Aizawl, Dec 26 (KNN) The Reserve Bank has emphasised the need for facilitating access to markets and formal credit to the industries in the north eastern state of Mizoram, which is dominated by micro and small industries.
While emphasizing on the few challenges in the state, the RBI’s Executive Director said, “industrial development in Mizoram started late in the 1990s, mainly after attaining statehood. The industrial landscape is dominated by micro and small industries. There is a need to reinforce this process by facilitating access to markets and formal credit,” said Executive Director of RBI, Deepak Mohanty while speaking at the Aizawl Club recently on Economic and Financial Developments in Mizoram.
“Weak market linkages with the rest of India coupled with lack of good quality road and absence of railway network inhibits the effective marketing of goods. Therefore, priority should be given to the development of infrastructure, especially roads and also provision of post-harvest management, cold storage and processing facilities. There is also the need to further harness the hydro-power capacity,” he said.
Better accessibility will also help develop the services sector, particularly tourism, which could become a significant source of employment and revenue, said the RBI’s Executive Director.
“The topography of the state and infrastructure bottlenecks together work as a deterrent for the development of physical banking and financial infrastructure. Hence, greater reliance may need to be placed on technology to make banking more accessible to the majority of the population. This will require improvement in telecommunication facility, Mohanty added.
It is important to create employment opportunities in the manufacturing and services sector in Mizoram, as the labour force in the state still concentrated in the agriculture sector.
“It is worthwhile to note that while the economy of Mizoram, in line with the national trend, is getting increasingly dominated by industry and services sectors, labour force is still concentrated in the agricultural sector.
“Therefore, creating employment opportunities in the manufacturing and services sectors has become important,” said Mohanty.
According to the Labour Bureau data, the share on employment by Agriculture & Forestry in Mizoram is 47.5 per cent, while that by manufacturing is only 4.3 per cent.
“A higher proportion of working age (ages 15-59) population in rural Mizoram as compared to rural India provides a favourable condition for growth. But for this to happen, industry and services sectors should increasingly provide the employment opportunity,” Mohanty said.
Meanwhile, RBI acknowledged that with greater urbanisation and higher literacy, indicators of human development in Mizoram are better than the national average
Share of households having access to the basic amenities like electricity, television, computers, telephones and four wheelers are significantly higher in Mizoram than the national average.
On the other hand, proportion of population having access to banking facilities, although improved during the decade 2001-2011, was below the national level.
“This is a policy challenge in the context of development with increasing emphasis on financial inclusion,” he added.
Mizoram is one of the 11 special category states which are characterised by low resource base and the cost disabilities due to their geography, sparse terrain and remoteness.
“In order to overcome these inadequacies, the Centre accords special consideration in devolving resources from the central pool,” Mohanty said.
While speaking about the banking developments in the said, RBI’s Executive Director said that, “The banking sector penetration in Mizoram may be seen in the context of its special characteristics of difficult terrain and economic structure. Agriculture is characterised by hill and mountain cultivation and industry is dominated by micro and small units.”
The population per bank branch in Mizoram declined from 11,400 in June 2001 to 9,100 by June 2013 and thus was much lower than the all-India average of 11,800 reflecting better coverage of banking services.
“The Reserve Bank is committed to Financial Inclusion (FI) so that the banking services touch every section of our society. It is imperative to bring the poor and under-privileged section of population under the banking fold for inclusive growth and development,” said Mohanty.
Mohanty further added that the Reserve Bank has enabled commercial banks to operate through their Business Correspondents (BCs) thus taking banking to the door step in the rural areas.
“Mizoram economy has performed well in the recent years. However, keeping in view the young population and high literacy and strategic location, there is considerable scope for growth and development,” he said.
Mizoram's economy grew by 10.37 percent in real terms in 2012-2013 over the previous year and the GSDP for 2012-13 was Rs 8,091.86 crore. The growth of the state at current prices was estimated to be 16.74 percent over the previous year.
The per capita income of the state for 2011-2012 was estimated at Rs 54,689, while the national per capita income during the same period was estimated at Rs 61,564.
The contribution of service sector in the state’s economy was 61.04 per cent, while industry and agriculture sector contributed 20.29 per cent and 18.68 per cent respectively even as around 60 per cent of the population depended on agriculture and allied sectors.
