Meghalaya, one of India’s northeastern states known for its lush green landscapes and rich cultural heritage, faces a persistent economic challenge: its per capita income remains one of the lowest not just in the region but across the entire country. This issue has been highlighted by a recent report from the Economic Advisory Council to the Prime Minister (EAC-PM). The report paints a stark picture of Meghalaya’s economic standing, revealing its struggles to keep pace with national growth trends over the decades. Despite showing some initial promise in the 1980s and 1990s, the state’s relative per capita income has been in a state of decline, now standing at just 74.3% of the national average in 2023-24.
Historical Overview of Meghalaya’s Per Capita Income
The report titled “Relative Economic Performance of Indian States: 1960-61 to 2023-24”, authored by EAC-PM Member Sanjeev Sanyal and Joint Director Aakanksha Arora, examines the economic performance of Indian states over several decades. According to the data, Meghalaya’s relative per capita income was 74.4% of the national average in 1980-81. By 2000-01, it had risen to 88.4%, showing moderate growth. However, in the years following, it began to slide. In 2010-11, the state’s per capita income had fallen to 81%, and by 2020-21, it dropped further to 71.3%. This downward trend shows no signs of reversal, as the state continues to struggle with economic growth and development challenges.
Comparisons with Other Northeastern States
When we compare Meghalaya with other northeastern states, the contrast is stark. Sikkim, for example, has seen a phenomenal surge in its per capita income. According to the same report, Sikkim’s per capita income surged from around 100% of the national average in 2000-01 to an impressive 319% in 2023-24. Mizoram has also experienced rapid growth, with its relative per capita income jumping from 70.4% in 1980-81 to 126.9% in 2023-24. Even states like Arunachal Pradesh and Nagaland, which started off at similar levels, have outpaced Meghalaya. Arunachal Pradesh’s per capita income has grown to 118%, while Nagaland’s has risen to 85.9% during the same period.
These trends suggest that while neighboring states have made significant strides in improving their economies, Meghalaya has lagged behind. Assam, another state in the region, has also seen fluctuations in its per capita income. Once slightly above the national average in the 1960s, Assam’s per capita income has declined to 73.7% in 2023-24, still faring better than Meghalaya(Highland Post)(The Shillong Times).
Factors Contributing to Meghalaya’s Economic Struggles
Several factors contribute to Meghalaya’s poor per capita income performance. One of the primary issues is the state’s reliance on traditional sectors such as agriculture, where productivity remains low due to outdated practices and lack of infrastructure. The state’s economy also suffers from limited industrialization and inadequate investment in manufacturing, which are key drivers of economic growth in more prosperous states.
Another issue is the high unemployment rate, particularly among the youth. According to the Centre for Monitoring Indian Economy (CMIE), Meghalaya has one of the highest unemployment rates in the Northeast, further hampering its economic development. In a state where nearly 80% of the population lives in rural areas, job opportunities outside of agriculture are scarce, pushing many to migrate to other states in search of work.
The state’s geographical isolation is another significant hurdle. Despite being endowed with natural beauty and resources, Meghalaya remains disconnected from major trade routes, making it difficult to attract investment and stimulate economic growth. This geographic remoteness, coupled with inadequate infrastructure such as roads, transportation, and power, restricts the state’s economic potential.
Government Initiatives and Policy Failures
The government has undertaken several initiatives to boost Meghalaya’s economy, particularly in the tourism and education sectors. The state has great potential to develop as an eco-tourism hub, and efforts have been made to promote sustainable tourism, leveraging its natural beauty. However, these efforts have been hampered by poor infrastructure and limited connectivity to major cities.
Agricultural reforms have also been attempted, with initiatives aimed at promoting organic farming and horticulture. However, these initiatives have not been implemented at a large enough scale to make a significant impact on the state’s overall economic performance.
Additionally, the state has seen investments in education, with several higher education institutions being established in recent years. However, the gap between educational qualifications and job opportunities remains wide, leading to a “brain drain” as young professionals leave the state for better opportunities elsewhere.
National and Global Comparisons
Meghalaya’s economic challenges become even more evident when we compare its performance with India’s overall economic growth. India’s per capita income in 2023-24 is projected to be $2,303, a significant increase from previous decades. This national growth has been driven by rapid industrialization, technological advancement, and policy reforms that have spurred economic development in states like Gujarat, Maharashtra, and Karnataka.
Globally, Meghalaya’s performance is comparable to some of the world’s poorest regions. The per capita income of Meghalaya, adjusted for purchasing power parity (PPP), is significantly lower than the global average. While countries like Vietnam and Bangladesh, which were once behind India in terms of economic growth, have surged ahead due to focused economic policies, Meghalaya remains mired in poverty and underdevelopment(Highland Post).
The Way Forward
For Meghalaya to improve its economic standing, a multifaceted approach is needed. First, there must be a significant investment in infrastructure, particularly in transportation, communication, and energy. Improving connectivity with the rest of the country would make the state more accessible for both businesses and tourists, unlocking its potential as a tourist destination.
Second, the government should focus on creating job opportunities in sectors like information technology, manufacturing, and services. Developing skills training programs tailored to the state’s youth would help reduce unemployment and stem the tide of migration out of the state.
Third, agricultural reforms need to be deepened and expanded. Meghalaya has the potential to become a leader in organic farming and horticulture, but this will require investment in technology, infrastructure, and market access.
Lastly, the state needs better governance and policy implementation. Many of the government’s initiatives have failed due to bureaucratic delays, corruption, and inefficiencies. Streamlining these processes and ensuring transparency will be crucial to attracting investment and fostering economic growth.
Conclusion
Meghalaya’s economic journey over the past few decades reveals a state struggling to keep pace with national and regional growth. While its neighbors have surged ahead, Meghalaya remains stuck with one of the lowest per capita incomes in the country. Addressing these issues will require a concerted effort from both the state and central governments, as well as the active involvement of the private sector. If the state can overcome its challenges and capitalize on its strengths, it has the potential to significantly improve its economic standing in the coming years.