Address of Shri Zoramthanga, Chief Minister, Mizoram
49th N.D.C. Meeting, 1^st September 2001, Vigyan Bhavan, New Delhi.

Respected Prime Minister, Deputy Chairman, Planning Commission and my esteemed colleagues,

1. I am very happy to take part in this 49th Meeting of the National Development Council today which will consider the draft approach paper to the Tenth Five Year Plan and other important issues regarding the socio-economic development of the country. This occasion offers us an excellent opportunity to discuss the agenda placed before us. While I do not consider it necessary to offer my detailed comment on the Approach Paper which is generally in consonance with the economic reforms process being carried out in the country today, I would like to touch only on some of the important economic development issues of the whole country as they relate to Mizoram and other similar hilly States.

2. The draft Tenth Five year Plan offers us quite a challenging job particularly in view of the targetted annual GDP growth rate of 8%-This exercise not only calls for the most efficient use of the available resources but also mobilisation of additional resources. While it will be extremely necessary to gear up the existing implementing machinery it is also imperative to give utmost importance to improve the capacity of the Government and other concerned organisations implementing development schemes. Regarding this critical aspect of the forth-coming Tenth Plan I would like to mention the uphill tasks confronting Mizoram State. Mizoram State was created in 1987 as a result of Mizo Peace Accord. It is thus relatively a new State with difficult geographical with difficult geographical conditions and communication connections with other parts of the country. However, being the most peaceful State in the North East it looks forward, in this new millennium, to the prospects which the Tenth Plan will offer for the speedy socio-economic development.

3. While implementation of the objectives and strategies of the proposed Tenth Plan will improve the national economy, we should also not forget that the same can bring about inter-State inequality leading to regional imbalance thereby jeopardising existing national harmony. It is, therefore, necessary to have flexible norms and guidelines for implementation of the various Central schemes in order to cater to the peculiar requirements of the new hilly States which still require special attention. While redefining the role of the Government in the changing economic circumstances so as to give appropriate role to the private sector, special considerations and dispensation will still be required in States like Mizoram and other similar special category States because there are hardly any vibrant and efficient private sector organisations to play meaningful role within these States. The Central Government should, therefore, make all-out efforts to assist these special category States in their effort to build up the capacity of the Government machinery and local non-Government organisations.

4. The basic difficulties to be faced, m the course of implementation of the Tenth Plan, by States like Mizoram will be resources constraint. While most States in the country are facing difficult financial resource conditions the peculiar problems of hilly States like Mizoram is an extremely limited resource base with committed expenditures in the form of salaries and wages, pensions and interest payments, etc., are on the increase. Fiscal reform measures are taken in right earnest. However, as we have been emphasising from time to time that some small States in the international border areas were formed not so much with a hope to be a viable economic entity but for political and security reasons. I would, therefore, place before your consideration that these small hilly States in the international border areas should be given special considerations by the Central Government and their fiscal reforms measures should not be assessed uniformly with other more established States which have already been provided with necessary economic infrastructure and viable resource baee-. In short, for the special category State in border areas, grant of Central assistance for economic development should not be linked entirely for fiscal reforms performance.

5. The proposed adoption, in the Approach paper, of the concept of "core plant" at both Central and States and recognition of agricultural development as core element of the strategy and suitable land use to encourage for higher production are sound propositions. In this context it will be required to evolve specific strategies for productive use of hilly regions in Mizoram and other similar States for the purpose of economic plantation. In other words the uniform patterns/guidelines of the whole country should be modified to suit the peculiar needs of Mizoram and similar hilly States.

6. Mizoram has a great prospect of Agro-Forest based economy. However, due to inadequate infrastructural facilities private entrepreneurs are not attracted to the State. It is extremely essential that the big gap in infrastructural need should be narrowed down speedily. It is, therefore, necessary to increase fund allocation for the development of roads and power sector on priority basis. Sharp increase should be granted in rural connectivity fund for connecting all the villages with good roads in Mizoram. We have huge hydel power potential in the State which should be harnessed to generate relatively cheaper hydro power for meeting the requirement of the State as well as contributing the surplus power to the Power Grid for the neighbouring States. In this connection, I would like to make special mention of the Bairabi Hydro Electric Project (80 MW) which we propose to take up in the very near future. The CEA has accorded techno-economic clearance for the project. I am hopeful that all the necessary support will be forthcoming from the Central Government,

7. Mizoram State has a literacy percentage of 89.49, infant mortality rate was 19 and there were just 8 cases of maternal deaths in about 17000 of pregnancy cases during 1999. It is not only necessary to sustain these favourable education, health and other indicators but also it is our utmost endeavour to make significant improvement during the course of Tenth Plan period. This will be possible if the Central Ministries take cognisance of the peculiar needs and requirements of the hilly State of Mizoram in formulation, implementation and monitoring of relevant schemes.

8. In spite of these social favourable indicators, Mizoram State is still one of the most economically backward States of the country. We are yet to attain self sufficiency in food production. Only 17.44% of the net cultivated area is irrigated, the per capita power consumption is only 108.65 KWH, about 6% of our villages are yet to be connected by roads and the per capita annual income was only Rs. 12,817 in 1997-98. Unemployment among educated youth is on the rise. While Government alone cannot provide employment to all, it is extremely essential to create ample opportunities for the emerging educated youth for employment or self employment in private sector. This will entail the need for upgrading the technical capability of the educated youth in the field of Information Technology, economic plantation, industries, services, tourism, marketing and other relevant sectors. In this regard special attention of the Central Government Ministries is invited with a request to formulate projects to suit the peculiar needs of the State.

9. Regarding criteria for allocations of funds under major rural poverty alleviation programme, I cannot over-emphasis the need for giving special attention to hilly States with sparse population. For such hilly States, population should not be the main criteria. Lack of economic infrastructure, difficult terrain, poverty level of the people, performance of the State Government and other similar economic conditions should form the main criteria for allocation of fund. In short, funds should be allocated on the basis of need in order to reduce regional imbalance in the country.

10. Regarding food security for rural population, it may be mentioned that while food for work programme may be taken up in areas of distress and wages paid in terms of food grains at the rate of 5 kgs. per day to a worker for standard work as envisaged, the existing employment programmes are required to be continued particularly in a State like Mizoram where the scope of more employment in the Government sector is quite limited now and private sectors are not vibrant enough to create sufficient scope for employment.

11. The PMGY fund is meant to be utilised for creation of rural infrastructure. As construction of school buildings or health centres alone cannot serve full purpose unless they are manned by qualified employees to render needed services. Under these circumstances, it is suggested that a portion of the PMGY fund for health and education sectors may be allowed to be utilised for payments of wages and salaries to the Health Workers and Teachers posted in rural areas. It is becoming increasingly difficult to maintain these staff from the normal Plan fund allocation of these Departments.

12. Border Area Development Programme has appreciable impact in areas along the international border with Bangladesh and Myanmar. It is, therefore essential to continue BADP during the Tenth Plan period also with enhanced allocation of fund and improved monitoring system to ensure that the required funds are sanctioned and released in time and not at the fag end of the financial year.

13. The Centrally Sponsored Scheme being-implemented by various Departments of the State Government have been making significant contributions to the development process of the State. In this regard a mere proliferation of CSS will increase a mismatch between the intention of the Government of India and inadequate implementation capability of the State Governments. A thorough study of CSS will be required to identify some schemes which should continue and others which may be transferred to the States with fund. The schemes should be drawn to suit the needs of individual State. Stereo-type uniform scheme should be avoided. Outlays should be demand driven rather that mathematical calculations. An effective monitoring system should be evolved. Wherever State's matching shares are required, only a token share of about 10% may be demanded from special category States. The funding pattern of CSS between the Central Government and special category states may thus be 90:10. In order to avoid confusion, the pattern of State's share in CSS projects may be the same in all the projects.

14. Regarding implementation of various centrally sponsored Rural Development programmes, I am happy to mention that the Inter-Ministerial Committee constituted by -Ministry of Rural Development have been making satisfactory progress in their efforts to examine the various issues raised by the conference of the Rural Development Ministers of North Eastern States. I do hope that the recommendations of the Inter-Ministerial Committee, especially those relating to Cut-Off Line for B.P.L., Pattern of sharing of funds between the Centre and the States in the ratio of 90:10 and allocations of funds to states on the basis of 50% of population and 50% on the basis of inverse of density of population, would be accepted and implemented by the Planning Commission and the Government of India.

While appreciating the efforts so far made by the Govt. of India to solve various problems faced by the North Eastern States in the implementation of different Rural Development programmes, I would like to mention that certain demands put forward by the North Eastern States have not been considered favourably.

For instance, the demand of the North Eastern States for conversion of Employment Assurance Scheme into a "Demand Driven Scheme" has not been favoured by the Govt. of India. I would like to request the Govt. of India to consider this request favourably.

15. Regarding allocation of Annual Plan funds to the State, huge earmarking of funds for specific projects make the sectoral allocations of Plan Fund very difficult as there is very little fund for the unearmarked sector. We are already facing a very tough time in meeting the demands for the fund for the service sector Departments like Education, Health Services, etc. where the salary component of Plan is very high. Salary components of other development departments have also already increased sharply because of implementation of the Fifth Pay Commission's recommendations. It is, therefore, suggested that while the proposed expansion of project based support to the States from the normal Central assistance if implemented, adequate unearmarked fund should also be provided to the State for meeting its on-going commitments. As pointed out earlier, we are making sincere efforts for mobilising additional resources and at the same time reducing revenue expenditure.

16. We have introduced sale tax on several new items and increased tax rates of some others. We have banned creation of new posts and purchase of new vehicles. But in spite of our efforts, the fiscal reforms programme undertaken by us may appear to be of little consequence because of our narrow resource base. If sectoral assistance to us is made contingent on the success of the fiscal reforms programmes, I am afraid that the developmental process initiated in the State will come to a stand still. We, therefore, do not agree this suggestion.

17. Presently under the provisions of 275(1) of the Constitution, funds are provided to the State Government for infrastructural development in tribal areas and the fund is made to be within the over-all Central assistance being sanctioned to fund the Annual Plan of the State. In this situation the State of Mizoram is finding it difficult to implement the scheme under 275 (1) for tribal infrastructure in the State. In order to effectively implement the scheme for tribal infrastructure under 275 (1), the provision of fund should be given over and above the Central Assistance being provided for the Annual Plan of the State. In short, fund under Article 275(1) should be provided as an additionality to the normal Plan fund.

18. In view of the Plan fund constraints at the State level, assistance of World Bank has been sought by the Government of Mizoram for road construction. Generally for projects being funded by the World Bank the State's matching contributions varies between 10% to 15%. Government of Mizoram is implementing road infrastructure involving an amount of Rs. 340 crores through World Bank. The State's matching contributions under the project will be substantial. For a State like Mizoram which is facing financial constraints, matching contribution of this magnitude will be quite difficult. In view of this, Central Government may kindly agree to provide additional Central Assistance to the extent of States's matching share to the project being funded by the World Bank.

19. We extremely appreciate the Hon'ble Prime Minister's initiative for the development of the North-East. The development package evolved under Prime Minister's programmes for the North East will definitely go a long way towards economic development of the North East. I would specially say that the State of Mizoram will greatly benefit this economic package of the Prime Minister. The State of Mizoram continues to be the most peaceful State in the region and under such conditions the path of peaceful development is being followed with a firm determination to uplift the present economic condition of the people. The Central as well as the concerned State Governments may evolve a more effective monitoring system for speedier achievement of the objective of the package.

20. I also appreciate the initiative of the Central Government in earmarking 10% of the various Ministries Plan Fund for the North-East and also for creating a system on non-lapsable pool of Central resources in the Planning Commission in favour of the North East. This has already made visible impact in the North East. With continued and vigorous implementation of this laudable initiative of the Central Government, the various States of the North Eastern Region will be benefitted and it will go a long way towards reduction of regional imbalances in the country.

21. If Uttaranchal State conforms to the requisite characteristics to become a special category State, there should not be any objection in declaring it as one. But in the event of its inclusion in the list of special category State, there should be a matching increase in the percentage of Central assistance reserved for the special category States.

22. In conclusion, the most important point I would like to emphasise is the need for Regional flexibility of funding System, norms and guidelines to suit the requirement of hill areas. A vast country like India, having diverse geographical terrain and climate, from snowbound area to hot desert, from everflooded plain area to hilly mountainous region, the same developmental funding pattern and guidelines can in no way suit the different local requirements. The present system is mainly plain area oriented. As I attach a very high priority to this point I would urge the National Development Council to resolve that Regional Flexibility in Funding System, norms and guidelines be permitted to meet the local developmental requirement of the States of hill areas.

23. I sincerely hope that the National Development Council will appreciate our view points and give them due consideration.

Thank you.