A Glimpse into the Assam Economic Survey

Arup Baisya

The Hon’ble Chief Minister of Assam has recently brought two economic indicators into the limelight as a success story for the Assam government. The first is the rise in Assam’s GDP growth rate; the second is the increase in capitalists’ interest in investing in Assam.

The Assam Economic Survey indicates that Assam’s nominal economic growth in the financial year 2022-23 was 19.9%, while it was 16.1% on the national level. For the same period, Assam’s real growth was 7.9%, while the all-India growth was 7.2%. Per capita income, which was Rs 80,440 in constant prices in 2011-12, has increased to Rs 1,35,787 in 2023-24. On the surface, this is a praiseworthy state of affairs for the Assam government.

But the real secret lies elsewhere. An increase in real growth should mean increased production. The agricultural production index numbers in 2020-21, 2021-22, and 2022-23 were 144.22, 133.79, and 163.57 respectively (whether any change in the base period was made for these calculations has not been verified). These three fiscal years saw a production of 52,14,000, 43,83,000, and 6045000 tonnes of rice respectively. In the fiscal year 2021-22, production seems to have somewhat recovered from this dip, and has seen a slight increase. Considering the increased population and low crop prices, it is conceivable that the income of farmers has decreased in terms of per capita income growth.

The contribution of industrial production to GDP was 29.55% in the fiscal year 2022-23, and in 2023-24, it decreased to 27.63% in constant price terms. This means that the income of industrial workers has decreased.

The credit-deposit ratio of recognised commercial banks was 48.62% on March 31, 2022, which increased to 51.9% in 2023. The participation of local entrepreneurs in Assam in the production of goods in this recessionary market is utterly negligible—bank loans for commercial and productive activities are, as before, next to none.

In 2022-23, the unemployment rate in rural areas was 7.69% in Assam and 2.4% in the all-India context; 13.32% in urban areas of Assam and 5.4% in the all-India context. The number of educated unemployed individuals has increased by a huge margin from 1,37,860 in 2021 to 9,83,093 in 2022, and is still on the rise. And these figures do not even include those who have given up applying for jobs, plagued by the trauma of prolonged states of unemployment. This indicates a decline in the income of the lower-middle class and the middle class.

Behind the growth in non-productive sectors like infrastructure, transportation, etc. that has taken place for the benefit of investors lurks cheap labour. There is no indication of any government initiatives to implement a holistic increase in wages.

The real income of the vast majority of the common people has hit rock bottom.

At a glance, I could not find the Gini index—that would indicate the measures of inequality—anywhere in the entire report. But it can be said without doubt that such an abnormal growth in GDP and per capita income indicates extreme inequality and social imbalance. At the same time, there has been an abnormal increase in a portion of income from socially harmful sources.

It is true that Assam’s revenue income from the state and central sectors has increased, but a large part of it is central grants. On the other hand, revenue expenditure is estimated to increase by 17.44% in the fiscal year 2023-24—growing from the total of Rs. 82,547.96 crore in the fiscal year 2021-22 to Rs. 1,11,336.59 crore in 2023-24.

This increase in revenue expenditure is not being spent on reducing inequality or increasing the income of the marginalized, but is being hoarded by a small number of people at the top of the economic pyramid.

Only a small part of the increased revenue expenditure is being spent on so-called welfare schemes—this expenditure is not harmful to the economy in any sense, but is useful, albeit slightly, in creating demand for consumer goods. No records have been taken of the development of social parameters such as education, health, etc. In truth, government expenditure on them has decreased and the actual situation in these parameters is very pathetic. Expenditure on laws and schemes in various social security sectors is either being reduced or the schemes are not being implemented, such as those for the welfare of construction workers, transport workers, etc.

No importance is being attached to the agricultural sector; rather, the forested territory is decreasing due to indiscriminate deforestation, which will endanger the environment and adversely affect agriculture and tea production. The average land area in agriculture is only 1.09 hectares, which shows that the agro-economy is mainly dependent on small-scale farmers. This idea that small land is not suitable for increasing production is erroneous: in fact, it is useful for cooperative-based production. The government’s attention and support towards agricultural production would also be useful for the development of agro-based industries—if the government does adopt such a development policy.

But the Hon’ble Chief Minister is painting for people's dreams of domestic and foreign investment. The real secret behind that dream is that the government will provide land, communication systems, electricity, etc. to the capitalists for free and will put the burden of responsibility on the shoulders of the people of Assam. It will arbitrarily enforce evictions on prime land to provide big capitalists with convenient space. The CM is promising to make arrangements so that the big capitalists can tap all possible opportunities with the help of state generosity, and is also allocating the funds needed for this from the government treasury.

Everybody probably can remember that when the Northeast was made tax-free, the big capitalists shifted their factories to Assam just to enjoy the tax benefits and then withdrew them again. The capitalists who will fry the proverbial fish in their own oil during new investments will burden the government if they do not reap the desired profit, as the government will be forced to save them by providing more money on the logic of “too risky to fail”.

The government does not have the courage to confront and combat these big capitalists with the economic and political policies of developing Assam’s agriculture and local enterprises. This dependence will increase further with the policies of the Hon’ble Chief Minister. However, states like Karnataka have created their own brand by challenging big corporates like Amul, which has had a visible impact in the last elections.

Therefore, for the sake of Assam’s political economy, there is no alternative but to develop a united struggle demanding land reforms, land pattas [i.e. record of rights], social security, wage raise, unemployment elimination and unemployment allowances, and local initiatives and welfare projects for all.

Otherwise, malnutrition, starvation, and dependency are bound to become part and parcel of the daily lives of the people of Assam. It is important to prepare for a mass struggle so that mass discontent does not turn into surrender.

[Translated from original Bengali by Sohini Sengupta]

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Frontier
Vol 57, No. 31, Jan 26 - Feb 1, 2025