The major reasons attached with the economy of Assam can be broadly
divided into Economic and non-economic factors. Assam has its set of problems
which has hindered its economical growth. They are as follows-
Economic Factors:
o
Population Outburst: The rapid growth of population due to the influx of people from Bangladesh
(Formerly East Pakistan) and illiteracy among masses has played significant
role in slow economy in Assam. The high rate of growth of population growth
created problems of unemployment, poverty and
inequality of income in the region.
o
Natural Calamities:
Assam is often visited by natural calamities specially floods. Production and income of the State are facing
setback every year due to major erosion by the
Brahmaputra and its tributaries and the
growing occurrence of floods. A good volume of state's resources has been diverted for making repairs and for giving relief
to the flood victims. As a result of such a
burden on state's resources, plans for
development have received a setback Thus, natural calamities in Assam make
speedy implementation of plans difficult.
o
Geographical Isolation of the State and
Its Difficult Terrain: Assam was a neglected state partly due to
its geographical isolation and its difficult terrain surrounded by hills,
rivers and dense forest. It has restricted capital flow into the state's
economy and lack of interest due to high cost of administration for developmental
projects for industrialisation of the state.
o High
Cost Structure: High cost structure has gone against the development
of the economy of Assam. The consumer price level in
Assam is higher than all India average. This has minimized the chances of
raising taxes to generate revenue. This created added pressure on financing of
development projects in Assam and has reduced feasibility.
o
Poor Transport and Communication Facilities: Assam is
lacking a sound transport and communication system Geographical isolation,
difficult terrain and lack of attention are some of the basic factors which are
responsible for poor development of transport and communication facilities. Both
the railway and road transport facilities in Assam are very minimum compared to
its need. In the absence of such facilities, a region cannot develop
industrially. In recent years, steps have been taken to improve the transport
and communication system of the state without which the development of the
economy is impossible.
o
Capital Deficiency: Inspite of having huge development
potential, the State's economy cannot develop due to lack of capital formation.
As the level of per capita income in Assam is very poor, the saving potential
is low. Moreover a sizeable section of the population, who are earning their
livelihood in Assam is of a migratory character whose savings are remitted
outside. Similarly, the corporate sector and trade are substantially in the
hands of persons exercising control from outside and they are remitting profits
outside Assam. This heavy amount of outflows of capital is creating a heavy
pressure on the financial condition of the state, besides making the pace of
development slower.
o
Wastage of Natural Resources: Inspite of
having a huge amount of natural resources, the State's economy still remains largely
under-developed. Underutilization of natural resources in Assam is also responsible
for this poor economic development of the state.
o
Lack of Skilled Personnel and Entrepreneurial Talent: Assam is also
suffering from an acute shortage of skilled labour and Assam has to depend upon
other states and foreign countries. Consequently it has to pay higher wage
rates for skilled labour than in many other States. The state lacks entrepreneurial
and managerial talents and very little initiatives are observed from local
people to set up Industries.
o
Poor Credit Facilities : The credit
facility, which is a part of infrastructure requirement for development, is
very minimum. The lending policy of the commercial banks is far from generous
to this poor State of Assam. In the absence of large scale credit facilities,
industries in the private sector in Assam cannot grow satisfactorily.
o
Primitive Technology:
Technological progress is the root of economic development. But Assam is
suffering from lack of technological development due to poor scientific
educational facilities Assam.
·
·
Non-Economic Factors : These
inciude-
o
Sensitive Borders: Assam has never been a favourable place for the
investors. One of the major non economic reasons being its sensitive
international borders. China and Bangladesh, with whom India has dispute since
independence, creates tension due to various issues. In such scenario the
public and private sectors don’t risk to set their businesses.
o
Disturbed Law and Order Situation: The
maintenance of law and order is a critical subject as Assam is a sensitive
border State Assam has to spend a heavy amount on police administration for the
maintenance of law and order. Further, this disturbed law and order condition
will also restrict the flow of private capital into the State's economy.
o
Lack of Efficient Administrative Machinery: Administrative
machinery in Assam is neither efficient nor clean. The leakage of funds in
various developmental works is quite common, resulting in poor performance of
various plan and non-plan projects and wastage of financial resources of the
state.
o
Social Structure: Social structure in Assam is
not favourable for economic growth The joint-family system creates underemployment
and makes savings difficult. The caste system restricts the mobility of
labour.
(874 Words)
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