In a meeting held at the Planning Commission, it was pointed out that though the population of the eight states was just 3.74 per cent of the total population of the country, they get more than 19 per cent of the normal Central assistance.

The share of N-E states in Central taxes is 9 per cent and in grants, it is 14 per cent, the Central government officials said. In 1999-2000, the region is expected to get Rs 4,884 crore as total Central assistance, Rs 4,012 crore out of Central taxes, and Rs 668 crore from grants as prescribed by the Finance Commission. Another Rs 2,407 crore was from the Central sector or Centrally-sponsored schemes.

Further, the per capital plan outlay for Arunachal Pradesh exceeds Rs 6,000, for Mizoram, too, the figure is above Rs 4,000, and for Sikkim, it is a little less than Rs 5,000. On the other hand, the per capital plan outlay for Uttar Pradesh is well below Rs 1,000, for Bihar, it is less than even Rs 500.

The Central government officials said that 90 per cent of the Central assistance to the N-E region is in the form of grants and the rest as loans. For other states, only 30 per cent is in the form of grants, while the loan component is as high as 70 per cent.

The utilisation of funds for the rural development and poverty alleviation schemes are also very low for the region, officials pointed out. For the entire region, it was just 44 per cent. In Manipur, only about a quarter of the fund is used, while in Assam only one-third of the fund is utilised.

The Central government officials said that there had been huge decline in the tax and non-tax revenue of N-E states, coupled with hike in wages, salaries and pensions. Increasingly, the states are relying on borrowing and Central assistance. Assam, for instance, had a revenue surplus of Rs 285 crore in 1996-97; now the revenue deficit is in the region of Rs 840 crore.

The Central government listed the the problems of the NE region as poor connectivity, geographical isolation, inadequate infrastructure, little inflow of private capital, poor quality of land, less developed formal credit, and above all, insurgency.

The Centre has suggested that the states should bring down their non-Plan expenditure and cut the flab in the bureaucracy.