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Professor and economist Joydeep Biswas on Barak Valley as a separate state: It would not be any worse than what it is now

The Citizenship Amendment Bill 2016 has been the talk of the town for some time, but after the JPC (Joint Parliamentary Committee) visit in Barak Valley, it has turned into a war of words within the state. The gap between the two sides of Borail (Barak Valley and Brahmaputra Valley) has stretched like never before. The JPC visited Assam in May, and since then the entire state has aggressively debated the issue in all forums. Intellectuals, regional organisations, student unions, have all voiced their opinion. While Barak Valley supported the proposed amendment, Brahmaputra strictly opposed it. The debates and differences of opinion have also given rise to a proposal of separation of Barak Valley as an independent state. Since independence and especially after May 19, 1961, the demand for Barak Valley as a separate state has always been there but not with as much support as it has now.

Even in the case of separate Barak there are differences in opinion. While one section of people feels it’s a great move, others fear they might lose their jobs and the new state might turn out to be an economically unstable one. got in touch with associate professor of Economics at Cachar College, Joydeep Biswas, to understand the economic implications of Barak Valley’s separation from Assam. Biswas is a renowned political commentator, he is often seen in debates and his articles are published in various reputed publications including The Hindu.

We gave him a hypothetical scenario where Barak Valley is jettisoned from Assam and quizzed him on the basis of that hypothesis. Here are the edited excerpts of the interaction.

To start with in simple terms, could you please explain the economic condition of Assam?

Assam like all other North Eastern states is heavily dependent on Centre as it is not a self-sustaining or an economically rich state. If we look at the statistics of the State Government receipts and expenditure for 2016-17, the total revenue received is around Rs 66,180 crore out of which about 68% is contributed to by the Centre. This means domestic collection is only around 32-33% that is about Rs 21,780 crore in 2016-17. So, two thirds of the revenue is coming from Delhi.

So hypothetically if Barak Valley gets separated from Assam, do you believe, by depending on Central Government, it can sustain?

First and foremost, I would like to clarify, my views here are completely technocratic and we are speaking about economic implication of a hypothetical situation, which is, if Barak Valley is separated from Assam. Now, coming to the question, I would say Barak Valley, if separated, won’t face any additional burden from economic point of view. It won’t be any worse than what it is today.

Upper Assam has oil refineries, minerals, and rich cultivation of tea as a crop. What are the resources in Barak Valley that you think will boost the economy?

We do not have district wise revenue collection data to statistically make a comment at this stage. Having said so, yes it’s true we will miss the revenue from mines and minerals if we separate Barak Valley from Assam. As far as Tea is concerned, Barak Valley also has its fair share of Tea Gardens. Like Upper Assam, here too, we have our tea belt. Again Tea as an industry is not doing well in Barak Valley, and the scenario is quite similar in whole of Assam. The golden days of Assam being a global leader in Tea production is long gone. The revenue generated from Tea industry is not a big contributor to the revenue of Assam.

What about oil and natural gas?

There is credible information that ONGC has upgraded their forward base in Srikona. It is believed that we have got plenty of oil under the surface of Barak Valley also. For some reasons, ONGC never really took Barak Valley or its resources seriously. That might change in Barak Valley as a separate state kind of a scenario, and we too might have crude oil as a natural resource. Yes, we do not have our own refineries but having a refinery is not really a big ask. Whenever you separate yourself from a state as an independent federal unit, the policy makers would surely come up with a separate plan depending on needs and wants of the State, and its people. Look at Tripura for example, it is located in a far more disadvantageous geography compared to Barak Valley. For most part of its existence, it was ruled by a government different from that in the Centre, and yet the state has sustained. Yes, it’s not a rich state economically and has its own challenges, but in some counts they have been progressing well. So, if Tripura can sustain as a state being located in the remotest corner of the map, why not Barak Valley?

Why do you say location of Barak Valley is better than Tripura and how can the location be an economic advantage?

Already Barak Valley is the only passage for Tripura, Manipur, and Mizoram to connect with the rest of the country. If Barak separates itself from Assam, then add Meghalaya and Assam too, on the list that places Barak Valley as a gateway for South East Asia. This is a great advantage, which can be explored strategically to up the economy. In the new political map of the NE, Barak Valley as a state or union territory could emerge as a big player in the Look East Policy regime. The rules of the game could change completely.

What about Health, education and standard of living; don’t you think the standards would drop if Barak Valley separates itself from Assam?

In the Assam Human Development Report 2014, on the HDI ordinal scale, Cachar is 24th, Hailakandi is 27th and Karimganj is 26th, out of 27 districts. So we are already ranked very low when it comes to Human development and standard of living. Health wise too, the performance of Barak Valley is miserable; Cachar is ranked 27th, Hailakandi is 24th and Karimganj 25th. And if we look at education, Cachar is ranked at 16th, Karimganj is 19th and Hailakandi is ranked 24th. We are not doing any good being a part of Assam. So to fear that if we separate we will decline is unfounded. I mean when you are ranked in 20s out of 27, you are one in the bottom half of the table. In some cases, Hailakandi is at the 27th position, which is the lowest a district can rank in 27-district state. Again, I would like to clarify; I am not saying we are not performing because we are a part of Assam. I am just stating the statistics to make a point that it cannot get any worse than what it is today.

What according to you would be the challenges if Barak Valley separates itself from Assam?

For a newly born state, the initial few years are always very turbulent. Also we need to understand that if we are shifting away from Assam, we cannot expect too good a relationship with them in the initial years. We will continue to heavily depend on them, geo-strategically. Surface transport as well as railway connection with all other parts of the country will continue to be through Assam only. In the long run, things will ease out, relationships will strengthen and it will all depend on the political fraternity and the state government. I believe that the mood in upper Assam too is to separate Barak from Assam because of the difference in cultures and tradition.

What happens to the existing government employees, will the new state manage to match the salaries and better them?

Sustaining the pensions and salaries of government employees is the first problem that the new State government will face. All small states face the same problem. Again, we can use Tripura as an example. Let us take the case of us the college and university teachers of Assam. We all have always been paid as per the latest and revised University Grants Commission pay scale. The Seventh UGC Pay Package is yet to be implemented though I must say Assam government has been efficient as well as generous enough to implement the revised pay scale for its employees while many Indian states are yet to implement the latest pay scale. Now, if you compare it with Tripura government, employees there are still being paid as per the fourth pay commission. In fact, it was a big election plank for the BJP. I term this as the first and biggest problem, because, I believe that to develop a new born State, the government needs its own employees to cooperate and continue with full energy and matching the salaries is the minimum the Babus can expect in return from the new fangled government.

How important will be a cordial relationship with the Central Government?

Extremely critical. The new state, at least in the first five years, will have to completely depend on the Centre to keep the state going. It will need a lot of political manoeuvring to develop the State and its people.

Where do you see the domestic revenue coming from?

The new State will continue to generate revenue from various state and central government taxes which include income tax, sales tax, excise duties, motor-vehicle taxes, customs, service tax and all. Another aspect, if you see the decomposition of tax and non-tax revenue sources of Assam, GST happens to be the largest contributor with a contribution of more than 60%. That is because GST is a destination-based tax and consuming States get benefitted compared to the producing ones. Barak Valley like Assam will be another state where consumption will be far more than production, and, therefore, GST will emerge as a big contributor to the economy. Forest will be another good source of revenue and with the passage of time the political class will have to come up with innovative sources of revenue. Having said all of that, like I said before, all the states in North East will continue to depend on Centre’s fund. What is the source of revenue for Mizoram? Other then production of ginger there is nothing; Meghalaya, Tripura and all other are states are revenue-starved states.

How much of a challenge do you think the border will be for the new state?

Border is both an asset and a liability; liability, because despite all the agitations and Assam Accord, the fact is there are still pores in the India-Bangladesh border. Immediately after Barak Valley separates itself from Assam, there will be migration from both within the country as well as from across border. While border is Centre’s responsibility, the new state will have to do everything it can to stop cross border infiltration. Now, the border can be an asset too; suppose in Sutarkandi we have a trade centre, which is more or less inoperative despite having necessary infrastructure in place. Bulk of the trading that takes place is unauthorised and illegal. If the newborn State can formalise the informal trade, then it can be a big boost for the economy. Bangladesh is again a consuming country, I was there in 2011, and I remember I bought a five rupee chocolate for 15 bucks. The chocolate was traded illegally from India.

As per your understanding and judgement, do you think Barak Valley will manage to sustain if it separates itself as an independent state?

If you look at the fiscal history of Assam, it was never a revenue generating state. In fact, in 1874 when the new Assam province was created under the chief commissioner by the colonial power, only five districts were there. They soon found that the newly created province was a revenue deficit province. To mitigate the deficit, the British Government incorporated Sylhet, as it was a revenue surplus district in British India. So, scarcity of revenue has always been an issue for Assam since its inception and even after Independence, the fiscal condition has remained the same. So, coming to your question, while there are data and statistics that will suggest that it is impossible for Assam to sustain as an independent State, my thesis is that the new state will not be any different from any other state in Northeast. It will just be another state in Indian federation, which cannot sustain by itself. Why should there be a hullabaloo over that?

While you have throughout answered all the questions staying apolitical and strictly limited yourself to the economics, we would like to know your personal opinion on the idea of a separate state?

Well, if it separates, I would say it would not be any worse than what it is now. However, as far as I am concerned, I am not in favour of this proposal of Barak Valley as a separate state. I believe that vivisection of a state cannot be a solution to the political problems; instead, it will accentuate problems on many fronts. I am against the idea simply because ‘there are two cultures which cannot co-exist and therefore a separation’ is a very bad theory. This theory has already cost the sub-continent in general and Assam in particular. So no more reorganisation despite all the provocation from either side of the Borail (mountain). I will be for Barak Valley to continue to be a part of Assam.

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