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Development and Growth in Northeast India The Natural Resources Water and Environment Nexus Strategy Report Strategy Report DEVELOPMENT AND GROWTH IN NORTHEAST INDIA The Natural Resources, Water, and Environment Nexus Report No. 36397-IN Development and Growth in Northeast India The Natural Resources, Water, and Environment Nexus Strategy Report June 2007 South Asia Region Sustainable Development Department Environment & Water Resource Management Unit Document of the World Bank © 2007 The International Bank for Reconstruction and Development/ The World Bank 1818 H Street, NW Washington, DC 20433 First published, 2007 Produced by: Roots Advertising Services Pvt Ltd B-4/26, Safdarjung Enclave New Delhi - 110029, India Tel.: 26166493, 26104751 Fax: 26178688 E-mail: roots@rootsadvertising.com Photo Credits: Biswasjyoti Das and Karin Kemper Printed at: PS Press Services Pvt. Ltd., India The findings, interpretations, and conclusions expressed herein are those of the author(s) and do not necessarily reflect the views of the Executive Directors of The World Bank or the governments they represent. The report has been discussed with the Government of India, but does not necessarily bear their approval for all its contents, especially where the authors have stated their judgements/opinions/policy recommendations. This report has received funding from the UK Department for International Development, although the views expressed within do not necessarily reflect their official policy. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgement on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. 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All queries on rights and licenses, including subsidiary rights, should be addressed to the Office of the Publisher, The World Bank, 1818 H Street, NW, Washington, DC 20433, USA, fax 202-522-2422, e-mail: pubrights@worldbank.org Development and Growth in Northeast India: The Natural Resources, Water, and Environment Nexus – STRATEGY REPORT Acronyms and abbreviations CDM Clean Development Mechanism CFANE Community Forestry Alliance for Northeast India CFM Community Forest Management GEF Global Environment Facility IFAD International Fund for Agricultural Development IWAI Inland Waterways Authority of India JFM Joint Forest Management MoDONER Ministry of Development of North Eastern Region NW-2 National Waterway 2 NSDP Net State Domestic Product Exchange rate US$ 1 = Indian Rs. 46.1 (8 September 2006) Vice President - Praful Patel Country Director - Isabel M. Guerrero Sector Director - Constance Bernard Task Leader - Karin Kemper iii Development and Growth in Northeast India: The Natural Resources, Water, and Environment Nexus – STRATEGY REPORT iv Development and Growth in Northeast India: The Natural Resources, Water, and Environment Nexus – STRATEGY REPORT Contents Acronyms and abbreviations iii Acknowledgments x Executive summary xi I. Introduction xiii II. Objective, process, audience, and scope of the study xiii III. The Northeastern Region: Water and forest resources xv IV. Institutional environment xvi V. Key findings of the study xvi VI. Challenges for the Northeastern Region xxv VII. Recommendations for priority activities xxviii VIII. Conclusions xxix 1. Introduction and background 1 The natural resources, water, and environment nexus in the Northeast 3 Water 5 Forests 6 Institutions for resource development and management in the Northeast 7 2. Objectives of the study 9 3. Process, scope, and audience 11 4. Analytical framework 13 Development economics 15 Institutional economics 16 Water and natural resource management approaches 18 5. Path dependence in the Northeast: Why history matters 21 The history of the Northeastern Region: An exercise in historical accidents? 23 Overview of current situation 24 The economy of the Northeastern Region 25 v Development and Growth in Northeast India: The Natural Resources, Water, and Environment Nexus – STRATEGY REPORT Contents 6. Study findings: Water 31 Water resources in the Northeastern Region 33 Flood and erosion management 42 Hydropower 55 Inland water transport 66 7. Study findings: Forests 73 Forests and biodiversity in the Northeastern Region 75 Community forestry for sustainable development 76 Carbon finance opportunities for natural resources in Northeastern India 93 8. Towards an integrated vision of water resources and forests in the Northeastern Region 99 Challenges facing the Northeastern Region 101 Priority activities 104 Institutional reforms and expected outcomes 104 9. Conclusions 109 Annex 1. Background Papers for the study 113 Annex 2. Program for stakeholder consultations and dissemination 114 Bibliography 116 vi Development and Growth in Northeast India: The Natural Resources, Water, and Environment Nexus – STRATEGY REPORT Tables Table A. Priority activities at regional and local levels in the Northeast xxx Table 1. States of the Northeast: Selected population and natural resource indicators 4 Table 2. Summary of water resources in the Barak and Brahmaputra basins and Northeast India 34 Table 3. Flood damage in the Northeastern Region 43 Table 4. Flood damage trends in the Brahmaputra valley of Assam 46 Table 5. Justifiable capital expenditure for corresponding percent reduction in average annual flood damage 47 Table 6. Central flood assistance sought and received and area affected 48 Table 7. Northeastern Region flood management infrastructure by state 49 Table 8. 2001-2012 plan for electric power generation 56 Table 9. Status of hydroelectric development (as on 1 July, 2005) 57 Table 10. Status of major hydro development in the Northeastern Region, 2005 58 Table 11. Status of small hydro development in the Northeastern Region (as of 1999) 59 Table 12. Roads in the Northeast 66 Table 13. Transportation potential of major waterways in the Northeast 68 Table 14. Major identified cargo routes on NW-2 69 Table 15. Existing ferry services on NW-2 69 Table 16. Waterways not part of NW-2 with high development potential 70 Table 17. Administrative classification of forest cover in Northeastern India 79 Table 18. Population change in the Northeastern Region 81 Table 19. Per capita availability of forestland 82 Table 20. Per capita grain production in Northeastern states, 1972 and 1991 82 Table 21. Forest area and shifting cultivation in the Northeastern Region 83 Table 22. Major forest management contexts in Northeastern India 86 Table 23. Comparison of community forest management and joint forest management systems in Northeast India 87 Table 24. Agricultural net present benefits 96 Table 25. Forest conversion net present value 96 Table 26. Priority activities at regional and local levels in the Northeast 105 vii Development and Growth in Northeast India: The Natural Resources, Water, and Environment Nexus – STRATEGY REPORT Figures Figure 1. Interlinkage of topics addressed in the study 7 Figure 2. Analytical framework and link with outputs 15 Figure 3. Summary of interactions defining institutional framework 17 Figure 4a. India: Per capita domestic product by state 25 Figure 4b. India: Percentage of population below poverty line by state 26 Figure 5. India: Mineral and forest share and per capita income by state 28 Figure 6. Finance Commission ranking of infrastructure 29 Figure 7a. Flood-affected crop area as percentage of total cropped area 45 Figure 7b. Flood-affected area as percentage of total area 45 Figure 8. Cargo transported on NW-2, 1999-2005 68 Figure 9. Forest cover over time, northeastern India 94 Figure 10. Percentage annual change in forest cover between 1987 and 2001 95 Figure 11. Land available for forest conversion in northeast India 96 viii Development and Growth in Northeast India: The Natural Resources, Water, and Environment Nexus – STRATEGY REPORT Boxes Box 1. Historical development of organizations dealing with Northeast rivers 38 Box 2. Functions of various agencies under Ministry of Water Resources 38 Box 3. The Brahmaputra Board 40 Box 4. The Brahmaputra River 44 Box 5. Land use trends in Northeast India 84 Box 6. Loktak Lake catchment conservation initiative in Tokpa Kabui village 89 Box 7. Moving away from jhum: Iskut growers in Sihphir village, Mizoram 91 Box 8. Kyoto Protocol and greenhouse gases 93 Box 9. Forest definition 95 ix Development and Growth in Northeast India: The Natural Resources, Water, and Environment Nexus – STRATEGY REPORT Acknowledgments This report is the product of a collaborative effort between the World Bank and several ministries and agencies of the Government of India; and the state governments of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, and Tripura under the overall leadership of the Government of India, Ministry of Development of North Eastern Region (MoDONER). Special gratitude is extended to Ms. Sushma Singh, Secretary, MoDONER; Ms. Gauri Chatterji, Secretary, Water Resources; Mr. D.S. Poonia, Joint Secretary, MoDONER; Mr. R.P. Singh, Director, Department of Economic Affairs, Ministry of Finance; and Mr. S. Mittra, Director, MoDONER, for their support