World
India
Upon landing at the Sardar Vallabhbhai Patel International Airport, visitors are greeted with advertisement posters from major trading firms, such as Motilal Oswal and other brokerage firms, a clear indication of Gujarat’s vibrant investment culture.
The state has become a beacon for active stock market participants, with individuals investing both as traders and through Systematic Investment Plans (SIPs). Contrast this with the situation at Lokpriya Gopinath Bordoloi Airport in Assam just a few years ago, where a large poster of a famous gutka brand was the first thing one would notice. Today, in Guwahati Airport, you will not see the same poster, and this shift highlights a broader transformation taking place in Assam today.
Over the years, Assam has become a rising force in India’s investment landscape, boasting more than 24.6 lakh registered investors, with nearly 30% of them being women. The Assam we see today is aspirational—emerging from its troubled past marked by insurgency, violence, and the controversial Armed Forces Special Powers Act (AFSPA). Assam has overcome the era of “Chanda Raaz,” a term that encapsulates the culture of extortion and forced financial contributions, which we’ll explore further below.
A symbolic reflection of this transformation was seen at Advantage Assam 2.0, a summit that secured investment commitments worth approximately Rs 4.91 lakh crore—nearly five times the amount of the 2018 summit. During the event, 240 Business-to-Government (B2G) meetings were conducted, and 108 international meetings took place in countries such as Singapore, Thailand, Malaysia, Japan, and South Korea. The event attracted 8,000 entrepreneurs and featured a sprawling exhibition that underscored Assam’s growing economic potential. This includes stories like that of Woolah Tea, a small startup that secured funding through Shark Tank India and was present at the summit, reinforcing the state’s new image.
The Catch: Fear of Corporate Exploitation
Despite the wave of optimism, there is resistance to large-scale investments, largely due to fears that corporations might monopolize resources, exploit farmers, or shift the state’s agrarian economy towards industry dominated by corporate capitalism. These concerns were voiced during a press meet with Assam Chief Minister Himanta Biswa Sarma, where journalists questioned whether corporations would adopt villages for development. The CM responded by emphasizing the need to move away from the old ways, particularly the “Chanda Raaz” mentality.
What is “Chanda Raaz”? This term refers to a deep-seated culture of extortion, both forced and at times emotional in the Northeast, where individuals or groups demand money for events or business activities, sometimes resorting to violence. This culture has persisted across various sectors, from Manipur’s businesses to local festivals in Assam. The CM’s comment underscores the need for a shift in mindset away from reliance on such practices, advocating for a more professional approach to governance and development.
Gujarat or West Bengal: The Path Forward
The comparison between Gujarat and Assam highlights a pivotal decision in the state’s economic trajectory. Gujarat, often seen as a model of business and professionalism, has led the way in shaping India’s corporate landscape. The state’s Vibrant Gujarat summit, which has been ongoing for over two decades, showcases the successful establishment of a thriving business ecosystem. Almost every episode of Shark Tank India typically features a startup from Gujarat, reflecting the state’s entrepreneurial spirit and focus on market-driven growth.
On the other hand, West Bengal has long been considered the cultural and economic hub of India. However, the state’s economic downturn began with the communist-led government under Jyoti Basu and continued with policies that destroyed the state’s industrial and intellectual capacity. Economist Sanjeev Sanyal noted that West Bengal’s economic stagnation and intellectual decline were products of a “poverty of aspiration,” which ultimately led to its decline.
This “poverty of aspiration” was epitomized by the Tata Nano Singur controversy. The opposition from farmers, led by Mamata Banerjee, to Tata Motors’ car factory led the company to move the plant to Gujarat. This event significantly damaged West Bengal’s reputation as an investment-friendly state, leaving the impression that Bengal was not conducive to industrial development.
Brain Drain: The Exodus from Bengal and Assam
West Bengal has historically been a destination for Assamese talent. However, with the decline of Kolkata’s economy, East Indian people no longer find the city as attractive as before. A similar pattern is emerging in Assam, where young talent often leaves the state in search of better opportunities. The fall of West Bengal as a leading economic powerhouse presents an opportunity for Assam to fill the void. If executed properly, initiatives like the semiconductor ecosystem could create direct and indirect jobs, curbing the brain drain and offering local talent a chance to thrive.
A New Form of Governance
Assam’s economic governance has evolved significantly since the liberalization of the 1990s. The state now follows a neoliberal model, which advocates for reduced state intervention in the economy and promotes market-based solutions. This is a shift from the traditional mindset of state control, where the focus was on producing goods and providing government jobs. This form of economic governance was visible with the coming to power of the Asom Gana Parishad (AGP) who started a lot of Government Owened Industries, which later got defunct or is still running poorly. One such example is the Nagaon Paper Mill, which was established in 1985. The paper mill got shut down due to various operational issues and now this is the same place for the Tata semi-conductor plant.
As aptly stated by James Buchanan, “The central task of economic policy is to remove barriers to exchange and to allow market forces to work.”
Under this governance, the role of the state is primarily regulatory. It is now up to intellectuals and opposition parties to ensure that these regulations are fair and serve the people’s interests. However, to outright reject investments as exploitation would only lead to the continued exodus of talented individuals from the state. The rejection of such investments could undermine Assam’s potential to become a major player in India’s growth story, depriving its people of opportunities.
Conclusion: Assam’s Future
Assam is at a crossroads, with two paths before it. One path mirrors Gujarat’s model of corporate growth and professionalism, fostering an environment where both industry and the state thrive.
The other path, reminiscent of West Bengal’s past, is a more cautious and resistant approach, which could stifle progress and drive away talent. The question remains: Will Assam choose the path of growth and opportunity, or will it fall prey to the fear of exploitation? The future depends on the choices made today, and the stakes could not be higher.
