Looking Beyond Assam

THE NORTHEASTERN REGION (NER) accounts for 7.97 per cent of India’s geographi­cal area and 3.78 per cent of its population. With Assam accounting for about 63 per cent of the Northeast’s GDP, each of the surrounding hill states contributes barely 4‑9 per cent, reflect­ing regional disparity, which is a result of various factors like steep terrain, chronic connectivity hurdles, smaller markets, and years of insurgency that discouraged private investment. The region has historically been at the lower end of social and economic development.

The NER is abundant in natural resources, featuring fertile agricultural land, vast forests, and rich mineral deposits. These re­sources vary significantly by state, contributing to each state’s dis­tinct economic profile. Therefore, concentrated efforts are needed to unlock the benefits of overcoming such a wide intra‑regional gap within the “landlocked region”, which has been absent for decades. This underscores the need for focused logistics links, sector-specific value chains, and security‑led confidence‑building to spread growth more evenly across all eight states.

The decade from 2014 to 2024 can be regarded as a transfor­mative period of delivery and progress for the Northeast. The shadow of insurgency that once defined the region has dra­matically receded in recent years. A concerted effort has also been made to scale down the Armed Forces (Special Powers) Act (AFSPA) from the NER. Connectivity, which remained one of the pe­rennial constraints on the region’s growth, has received significant, unprecedented capital. Indian Railways has 18 projects, costing ₹74,972 crore, under execution in the Northeast Frontier zone; annual railway outlays for the region have risen from ₹2,122 crore (2009‑14 average) to ₹10,376 crore in 2024‑25, while average new track commis­sioning has almost tripled.

Since 2014, the NER has witnessed a notable improvement in GDP per capita, substantially aided by the Union govern­ment’s mandate to allocate at least 10 per cent of Gross Budgetary Support (GBS) to the region. This focused investment has en­hanced infrastructure and connectivity and strengthened social welfare programmes, fostering steady economic growth. States such as Mizoram and Sikkim have regis­tered Compound Annual Growth Rates exceeding 6 per cent, while Tripura and Manipur also exhibit upward trends.

Despite their modest share in India’s GDP, several northeast­ern states consistently outrank most states and Union territories on the Social Progress Index (SPI). Higher performance on the SPI means a region is doing well in providing for its people’s ba­sic human needs, ensuring access to education and healthcare, and creating a supportive environment for personal freedom, safety, and opportunity, regardless of economic performance.

While various measures have been taken to achieve progress on social and economic fronts, the underutilisation of funds has always been seen as a primary concern for the NER. Ten per cent GBS of the Central sector and Centrally Sponsored Schemes (CSS) for the Northeast has been the core of this change. As per the Union government’s policy, 54 non-exempt Union minis­tries/departments are required to allocate a minimum of 10 per cent of their GBS of the Central sector and CSS for the Northeast.

Since 2014, the Union government’s budgetary allocations to the NER have exhibited a marked and consistent upward trajec­tory, reflecting a deepened commitment to inclusive growth and balanced regional development. GBS under Budget Estimates (BE) for the NER has substantially increased, from about ₹36,108 crore in 2014-15 to nearly ₹1,00,893 crore in 2024-25.

The actual expenditure under the mandatory 10 per cent GBS provision for the eight northeastern states totalled ₹24,819 crore in 2014-15. By financial year 2023-24, this amount had increased more than four times to ₹1,02,749 crore, resulting in cumula­tive spending of ₹5.74 lakh crore since 2014-15. Specifically, such an expan­sion in fiscal outlays underscores the government’s strategic priority for the socio-economic transformation of India’s north-eastern states. When studied carefully, we find that the an­nual GBS actual expenditure for the NER has surged from approximately ₹29,000 crore in the first three years of the decade to well above ₹90,000 crore in the last three years. This has been driven by reforms that have translated higher allocations into higher absorp­tion. First, 54 non-exempt Union minis­tries are monitored quarterly to ensure that earmarking aligns with actual disbursements. Second, the Poorvottar Vikas Setu and GBS online dashboards provide state governments and Delhi with a common, near-real-time view of sanctions, releases, and utilisation, significantly reducing delays caused by paperwork. Third, regular ministerial visits of over 723 since 2015 have established detailed feedback loops that enable timely course corrections before projects face delays.

Moreover, today the NER sits at the intersection of Japan’s “Free and Open Indo‑Pacific”, ASEAN’s connectivity agenda, and the multilateral climate‑finance circuit. India’s partners, from Japan to Thailand, have recognised the region’s strategic value, pumping substantial capital into ambitious infrastructure projects. The ongoing construction of the Dhubri-Phulbari Bridge, India’s lon­gest river bridge at 19km, supported by Japan, underscores how infrastructure is shrinking the region’s distances. What once took eight hours will soon be a 23-minute drive. This bridge is symbolic: the Brahmaputra, historically seen as a barrier, is now becom­ing a connector, not just across Indian states but between India and its eastern neighbours, including Bangladesh. Meanwhile, Thailand’s partnership via the India–Myanmar-Thailand Trilat­eral Highway signifies deeper regional integration, ensuring the Northeast moves closer to ASEAN markets.

ALONG WITH OTHER countries, the Asian Develop­ment Bank (ADB) has emerged as a pivotal partner in strengthening the NER as a reliable trade, connectivity, and clean energy corridor. Two initiatives exemplify the trans­formation in the region that started in the past three years. The first initiative focuses on enhancing road connectivity infra­structure to facilitate market access. In December 2022, ADB approved a loan of $300 million dedicated to the improvement of over 300 kilometres of state highways and major district roads in Assam. This project involves widening six critical links throughout the state’s western, central, and southern regions from single-lane to double-lane configurations. The upgrades will incorporate climate-resilient and disaster-responsive design features, ensuring alignment with the South Asia Subregional Economic Cooperation (SASEC) corridors that approach the borders with Bhutan and Bangladesh. Additionally, the proj­ect includes the development of pedestrian facilities, elevation of highways in flood-prone areas, and measures to prevent landslides in hilly regions. By complementing the upcom­ing multimodal logistics parks in Jogighopa and Silchar, this initiative aims to reduce travel time, enhance cross-border freight capabilities, and extend essential social services to pre­viously underserved and isolated communities.

Another initiative focuses on clean energy, as ADB approved a second $434.25 million loan in October 2024 to construct a 500 MW grid-connected solar photovoltaic facility with battery stor­age in Karbi Anglong. The project supports Assam’s aim to reach its target of 3,000 MW of renewable capacity by 2030. It strength­ens the state’s PPP framework for an additional 250 MW plant and modernises rural distribution lines to ensure reliable last-mile delivery. By decarbonising daytime supply and smoothing peak-hour volatility, the investment lowers fuel imports and frees fiscal space for further social spending. Assam is also already home to India’s first bio-refinery, which produces fuel-grade ethanol from bamboo biomass. The facility plans to use bamboo as feedstock and is expected to produce 50,000 tonnes of ethanol, 16,000 tonnes of furfural, and 11,000 tonnes of acetic acid annually.

Together, these efforts exemplify a new, integrated develop­ment model that can focus on climate-resilient infrastructure with clean energy growth. Other northeastern states are still behind but are moving across value chains, as Mizoram now leverages its bamboo resources while Sikkim aims to pioneer sustainable aquaculture through organic fish farming. Nagaland is developing agri-processing clusters and bioplastics; and Arunachal Pradesh, Manipur, Meghalaya, and Tripura are enhancing eco-tourism, with health, education, energy, and connectivity initiatives. However, these efforts must culminate in improved supply chains, diversified products, increased employment opportunities, and enhanced market connec­tivity, as the NER’s share is only 0.24 per cent of India’s exports. The NER’s share in India’s GDP, exports, and tourism needs to improve.

India’s pursuit of strengthening the NER requires that the development model place the Northeast’s cultural wealth at its core. The integrated model, which respects the diverse traditions, languages and knowledge systems of the ‘Seven Sisters’ (Assam, Arunachal Pradesh, Meghalaya, Manipur, Mizoram, Nagaland, and Tripura) and ‘Brother’ (Sikkim), is not being sidelined but celebrated as assets that together inform sustain­able growth and development practices. The results are begin­ning to show; however, the urgent need is to diversify exports beyond traditional commodities and increase investment in education, health, and employment opportunities. This should not come at the expense of the ease of living for people living in the Northeast.

While challenges remain, especially in ensuring equitable distribution of benefits within the NER states due to their unique geographical constraints, the region’s journey should reflect India’s overarching goals, particularly the 4S principles: ensuring prosperity is accompanied by social progress, shared equitably across all eight states; environmentally sustainable through innovative ecological practices; and solid amidst geopo­litical tensions and external disruptions, creating an anti-fragile development model that honours the region’s unique cultural and natural wealth.

Assameconomic developmentNortheast Indiaregional developmentstrategic necessity