ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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An Empirical Investigation

Assessing Economic Impacts of Connectivity Corridors in North East India

One of the main constraints to development in North East India is the lack of connectivity. How the existing East–West Corridor and the proposed transboundary corridors such as the Trilateral Highway, the Kaladan Multimodal Transit Transport Project, and the Bangladesh–China–India–Myanmar Economic Corridor connecting India with neighbouring countries in the eastern neighbourhood would stimulate economic activities in the North East is examined. It is found that the corridor-based development projects may generate economic activities and regional development, which, in turn, would influence economic growth through higher production and consumption.

Empirical studies reveal that infrastructure, such as corridor-based development, promotes economic growth and regional development through easing the demand for infrastructure, reducing time and cost of the transaction due to increase of transportation activities, encourages fragmentation of production in a region, creates employment opportunities, and also contributes to poverty reduction (ADB 2008; Kumagai et al 2009; Brooks and Hummels 2009; Ghosh and De 2005; De et al 2013). Therefore, infrastructure endowment along with geographical location and agglomerative sectoral structure is the potential determinant for a regional development (Capello 2007).

In the case of India’s infrastructure development, activities on upgrading and creating new roads and highways, railways, airports, inland waterways, and ports, etc, are expected to provide cost-effective and efficient logistic services to promote trade and development. In addition, India’s focus on the North East Region (NER) by developing deeper connectivity would enhance the scope of intra- and cross-border trade and socio-economic benefits in that region. Especially, the existing East–West Corridor (EWC)1 connecting North East India with Gujarat improves the connectivity of the NER with the rest of the country. There are also other ongoing and proposed corridors connecting the NER with the neighbouring countries of India, namely the Trilateral Highway (TH), the Kaladan Multimodal Transit Transport Project (KMTTP), and the Bangladesh–China–India–Myanmar Economic Corridor (BCIM-EC), which are expected to bring potential benefits to the region. These corridors are significant for India and the NER in particular in view of the ambitious Act East Policy (AEP) that aims to strengthen connectivity between India and South East Asia.

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Updated On : 20th Mar, 2019

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