Ministry of Development of North Eastern Region (2001): Strengthening India’s Northeastern Integration

Policy Update
Diva Bhatia

Background 

The Ministry of Development of North Eastern Region (MDoNER) was established in September 2001 to rectify the fragmentary planning and uneven growth in eight north-eastern states of India – Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim and Tripura. Prior to its creation, large central line ministries such as Railways, Road Transport & Highways and Rural Development were involved with development outlays and a significant amount of per capita funds. However, there was duplication of works, policy contradictions, and a lack of infrastructure in major corridors (MDoNER, 2023). Despite the fact that the North Eastern Region (NER) accounts for less than 4 % of India’s land area, its position between South and Southeast Asia provides considerable geo‑political and economic opportunities.

Recognizing the obstacles of unrest and bad infrastructure alongside the benefits of ASEAN neighborliness, the Indian government declared MDoNER the one-stop-shop for approval, coordination, and outside help under a single policy arrangement (MDoNER, 2023). Initially it was formerly aimed at basic infrastructure development such as building roads, bridges, power source, and telecommunication networks, the department now focuses on social issues, entrepreneurship, and connectivity throughout borders.

Several key projects are now under way, including the North East Special Infrastructure Development Scheme (NESIDS), North East Road Sector Development Scheme (NERDS), and North East Venture Fund (NEVF).Collectively, these efforts aim not only to address critical infrastructure gaps but also to spur private sector investment, support human capital and develop regional integration both within India and with the rest of the surrounding countries (Press Information Bureau, 2023b). 

Impact 

An examination of MDoNER’s budgetary trajectory over the past five years reveals the Government’s sustained commitment to narrowing the development gap. In FY 2019–20, MDoNER’s total allocation stood at ₹2,980 crore; by FY 2023–24, the Budget Estimate had risen to ₹5,892 crore—an increase of nearly 98 % in absolute terms and 114 %relative to the Revised Estimate for FY 2022–23 (Press Information Bureau, 2023b). This capital infusion has underpinned a surge in project approvals: from 1,150 infrastructure projects in FY 2019–20 to over 2,350 in FY 2022–23, spanning transport, energy, water supply, and digital connectivity.

On the ground, these investments have translated into tangible outcomes. Between FY 2019–20 and FY 2023–24, more than 1,300 kilometers of all‑weather roads and over 200 new or strengthened bridges were completed under NERDS, vastly improving inter‑district and inter‑state mobility (MDoNER, 2023).

Electrification initiatives backed by DoNER and the North East Rural Electricity Project have achieved near‑universal household access, lifting the region’s rural electrification rate from 78 percent in 2018 to 98 percent by mid‑2024. Meanwhile, the NEVF has disbursed equity support and grants totaling ₹420 crore to more than 4,500 startups, fostering a nascent entrepreneurial ecosystem that extends from agro‑processing units in Tripura to ICT ventures in Assam (Press Information Bureau, 2023a).

Human development indicators have likewise shown improvement. According to NITI Aayog’s North‑Eastern Region District SDG Index, the average district score rose from 62.4 in 2021 to 68.9 in 2023—outpacing the national average growth rate of 3.2 percent with a regional increase of 4.1 percent (NITI Aayog, 2023). Notable gains were recorded in education (mean years of schooling up by 11 percent), health (decline in infant mortality from 38 to 29 per 1,000 live births), and sanitation (open defecation rates falling by 12 percent), reflecting the cumulative effect of MDoNER‑supported social sector schemes.

Performance (Analysis with Case Studies)

Have put this particular performance metric about MDoNER in terms of an analysis of two case studies that reflect rail connectivity and community-led eco-tourism, both which represent economic integration and livelihood enhancement.

Case Study 1: Rail Link between Akhaura and Agartala

The 15 km link between Akhaura and Agartala was inaugurated by India and Bangladesh during the month of December 2023, thus providing direct rail connectivity between Tripura and the port city of Chittagong. Much of the investment for this project has come from MDoNER grants (₹300 crore) and concessional external assistance to give it tangible economic benefits.

For instance, freight throughput on the corridor in 2024’s first quarter saw an increase of 20 percent compared to that during the same period last year while the average logistics costs for carrying cargo from Agartala to Kolkata through Chittagong have decreased by about 30 percent.

Something extremely good news for tea, bamboo products and horticultural produce exporters (Press Information Bureau, 2023a). More significant, however, is that passenger services have begun to provide the complement for people-to-people contact, which would facilitate cultural exchanges and encourage trade at small scales, thus further cementing the region’s integration into South Asian markets.

Case Study 2: Community-Driven Eco-Tourism in Meghalaya

Under NESIDS, MDoNER allocated ₹50 crores in matching grants to community cooperatives in the villages of Cherrapunji and Mawlynnong, known for their natural beauty and living root bridges, for the development of homestays, nature trails, and local craft ventures. By FY 2022-23, average household incomes in the participating villages increased by 45 percent over baseline surveys carried out in 2019.

The visitor footfall almost doubled from 60,000 to 110,000 per annum, while local cooperative revenue grew from ₹2.3 crores to ₹4.7 crores in the same period (Press Information Bureau, 2021). Apart from the direct income benefits, capacity-building benefits have been generated by the project: youth were trained in guiding and hospitality management, forming what is now a pool of 120 certified eco-tourism professionals, giving rise to spill-on opportunities in other parts of the state tourism sector.

Over the two case studies, the MDoNER has had a budget utilization rate averaging 92 percent over the last five years, which affirms that fiscal management in the department is sound. The sectoral allocations are accordingly balanced-strategically, with around 55 percent for transport infrastructure, 25 percent for social development (health, education, livelihoods), and 20 percent for enterprise support and digital initiatives (MDoNER, 2023). These benchmarks emphasize the dual share of MDoNER between physical connectivity and human capital development.

Emerging Issues

While it is true that these advancements have taken place, the North Eastern Region is still subject to considerable stumbling blocks that threaten to derail its momentum. Climate vulnerability is acute as repeated inundations, landslides and seismic activities hit in the annual pattern.

Notably, 38 percent of road works done in FY 2022-23 were designed for climate-resilient interventions such as bioengineering for slope stabilization or flood-proof bridge design, resulting in repeated interruptions and rising maintenance expenditure. Secondly, issues of security and insurgency from the west still exist.

Between 2019 and 2023, insurgents’ attacks reduced by 25 percent, but that is much lower compared to what actually would have been observed with such sporadic flare-ups in Manipur and Assam, which still have cross-border smuggling networks discouraging private investors-in agro-processing and hospitality, where long-term capital obligations are required (Press Information Bureau, 2023a).

Thirdly, there is still low institutional capacity at the local level: only 30 percent of Panchayati Raj Institutions of NER states have functional planning and monitoring cells, meaning reduced community participation and great dilution of centrally funded schemes’ effectiveness (NITI Aayog, 2023).

Lastly, there are still the digital divides: with almost universal electrification, high-speed broadband coverage stands at 42 percent compared to the national average of 65 percent, obstructing access to tele-medicine, online education, and e-government services.

Way Forward

To effectively realize the potential of the North-Eastern Region (NER), DoNER will need to undertake a multi-faceted approach that fits together climate-resilient infrastructure, local governance reforms, scalable public-private partnership (PPP) frameworks, and digital integration.

To begin with, at “climate proofing” every new road and bridge project should commit to implementing 15% in resilience on project budgets for such measures as slope stabilization, elevated culverts, and flood-resistant materials (The Energy and Resources Institute & Ministry of Road Transport and Highways, 2021).

Equally important is to ensure grassroots accountability through participatory planning; DoNER should set up “block-level development units” in three districts by FY 2025-26 to assist the Panchayats in project management.

Third, investments into cold-chain systems, river transport, and warehouses through a PPP such as the ₹1,000 crore NER Logistics Infrastructure Fund could drive down freight costs from NER by as much as 15-20% (NITI Aayog, 2023).

Furthermore, the integration of state e-governance systems with a unified “NER e-Portal” will facilitate real-time tracking of fund flows, milestones, and outcomes.

Finally, outcome-based monitoring combined with third-party auditing on 30% of project works and a biannual NER Development Index will help benchmark progress and inform policy course corrections (World Bank, 2017). 

All these initiatives together hold the promise of sustainable growth, enhanced regional integration, and significant improvements in the lives of the people.

References:

About the Contributor

I am Diva Bhatia, a research intern at IMPRI and currently pursuing a major in Political Science with a minor in History from Jesus and Mary College, University of Delhi. My research interests include gender studies, international relations and exploring the socio-political intricacies of North East India.

Acknowledgment
The contributor gratefully acknowledges the guidance and support provided by Team IMPRI throughout the course of this work.

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