Problems of industrial development in north east India | Problems of Industrialization in India

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The North East region is one the industrially backward region in the country. Inspite of being blessed with a high potential resource based and demand based industrial development , the pace of industrialization in North East had not been satisfactory. So Friends, in today’s article we are going to know about Problems of industrial development in north east India (Problems of Industrialization in India and also know the role of Industrialization in the north east region). So let’s discuss in details.

What are the problems of industrialization?

The entire industrial sector of this area can be broadly classified into four heads – (i) Agro based (ii) Mineral based (iii) forest based and (iv) Others. The important problems of industrialization in the North East India are mentioned below-

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• Low Capital formation – Without capital industrialization is meaningless. Capital formation depends on per capita income, saving habits and expansion of the financial system. But unfortunately, the North East economy is suffering from low per capita income, low saving habits and less expansion of the financial system. Thus the capital formation process is very poor which hinders the growth of industries in this North East region.

• Lack of entrepreneurship – Proper industrial development depends on the entrepreneur abilities or entrepreneurship. North-Eastern people do not posses this ability. As a result the region is suffering from slow industrial development inspite of huge potentialities.

• Inadequate infrastructure – The basic infrastructural facilities are not sufficient in the North-East region. As for example- Communication, road ways, power supply, etc. Without a sound infrastructural base the region can not develop various industries on the basis of its resources.

• Investment risk – The entire NE region is surrounded by foreign countries. Thus there is heavy risk of investment from political points of view.

• Lack of Market – Proper market has not yet developed in the region for the marketing of products produced by the industries. There is only one market in the North East region which is called Guwahati tea auction center in Assam.

• Distributed law and other situation – Cost structure in the region is very high which reduces the profit margin. This is due to higher price level of the essential goods and services. High cost structure is another major problem of industrialization before the industrial development of the region.

• Lack of credit facilities – Credit facilities in the NE region are not easy. This is because there is no banking coverage in many parts of the region. The banks are not offering financial helps to the small and cottage industries. Thus it is another factor for the low development of industries in the region.

• Inefficient administration – Inefficient administration is another factor responsible for the poor growth of industries in the North-East region.

• Lack of Central help – The Central government did not consider the problems of the NE as serious one. The central sector did not provide any importance to the industrial development in the North-East region.

Role of industrialization in economic development

The North-Eastern region is rich in different types of natural resources. The prospect of industrial development or the role of industrial development in the North East region can be explain with the help of following points –

• Forest based industrial development – The north eastern region is rich in forest resources. Therefore, different types of forest based industries can be developed in the region. The important industries are paper, plywood, match box, aroma, etc. industries.

• Agro based industrial development – In this region 70% of the population engaged in agricultural sector. Although its agricultural sector is suffering from several drawbacks but still today it possess huge potentiality. It includes the growth of tea industry, sugar, coffee, jute industries, etc.

• Textile Industry – The north eastern people, specially the women are expert in different types of textile produce, such as eri, muga, silk, etc. Therefore, textile industry can be developed in the region with the help of local resources and local skills.

• Petrochemical industry – In the North East region Assam is very rich in petrochemicals. As a results different types of petrochemical products can be produced in this region. As for example- Plastic, polyester, etc.

• Mineral based industries – Another important sector of the North East region is the mineral based industries such as coal, lime stone, mineral water, plant, etc.

• Tourism industry – North Eastern region possesses a rich tourism potential. Despite the great tourism potential of the region the flow of incoming tourists both domestic and foreign has remain in significant. The important tourists places are Shillong, Bomdila, Guwahati, etc.


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