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The Natural Resources,
Water, and
Environment Nexus

Report No. 36397-IN

Development and Growth in
Northeast India
The Natural Resources, Water,
and Environment Nexus

Strategy Report
June 2007

South Asia Region
Sustainable Development Department
Environment & Water Resource Management Unit

Document of the World Bank

© 2007 The International Bank for Reconstruction and Development/ The World Bank 1818 H Street, NW
Washington, DC 20433

First published, 2007

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The findings, interpretations, and conclusions expressed herein are those of the author(s) and do not necessarily reflect the views of the Executive Directors of The World Bank or the governments they represent. The report has been discussed with the Government of India, but does not necessarily bear their approval for all its contents, especially where the authors have stated their judgements/opinions/policy recommendations. This report has received funding from the UK Department for International Development, although the views expressed within do not necessarily reflect their official policy. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgement on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries.

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Development and Growth in Northeast India: The Natural Resources, Water, and Environment Nexus – STRATEGY REPORT

Acronyms and abbreviations

Clean Development Mechanism
Community Forestry Alliance for Northeast India
Community Forest Management
Global Environment Facility
International Fund for Agricultural Development
Inland Waterways Authority of India
Joint Forest Management
Ministry of Development of North Eastern Region
National Waterway 2
Net State Domestic Product

Exchange rate
US$ 1 = Indian Rs. 46.1 (8 September 2006)

Vice President
Country Director
Sector Director
Task Leader



Praful Patel
Isabel M. Guerrero
Constance Bernard
Karin Kemper

Development and Growth in Northeast India: The Natural Resources, Water, and Environment Nexus – STRATEGY REPORT


Development and Growth in Northeast India: The Natural Resources, Water, and Environment Nexus – STRATEGY REPORT

Acronyms and abbreviations




Executive summary






Objective, process, audience, and scope of the study


III. The Northeastern Region: Water and forest resources


IV. Institutional environment




Key findings of the study

VI. Challenges for the Northeastern Region


VII. Recommendations for priority activities


VIII. Conclusions


Introduction and background


The natural resources, water, and environment nexus in the Northeast






Institutions for resource development and management in the Northeast



Objectives of the study



Process, scope, and audience



Analytical framework


Development economics


Institutional economics


Water and natural resource management approaches


Path dependence in the Northeast: Why history matters


The history of the Northeastern Region: An exercise in historical accidents?


Overview of current situation


The economy of the Northeastern Region




Development and Growth in Northeast India: The Natural Resources, Water, and Environment Nexus – STRATEGY REPORT





Study findings: Water


Water resources in the Northeastern Region


Flood and erosion management




Inland water transport


Study findings: Forests


Forests and biodiversity in the Northeastern Region


Community forestry for sustainable development


Carbon finance opportunities for natural resources in Northeastern India


Towards an integrated vision of water resources and forests in the Northeastern Region


Challenges facing the Northeastern Region


Priority activities


Institutional reforms and expected outcomes




Annex 1. Background Papers for the study


Annex 2. Program for stakeholder consultations and dissemination





Development and Growth in Northeast India: The Natural Resources, Water, and Environment Nexus – STRATEGY REPORT

Table A.

Priority activities at regional and local levels in the Northeast

Table 1.

States of the Northeast: Selected population and natural resource indicators

Table 2.

Summary of water resources in the Barak and Brahmaputra basins and Northeast India


Table 3.

Flood damage in the Northeastern Region


Table 4.

Flood damage trends in the Brahmaputra valley of Assam


Table 5.

Justifiable capital expenditure for corresponding percent reduction in average annual flood damage


Table 6.

Central flood assistance sought and received and area affected


Table 7.

Northeastern Region flood management infrastructure by state


Table 8.

2001-2012 plan for electric power generation


Table 9.

Status of hydroelectric development (as on 1 July, 2005)


Table 10. Status of major hydro development in the Northeastern Region, 2005


Table 11. Status of small hydro development in the Northeastern Region (as of 1999)


Table 12. Roads in the Northeast


Table 13. Transportation potential of major waterways in the Northeast


Table 14. Major identified cargo routes on NW-2


Table 15. Existing ferry services on NW-2


Table 16. Waterways not part of NW-2 with high development potential


Table 17. Administrative classification of forest cover in Northeastern India


Table 18. Population change in the Northeastern Region


Table 19. Per capita availability of forestland


Table 20. Per capita grain production in Northeastern states, 1972 and 1991


Table 21. Forest area and shifting cultivation in the Northeastern Region


Table 22. Major forest management contexts in Northeastern India


Table 23. Comparison of community forest management and joint forest management systems in Northeast India


Table 24. Agricultural net present benefits


Table 25. Forest conversion net present value


Table 26. Priority activities at regional and local levels in the Northeast




Development and Growth in Northeast India: The Natural Resources, Water, and Environment Nexus – STRATEGY REPORT

Figure 1. Interlinkage of topics addressed in the study


Figure 2. Analytical framework and link with outputs


Figure 3. Summary of interactions defining institutional framework


Figure 4a. India: Per capita domestic product by state


Figure 4b. India: Percentage of population below poverty line by state


Figure 5. India: Mineral and forest share and per capita income by state


Figure 6. Finance Commission ranking of infrastructure


Figure 7a. Flood-affected crop area as percentage of total cropped area


Figure 7b. Flood-affected area as percentage of total area


Figure 8. Cargo transported on NW-2, 1999-2005


Figure 9. Forest cover over time, northeastern India


Figure 10. Percentage annual change in forest cover between 1987 and 2001


Figure 11. Land available for forest conversion in northeast India



Development and Growth in Northeast India: The Natural Resources, Water, and Environment Nexus – STRATEGY REPORT

Box 1.

Historical development of organizations dealing with Northeast rivers


Box 2.

Functions of various agencies under Ministry of Water Resources


Box 3.

The Brahmaputra Board


Box 4.

The Brahmaputra River


Box 5.

Land use trends in Northeast India


Box 6.

Loktak Lake catchment conservation initiative in Tokpa Kabui village


Box 7.

Moving away from jhum: Iskut growers in Sihphir village, Mizoram


Box 8.

Kyoto Protocol and greenhouse gases


Box 9.

Forest definition



Development and Growth in Northeast India: The Natural Resources, Water, and Environment Nexus – STRATEGY REPORT

This report is the product of a collaborative effort between the World Bank and several ministries and agencies of the Government of India; and the state governments of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, and Tripura under the overall leadership of the Government of India, Ministry of Development of North Eastern Region (MoDONER). Special gratitude is extended to Ms. Sushma Singh, Secretary, MoDONER; Ms. Gauri Chatterji, Secretary, Water Resources; Mr. D.S. Poonia, Joint Secretary, MoDONER; Mr. R.P. Singh, Director, Department of Economic Affairs, Ministry of Finance; and Mr. S. Mittra, Director, MoDONER, for their support and guidance throughout the study. The team would especially like to thank the eight state governments that produced reports of the stakeholder meetings held in each state as an input to the study and the Central Water Commission and Ministry of Water Resources for their detailed written comments. Contributions by numerous participants in several meetings and workshops held at various stages of the study, both in Delhi and in the Northeastern Region, are gratefully acknowledged. The World Bank team was led by Karin Kemper and included Tapas Paul, Richard Damania, Sanjay Pahuja, Siet Meijer, Sudip Mozumder, Judith Plummer, Grant Milne, Herb Wiebe, Bela Varma, Sadaf Alam, Vandana Mehra, Kiran Negi, Catherine Tovey and David Meerbach. Background Papers were produced by B.G. Verghese, Sanjoy Hazarika, Syed Naqvi, Chandan Mahanta, Dulal Goswami, Lian Chawii, V.V.R.K. Rao, Donald Blackmore, Mark Poffenberger, M.K. Sharma, Richard Damania, Siet Meijer, Sanjay Pahuja, Inland Waterways Authority of India (IWAI), and WWF-India. Thanks are due to John Dawson for his excellent editing. Peer reviewers were Guy Alaerts, Peter Jipp, Salman Zaheer, Claudia Sadoff, and Barry Trembath of the World Bank. Helpful comments and contributions were received from World Bank staff representing several sectors and regions, including Barbara Miller, Sumir Lal, George Tharakan, Neeraj Prasad, and Martien van Nieuwkoop. Special thanks are due to John Briscoe for his guidance, especially in the early stages of this activity. Jeffrey Racki, former Acting Sector Director, South Asia Environment and Social Development Unit; Michael Carter, former Country Director for India; Fayez Omar, Senior Manager, India program, and Rachid Benmessaoud, Operations Advisor, India program, guided the overall effort.

The team gratefully recognizes the collaboration of the many people who assisted in preparation of this report. The opinions presented here and any errors are the sole responsibility of the authors and should not be attributed to the individuals or institutions acknowledged above.


Executive summary

Development and Growth in Northeast India: The Natural Resources, Water, and Environment Nexus – STRATEGY REPORT


Development and Growth in Northeast India: The Natural Resources, Water, and Environment Nexus – STRATEGY REPORT

I. Introduction
India’s Northeastern Region consists of eight states –
Arunachal Pradesh, Assam, Manipur, Meghalaya,
Mizoram, Nagaland, Sikkim, and Tripura – occupying
262,179 square kilometers and with a population of
39 million (2001 census). Most accounts and
discussions about the Northeast point out its diversity
in people, plants, and animal life. The region is rich in
natural resources, especially water and forests, and
there is a feeling that it could potentially be one of the
wealthiest regions of India. However, several indicators
reveal a different picture: in spite of some progress in a
few of the northeastern states (for example, Mizoram),
overall growth rates over the past years have remained
low, poverty incidence (especially in Assam) is high,
there are still a number of areas subject to continued
violence, and there is an abundance of reports
documenting natural resource degradation, depleting
the very assets that are usually highlighted as offering
the greatest potential for growth and development in
the Northeastern Region. Thus, in recent years, the
region has missed out on the economic growth
acceleration witnessed in much of India. The region’s
agriculture sector has been declining, and
diversification into services and manufacturing has
been inadequate.
This report has come about at the request of the
Indian Government for the World Bank to focus more
of its attention on the Northeastern Region in order to
support poverty reduction and development in the
region. Accordingly, the Ministry of Development of
North Eastern Region (MoDONER) and the Bank
devised a study that would provide a broad, regionwide
view. This report synthesizes the study, which focuses
on water and forests, two key interconnected
resources of the region, and the institutional framework
that deals with their management. These resources are
abundant, renewable, and linked to significant
development and growth options.


II. Objective, process, audience,
and scope of the study
The overall objective of the study, Development and
Growth in Northeast India: The Natural Resources,
Water, and Environment Nexus, is to develop a broad
vision for water and natural resource development and
management leading to sustainable and equitable
economic development and growth in the region. It also
seeks to identify options for harmonizing interventions
that are being carried out by agencies in the area of
water and natural resource development and
management. The specific objectives are:

To identify critical institutional reforms necessary
for the more effective development and
management of the region’s water and natural

To develop an analytical framework that can help
identify and prioritize high-return investments in
physical and institutional infrastructure based on an
inclusive and participatory approach; and

To create a platform for interaction of the relevant
stakeholders, ultimately leading to desired
institutional reforms.

The process followed in developing the study was
multifaceted. It consisted of a range of stakeholder
workshops involving state and central government
officials, experts, and representatives of
nongovernmental organizations (NGOs), carried out in
2005 in both Delhi and in Guwahati. In parallel, and
based on the recommendations received during those
interactions, a total of 14 Background Papers covering
a wide range of topics related to water and natural
resources in the Northeastern Region were
commissioned (see Annex 1) from knowledgeable
experts and institutions. A first draft report was
produced based on all of the above and discussed at

Development and Growth in Northeast India: The Natural Resources, Water, and Environment Nexus – STRATEGY REPORT

state-level workshops across the region. The above
documents have also been available on MoDONER’s
website at This final document
incorporates the feedback received during the
workshop held in New Delhi in June 2006 as well as
the comments received on the final draft from
MoDONER, the Ministry of Water Resources, and from
various northeastern state governments. It specifically
highlights the need to ensure that any developmental
activities benefit local people in the Northeastern
Region, an issue that was consistently raised in all
stakeholder consultations.
The audience for this report are the central and state
government agencies concerned with the Northeastern
Region and the numerous nongovernmental
organizations, donor and financing agencies,
corporations, academics, and any other engaged
citizens of the region.
The Northeastern Region is socially, culturally, and
politically very complex and contains great
environmental and natural resource diversity.


It, therefore, needs to be pointed out that although this
study draws on all of the above sources, it is not
comprehensive, and can only make a contribution to
the ongoing development discussions in the region.
Notably, the scope of the study with its focus on water
and forests was defined based on initial discussions
with a variety of stakeholders and on the important role
that these natural resources could play in furthering
development in the Northeastern Region. The study, by
design, thus deals with the larger systemic issues and
does not deal with services (such as water supply) or
with environmental pollution issues, which are also
important but could not be addressed at this stage.
It also needs to be pointed out that the significant data
limitations, both on the water resources and the forest
and biodiversity sides, have restricted some of the
analysis. As outlined in the report, filling the knowledge
gaps and increasing public accessibility to available
knowledge and data would be an important next step
for the Northeastern Region in strengthening its basis
for inclusive and participatory approaches to regional
growth and development.

Development and Growth in Northeast India: The Natural Resources, Water, and Environment Nexus – STRATEGY REPORT

III. The Northeastern Region:
Water and forest resources
The Northeastern Region has abundant water
resources. One-third of India’s runoff flows from the
Northeast through the Brahmaputra and Barak rivers.
These rivers constitute India’s National Waterway 2
(NW-2) and their basins contain seasonally flooded
wetlands that sustain a broad range of biodiversity.
There is an estimated 60,000 megawatts of
economically viable hydropower potential, of which
only about 2004 megawatts is developed or under
construction. It is also clear that the abundant surface
water resource imposes severe distress and costs on
the region through frequent flooding and erosive
processes and that this needs to be managed to
improve economic development. The region also has a
substantial unutilized groundwater resource.
The Northeastern Region can be physiographically
divided into the eastern Himalayas, the northeastern
hills, and the Brahmaputra and Barak valley plains.
At the confluence of the Indo-Malayan and Palearctic
biogeographical realms, the region contains a profusion
of habitats characterized by diverse biota with a high
level of endemism. The region is also home to more
than 200 out of 450 of India’s tribes, the culture and
customs of which have an important role in providing
lessons for biodiversity conservation.
The immense biodiversity of the Northeastern Region
has made it a priority area for investment by the
leading conservation agencies of the world. For
example, the World Wide Fund for Nature (WWF) has
identified the entire eastern Himalaya as a priority
Global 2000 Ecoregion; and Conservation International
has subsumed its eastern Himalaya “hotspot” into a
wider Indo-Burma hotspot, which now includes all the
eight states of the Northeast. The region is one of the
endemic bird areas defined by Birdlife International,
harbors a World Conservation Union (IUCN) center of


endemism, and is an important subcenter for the origin
of cultivated crops. The region’s lowland and montane
moist to wet tropical evergreen forests are considered
to be the northernmost limit of true tropical rain forests
in the world. Northeast India probably supports the
highest bird diversity in the East, with about 836 of the
1,200 bird species known from the Indian subcontinent.
The richness of the region’s avifauna largely reflects
the diversity of habitats associated with a wide
altitudinal range. Assam hosts the entire known world
population of the pygmy hog, 75 percent of the world
population of the Indian rhinoceros and wild water
buffalo, and a sizable population of Asian elephants
and tigers.
Accordingly, the biodiversity of the Northeastern
Region is of major importance globally and of great
significance locally for citizens’ livelihoods. In much of the literature about the region, its biodiversity is
highlighted as one of its great assets and as an
underlying resource for development. Suggestions
abound with regard to improving livelihoods through
developing forest produce, cultivation and export of
exotic fruits and plants, harnessing of medicinal
plants, and so on. Yet, the review undertaken for this
study shows that there are still enormous knowledge
gaps with regard not only to the biodiversity of the
region, but also the potential sustainable uses of much
of the flora. Despite the region’s recognition as a
biodiversity hotspot, biodiversity information is
generally restricted to species inventories for specific
locations, mainly the protected areas. Important data
such as distributional patterns and population
dynamics are unavailable, except for very few species.
Documentation and systematic analysis of the region’s
biodiversity is vital to understand correlations between
richness and distributional patterns, relationships
between landscape variables and species composition,
impacts of habitat fragmentation, and the role of
biological corridors. All of these are vital for
determining management strategies for the biodiversity

Development and Growth in Northeast India: The Natural Resources, Water, and Environment Nexus – STRATEGY REPORT

resource and options on how to make use of it in a
culturally appropriate manner for the sustainable
improvement of people’s lives.
Thus, appropriate water and forest development and
management could provide benefits in the form of
hydropower, agriculture, inland water transport,
biodiversity conservation, reduced flood damage and
erosion, longer dam-reservoir life, forestry, and
ecotourism. These benefits, which would accrue at
both regional and local levels, would, in turn, directly
and indirectly increase incomes and enhance
economic growth and poverty reduction.
Such accelerated broad-based development of the
region could be achieved through a resource-led
strategy within an institutional environment that has
been appropriately reformed and strengthened.
Institutions must be able to create and manage an
environment of incentives and disincentives that
encourage initiatives consistent with sound policy
objectives, and discourage initiatives that channel
benefits to a small group while externalizing social and
environmental costs to the broader community.
Low connectivity with the rest of India is perhaps the
greatest economic impediment in the region. Road
access cannot be much improved, but improved inland
water transport would benefit some areas. Another
difficulty is the civil unrest associated with conflicts
between and within some of the region’s states.
In general, development and growth can help reduce
conflict by enlarging the economic pie, but a risk of
resource-led development is the creation of localized
assets that then become foci of intensified conflict
between potential winners and losers. This report
highlights the need to manage this risk.

IV. Institutional environment
This report outlines an analytical framework drawing on
institutional, resource, and development economics,
and on water and other natural resource management
approaches. Broadly, these imply that for a country or
region to benefit from its natural resource wealth,


certain institutional elements must be present. These
include clear institutional arrangements; participatory
decisionmaking by the different levels of stakeholders
(ranging from state governments to water users and
forest-dependent producers); clear and transparent
rules and regulations; and equitable enforcement of
those rules and regulations. In addition, an integrated
management system is required with regard to river
basins and natural resources.
Little of the above exists in the Northeast today.
Certain key themes keep emerging in all sectors,
notably (a) the central government has taken on a
large role, partially due to weak state capacity,
for instance in areas such as water resources;
(b) institutional arrangements are very complex but at
the same time incomplete; (c) the natural resource
knowledge base is incomplete and partly inaccessible;
and (d) local stakeholders question current approaches
and their benefits to local populations. The region is
plagued by large fiscal deficits and poor service
quality, including poor infrastructure provision, despite
generous transfers from the central government.
Institutions continue to overfocus on top-down
accountability. Public sector goals are defined in terms
of readily observed and assessed physical outputs
rather than in terms of desired functional outcomes:
typical criteria are embankment length constructed
rather than flood protection provided, and number of
schools built rather than education quality. But physical
outputs are meaningful only insofar as they achieve
desired functional outcomes; and frequently, outputs
and outcomes are not well correlated.
A further challenge is the need for an integrated
approach that increases cooperation at and between
regional and local levels. This involves developing a
shared vision of costs and benefits through strategic
planning and infrastructure interventions that improve
the lives and livelihoods of communities and citizens.

V. Key findings of the study
One of the key messages of the study focuses on the
major benefits that regionwide investments can

Development and Growth in Northeast India: The Natural Resources, Water, and Environment Nexus – STRATEGY REPORT

provide for the Northeast. This includes not only
investments in “hardware” (for example, construction of
infrastructure), but also regional “soft” investments,
such as coordinated research and information-sharing.
Major benefits can be derived from hydropower; inland
water transport; joint water resource management,
including flood and erosion management; biodiversity
research and cataloging; and joint creation of
ecotourism approaches and related infrastructure.
Cooperation across states can be designed to ensure
that these benefits are equitably distributed among
all stakeholders.
At the same time as these cross-regional investments
are elaborated and implemented, it is also of major
importance that benefits are created at local levels.
This type of activity would focus, for instance, on
community-based forest management, built on local
traditions; creation of access to local markets for
produce; enhancement of local inland water transport
options; watershed management and local erosion
control; local adaptation to floods; and management of
beels (seasonally flooded wetlands).
Clearly the latter group of activities, although
attractive, will not make a major dent in the region’s
development prospects if it is not augmented by the
larger investments that increase access to electricity,
reduce vulnerability caused by floods and erosion, and
improve the Northeastern Region’s connectivity by
widening the range of transport options. For these
reasons, this report strongly emphasizes that local
investments and interstate cooperation need to go
hand in hand if benefits are to be maximized.
A further crucial element related to the above is the
institutional framework and the incentives it
provides for stakeholders to act in a productive
way. Interlocutors and authors for this study have been
surprisingly eloquent in their openness about the
weaknesses in the institutional arrangements that have
governed the Northeast. The Planning Commission’s
2005 publication, Yojana, outlines in several articles


the need to reduce leakage and to increase
accountability in order to fully reap the benefits of the
large financial investments that are made annually in
the Northeast. It is thus clear that envisaged benefits
from investments may not materialize if the
institutional framework is not addressed upfront.
Each sector covered in the present study has its own
institutional framework and its own strengths and
weaknesses, and the solutions for each sector will be
different. However, there are also common themes
across the sectors, indicating the need for more
transparency and involvement of stakeholders at the
different levels; redesign of organizations (for example,
the Brahmaputra Board and the Forest Service) and
their internal incentives to provide better services;
focus on investments reaching local stakeholders (for
example, for flood warning and management systems
or for improved livelihoods from forest produce); and
changes in the way budget allocations are made.
This type of change requires a specific in-depth
analysis by sector. This study has carried out the
overall diagnostics in order to arrive at priorities.
Its multisectoral and regional scope, combined with
limited time, did not permit development of detailed
proposals for revised institutional arrangements for
each sector. However, it outlines the institutional
commonalities and challenges across sectors in the
Northeastern Region and points to concrete priority
actions to be taken forward.
In the following subsections, the study’s main findings
are presented by topic.

The case for interstate cooperation in the
Northeastern Region
There clearly is a strong case for international and
interstate cooperation. This goes primarily for the
water-related sectors, but also for forestry and
biodiversity. The huge rivers, which are the lifeblood of
the region, cut across several states. Their strategic

Development and Growth in Northeast India: The Natural Resources, Water, and Environment Nexus – STRATEGY REPORT

management and development could generate the
greatest impact at the regional level, be it through
reduced erosion (providing communities with
assurance that investments in industries and
infrastructure are sustainable); flood mitigation (saving
millions of Assamese farmers from devastating effects
on a recurring basis – and possibly even more
frequently than now, depending on future climate
change); or through hydropower generation. A vision for
the Northeast is needed, one that sees development
instead of stagnation, and focuses on the benefits that
can be derived through cooperation. For this to happen,
the northeastern states need to work together in a
cooperative framework, for instance, within river basin
organizations as active and strong stakeholders,
negotiating a long-term view of integrated regional
While the study has focused primarily on the
northeastern part of the Brahmaputra and Barak
basins, it also highlights that there would be major
benefits to be derived from international regional
cooperation between India and its upstream and
downstream neighbors. Cooperation will become all the
more necessary as climate change affects the basins’
hydrological regimes. Cooperation on information
sharing and joint management and development action
would benefit all basin countries, and notably the
Northeastern Region, by helping them to cope with
increased and possibly more erratic river flows, and to
harness the potential that these transboundary basins
provide, for example, in the area of inland water

River basin management
The experience with the current institutional
arrangements for water resource management in the
Northeastern Region has shown that without active
cooperation by all stakeholders, neither development
nor management of the northeastern rivers is likely to
occur. Modern water resource management
approaches highlight the need for decentralization of
decisionmaking “to the lowest appropriate levels.” For a number of decisions, central and state governments


should certainly be included. For many decisions,
other stakeholders, for example, communities
affected by floods or erosion on tributaries, should also
be included.
The findings of the study, therefore, strongly support
the plans outlined by India’s prime minister to develop
a new river basin management institution that would
work across the entire Northeast and to which
decisionmaking powers would be devolved, with strong
participation by the states. This increases options to
develop stronger interstate cooperation in the
Northeastern Region, and to optimize the benefits from
investments in flood and erosion management,
hydropower, and inland water transport, through a
comprehensive and integrated approach. An
appropriate research agenda could be established
within this institution supporting decentralized
investigation of groundwater resources, wetlands, and
critical watersheds.
A crucial ingredient would be a high level of
transparency and consultation with stakeholders.
This would bring more information into the system,
thereby enhancing the decisionmaking process, and
it would also support socially beneficial outcomes.
Institutional performance would be greatly improved
through increased transparency and accountability to a
wider public (for example, public access to draft plans
and data).
A distinction needs to be made between the policysetting, planning, and regulatory functions of an interstate river basin organization and the infrastructure
implementation functions of agencies in the different
water-related sectors. International experience in
past decades has shown that it is generally advisable
to separate the construction function from other
functions, since water resource organizations easily
get drawn into construction only and neglect their vital
management mandate. It is not within the scope of this
study to outline the specific sector arrangements.
The background documentation produced for this
report shows, however, that India’s power sector, for
instance, already successfully distinguishes between

Development and Growth in Northeast India: The Natural Resources, Water, and Environment Nexus – STRATEGY REPORT

regulatory and power development mandates. Similarly,
the inland water transport sector has its own
dynamics. A river basin management framework
should be appropriately crafted to tie into these sectors
to enable them to function in the Northeast, but within
an integrated perspective. The flood management
functions of existing state departments would need to
undergo a similar analysis.

Hydropower, flood and erosion management,
and inland water transport
This report shows that hydropower from the
Northeastern Region is of great importance to the
realization of India’s development potential. And given
the current socioeconomic and development status of


the Northeast, the hydropower sector also emerges as
one of the best opportunities for development in the
region, provided that the hydropower projects are
developed in a manner appropriate for the region’s
social and environmental contexts. Hydropower project
revenues could potentially double the region’s net state
domestic product (NSDP).
In addition to the direct financial benefits, other
potential benefits include reduced flood damage in
Assam if storage facilities were part of the hydropower
projects in Arunachal Pradesh, and the substantial
employment generated by the significant investment
for the priority projects, which, in turn, would have an
impact on sectors such as services, transport and
tourism. Also, transport infrastructure to remote areas,
built by the hydropower projects, would be of some
importance to the region. Finally, benefits would

Development and Growth in Northeast India: The Natural Resources, Water, and Environment Nexus – STRATEGY REPORT

include improved navigation and fisheries and
considerable augmentation of lean season flows.
An issue to be dealt with is the problem of power
transmission and cost-sharing between projects
spaced over time, given the limited right of way
available between the Northeastern and Eastern
regions. This issue is fundamental to hydropower
development in the Northeast, because without
development of a transmission corridor, the power
produced will only have the limited market of the
northeastern states. Accordingly, hydropower
development would be slower and it would also be hard
to justify the largest developments, which are often
those with the greatest potential for issues such as
flood control. Thus, the transmission corridor needs
to be built for the first project, but will not be fully
utilized until four or five such projects have been
commissioned. Since the first project cannot bear the
full cost until the others come on line, there needs to
be an agreement on how this is funded.
Thus, hydropower may be harnessed only in a few
states of the Northeast, but the potential development
impacts – depending on which path is chosen - would
build up regionwide. How much of these state-level
production and revenue receipt benefits would accrue
to the communities and citizens would depend on a
number of factors, including governance. Equitable
benefit-sharing, spending the net additional revenue on
purposeful community development works, would be a
key challenge to the northeastern states and to the
central government agencies involved.
For developing storage projects, it would be important
to adequately and concertedly address the critical
challenges of protecting the livelihoods and the cultural
and territorial identity of the tribal communities and the
environment. This would imply serious examination of
the tradeoffs of different development options from an
integrated point of view that fully takes into account
the interests of the Northeastern Region and its
There is an inherent tension in the tradeoffs between
run-of-the-river schemes (which produce electricity and


revenues, and reduce submergence area) and storage
schemes (which produce electricity, revenues, and
flood moderation and irrigation for downstream states,
but have a larger submergence area). Renewed efforts
are needed to ensure long-term interstate or
intercommunity cooperation in the interest of larger
gains based on mutually beneficial interdependencies
and tradeoffs. Agreement and consent of the states
and the communities would be likely to take time.
Therefore, it would be prudent to study the optimal
development of the potential and see if there are
low-impact projects that would allow some
development to take place while agreement is reached
on sites with larger storage potential. This could ensure
some progress while not ruling out storage sites. This
will, at least, ensure that dam sites, which would bring
major flood moderation benefits to the millions of
downstream poor, are not lost forever by being
developed with a short-term view without exploring all
possibilities of greater regional benefit.
The thrust of the development agenda needs to be
directed towards using the region’s comparative
advantage, part of which includes developing its
hydropower potential. However, to accelerate poverty
reduction and assure inclusive and sustainable growth,
attention must be paid to the distribution of losses and
gains, including those arising from different types of
hydropower infrastructure. Ultimately, people will
support development if they foresee economic benefits
and if the development path is culturally and socially
accepted. This requires establishing credible
mechanisms to deliver on policy commitments and
calls for greater inclusiveness through the sharing of
benefits. This report outlines key elements of a benefitsharing approach.

Flood and erosion management
The basin of the Brahmaputra River is among the most
flood-prone in the world, followed closely by that of the
Barak River. Floods affect an annual average of 1.25
million hectares of land, but in some years they affect
more than 3.8 million hectares of Assam’s total area of
7.58 million hectares. Such extensive floods inundate

Development and Growth in Northeast India: The Natural Resources, Water, and Environment Nexus – STRATEGY REPORT

at least 2,000 villages in addition to destroying other
Despite extensive efforts on flood control, disastrous
flooding continues to affect large segments of the
population in several states, and to discourage
investments. Embankments are only partially effective
for numerous reasons: (a) they can contain only floods
up to a certain magnitude; (b) they usually have gaps
where tributary streams enter the embanked river;
(c) they are susceptible to failure from river erosion or
geotectonic instability; (d) they are often inadequately
maintained; and (e) they may be deliberately breached
to release impounded water.
The social disruption and costs associated with
flooding have been rising, partly because of increasing
human occupation and associated economic activity,
but possibly also due to increased magnitude and
frequency of floods.
In response to flooding between fiscal years 1983 and
1987, six of the eight Northeastern states sought flood
relief from the central government amounting to
US$195.5 million and received assistance of US$36.1
million. The flood-prone area in these states was
estimated to be 3.6 million hectares. Assam, which
contained 88 percent of the flood-vulnerable area,
sought and received assistance amounting to
77 percent and 72 percent respectively of the totals.
Between 1999 and 2004, when average annual flood
damage in Assam was estimated at US$163 million,
the allocation of the Central Relief Fund averaged
US$21 million.
In addition, erosion is a major problem. It is estimated
that an area of 386,000 hectares has eroded since
1954. This, in turn, has reportedly affected more than
90,000 families and about 2,500 villages, and
translates into an average annual erosion rate of about
8,000 hectares. Erosion not only affects Assam but
also upstream Arunachal Pradesh.


The existing plans and strategies to improve water
resource management in general, and flood
management in the Assam valley in particular, reflect
the outcome of considerable and careful analysis of
available information. However, there is a need for
more consultation and transparency regarding the
Brahmaputra master plan. It would also benefit from
more consideration of policy options to promote
adaptive land use, particularly with respect to
agriculture. In practice, this would involve shifting
agriculture production systems to the rabi (boro rice)
and kharif seasons, relying heavily on extraction of
groundwater and, thereby, reducing reliance on the
kharif II season, when crops are most susceptible to
flooding. Since floods would not be eliminated, and as
populations in the Northeast will continue to expand,
additional measures would be needed to ensure stable
incomes and food production.
Fish are an important source of protein in the diet of
the people of the Northeastern Region. The annual
production of fish is reportedly about 170,000 metric
tons, compared to the estimated requirement of about
280,000 metric tons. From the perspective of their
contribution to groundwater recharge, their potential to
moderate smaller floods, and their role in providing fish
habitat, the lack of attention to the wetlands and beels
should be of some concern.
It is not clear to what extent climate change has been
incorporated into the existing Brahmaputra master
plan. An assessment of the implications of climate
change for hydrological regimes and water resources in
the Brahmaputra basin, using model simulations
developed by the Hadley Center, indicates that, after
an initial increase of flooding in the coming decades
due to snowmelt, by the year 2050 the average annual
runoff in the Brahmaputra River will decline by
14 percent. In another model, according to information
from the Ministry of Water Resources, studies carried
out by the Geological Survey of India (GSI) indicate
that glaciers may recede due to subnormal snowfall,
higher temperatures during summer, less severe

Development and Growth in Northeast India: The Natural Resources, Water, and Environment Nexus – STRATEGY REPORT

winters, or a combination of all of these factors. Under
this scenario, there would be less increase in flooding
than predicted by other models.
Thus, the exact impacts of climate change are still
under investigation. It is clear though that climate
change is likely to have extensive impacts on the
land-water system. Further research is needed, as well
as the development of adaptation measures that
incorporate climate change responses into long-term
planning. Dealing with existing climate variations
through good construction quality and strengthened
operation and maintenance, is also good preparation
for dealing with climate change, since infrastructure
will need to respond to conditions that approach the
limits of their design.
The erosive potential of the Brahmaputra River is
extremely high and has led to frequent pulling back or
“retiring” of flood control embankments, with adverse
social consequences. Assam has made limited efforts
to avoid loss of embankments by constructing spurs at
right angles to the embankments in some vulnerable
locations. Discussions in Assam indicate that the
methods used have been fairly successful and that
considerable benefits would accrue from substantial
expansion and acceleration of spur construction where
embankments are under immediate or near-future
In summary, improvements in systemwide flood and
erosion management in various states, including
Assam and Arunachal Pradesh, could be achieved
with strategic investments at high-value priority points.
Incentive structures at national and state levels,
including budget allocations, need to be changed to
ensure appropriate operation and maintenance of
existing infrastructure. There is also a need to
strengthen communities’ ability to cope with floods that
occur despite investments in erosion and flood
management. The linkage to overall water resource
management in the region is clear, since state-level
activities would need to tie into a regional strategic


Inland water transport
One of the key development constraints for the
Northeast over the past decades has been its
geographical isolation. Certainly the advances in air
flight have brought markets closer to the Northeast,
but the relatively high proportion of bulky goods in the
region’s economy requires the further development of a
means of transport suited to the movement of such
goods to other regional markets – inland waterways.
Besides their relative cheapness for bulk transport,
inland waterways follow shorter routes to the Northeast
than those taken by road or rail, and are also still
available during monsoon or flood seasons.
With the renewed focus of the Government of India on
the development of inland water transport and the
implementation of ongoing improvement projects, it is
expected that NW-2 can develop into an efficiently
functioning waterway with adequate infrastructure. The
development of NW-2 and of waterways in the tributary
rivers would increase the opportunities for economic
growth and employment, and would accelerate the
development of the hinterland. Cargo movements of
agricultural produce, basic commodities, coal,
limestone, petroleum, and bitumen offer considerable
growth potential.
With further development of NW-2, 6 million metric
tons are projected to be transported by 2020, a
sevenfold increase compared to 2004, and the
projected increase in economic activity as a result of
the development of inland water transport would create
an additional 27,000 jobs. Related development and
multiplier effects in the hinterlands, as a result of this
increased activity, have not been projected, but are
estimated to be significant.
Institutional challenges include integration of inland
water considerations into an overall regional water
resource and development framework and provision of
incentives for private sector investments. This
structure would need to address the policy,
institutional, and regulatory issues to be tackled within

Development and Growth in Northeast India: The Natural Resources, Water, and Environment Nexus – STRATEGY REPORT

the framework of overall development of the
waterways. It would also require an analysis of how to
effectively stimulate investments in ships, ferry
services, and transportation enterprises in order to
encourage private enterprise to make optimal use of
the upgraded waterways.
Trade and commerce between India and its neighboring
countries would be accelerated by the development of
waterways between Nagaland and Myanmar, between
Mizoram and Myanmar, and between Tripura and
Bangladesh. A key issue in making inland water
transport viable for Northeast India is increased
cooperation with Bangladesh. Such cooperation has
brought considerable benefits in the past five years,
and there is scope for further analysis of mutually
advantageous options for intercountry waterway
linkages, with the ultimate goal of formalizing
agreements as part of a stable trading environment in
the region.
Inland water transport needs to be integrated with other
modes of transport. Accordingly, institutions need to
be set up in a way that optimizes multimodal
approaches to enhancing the Northeast’s transport
Passengers and cargo are moved via inland water
transport in both the larger-scale organized sector and
the smaller-scale less organized sector. At present,
there are no data regarding the transport volumes
within the small-scale sector. However, this mode of
transport is essential to small or remote communities
for the transport of agricultural and commercial
products to and from regional markets and growth
centers, especially during the monsoon and flooding
season. A case study on passenger transport in and
around Neamatighat showed that privately operated
small-scale ferry services operated faster and more
regularly than the government-operated ferry.


Therefore, relatively small investments in transport
facilities for private or small-scale transport services
would increase the strategic connectivity of rural
communities through ferry services and small goods
transport. An analysis should be undertaken to identify
strategic nodal points through which increased access
to markets, education, or health services might bring
benefits to the region.

Forest management
The Northeastern Region boasts a vibrant tradition of
community-based forest management. Current
incentives seem to work against rather than for
supporting this tradition. There is a need to strengthen
incentives for communities to develop or redevelop
their forest management skills, while adapting them to
changing demographic, social, and economic
pressures. There is also a need to change incentives
so that forest departments favor community-oriented
rather than centralized approaches. Such a realignment
could involve, for example, changing the relevant
forest classifications or adapting forest department
budget allocation procedures.
The importance of community involvement in forest
management has gained widespread acceptance in the
forest sector globally, and is critically important in the
Northeastern Region, where the vast majority of upland
forests are legally owned by rural villages. There are
attractive opportunities in Northeast India to create
management partnerships that respect the legal
authority of communities and work through indigenous
institutions drawing on centrally funded schemes as
well as international conservation programs. By
empowering and enabling traditional institutions and
building modern management capacities within them,
the forest departments will have viable partners to
craft new landscape management systems that rely on
networks of villages. In return, communities will be

Development and Growth in Northeast India: The Natural Resources, Water, and Environment Nexus – STRATEGY REPORT

able to develop new resource management plans that
address forest conservation and livelihood issues, and
gain formal tenure security for their ancestral domains.
Retaining ancestral domains under communal tenure
may be one of the most effective strategies for
maintaining forest cover and protecting biodiversity in
a manner that respects indigenous rights to natural
resources and livelihood needs. Given the population
increase in the Northeastern Region, it will be
important to support community efforts to intensify
land productivity, especially on sites where terracing
and irrigation are possible. Agroforestry systems with a
mix of commercial products, including timber, fiber,
spice, and medicinals, would also help to generate
income, taking pressure off steeper slopes and
allowing for longer fallow periods in areas of jhum
(shifting cultivation). Extension of family planning and
health services is also a priority in the hills, where
fertility and growth rates are often high, placing
continued pressure on the resource base.


Biodiversity and carbon trading
This report highlights the region’s wealth of biodiversity. It also reveals significant gaps in existing knowledge.
Both flora and fauna in the Northeastern Region are
under threat due to deforestation, mining and quarrying,
jhumming, charcoal-making, construction of reservoirs
and dams, overharvesting of medicinal plants, drying up
of wetlands, and overfishing and pollution of water
bodies. In addition, conflicts between development and
conservation, coupled with general political conflict in
the region, are likely to have negative impacts on
biodiversity conservation.
The dream of the Northeast to use its biodiversity
wealth sustainably and beneficially can only be
realized if mobilization takes place at both regional
and local levels, for example by fully involving local
communities in regionwide efforts to catalog and
document existing plants and their potential uses.

Development and Growth in Northeast India: The Natural Resources, Water, and Environment Nexus – STRATEGY REPORT

Only if knowledge and awareness come together can
potential benefits be harnessed, be it through
medicinal plants or ecotourism. Favorable institutional
development would be stimulated by the emergence of
a leader or champion, perhaps an agency or a research
consortium consisting of the region’s universities,
to integrate biodiversity-related work.

is a participant in this mechanism, it will have to
analyze its effectiveness in harnessing benefits for the
country’s various regions, including northeast India.

If the biodiversity wealth is to be maintained and
developed to the benefit of the region’s citizens, a
number of activities in the region could be further
explored (some are ongoing, but not as yet in a
comprehensive and strategic manner). This includes
assessment of capacity-building needs in the forest
departments, and a focus on protected area
management plans. Many protected areas do not have
management plans, or their effectiveness is very
limited. Besides strengthening these systems, other
potentially advantageous activities include cataloging
of flora and fauna and making the information widely
available, research in the use of plants, working with
communities to improve their livelihoods through
increases in local productivity, and collaboration
between the different stakeholders.

The analytical framework developed for this study
outlines which different elements of an institutional
framework influence stakeholders’ decisionmaking.
They can be defined as (a) formal, informal, and
indirect institutional arrangements; (b) instruments
for natural resource management (such as forest
and water use rights, monitoring systems); and
(c) the institutional management form (for example,
government agencies at different levels, communitybased groups).

With regard to carbon trading, the current official forest
classification system could be reexamined to more
accurately assess the eligibility of the region’s forests
for carbon credits under the Clean Development
Mechanism (CDM) of the Kyoto Protocol. Again,
interstate cooperation to bring about change would be
highly beneficial, since a starting point would be to
agree on a forest classification. An outcome of the
analysis is a recommendation that the focus should
not be specifically on stand-alone projects, but rather
on activities that complement projects dealing, for
example, with land degradation, watershed issues, and
species and biodiversity, to create greater benefit and
opportunity. In this way, carbon funding could generate
benefits for local land users and owners as well as for
the local and global environment. The global carbon
finance mechanism itself is still in its infancy. As India


VI. Challenges for the
Northeastern Region

Based on the findings of this study, what can be said
about the way in which these elements influence water
and natural resource management and use in the
Northeastern Region, and what are the implications
for the selection of particular options for development
and growth?
Although this report cuts across many diverse sectors
and generalizations are difficult, certain key themes
emerge with regard to all sectors, notably the large role
of the central government in decisionmaking and very
complex, but at the same time, incomplete institutional
arrangements. The following subsections outline these
issues with reference to the water-related and forest
sectors and consider the needs and possible options
for institutional change.

Water-related sectors
In the water-related sectors, the formal institutional
arrangements (the constitution, the River Boards Act)
give central government the option to create interstate
river basin organizations. The Brahmaputra Board was

Development and Growth in Northeast India: The Natural Resources, Water, and Environment Nexus – STRATEGY REPORT

created under the separate Brahmaputra Board Act.
The states have been playing a limited role in these
regional endeavors. The consequences seem to have
been counterproductive. On the one hand, a central
agency can play an important role in addressing
interstate tradeoffs and guiding the overall strategic
objectives of water policy and development. But, for
this, it needs strong stakeholders. It also needs a
strong mandate and mission, financing, and
transparency in decisionmaking. Otherwise, there is a
risk of creating an overdependence on the Centre and
eroding accountability to stakeholders.
At times, structures meant to deliver direct benefits
(such as embankments) have been unpopular with
those they are designed to protect. There is a need for
the state-level agencies to consult local communities
and stakeholders.
The states have focused on what is of most
importance to them, for example, flooding and erosion
in Assam, irrigation in Mizoram, and, lately, some
hydropower development in Arunachal Pradesh.
However, the relevant state departments are heavily
dependent on central government for financing,
especially in the case of recurring natural disasters,
but also for financing of infrastructure, such as
hydropower facilities or embankments, and for their
maintenance. Their capacity constraints may also
hamper their full participation in the Brahmaputra
In the inland water sector, some progress has been
made by improving the transit protocol with
Bangladesh, thus increasing trade options, but border
transit regulations are still hampering this means of
improving the interconnectivity of the Northeast and
its surroundings.
Overall, in the water-related sectors, it seems that
links into community-based institutional arrangements
are limited or do not exist, be it for watershed
management, early warning systems, or adaptation to
the recurrent floods. This goes for both state and
central government initiatives.


These institutional arrangements also influence the
management instruments that have been chosen and
the way they are being implemented. There is
significant knowledge about water resources in the
region, but the knowledge is still incomplete, and it is
partially inaccessible. Management instruments for
water resources include such diverse measures as
functioning river erosion monitoring systems and water
allocation systems through concessions (for example,
hydropower or irrigation uses). Such instruments are
concentrated in central government agencies and the
data are not available to other stakeholders in general.
In addition, the systems seem to be outdated.
The organizational structures for water have then,
logically, also become very center-focused, with, for
example, the Brahmaputra Board and the Central Water
Commission playing the driving roles with regard to
planning and knowledge creation, archiving, and use.
There have been contradictory indications in the
course of this study as to the extent to which the
states, which have representatives on the
Brahmaputra Board, could play a bridging role between
this regional organization and the local stakeholders.
It was suggested by many during the course of this
study that local stakeholders should be active
participants in the organizational structures to ensure
that benefits flow from these initiatives to local
It is not surprising, then, that there is a lack of
alignment between the articulated aim of the region’s
development, namely prosperity for the Northeastern
Region as a whole, and the actual implementation of it.
With a lack of access to data and information by the
wider public, decisionmaking takes place within
agencies, but without much outreach, and accordingly
accountability to the public is very limited. Global
experience has shown that such a situation leads to
low performance and to little consideration of impacts
on the ground, as indicated by the degree to which
investments effectively reach beneficiaries.
Stakeholders (water users, marooned flood victims,
citizens without access to basic electricity in rural

Development and Growth in Northeast India: The Natural Resources, Water, and Environment Nexus – STRATEGY REPORT

areas, young people without jobs) then feel abandoned
and look for other sources of livelihood, for example,
by leaving the region or even by participating in

potentially lengthy negotiations with the Government of
Bangladesh to establish the protocol provisions for
transboundary water transport routes.

Forest sector
The challenge, then, is to reverse this trend and
instead build a more accountable institutional
framework. This implies strong political will to
counteract the tendency of a society to follow the path
it has already taken due to the political or financial
cost of changing it (“path dependence”). A case in
point is the Brahmaputra Board: there seems to be
widespread consensus that the board needs to perform
better, but with its current setup it is not able to deliver on its regional mandate. There is, therefore, need for
an updated mandate and, perhaps, a more broadbased organization to address the intraregional concerns.
Similarly, improvements in inland water transport,
so important for the Northeast, are dependent on


In the forest sector, there is a strong tendency toward
Centre-led activities through the Forest Act, while more
informal community customs and traditions are slowly
(or rapidly?) dying out, thus diminishing options for
enhancing livelihoods in the Northeast in a strategic
and sustainable manner.
The institutional arrangements, as expressed for
instance in the constitution and in the Forest Act, take
a primarily national view, with little consideration for the special multiethnic mosaic in the Northeastern Region.
As amply analyzed in the report, the Joint Forest
Management mechanisms are functioning in peninsular
India where tribal people, who have long been
marginalized, are now afforded access to land and

Development and Growth in Northeast India: The Natural Resources, Water, and Environment Nexus – STRATEGY REPORT

forests. In the Northeast, the situation is different
because much of the land is owned by tribal
communities. Accordingly, the formal institutions need
to be adapted to the realities of the Northeastern
Region and linked into informal institutional
arrangements by incorporating tribal customs and
traditions in order to provide incentives for rural
communities to more sustainably manage their forests.
This would, then, also provide a better platform for
developing sustainable ways to use the biodiversity in
the Northeast for the benefit of local people and of
regional development.
Also, with regard to forests, the resource management
instruments, including monitoring devices, cataloging
(for example of biodiversity), and definition of forest
use rights, are strongly conditioned by the centralized
approach defined by existing formal laws and
regulations. Plans do exist, but incentives (for both
government agencies and stakeholders) to apply them
seem to be lacking, as very few are being
implemented. The organizational management form for
forest management requires review in order to create
functioning structures to enable forest agencies, at
different levels, to work jointly with communities to find
ways of building sustainable livelihoods.
Given the current institutional setup and the ensuing
incentives for stakeholders, the challenge for the
Northeastern Region is to move from a Centre-focused
approach to one that gives more say to the states and
to the communities within the states. The creation of
structures that permit a regionwide development
vision, and, at the same time, a vision that enables a
development process at the local level, is complex.
It also implies that states have to take on more
responsibility for their own development.
Such an approach would aim to enhance cooperation
across the region in order to help establish a solid
basis – in terms of physical and institutional
infrastructure – for joint regional action, growth, and
poverty reduction. As the study findings have shown,
there are significant benefits to be derived from joint


action built on a benefit-sharing vision. Action steps to
implement such a vision would include strategic
planning and infrastructure interventions at the macro
or regional level, while simultaneously improving the
lives and livelihoods of communities and citizens at
the local level.

VII. Recommendations for
priority activities
This section considers priority actions that would help
reshape the institutional framework to enable a more
effective regional development path.
Table A shows, in a simplified manner, the priority
activities that might address the challenges implied by
the integrated approach described in the preceding
sections. The left-hand column designates the sector,
while acknowledging that in practice there are some
overlaps among sectors. The middle column shows
regional-level action steps that would be considered
high priority in order to create a regional enabling
institutional and physical framework to enhance
development activities. The third column identifies
activities that can be undertaken in parallel to
stimulate local development, based on the different
states’ needs and priorities.
From the sector-based analyses in this report, the
conclusion can be drawn that regional-level activities
are a prerequisite for local-level activities if longlasting results are to be achieved. For instance, improved
forest productivity is unlikely to contribute significantly
to local development without parallel improvements in
market access, through upgraded road or waterway
networks, at regional level. Local community
adaptation to floods will only be helpful if large-scale
flood and erosion management investments are
undertaken. This is also the reason why institutional
change needs to be brought about at the higher levels
of natural resource management and why it is a
necessity if benefits from physical investments are to
be reaped. Changes at local levels alone will not

Development and Growth in Northeast India: The Natural Resources, Water, and Environment Nexus – STRATEGY REPORT

suffice to make an impact on the huge development
agenda in the region.

VIII. Conclusions
This report shows the significant potential that exists in
the Northeastern Region for its renewable natural
resources to generate benefits at the regional and local
levels. It has also been shown that these resources
alone, without enabling institutional frameworks and an
integrated vision, have not brought and will not bring
development to the Northeast. The report makes an
initial effort to develop such an integrated view and to
show how the different sectors are linked to each other,
and also how the macro and micro levels are connected.


With a targeted thrust that comprises central
government and state stakeholders and, importantly,
local communities and stakeholders, the natural
resource curse – the tendency for resource-dependent
economies to perform poorly – does not need to
become a reality in the Northeast.
The natural wealth of the Northeastern Region is
well acknowledged. However, in the available
documentation and literature, there are few
suggestions on what to do in order to develop them
to the benefit of the region’s citizens. This report
highlights that for all of the topics covered in the study,
institutional change is the necessary first step.
Incentives need to be changed at central levels as well
as at state and local levels in order to direct work

Development and Growth in Northeast India: The Natural Resources, Water, and Environment Nexus – STRATEGY REPORT

Table A. Priority activities at regional and local levels in the Northeast Sector

Regional-level activities

Local-level activities

Water resources

– Create an appropriate institutional
framework for river basin management,
including an interstate river basin
organization with a clear mission and
– Undertake comprehensive strategic
participatory river basin management and
planning covering several states
(Brahmaputra and Barak basins) including
tradeoff analysis of different development
and management options (for example,
floods, hydro, wetlands, environmental
– Implement and maintain effective water
monitoring systems
– Develop and support regionwide and
basin-level research on water resources
– Create new or align existing state agencies
for water resource management that can
effectively interact with the interstate river
basin organization

– Develop groundwater resources
– Manage wetlands, restore and
preserve beels
– Manage watersheds

Flood and erosion

– Develop and implement an operational
plan to enable strategic investments in
annual maintenance of flood
management structures
– Carry out structural interventions to
enhance erosion management
– Develop an appropriate flood and erosion
monitoring system with information
available to all stakeholders
– Develop a functional flood warning and
community alert system
– Develop a functional plan to start
addressing drainage issues
– Review and adjust existing agencies’
internal incentive structures (including
budget allocations and accountability
structures) to enhance delivery of services

– Enhance communities’ capacities
to “live intelligently with floods”
through strengthening coping
mechanisms, supporting and
learning from innovations,
improving basic health services
– Develop local capacity to link
into and respond to a broader
flood warning system
– Analyze local needs for
watershed management to
control local erosion and
landslides in tributaries –
“landscape management” –
and work with communities
to develop local watershed
management actions


– Assess potential benefits and tradeoffs
between hydropower and flood
management benefits/costs and continue
dialog on different options

– Develop small/mini/micro/pico
hydel projects in a more
targeted manner
– Ensure benefits (for example,


Development and Growth in Northeast India: The Natural Resources, Water, and Environment Nexus – STRATEGY REPORT


Regional-level activities

Local-level activities

– Develop scenarios to harness hydropower
at the basin level (sequencing, integration
with, for example, considerations for flood
management benefits, inclusion of
local stakeholders)

electrification of villages, job
creation) and minimize costs
(for example, displacement,
erosion of cultural values) at
local level from large hydel by
developing and implementing
functioning benefit-sharing
mechanisms to improve
people’s livelihoods

Inland water transport

– Analyze and develop opportunities for
linkages between India and its neighbors
in order to break Northeastern Region
isolation and enhance options for trade
– Invest in multimodal transport
infrastructure strategically, reinforcing the
existing NW-2 to support regional
connectivity with neighbors and
peninsular India

– Develop local-level infrastructure
for community water transport
on secondary rivers, improving
access to markets and to
social infrastructure (for
example, health, education)

Forest and

– Build up a regional systematic knowledge
base on biodiversity and forest resources
– Develop institutional arrangements that
take into account the specific social and
cultural background of the Northeastern
– Assess options for regional ecotourism
and create an enabling institutional
– Carbon trading: Reclassify northeastern
forests to enable carbon trading

– Support communities in
recovering and building on their
traditional structures for forest
– Develop appropriate knowledgesharing and extension service mechanisms for rural
communities to develop
sustainable economic activities
(for example, diversified
agriculture, ecotourism)
– Work with local communities to
find out their interest in
preserving forests through
carbon finance


Development and Growth in Northeast India: The Natural Resources, Water, and Environment Nexus – STRATEGY REPORT

toward the region’s developmental goals. Key among
these changes are:

Provision of incentives to encourage interstate
cooperation across the Northeastern Region

Devolution of decisionmaking power to appropriate
lower levels by moving to a participatory approach
where the various stakeholders participate more
actively in the development process

Transparency in decisionmaking in order to increase
the accountability of the different actors.

It is always easier said than done to change
institutions; such change requires the introduction of


incentives, including economic incentives, supported
by political will. With India moving into a new era of
economic liberation encouraging free enterprise, the
Northeast should not be left out. Thousands of young
Northeasterners are waiting for a chance to
productively contribute to their home region. Thus, with
some of the changes advocated here taking place, a
process would be set in motion that could support
them in this endeavor. It is vital that this process
includes mechanisms for equitably sharing the benefits
to be derived from development and focuses not only
on the big-ticket items that support broad-based, longterm growth, but also on those complementary activities that have immediate impact on poverty
reduction at the community level.

I. Introduction and

Development and Growth in Northeast India: The Natural Resources, Water, and Environment Nexus – STRATEGY REPORT


Development and Growth in Northeast India: The Natural Resources, Water, and Environment Nexus – STRATEGY REPORT

India’s Northeast is rich in natural resources. While in
terms of development – contrary to its true potential –
the region lags behind the rest of the country, much
has been changing in the Northeastern Region.
Over the past decades, economic development,
population growth, growing educational opportunities,
commercialization of livelihoods, and increasing
interactions between the northeastern people,
peninsular India, and the southeastern neighbors have
started to change the region’s social and economic
fabric and the outlook on development challenges.
This report examines ways in which the region can
strategically harness its natural resources to unleash
its development and growth potential in ways that are
inclusive and environmentally sustainable.
The report synthesizes the results of the study
Development and Growth in Northeast India: The
Natural Resources, Water, and Environment Nexus,
initiated in 2004 and carried out jointly by the Ministry
of Development of North Eastern Region (MoDONER)
and the World Bank.
The study was triggered at the request of the
Government of India that the World Bank focus more
attention on supporting development efforts in the
Northeastern Region, potentially one of the richest
regions of India, but, in fact, one of the poorest.
Before embarking on any further engagement by the
Bank, which hitherto had focused on Assam, it was
essential to gain knowledge and understanding of the
underlying opportunities, constraints, and priorities
for development in the Northeast. Therefore,
MoDONER and the Bank devised the study with the
focus outlined below.

The natural resources, water, and
environment nexus in the
India’s Northeastern Region consists of eight states,
namely Arunachal Pradesh, Assam, Manipur,
Meghalaya, Mizoram, Nagaland, Sikkim, and Tripura.
With a total population of 39 million (2001 census) and
covering an area of 262,179 square kilometers, the
Northeast is relatively sparsely populated compared to
much of India. As shown in Table 1, however,
population density in the northeastern states varies
widely. Assam and Tripura are the most densely
populated (with over 300 people per square kilometer,
around the Indian average) while Arunachal Pradesh is
the least densely populated (13 people per square
The Northeastern Region is characterized by the great
diversity of its people. There are more than 200...

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stretch strident strife strike strip strong stronger struck structur struggl student studi sub sub-region subansiri subbasin subcent subcontin subject submerg subnorm subregion subsect subsequ subsidi subsidiari subsist substanti subsum subtransmiss succeed success sudden sudip suffer suffic suffici suggest suit suitabl sumatra sumir summar summari summer sundarban sunder supplement supplementari suppli supplier support suppos suprem surfac surg surinam surplus surpris surround survey surviv suscept sushma sustain swath swidden swidden/jhum sy symposium syndrom synergi synthes system systemat systemwid tabl tackl take taken talent tamil tangibl tank tap tapa target target-bas target-driven tariff task tata tax taxpay tea team tech technic techniqu technolog tecton teesta tel tell temperatur tempor temporari temporarili tempt ten tend tendenc tenfold tension tenth tenur term termin terrac territori testimoni tezpur tezpur-kolkata thailand thank tharakan theme theori therebi therefor 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want war warn warrant wash washington wast wasteland water water-rel waterlog watersh waterway wave way way.27 wcd weak weaken wealth wealthiest web websit website/other wed wedg weed weight well well-b well-defin well-found well-funct well-preserv went west western wet wetland wherea wherebi wherev whether whitmor whoever whole whose wide widen wider widespread width wieb wif wild wildlif win win-win wind wind-induc windfal winner winter wire wit withdraw within without withstand women wooden work worker workshop world worldwid worst worth would write written wrong wwf wwf-india x xi xii xiii xiv xix xv xvi xvii xviii xx xxi xxii xxiii xxiv xxix xxv xxvi xxvii xxviii xxx xxxi xxxii year year-old yet yield yojana york young yung zaheer zeliangrong zero zirania ziro zone