ECONOMY OF ASSAM

Among eight states of the North Eastern Region, Assam is most industrially advanced state. There are several large, medium and small scale industries based on the resources like agriculture, forest and mineral available here. Two main large scale industries are OIL and Natural Gas which make up 50% of India's on-shore production and Tea which make up 53% of all India production. Papers, cement, Petrochemical are some other industries of Assam.

The Economy of Assam represents a unique example of poverty amidst plenty. In spite of being richly endowed with natural resources, the state legs behind the rest of India in many aspects. One of the main reasons is that Assam has been a victim of large scale migration. In most of the decades during the last century the growth rate of population Assam has been well above the national growth rate. The difference can be attributed only to large scale migrations.

The Economy of the state in terms of Gross State Domestic Product (GSDP) at factor cost is expected to attain a growth rate of 6.04% at constant (1999-2000) prices as per Advance Estimates in 2008-09 as against the growth rate of 6.06 % estimated as per Quick Estimates. The growth rate of 6.04 % GDPS has been expected mainly due to considerable growth in the sectors like Construction, Electricity, Gas & Water Supply, Transport, Storage and Communication, Trade, Hotel and Restaurant, Banking and Insurance, Real Estate, Ownership of Real Estate, Ownership of Dwelling and Services and Other Services. The agriculture and Allied Sector on the other hand, likely to show a nominal growth rate of 0.37 %. The Secondary Sector growth is expected at 6.72 % as against 3.47 % in 2007-08, the Service Sector growth is likely to attain its peak of 8.41 % in Advance Estimates as against 9.92 % achieved during 2007-08 as per Quick Estimates. The state economy has undergone a remarkable shift from Primary Sector to Service Sector in recent years. The GSDP at current prices, a growth of 10.03 % expected in 2008-09 as against 10.46 % growth recorded in the previous year. The state Income ie Net State Domestic Product (NSDP) of Assam at Constant (1999-2000) prices is estimated at Rs. 49,226.38 crore in 2008-09 (Advance Estimate) higher by 9.99 % than that of Rs 62,852.00 crore in 2007-08.

 

Year 2011-2012

GSDP

NSDP

Per Capita NSDP (Rs)

At Constant (2004-05) Prices (Rupees in crore)

75082.07

65388.48

21500

At Current Prices (Rupees in crore)

104217.70

92495.60

30413

 

 

Source: Directorate of Economics and Stati sti cs, Assam

 

The economy of Assam is basically based on agriculture as the dependence of rural labour for on agriculture and allied activities was nearly 53 % as per Population Census,2001. During 2007-08, the productivity of Summer Rice has increased to 2267 Kg per hectare as against 2017 Kg per hectare in the previous year. The productivity of Autumn Rice has increased to 1380 Kg per hectare from 899 Kg and that of Winter Rice has increased to 1380 Kg to from 1321 Kg per hectare during same period. The production of total food grains in the state was 35.04 lakh tones during 2007-08 as against 30.60 lakh tones during 2006-07.Rice is the staple food of Assam and the production of rice has increased by 13.82 % during the same year over the previous year.There is an impressive increase in the production of Wheat and Pulses with 6.78 % and 5.97 % respectively during 2007-08 over 2006-07. The production of Oilseeds has also increased by 4.65 % during the same period. The production of commercial crop Jute has shown a substantial increment to 657 bales in 2007-08 from 558 bales in the previous year.

However, the Agriculture alone has registered a significant growth rate of 6.6 percent and all together Agriculture and Allied sector is expected to attain a favourable growth rate of 6.1 per cent in 2010-11 against 4.2 per cent of the previous year.

 

Under Horticulture, 40.02 lakh MT fruits and 39.16 lakh MT vegetables were produced during the year 2007-08. The state is surplus as regards to fruits, vegetables and spices production.

 

The achievement made by Irrigation Department in creation of additional irrigation potential has not been much encouraging as per report available. Out of total geographical area of 78.44 lakh hectares, the ultimate Gross Irrigation Potential (Annually Irrigable Area) is estimated at about 27 lakh hectares, which constitutes 66.06 per cent of the Gross Cropped Area.

 

The Industry Sector of the State has shown mixed performance during 2007-08. The Industry Sector registered a growth of 3.47 percent in 2007-08 over 2006-07. The growth of Manufacturing Sector in Gross State Domestic Product has recorded at 2.56 percent in real terms (1999-2000) and 12.46 percent growth registered in current prices during 2007-08 over the period year. The growth observed in the manufacturing sector was the result of benefit achieved in the production of industrial items like Wheat Flour, Jute textiles, Cement, Fertilizers, etc. over the level of production of the previous year.However, the General Index of Industrial Production of the State reduced to 143.78 on 2007-08 from 152.82 in 2006-07.

 

The total SSI units in the State numbered 32984 are providing employment to 167216 persons till the year 2009-10. In 2009-10, the value of produced goods of 1667 number SSI units was worth `584.00 crores. During the year the number of factories registered was 3971 and provided employment to 137164 persons. The growth of Manufacturing Sector is estimated at 0.5 percent at constant (2004- 05) prices and 7.1 percent at current prices in 2010-11over previous year. The growth observed in the manufacturing sector was the result of benefit achieved in the production of some selected industrial items like Tea, Wheat Flour, Jute textiles, Cement, Coal, Crude Oil, and Fertiliser etc. over the level of production of the previous year. The General Index of Industrial Production of the State also pegged at 155.83 in 2009-10 (Base 1999-2000) as against 151.40 in 2008-09.The Tea Industry of Assam, which is about 170 years old, playing a vital role in the State as well as in the national economy. The Assam's Tea industry also possesses a significant reputation in the global economy. The total area under tea on is accounting for more than half of the country's total area under tea and the Tea Industry of Assam provides average daily employment to more than six lakh persons in the State which is around 50 percent of the total average daily number of labour employed in the country.The number of Tea Gardens in the State was 49102 covering land of 301000 Hectares out of 140712 Tea Gardens covering 556000 Hectares of land in the country as a whole. The estimated tea production of the State was 4875 lakh kg.as against 9808 lakh kg.total tea produced in
the country during the year 2008 as per report of Tea Board of India. The tea production in Assam constitutes more than 50 percent of the total production of the country. Among the Plantation crops, Rubber cultivation is also gaining its popularity in the State due to congenial agro climate as well as its eco-friendly activity. Assam has ample scope for Bamboo based industry like Paper manufacturing industry, since this region has highest concentration of bamboo i,e, around 60% of the total Bamboo of the country. In viewing of the potentialities, The Ministry of Agriculture, Govt of India, has recently launched the National Bamboo Mission and under this Mission it is proposed for plantation of selected species of Bamboo in the State, in an area of 176000 Hectare, as a raw material for Bamboo based industry.

 

Sericulture, a major cottage industry of the State, is practiced in more than 10500 villages and provided employment to 2.6 lakh of family. Assam has the monopoly in production of Muga, the Golden Silk in the world and 99% of Muga Silk produced in Assam. Assam has also achieved the right of "Geographical Indicati on" in Muga Silk.
 

Assam is richly endowed with mineral resources. The performance of Mining Sector during the year 2009-10 was observed as satisfactory as compared to previous year.Apart from Natural Gas (Utilised) the all other major minerals Coal, Petroleum(Crude) and Limestone of the State have shown upward volume in production during the year as reported by the Indian Bureau of Mines, Government of India. The Index of Mineral Production is worked out at 100.99 in 2009-10. The Index of Mineral Production of the State (Base 1993-94=100) has decreased to 87.90 in 2007-08 from 95.33 in 2006-07.

 

The power supply position in the State was not much encouraging during the past several years. During the period, the installed capacity of generating power plants in the State has gradually come down to 401.5 MW in 2007-08 from 574.4 MW in the previous years due to de-commissioning of Bongaigaon Thermal Power Station (BTPS) and Mobile Gas Turbine sets and de-rating of age-old units of Namrup TPS. However, in 2007-08, the generation of power has taken its upturn and reached its peak level to 1541.317 MU from 867.539 MU in 206-07. The per capita availability of power in the State was 137Kwh in 2007-08. In order to meet the shortage of power supply, the State has continued to purchase power from other states and private traders. Like most of the states of the country, Assam is also lagging behind in respect of rural household electrification. Till the end of the year only 58.0 percent villages of the State could be completed. However,for better improvement of the power supply position in the State, various projects have been undertaken and are in progress.

 

The total number of reporting Schedule Commercial Bank Offices (including Regional Rural Bank) in the State at the end of March, 2008 was 1317. The volume of Deposits and Credit of these Banks stood at Rs.31666.0 crore and Rs.13057.00 crore respectively at the end of the said period. The Credit-Deposit Ratio in the State at the end of March,2008 was 41.2 percent as against all-India ratio of 74.2 percent.

 

There are about 3.91 lakh hectare of water area in the State in the form of rivers, beel,derelict water bodies and ponds and tanks. Scientific fish farming in natural water bodies has been mostly traditional capture fishery only. The scientific farming is practiced generally in individual and community tanks. Recently emphasis has been given for scientific fish farming in beels and community tank through awareness, training,government support and subsequent bank linkage. There is a positive trend in fish productivity during recent past. During the year 2009-10, the fish production has reached the tune of 2.18 lakh metric tone against 2.06 lakh metric tone fish produced in 2008-09.State is yet to reach self-sufficiency in productivity with regards to economic as well as minimum nutritional requirement of 11kg/Person.
 

As per Forest of the State, the Reserved Forest area and Proposed Forest area is 14206 sq km and 19418 sq km respectively in 2009-10. The total Forest area excluding unclassed State Forest is 19418 sq km and 3436 sq km area is under protected area as reported by State Forest Department. Thus, the reserved forest area constitutes around 18 per cent and total forest area excluding unclassed forest with constitutes around 25 per cent of the total geographical area of the State. The amount of revenue earned from the forest products during the year 2009-10 was `7761.60 lakh against `6266.00 lakh earned in the previous year.

As per estimation, the number of Indigenous Catt le is 7762572 and Crossbreed Cattle numbered 446185 in the State during 2009-10 as reported by State Animal Husbandry and Veterinary (AH&V)Department. The estimate also shows that the population of Buffalo and Goat is 571756 and 2828529 respectively. The AH&V Department has also published the estimated figure of Fowl and Duck as 7942817 and 3106136 respectively during the same year. The milk production in the State during 2009-10 was estimated at 830 million litres. The egg and meat production were estimated at 4680 lakh numbers and 32000 M.T. respectively during the same period.

 

The tele-density (Telephone per 100 populations) of the State as on March 2010 was 29.99 as against the national average of 52.74. Disaggregated figures however show that the telecom penetration has been uneven across the urban and rural segments. While the urban tele-density of the State stood at 96.54, the rural tele-density was only 18.49.

The Public Works Department (PWD) of the State is mainly responsible for the development of the road infrastructure for surface road transport & communication of the State. Excluding national highway, the length of surfaced road is 13163 in the State and the length of un-surfaced road is 24338. The total road length in the State that is maintained by State PWD is 37501 kilometres.
 

The Commissionerate of Panchayat and Rural Development of Assam has been implementing various schemes for poverty alleviation and uplift ment of rural poor. For eradication of poverty the Panchayat wing has been implementi ng various schemes viz.Indira Gandhi Nati onal Old Age Pension Scheme, National Family Benefit Scheme, Annapurna, Chief Minister's Assam Bikash Yojona, Backward Region Grant Fund etc. The Rural Development, on the other hand implementi ng programmes like SGSY, which provides help to form Self Help Group for taken up economic acti vity, IAY provides dwelling to the BPL families, MGNREGA provides employment to the job card holder,etc.

 

The State expects to receive Rs.22193.00 crore by way of revenue during the financial year 2008-09 as against the total expenditure estimated at Rs.20039.31 crore, thereby showing a surplus amounting to Rs.2153.67 crore in the Revenue account. The opening balance in the Budget for 2008-09 (B.E.) is in the decifit of Rs.2360.70 crore and the closing balance for the year is estimated at the decifit of Rs.2836.24 crore. The Revenue Receipt under State's own Revenue during 2008-09 stood at Rs.6269.75 crore (B.E.)as against Rs.5494.01 crore (Actual) showing an increase of 14.1 percent. The debt outstanding of the State has been increasing from year to year. However, the percentage of debt outstanding to total GSDP has declined to 27 percent in 2007-08 from 30 percent
2006-07. The per capita debt burden in Assam as on 31.3.2007, was Rs.7038.00, which is second lowest among all the States in the Country.

 

Year

Receipt

Expenditure

Surplus(+)

Deficit(-)

Revenue Account

Capital Account

Total

Revenue Account

Capital Account

Total

1980-81

43616

34450

78066

34399

56070

90469

(-) 12403

1990-91

177394

220058

397452

192040

204384

396424

(+) 1028

2000-01

563764

674276

1238040

641711

633297

1275008

(-) 36968

2007-08

1532492

117863

1650355

1274416

240614

1515030

(+) 135325

2008-09

1807704

291234

2098938

1424333

324256

1748589

(+) 350349

2009-10 (R.E)

2448516

338193

2786709

2981595

583265

3564860

(-) 778151

2010-11(BE)

2640893

342493

2983386

3236902

444101

3681003

(-) 697617

 

 

Price situation in the State remained more or less satisfactory during the period under report. The behaviour of price level can be observed from the movement of Consumer Price Index Number (CPI) for the working Class Population and the Wholesale Price Index Number for Agriculture Commodities. The average Consumer Price Index Number for the Working Class Population (Base 1892=100) for the state revealed a price rise of 6.1 percent increase recorded in 2006 over 2005. The annual average Wholesale Price Index Number for Agricultural Commodities (Base 1993-94=100) stood at 204 in 2007-08 as against 185 in 2006-07. During 2007 the annual average Consumer Price Index for Industrial Workers for Assam has shown a rise of 7.6 % during the period. The Consumer Price Index Number for Industrial Workers increased from 126 point in January 2008 to 136 points in August 2008, the increase being 7.1 % during the period.

 

As regards the Employment Sector, the number of persons employed in organized economic activity (comprising both Public and Private Sectors) was 11.7 lakh in the year 2007 thereby registering an increase of 4.3 % in employment over the previous year. The employment of women in the organized sector of the state was 396 thousand at the end of 2007 which was 34.0 % of the total employment.

 

Economic Census 1998 and 2005, Assam

Sl.No

Indicators

EC-1998

EC-2005

CAGR-during 1998-2005

ESTABLISHMENTS

1.1

Number of Establishments

Rural

404279

681670

7.75

Urban

188890

302023

6.93

Combined

593169

983693

7.49

1.2

Number of Agricultural Establishments

Rural

16960

39797

12.96

Urban

2529

2669

0.77

Combined

19489

42466

11.77

1.3

No. of Non-Agricultural Establishments

Rural

387319

641873

7.48

Urban

186361

299354

7.01

Combined

573680

941227

7.33

EMPLOYMENT

2.1

No. of Persons Employed

Rural

1550985

1442854

-1.03

Urban

643604

765315

2.51

Combined

2194589

2208169

0.09

2.2

Persons engaged in Agricultural Activities

Rural

48383

80017

7.45

Urban

6158

6131

-0.06

Combined

54541

86148

6.75

2.3

Persons engaged in Non Agricultural Activities

Rural

1502602

1362837

-1.39

Urban

637446

759184

2.53

Combined

2140048

2122021

-0.12

 

KEY RESULTS AS PER ECONOMIC CENSUS, 1998 & 2005, INDIA

Sl.No

Indicators

EC-1998

EC-2005

CAGR-during 1998-2005

ESTABLISHMENTS

1.1

Number of Establishments

30348900

41826989

4.69

1.2

Number of Agricultural Establishments

3474800

6079983

8.32

1.3

No. of Non-Agricultural Establishments

26874100

35747006

4.16

EMPLOYMENT

2.1

No. of Persons Employed

83299500

100904121

2.78

2.2

Persons engaged in Agricultural Activities

6748900

10913601

7.11

2.3

Persons engaged in Non Agricultural Activities

76550600

89990520

2.34

*Compounded Annual Growth Rate.
Source : Central Sta_ s_ cal Offi ce, Govt. of India.

 

 

 

 

In order to increase employment avenues through generation of gainful employment opportunities the Government has been implementing various schemes like Swarnajayonti Gram Swarajgar Yojana (SGSY), Sampoorna Gramin Rozgar Yojana (SGRY), National Rural Employment Guarantee Act (NREGA), Prime Minister's Rozgar Yojana (PMRY), and so on and at the same time which also aims at upliftment of rural people at the grass root level. The concept of Self Help Group (SHG) has already bought a revolution in the field of self employment. The Government of Assam has launched a unique self-employment scheme called Chief Minister's Swaniyojan Yojana for imparting job oriented training to the educated unemployed youth of the state. It is encouraging to observe that more and more people of the state are taking keen interest in availing opportunities offered through implementation of these schemes. A positive development is already under way in various key sectors of the states rural economy as evident from the achievements made their respective areas.

 

References taken from Economic Survey 2008-09
Assam Land and People edited by Basanta Deka