A vision 2030 without a reference to economic growth and a means of improving it will be devoid of the kernel required to sustain the Vision. Any vision for our state should also incorporate a strategy for improving economic growth. Before we look at possibilities for improving growth we examine the composition of our state GDP . Nagaland GSDP grew at a compound annual growth rate of 6% per annum between 2011-12 and 2015-16. The period saw two years that showed growth rates in excess of 8% (2012-13 and 2013-14 and between 2014-15 and 2015-16).
Sectoral decomposition of GSDP
Crops were the single largest contributor to the state GSDP between the years 2011-12 to 2015-16. Their contribution to GSDP hovered between 17 and 20%. A close second during the 5 years under consideration is the category- “Other Services.” The latter contributed 17.5% to the Nagaland GSDP in 2015-16. This category has shown a steady increase in its contribution to the state GDP. In 2011-12 it contributed 13% to the GSDP growing at a compound annual rate of roughly 13% on an average over the 5 year period. Other Services gained at the expense of Public administration, which decelerated at an annual rate of 0.5% pa reducing in importance from 15% of GSDP to roughly 11% of GSDP. The other sub-category that contributes the most to the GSDP was Construction which grew at a compound annual growth rate of 14.7%. Construction which had a contribution to GSDP of only 8.7% in 2011-12 increased its contribution to 13% of GDP by 2015-16. Manufacturing also showed a compound annual growth rate during the 5-year period of 7.4% which exceeded the CAGR of GSDP during the 5-year period (@6%). The higher than average growth rate of manufacturing was propelled by a 21.3% year-on-year growth between 2011-12 and 2012-13.
Engine of Growth?
What is included under the rubric of ‘Other Services?’ It includes coaching and tuition, and other educational services, recreational, cultural and sporting activities, human health activities, hair dressing. etc. The all-encompassing nature of the category hinders the search for the sub-category contributing to higher growth in our economy. To get into more specifics we may require more disaggregated data. With the available data and the above cursory analysis it is clear that as a state we should focus on sectors that contribute the most to the GSDP and those that have a potential of pulling up the growth rate of the economy.
As mentioned earlier, the primary sector contributes a substantial share to the GSDP. However, this sector cannot be the main driver of economic growth in our state as we have limitations of space and resources that can be used for commercial agricultural activities. The foothill areas of our state, which have a high scope for commercial agricultural activities is being tapped in an effective manner with the help from government departments. The agricultural and horticultural departments have focused on advertising our crops as organic products. The value addition that is a result of these activities will help in increasing incomes of our farmers. The need to keep up these income-generating activities is uncontested. The primary sector which includes agriculture, forestry, fishery and miningcannot provide employment opportunities to our youth. The inability of the primary sector to attract the young is evidenced by the gradual decline in the proportion of working age population engaged in agricultural activities, since the 1960s. Though agriculture remains the backbone of our economy, any future vision will have to incorporate a strategy that focuses on the non-agricultural sectors for accelerating growth and providing employment opportunities to the young. The inability to attract young talent and the limitations that geography imposes on enhancing agricultural productivity and yield becomes a natural ceiling on the sector’s future growth possibilities.
Service Sector
The locational and infrastructural disadvantages of our state leave the manufacturing sector as an unviable option for promoting growth. To compound these difficulties the property rights structure in our state is not conducive for manufacturing industries. Hence, even if we have some years of higher growth like the high rate of 21.3% year-on-year growth seen in 2012-13, we may not be able to sustain these high growth rates for a long enough period of time. Our state has to focus on the services sector to deliver higher growth in the economy. Services sector especially the “Other Services” category has increased its share to GSDP substantially.It is difficult to say if this growth in prominence of the said category is a cause or consequence of better growth opportunities in the state.
Jungle Safari and Adventure Sports
In the services sector, especially the tourism sector, the government has been trying to take the lead by organizing the Hornbill Festival. For sustaining these initiatives we also need to attract the youth. Focusing on adventure tourism especially trekking and other activities will also be an income-generating avenue for the youth of the particular areas. Partnering private agencies like the World Wide Fund for Nature, we can also encourage jungle/overnight safaris with a focus on conservation. The existing partnerships with conservation NGOs should be extended to include safaris and guided tours for tourists. If we do not compromise the safety of the tourists these safaris and tourism opportunities can provide a continuous source of income-earning opportunity for the youth. A midnight ride/stay in the jungle can attract a lot of youngsters who are interested in adventure to our state. The urban educated Indian youth staying in a city and working in an IT-office would be thrilled to take part in the adventure tourism that the operators have to offer. Another avenue with exciting opportunities is to tap the interest of our youth in motor cars and vehicles by encourages motor sport in the state. If our youth can link up with other states in the region then the thrill of an adventure motor bike ride also has the potential of attracting tourists. Our entrepreneurs should be net-savvy and creative in placing ads for these adventure activities. We should even explore the possibilities of using our rainy season to our advantage by promoting monsoon tourism like in some states.
Multiplier effect
All activities should have a focus on private players taking the lead. The government should provide the support by helping organize activities, arranging interactions with the villagers and providing general liaison. Any funding that may be provided should be strictly on the basis of sharing of operational profit. The above activities and the simultaneous focus on education that I had written about in the previous week can have a positive multiplier effect on income-generation in our state and can provide the basis for actualizing our Vision 2030 goals.
(The author is an IAS officer of Nagaland cadre. The views expressed above are personal. He may be contacted at vyasan_r@yahoo.com)
