The question is of 6 marks
Assam’s economy is fundamentally based on agriculture. Over 70 percent of the state’s population relies on agriculture as farmers, as agricultural laborers, or both for their livelihood. A majority of state’s population, almost 90 percent of an estimated 22.4 million in 1991, live in rural areas where the mainstay of business is production agriculture. In terms of the state domestic product (SDP), the agriculture sector contributed over 38 percent of the state income in 1990-91.
Agricultural Census data (Economic Survey of Assam, 1989-90) shows that total land under cultivation was 2.59 million hectares in 1985-86, or almost 33 percent of total geographical land area of the state (compared to almost 50 percent for India). The average size of land holding (including non-cultivable land) per household was only 1.30 hectares during the same time period compared to an average size of 1.47 hectares in 1970-71. Such fragmentation occurred due to two principal factors:(i) inheritance-related, i.e., breaking down land parcels to distribute among heirs, and (ii) government land reform measures which set the ceiling for land holding per family (50 bigha s at present) thereby promoting and facilitating land fragmentation (1). Numerous studies have shown that small and fragmented land holdings are one of the principal causes of low productivity because such land holdings do not facilitate economic and efficient use of modern technology (e.g., agricultural
machinery, chemicals, and hybrid seed). Assam is far behind in the use of modern agricultural technology to improve its agricultural productivity compared to the rest of the country. For example, the agricultural productivity index for Assam was 156 in 1989-90 compared to 183 for India. Another problem of land fragmentation is the hidden unemployment or underemployment which understates the true unemployment level in the state.
Assam produces both food and cash crops. The principal food crops produced in the state are rice (paddy), maize (corn), pulses, potato, wheat, etc., while the principal cash crops are tea, jute, oilseeds, sugarcane, cotton, and tobacco. Although rice is the most important and staple crop of Assam, its productivity over the years has not increased while other crops have seen a slight rise in both productivity and land acreage. For example, while rice yield per hectare in 1970-71 was 1,022 kgs compared to 1,261 kgs in 1990-91, wheat yield jumped almost three-fold from 583 kgs per hectare in 1970-71 to 1,455 kgs in 1990-91. A similar increase was observed in jute, sugarcane, potato, and rape and mustard.
Tea is the most important cash crop in Assam and the state is well known world-wide for its tea. The total land area under tea cultivation (gardens) was estimated at over 229,000 hectares in 1989, employing an average of over half-a-million people per day. In addition, a considerable number of Assam’s population depends on secondary and tertiary sectors-related to the tea industry. However, the exploitation of both precious land and laborers (employees) by the tea companies, most of which are either foreign-owned (non-Indian) or owned by Indian conglomerates (e.g., Tata), is well-documented. Bagchi (1997) reported that although such exploitations are going on for decades and even well-documented in the state government’s own inquiry reports, the government (under both AGP and Cong-I periods) has failed to take any appropriate action to end such exploitations.
Continuing to rely on the seasonal monsoon for the necessary water for cultivation is another characteristic of farming in Assam. As a result, potential exists for severe crop failure and consequent economic disaster. To avert such possible catastrophe, it will be necessary to equip the state with irrigation facilities, perhaps in selected areas first, due to the cost factor.
1.Assam’s economy has to accelerate and catch up with the rest of the country. Assam has come to a state where this seems possible. Infrastructure is in a better shape in terms of roads and railways. Civil aviation can be quickly improved. Power situation can be made better soon if projects under implementation are quickly completed. Telecommunication is growing rapidly and the new technology makes it possible to get connected from any place at modest cost without waiting for government to invest in capacity creation and network expansion. Finance is now relatively easier to obtain. The implementation of the package announced by Prime Minister Atal Behari Vajpayee will give a big thrust to the region’s economy. The continuous monitoring of the various measures in a transparent manner where the progress report can be tracked on a website updated every three months, offers hope that these measures will be implemented. Thus the stage is set for Assam to take off.
2.Government has an important role to play in the development of Assam, in the provision of social services, infrastructure and good governance. To do this it will have to put its fiscal house in order. Downsizing of government is the most pressing imperative for faster development. It is critical to develop institutional mechanism particularly to provide accountability and to shake up non-performing governance systems. Decentralization and devolution of financial resources to local Panchayats should be done as soon as possible. People should be given a right to information, so that local bodies function in a transparent manner. A strategy of development led by public action and initiatives all over the state is more likely to succeed, where young men and women clearly perceive the promise that the future holds out for them. Such decentralized development is less likely to be a victim of extortions.
3.If Assam’s development is to be based on its natural resources and on a participatory basis, the following sectors will play important roles:
-Horticulture and Agro Processing
-Silviculture and Handicrafts
-Forestry and related industries
-Petrochemicals and related industries
-IT based services
The Assam economy and development depend on the production of the state. The economy is prevalently agrarian in nature. The government makes continuous efforts to develop the already existing agrarian economy and to improve the other sectors of the economy in the state of Assam.
Almost 63 percent of the society of Assam earns its living from the agricultural sector. The state is reputed all over the world for its production of tea. The state produces 15 percent of the tea produced in the world. A large section of the labor force of the state is employed in the tea estates of Assam that cover large areas of the state. The other agricultural produce involves rice, sugarcane, pulses, potatoes and jute. Fruits like mangoes, bananas, pineapple and guavas are also produced in the state.
The secondary sector of the economy comprises of the industries in Assam with large and medium scale productions. Agro based industries prevail in the state coupled with the tea industry that has a major contribution to the economy of the state of Assam. Other industries include the petroleum industry with one of the oldest oil ventures of the world situated in Digboy. The state also earns revenue from the mining industry that produces the four important industrial minerals of coal, limestone, sillimanite and oil.
Some of the other industries of the state are mentioned below:
- Forest and wood industry
- Chemicals and fertilizers industry.
- Handloom and textile industry
Agriculture in Assam depends on the availability of proper funds. Banks ensure that the loans are available to the agricultural sector at easy interest rates. Infrastructure of the state supports the proper marketing of the produce of the agricultural sector.
The Assam Agriculture faces certain problems due to floods in the region. The government attempts to resolve these problems and to support the sector to achieve optimal production in agriculture in the state.
In Assam, Social Banking policies are spearheaded by the burgeoning network of Scheduled Commercial banks act as a buttress to the core sectors of the economy. The Regional Rural Banks that are fast proliferating through the state are an offshoot of the Scheduled Commercial Banks.
The state’s diversified banking system is classified and grouped under the following heads:
- State Bank of India and its Associates
- Nationalized Banks
- Foreign Banks
- Regional Rural Banks
- Other Scheduled Commercial Banks
Business in Assam is mainly related to the silk and tea that are produced here in large quantity. There is a large amount of revenue and investment involved in the business related to packaging and production of these two items.
Assam is very famous for its tea. A large quantity of Assam Tea is exported abroad. This business in turn earns a lot of revenue for the state. Assamese tea is famous world wide for its wonderful flavor and taste.
The state’s department of fisheries in Assam aims to promote and develop economic farming of fish in the state. This wing of the state government wants to promote the idea of commercially producing fish in almost all the water bodies in the state.
The mission of the fisheries department in Assam is to ensure a stable income from the fish market. They also want to restore indigenous species of fish in the state. They are planning to produce fish of such quality so that the state production can compete with the imported ones. In such cases they will have to consider the cost of production as well.
Forestry in Assam is one of the most important economic activities of the state. This has been possible due to the vast stretch of forests in Assam. A total area of 26,781.91 sq. km is under forests in this state. As a result about 34.14% of the total area of Assam is under forests. Thus a variety of flora and fauna are available in the state.
The State Forest Department is also considering social forestry in Assam very seriously. Their main objective is to enhance afforestation in the residential areas of the Indian state of Assam. The number of seedlings planted in order to promote this scheme was 96.76 lakh during the year 2001-2002.