenders and middlemen and enable them to obtain a better price for their products, a dis-intermediation objective. While it started with rubber, it has spilled over into poultry and dairy and through 135 SHGs, has integrated more than 1700 households.

In some other instances, the trigger has come from the government. The training of rural entrepreneurs in Betasing block of the West Garo Hills in marketing herbal cosmetics is an example. Under the PMEP, several enterprises have been encouraged. There has been an attempt to trigger clusters for cashew

nut processing in Selsela Block, bee-keeping and honey processing in Chandigre block and handlooms in Betasing and Zikzak blocks. Also in the West Garo Hills, rice intensification has led to greater yields for paddy. Check dams and water harvesting structures have been constructed and this has improved both supply of drinking and irrigation water. Households have diversified into poultry and piggeries. There are several cases of successes in fisheries, some individual, others community-based. There are horticulture hubs in Rongram, Zikzak and Rangmalgre. Broadly, these interventions can be divided into different heads â&#x20AC;&#x201C; (a) capacity building; (b) entry point; (c) watershed works; (d) livelihood systems; and (e) promotion of microenterprises. However, at the risk of sounding unfair, an assertion is necessary, based on field visits and talking to people. The momentum and traction one sees for the IBDLP in the West Garo Hills district is missing in the other districts. This reinforces the point that was made earlier about the software and human resources aspects of the IBDLP. Other than the software aspects, to take IBDLP up to the next level, the individual success stories need to be made a bit more systemic. One way to do that is to build village-level institutions, like village-level cooperatives. But this is only one part. Ensuring economies of scale in storage, distribution and marketing requires improved markets and infrastructure, with rationalized market feeds and transparent licensing systems. There are also issues connected with availability of land. One has a reasonably good idea of which districts, and even which blocks, have a comparative advantage in which crops, with that objective of diversification, commercialization and disintermediation in mind. As has been mentioned earlier, the clusters have positive externalities and Meghalayaâ&#x20AC;&#x2122;s path to prosperity is anchored on improvement in rural sector outcomes. The top-down part of IBDLP has begun to work, at least in districts like the West Garo Hills. Once it is integrated with the bottom-up demand, those isolated instances of success will become a bit more systemic. Those are the paths towards prosperity in Meghalaya.

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Capacity building, participatory rural

Entry point, drinking water facility under IWMP

appraisal programme

Watershed works, Dollonggre village

Promotion of micro enterprises, rice mill

Livelihood systems, wet terrace cultivation

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Driving Entrepreneurship

Meghalaya is a State in India’s North-East, and the name means “abode of the clouds”. While books exist on Meghalaya’s culture, history, society and tourist attractions, not much has been written about the State’s economy and development. This is a book on Meghalaya’s economy, constrained as the State is, by its physical location and connectivity problems.

This book is about Meghalaya’s governance and human development and about the role of the government, institutions and private enterprise in embarking on those paths to prosperity. It’s about the constraints, but it is also about means to overcome those. There are plenty of success stories in Meghalaya, not known as well as the obstacles. There are successes of individual enterprise in agriculture, horticulture, floriculture and animal husbandry and there are also successes in reinventing government schemes and improving delivery. These may not have been universally replicated, but the momentum and seeds of change are visible. This book is also an attempt to communicate that message of change. There are plenty of maps and photographs to make the book attractive and readable. The NorthEast is often ignored in mainstream India’s discourse. That is not acceptable. Apart from anything else, the North-East is an integral building block in India’s bridges towards neighbouring countries in the East. India cannot prosper if the NorthEast remains bypassed. Meghalaya is one of those Seven Sisters in the North-East.

If this book succeeds in making more people aware of the whiffs of change in Meghalaya, it will have served its purpose.