Changing Trajectories of Developmental Policies in Northeast India and a Reality Check of Trans-Regional and Trans-National Entrepreneurial Activities

Abstract

Increase in entrepreneurial activities is prerequisite for economic development and the key to macro-economic foundation of an economy. A close look at the policies followed during the colonial period, post-independent period and post-economic reform period for the North Eastern states of India have some distinctive features and outcomes. Colonial intervention accentuated the economic, social, and political isolation of the region and kept mercantile interests intact. Post-Independent India followed a protective policy regime specifically designed for the North Eastern states. Resultantly, the growth scenario of the North-Eastern states has become satisfactory. The per-capita income is also growing at a moderate rate. However, growth is pronounced where government intervenes as a principal economic actor. Size of the labour market has failed to respond positively due to the absence of credible manufacturing sector, the limited volume of trade and commerce, transport and communication and banking and insurance. Hence, the entrepreneurial activities did not receive a required fillip. The late-1990s saw the emergence of ‘Look-East’ and ‘Act-East’ policy with an expectation that it will expand trans-regional and trans-national entrepreneurial activities and bring credible changes in the economy of the Northeast. However, this paper suggests that revival of the road, railways, and water transport system through Bangladesh can become much more cost effective and beneficial for economic development of Northeast and will expand trans-regional entrepreneurial activities that will create employment opportunities for North Eastern states.