Investment and Industrial Policies of Assam

Assam's economy is predominantly an agrarian economy. Tea industry which occupies an important position in the State's economy and which is about 150 years old is basically a combination of agricultural and manufacturing activities. Still, the history of industrialisation of Assam dates back to the beginning of the nineteenth century when the country's first petroleum refinery was set up by the British at Digboi in Upper Assam. After Tea and Petroleum came the Plywood industries. With the almost unending forest reserves dotting the landscape of Assam miles after miles, there was a proliferation of plywood and veneer mills in the upper Assam districts. All these industrial activities were the result of British sense of commerce and adventurism.

With the advent of independence, the trade and commerce began to witness participation by the Indians. During this phase, smaller saw mills, flour mills, rice mills, oil expeller units, confectioneries etc. enjoyed the patronage of the entrepreneurs. Then came a few central sector projects like, Guwahati Refinery, Bokajan Cement factory, Oil India Ltd., ONGC Ltd., HFC Ltd. HPC, Bongaigaon Refinery and Petro-Chemical project and more recently Numaligarh Refinery etc. as a result of economic planning in India. The State Government also chipped in the process by promoting a few large industries in pulp and paper, petrochemicals, fertilizer, sugar and textile sector. In between there have been a sizeable number of small scale units. More recently a good number of medium scale projects too have come up particularly with the support of State level financial Institutions.

Despite this backdrop, the contribution of industrial activities towards the State Domestic Product has remained very insignificant. The State of Assam continues to be industrially backward. The impediments for this state of backwardness are many, varied and multidimensional. Some of these are historical, some are sociological and some are geo-political. Although the Central Government has liberalised the Industrial Policy in the early nineties, the impact of such liberalisation has not touched the state. No big national industrial houses with the exception of Reliance and Sanghi group have come forward to take up projects in Assam during the last 4-5 years. Similarly no foreign investment worth the name has taken place during the same period.

Industrialisation on a rapid growth scale has been recognised as the panacea for upliftment of the economic and the living standard of the people of this poor State. The future of the process of industrialisation on the other hand, lies in the understanding and appraisal of the prospect of future industrial opportunities by the State in its proper perspective.

The prospect of expansion of tea industry is very limited in that it has reached a sort of saturation in terms of fresh investment on a bigger scale. Expansion of petroleum and natural gas based (particularly associated gas) industries will depend upon the discovery of new oil fields in the State. These are very capital intensive projects requiring a massive dose of investment. Government will give due importance for development of these industries but the direction for future industrial development of the state wilt have to be focused on the high and innovative technology, integrated projects from agro-harvesting to production of items of mass consumption, creation of manufacturing base for popular international brands, newer uses and applications of locally available traditional raw materials. Enlargement of the base of ancillary industries to tea, crude oil and petroleum refining sector, modernisation of Handloom and Handicrafts industries of the State, development of Jute based industries for manufacturing non-traditional diversified products, development of horticultural food products etc. are some of the areas which will probably engage the attention of the investors and the Government alike in the near future.

Infrastructure

The Government of Assam recognise the importance of infrastructure in industrial development and have taken the initiative for providing a sound and efficient infrastructure base. The railway net-work is improving fast. The third bridge over the Brahmaputra at Jogighopa is nearly complete and a fourth one at Bogibeel in Dibrugarh district is underway. Roadways in the state are touching all important centres. The river Brahmaputra has been declared as a National Waterway. Guwahati is welt connected by air with both Indian Airlines and private airlines catering to the needs of the region.

Keeping in view the above scenario, the Government of Assam have formulated the Industrial Policy resolutions of 1997.

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