By Sumarbin Umdor
Congratulations to Mr. Conrad Sangma, Chief Minister of Meghalaya, on the launch of the Restart Meghalaya Mission (RMM) and a big thumb-ups to the officials and advisers of the state government for drawing up the revival plan for the economic and social well-being of the people of the state. In these hard times it is good to know that the government is alert to the problems faced by the citizens and is geared up to deal with the challenges. In the interest of wider public scrutiny and clarification, I present below my observations on some of the components of the RMM.
In his Independence Day speech, the Chief Minister has identified six priority areas that will be the focus of the RMM for which he has committed Rs. 14515 crore for the next three years, starting with an investment of Rs.7839 crore in this financial year of 2020-21. However, what is not clear about this amount is whether the earmarked investments are for new schemes and projects or are they the repackaging of existing schemes, or a mix of both. More clarity on this would help the public to better appreciate the efforts of the government.
With close to about 58 percent of the workforce of the state engaged in the primary sector, the Mission’s primary emphasis on farmers of the state is the right thing to do as the distressed sector needs immediate attention. Since statehood, our poorly thought out industrial policies have resulted in a situation where few large extractive industries have come up at a high environmental cost without much to show in terms of employment generation and multiplier effects on the local economy.
While the Chief Minister recognized the importance of agricultural credit in strengthening production, yet the Mission’s strategy to enhance credit flow through doubling of Kisan credit card loans and providing an interest subvention of two per cent is at best a short term measure.Majority of the rural households in Meghalaya are in possession of customary land titles issued by traditional institutions which has limited applicability as collateral while borrowing from banks. The failure to address land reforms and land titling issue has hindered rural households from using land as an asset to secure loans from formal banking institutions rendering land a dead asset in the state.
An important policy measure to protect the income of producer-farmers and prevent distress sale of agricultural produce is the mechanism of price support, which in our country is implemented through the minimum support price (MSP) and market intervention scheme (MIS). Unlike the former which mostly covers food grains, the latter is an adhoc scheme implemented on the request of state governments for procurement of perishable agricultural and horticultural commodities in the event of at least 10 per cent increase in production or 10 per cent decrease in the ruling rates over the previous normal year. According to figures of the Agriculture Ministry, GOI, between 2010-2020 states like Nagaland, Mizoram and Arunachal Pradesh among others have implemented the MIS scheme multiple times to provide price support to farmers covering commodities such as ginger, chillies, potatoes, grapes and pineapples. It is a wonder why this scheme was never implemented by the state government of Meghalaya in the last 10 years? Intervention in livestock rearing through the Piggery Mission is another appropriate measure under the RMM as animal production is an important activity accounting for more than five percent of economic establishment in the state as per Sixth Economic census of 2013-14.
Another priority area under the RMM is supporting entrepreneurship and small businesses. The business landscape in Meghalaya is dominated by micro and small enterprises with majority of them struggling to stay afloat and expand even in ordinary times. Studies have shown that lack of appropriate management skills of micro and small enterprises owners and managers is one of the main causes of failure for these enterprises. It is for this reason that many countries have programmes that provide management training to entrepreneurs. Japan International Cooperation Agencies (JICA) has been implementing a unique ‘TIF’ approach for supporting industries and business enterprises in Africa. The three major policy instruments involved in this strategy and implemented sequentially are training of owners and managers of enterprises (including Japanese-style Kaizen management), followed by infrastructure investment particularly the establishment of industrial parks or zones, and lastly financial support to competent entrepreneurs. JICA has vast expertise in implementation of this strategy in Africa and Asia and the state government should consider inviting them to implement it here to support and nurture our entrepreneurs.
Infrastructure is another priority area identified by the Chief Minister as part of RMM. Given the deplorable state of our basic facilities and services, the commitment of 60 per cent of the Mission’s financial resources to this area is understandable. However, based on our experience so far, the apprehension is that much of this money would end up in the pockets of corrupt officials and unscrupulous contractors leaving the state with poor quality infrastructure and low economic returns and over-cost. As corruption has become a well-entrenched social and institutional phenomenon, the task of tackling corruption in public projects in Meghalaya is easier said than done.
The Chief Minister’s statement on a comprehensive revamp of the power sector as part of the RMM is a long overdue commitment made by successive governments in the past. Availability of quality and affordable power is an indispensable factor in economic growth and vital to kick starting the economy. Our past experience shows that the lack of efficient project management team along with land acquisition problems are major hindrances to timely completion of power projects. Demand management of power is also an issue that the state government needs to look into, including adoption of energy efficient measures by industrial units, introduction of time of day tariff structure, and increasing the number of block tariffs to address both equity and efficient goals. Concerted efforts have to be made to bring down the the staggering Aggregate Technical and Commercial (AT&C) losses of power utilities which is among the highest in the country.
Another focus area of the RMM is on tourism. Here, the government’s decision to reposition the state as a high value low volume (low impact) tourism needs to be carefully discussed and debated with experts and stakeholders directly involved in this sector. How viable is this strategy given the present tourism and general infrastructure of the state? Would this policy necessitate large private investments thereby limiting the opportunities of small business from benefiting from this sector? How would it impact on thousands of small enterprises that sustain themselves from ordinary tourists visiting the state? Could the Rs. 200 crore earmarked for creating new high value tourist accommodation and infrastructure be better utilized for improving the existing tourist infrastructure so as to enhance the experience of existing clientele? While sustainable tourism is a desirable goal, is this the right time to embark on this strategy given the hardship that this sector has endured so far.
Overall, the responses of this government to the covid-19 crisis and the economic fallouts are commendable. The government’s decision to form the Chief Minister’s economic task force with prominent members at the very early stages of the pandemic, and the fact that we now have a roadmap to kick start and revive the stalled economy is an accomplishment that needs to be applauded. What is left to be seen is how well the government translates these well-meaning policies into action.