Introduction:

Economics, it is observed, has moved into the center of public concern and it has increasingly played role in shaping activities of the modern world. Economic performances, economic growth, economic expansion, economic achievement and so forth have attracted the critical attention of every nation. "It is really glorious to be rich". But it is not easy either. Unfortunately, we tend to think of development, not in terms of evolution, --but in terms of creation. But in fact growth comes out of creative evolution.
 
A surplus scenario prior to 1951:

Manipur, it is said, became a part of British India economy after the Anglo-Manipuri War of 1981. Prompted essentially by the fiscal needs and commercial interest, the age-old institution of ‘Lallup’ – a system of forced labor- was replaced by a tax system in 1892. Land revenue had to be paid in cash. The economy increasingly got monetized with the necessity for earning money-income, for which marketable surplus was necessary. With the introduction of Ryotwari system in Manipur, the economy witnessed emergence of a new class of ‘peasant-owners’.

A comfortable position could be observed as far as the balance of payment was concerned. In 1868-69, a surplus of Rs. 1,657 accrued to Manipur. This excluded the compensation for the Kabo-Valley.

Source: R. Brown, Statistical Account of Manipur, 1873, page 88

Composition of Export:

A promising beginning could be seen in the composition of the exports from Manipur prior to 1947. The industrial products such as clothe, yarn and silk accounted for 20.15 per cent while the primary products for 79.85 percent. The professional skill of managing a manufacturing unit in the early part of the nineteenth century could be a prospective economic endowment for planning and the development of Manipur. The Imperial Gazetteer of Manipur (1909) record that Manipur was China’s contemporary in the production of silk. The Burmese traders brought ‘greedily all the raw silk’ they could get in Manipur. Possibly Manipuris did not have limited horizon of interaction. They, it appears, were ‘efficient but poor’.

Source: R. Brown, Statistical Account of Manipur, 1837 page 88 (*Export to Burma)

Economy in 1951:

Manipur was exposed to the shocks and strains of the World War II. The substantial inflow of war finance, perhaps beyond its capacity to channelize into productive areas, became a new ‘liquidity factor’ to reckon with. The tantalizing forces unleashed by the ‘compensation-money-bubble’, after the said war also added to the inflationary tendency. The instability was obvious.

By and large the economy of Manipur was agrarian. 99.5 percent of the population belonged to the rural areas. Agriculture was mainstay of 83.4 percent of population. The net area sown per head of agriculture was only 0.42 acres as against 1.18 acres of All-India. Density of population was only 67 as against 285 (All-India). But the number of small-scale establishment was encouraging. The number of textile establishments was 33, 927 while that of the non-textile establishment 608 in 1951. Although geographical isolation was constraint on development process of the region, the prospect of ‘high-value-production’ rather than ‘high-volume-production’ could not be ruled out.

Rural entrepreneurship and self-reliance:

One distinct feature of the economy of ancient Manipur was the large number of self-employment. Out of 25,944 persons engaged in industries and services, only 441 were employers in 1951. The rests were self-employed persons –having the rare skill of organizing resources. They also acquired entrepreneurial experience. The industrial heritage of self-employment remains fairly active till today.

The significance of a large number of self-employed persons lies in the fact that Manipur, perhaps, did not increasingly experience the disadvantages associated with an ‘enclave economy’ (Gunnar Myrdal), as a large segment of the population was touched by the industrial impulses. Obviously they had a desire to grow. Secondly the occupational specialization in terms of settlement, specific knowledge and work experience was another growing advantage. Of course, industrialization in the existing form was not enough to accomplish a significance change. But the possibility of a ‘structural change’ could not be ruled out. What was possibly required was a policy of rational intervention to protect and promote the indigenous skill and work-culture. In fact, there was a base, - a base of skill, for further advance.

Influx and captive economy:

During the decade 1951-61, Manipur experienced a phenomenal increase in population –which can be termed as population explosion. The rising commercial opportunities ably abetted by the humble simplicity of people and good climate of the region perhaps became added attraction for the trading communities to stay and settle. The geo-physical constraint, -backward transport and communication etc. – appeared less discouraging in the wake of various ranges of income-streams. It may be recalled that the population of Sikhs recorded an increase of 946 percent during the said decade. The Jains and Buddhists recorded 418.67 percent and 884.85 percent respectively. The Christians also recorded 122.30 percent. The rate of increase was equally high and alarming in 1961-71 also. "The high rate of increase amongst the Sikh, Jains etc. may be mainly due to immigration" (Government of Manipur, Department of Economics and Statistics, Economic Review, 1975-76, page 8).

Source: 1) Govt of Manipur, Dept. of Statistics, Statistical Handbook, 1970
          2) Govt of Manipur, Dept. of Statistics, Economic Review, 1975-76

Manipur, as such, became a potential market for the products of other regions, -just an extension of 'mainland organization' with possible support of finance and business technique. The said market in Manipur had for obvious reasons of profit maximization of crucial area of control and virtual monopoly. On the other hand, the output market of 'indigenous' commodities was in disarray. Constraints in terms of distorted delivery were common. Intelligent traders, taking advantage of unsophisticated market and people applied two units of measurement - one for sale and one for purchase. In the act of buying from the local producers 45 seers means a mound while in the act of selling to the local buyers 40 seers means a mound. The multiple gains from the unfair trade practices strengthened in due course the system to establish itself. Not only in Manipur but also in the whole country, the per capita real income of the non-agricultural population was 45 percent more than that of the agricultural population during the period, 1969-70 to 1971-72. Judged by this national token the possible concentration and inequality in Manipur would have been growing. The outflow of resources was, perhaps, a logical consequence followed by the appearance of symptoms of a captive economy.

Commitment of Resources after 1951:

Manipur as part of Indian economy had its own share in the national exercise. Normally the policy decision of the government is concretized with the finalization of the commitment of resources for a specific period, say, five years. The first five year plan in Manipur with a token outlay of Rs. 1.55 crore was followed by Rs. 6.25 crore in the Second Five Year Plan. The total resource committed from the First to Fourth Plan was Rs. 50.93 crore only.

Source: Plan documents, Planning Commission, Govt. of India

Per Capita allocation:

The per capita outlay of Manipur during the First Five Year Plan was Rs. 17 only as against Rs. 175 of Punjab, Rs. 58 of Gujarat and Rs. 56 of Orissa. The per capita outlay during the Second Five Year Plan was equally disappointing. The per capita outlay of Nagaland was Rs. 280 while that of Manipur was only Rs. 100. During the Fourth Year Plan period Nagaland and Punjab went further ahead. The per capita outlay for Nagaland was Rs. 747, that of Punjab Rs. 316 and that of Manipur Rs. 290 only.

Source: Centre for Monitoring in Indian Economy, Bombay, Basic Statistics Vol2, September 1991

Inflation/Plan Allocation:

Viewed against the substantial value of money from 1960 as a result of inflation in the country, the increase of plan allocation appears nominal. At constant price (base - 1960), the annual percentage increase from the Second Five Year Plan to the Third Five Year Plan of Manipur was only 2 and for the period from Third to Fourth, it was a little over 10. This is to say that till 1966 the investment was negligible as against the massive investment normally required in the initial stage of development.

Note: In 1960 Re 1 - 100 Paise (base year)
         In 1966 Re 1 - 54 Paise
         In 1974 Re 1 - 35 Paise

Agricultural Sector:

The attention given to agricultural development in Manipur from the first to Fourth Plan was inadequate for a possible breakthrough into an 'advance-agriculture'. The First Five Year Plan started with a token allocation of Rs. 6.30 lakhs for agricultural development. The annual average outlay in this sector for the Plan period, 1951-1974 was only Rs. 30.62 lakhs. One cannot possibly expect 'impressive' turn with this meager outlay.

Planning Without Physical Target:

Curiously enough agricultural planning continued till 1969 without adequate exercise on physical targets. In fact, plan without physical targets is not a plan in the real sense. Financial allocation without any physical planning is a 'cart before horse'. It may be at best a compilation of a few schemes. A sound development strategy for agricultural planning would have been guided by:

• increase productivity of land and labor
• bringing more land under cultivation
• increase intensity of cropping

The role of government - a crucial economic input - was merely confined to the nominal involvement in the traditional production behavior, not as an active partner in the 'Science-based-agriculture'. Government of Manipur remained contended with routine exercises on:

• The Wangbal Rice Research Station
• Agricultural extension
• Development of local manure
• Fertilizer trials etc

No attempt was made to strengthen agricultural base in terms of improvement in:

• land system
• irrigation
• technology
• institutional finance etc.

Industries:

As stated above the prospective area for industrial expansion could certainly be handloom and silk sector. In 1951 the textile sub-sector operating mostly in the private sector created employment for 43,434 persons, while silk sub-sector for 822 in a small state like Manipur having a total population of 5,77,635. Necessarily the industrialization of Manipur could have been made through up-gradation and modernization of traditional skill. This strategy could also have provided greater impetus to the article of self-reliance and growth.

In this connection a reference may be made to the observation made by the Economic Report submitted by the National Council of Applied Economic Research, New Delhi (1961).

1. "The importance of development of Manipur flows from a variety of reasons among which its strategic importance is the most important" (page 81).
2. "The development policy should be directed towards development local enterprise and local skill" (page 78).
3. Thus while the major objective should be to develop local initiatives immediately, the government will have to pale an active, determined and direct role in the field of small industries" (page 79)

But a look at the trend of resources committed to the so-called industrial development conveys a message of less attention. The token outlay of Rs. 0.60 lakhs in the First Five Year Plan was increased to Rs. 13.06 lakhs and Rs. 49.39 lakhs in the Second Five Year Plan and Third Five Year Plan respectively. During the Third Plan the sericulture received a share of Rs. 4.29 lakhs only as plan allocation. No state policy of industrial development was announced. No skill inventory was prepared. However the number of small factories registered a modest increase from 27 in 1957 to 66 in 1961 and 130 in 1967. The tempo remained visibly low. The factories were too small to create any perceptible impact and basically meant for local needs.