Double drain in NE states is a big economy bummer...!!!

Boilal Gangte *

(Disclaimer - This piece is a hypothesis of the writer emanating from his conjectures, parallels, observations and experiences and hence should not be construed otherwise)

Brain drain was a much hyped topic in India before subprime meltdown. Yes, it's a debilitating phenomenon for any economy. I mean, which mother would want her productive offspring to move out and start helping other houses when there is so much work left at home? Why should a motherland be deprived of the best fruits produced by her produce?

Indeed!!! Greed took the better off the west; consumers try to satiate their unsatisfying needs and went on acquiring spree using money they don't own. Corporate wise men manufacture fictitious products/papers and sell to other corporate wise men, for a common interest of fat paychecks and bonuses. The end we saw was toxic... Lehman Brothers went kaput, Freddie and Fannie couldn't take it any longer, bail-out entered corporate dictionary and bankruptcy became a commodity. So much so, even Madhuri & Co. has to come back as the supposedly greener pastures turned dry and pale. Consequently the drainers don't want our brain anymore, they can't afford to splurge money on imported brains and hence the brain drain debate faded.

India received about $58 billion in global remittances in 2011 which was the highest for any country, followed by China at $57 billion. India has been number one global remitter for the past 4 years. $58 billion in a year by any economy standard is a hell lot of money to be siphoned off from your land. Hence it seems fair enough to say, they drain our brain and we drain their wealth...So much of the brain drain debate, after all we gain their wealth!!!

The North Easter states have been grappling with this problem for very long time now. However the situation though intra in nature, but is with much severity because the draining happens from both sides.

• Brain drain because the best of people went for further studies and have to adopt mainland as their base due to career prospect and then they continue for posterity as well.
• Wealth drain because money is hardly remitted back. Families send lots of their hard earn money during education, however the ripen incumbents hardly send back their wealth because they kind of adopt mainland as their pseudo home.

Why Brain Drain?

Brain drain phenomenon is due to systemic incongruence because the land doesn't offer opportunity even if all those brains want to come back and pursue a career. There is hardly any pasture to graze on except for some trickling government jobs, which in itself doesn't believe too much in brain (minus few exceptions). Except for Guwahati, there is hardly any town or capital state which can be referred as city, where there is a buzzing economic activity where people can build their careers.

Let's try to back it up by deep diving into the various possible career fields:

• Corporate career - For people committing to the corporate world, there is hardly any forward looking opportunity even if he/she wants to stay back. Our biggest city, Guwahati maybe the only options and even this can accommodate to a limited level. With the exception of maybe sales or in SBU structure, one can't grow because there is hardly any position as you move up the corporate ladder.
• Professional field - There are few markets where you can web your expertise for a living. Take an engineer, chartered accountants, lawyers, catering field, IT world, music, sports, any creative field, etc. the scale of operation can't exceed more than next door "mom and pops" level.
• Entrepreneurship - Apart from the small market for tapping, the land doesn't have good source of funds for throwing up seed capitals. Hence, it doesn't provide good incubation environment, which is fundamental for people to take start-up seriously.
• Even in the government job, except for the state government undertakings, there are higher chances that you may land up in other states because you have more vacancies outside.

How wealth drain?

Wealth drain is a big cause of concern for any economy because it depletes the economy. And in an economy like NE which is not self-sustaining and is dependent on limited fund infused by the central, this phenomenon is more aggravating. An imbalance in Net Flow (incoming money v/s outgoing money) results in economy shrinking, which is lethal for economic growth.

The reasons for wealth drain are structural in nature because the socio-economic and political set-up doesn't induce individuals for retention of wealth in the land. There are two main phenomena which contribute heavily to this:

0 Exodus to mainland syndrome:

Because the land doesn't have good and qualified institutions to promise students for bright prospects, hence parents (who can afford) tend to send their kids to study in mainland institutions. Moreover, the land is infested with much unrest in the forms of bandh (which rarely "not-happen") and security issues. To add to it, there are indigenous cultural issues which block the confidence of parents to let children stuck up in this uncertain environment.

And of the total people who have been exported to mainland, most of them continues their career and would also want his/her children to continue. Though NE people by heart will always be NE, but career and future prospects have bound them to mainland and hence it became their adopted house (if not home). Even if some goes back, they will let their children follow the same path and the cycle continues. A pictorial representation is given below -

While the above pictorial representation doesn't capture the entire pragmatic nuances, but the core point is that the number of people going back tapers down with generations.

o Lack of money retention in the economy by the trade:

Being deprived of anchor industries (with some exceptions) the main economic activities in North Easter states continues to be subsistence agricultural and the local trading industry. While the mom and pop retail outlets may be run mostly by the locals, however the supply chain is heavily controlled by people from mainland. Except for the required working capitals, the remaining money generated by these tradesmen are remitted back to their natives and hence the land doesn't really get that reinvestment which is needed for economic development. Apart from the fact that we Indians by nature are remitters, the land also doesn't induce them to invest because -

• The return on investment is not as attractive as it is in mainland.
• The land still has some sort of primitive xenophobia and hence doesn't really give the needed confidence to those rich tradesmen to reinvest.

Which is the cause and which is the effect will be as cryptic as a kryptonite. However, this is a reality and a grappling bummer for the economic development. Someone needs to bite the bullet to initiate the kick start. As one of my seniors rightly said in our casual conversations, the land needs a strong political will to break all those shackles. Therefore, irrespective of what names we called them, we do need our politicians to act and we need those actions very fast.

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* Boilal Gangte (Boi) wrote this article for e-pao.net
The author works for Idea Cellular as Marketing Head for Assam and NE. He is a management graduate from IIM, Bangalore and a commerce graduate from SRCC, Delhi. He can be reached at boilalpg(at)gmail(dot)com
This article was posted on October 24, 2012.

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