Twenty eight years back, when Sikkim became the 22nd State of India the state had very limited development space both in economic and political sense. The onset of democracy and building of economic structures changed the entire economic profile of Sikkim. From a traditional economy with a feudal slant, Sikkim has chosen for itself an accelerated path of eco-friendly sustainable development. The key objectives of the development strategy was to alleviate poverty, create income generation opportunities by empowering the people through education and employable skills and building the requisite infrastructure: The aim was to build on state’s strength, benefit from the post-liberalisation spurt in growth in the rest of the country and, with judicious use of modern technology. As a result, Sikkim has emerged as a modern and robust state of today.

The state’s total population is only around 5.5 lakh and nominal income has been growing at an impressive annual rate of around 14.5 per cent since 1989-90; however, Sikkim has the fifth highest incidence of poverty among the states, with 41.4 per cent of the population below the poverty line (1993-94). Furthermore, with 38 per cent of the population below the age of 15, the number of young people entering the workforce and looking for jobs in industry and services will increase in the near future.

A stagnant agricultural sector combined with steadily declining industrial activity has severely limited employment opportunities outside the government. Public administration has, by default, become the propelling force behind income growth. Further, growth that has taken place has been regionally imbalanced, with the North District still remaining relatively backward in comparison with the other three districts.

The cornerstone of the development strategy pursued so far has been a super-active government in all areas of economic activity. This has put the government under severe fiscal stress. Expenditure on wages and salaries (including pensions) and interest payments pre-empt almost half of total government expenditure.

Based on these inherent limitation, Sikkim has chosen for itself a development strategy based on sustainable development which means building on its traditions, rich cultural heritage and natural resources while integrating into the broader development process of the North East States and the rest of India. The present Government has turned the negative economic growth rate that prevailed in the State into positive and a vibrant growth regime. Everyone is observing the all round progress made by the State with keen interest. The State today is geared to develop State’s rich potentials in agro-industry, horticulture, medicinal plants, food processing, tea, animal husbandry, handlooms and textiles, forest resources, eco-tourism, information technology and education.

As a land-locked, mountainous state Sikkim’s focus is on developing high value and low-volume products. The development of handloom and textile has significant potential for preserving its cultural legacy. Today, Sikkim is an ‘investor-friendly state’. To attract investment from both within and outside, the Sikkim Government has made a number of far reaching policy changes that include Iiberal investment climate and diverse fiscal incentive

Since Sikkim has large reserves of bio-diversity, State has emphasised on researching various medicinal uses of the exquisite plant varieties that characterise the State. Besides generating knowledge and employment this can help in changing the livelihood pattern of the people to a much higher level. The organic production of medicinal pIants, oranges, lime, ginger, large cardamoms and (other agriculture produce would increase both agricultural production and income. With a magnificent forest area, floriculture and the non-timber sector offer strong possibilities for providing alternative sources of income and employment. The State is now reemphasizing on the more efficient use of our rich variety of cane and bamboo resources. They can be used for low-cost, earthquake resistant housing and host of other products.

The unparallel beauty of the State and very friendly and hospitable people are our competitive and comparative advantages. We are making use of both these factors to our advantage. These are the factors that bring conduciveness to the development of eco- tourism. We are quite consciously promoting eco-tourism as our core competence as it provides a notable possibility of international intervention in Sikkim especially for ‘Village Tourism’ i.e. housing tourists in villages. Eco-tourism can promote handicrafts, textiles, carpets and timber product: conservation of both natural and cultural heritage.

Sikkim maintained one of the highest economic growth rates in the country during the Ninth Plan. As mentioned in the 10th Five Year Plan (2002-2007) draft document (published by Planning Commission, New Delhi) with a growth rate of 8.3 percent the State is second to only Pondicherry, Chandigarh and Delhi. In this regard Sikkim was far ahead of many well performing states.

Sikkim has the 10th highest per capita income in the country. As per the National 10th Plan document Sikkim has had the 5th highest growth rate in the per capita net state domestic product during 1993-94 to 1999-2000.

The service-oriented sectors of Sikkim’s economy are its major strengths as this sector is likely to mark a double-digit growth rate of 10.36 percent during the 10th Five Year Plan period (2002-2007). A structural shift in the Sikkimese Economy has been very remarkable with Tertiary (services) sector contributing the largest share to the State Domestic Income. This is a very healthy trend and shows that the State is fast moving from ‘developing’ to ‘developed’ status. The primary sector consists of agriculture, mining, and forest; secondary sector mainly consists of manufacturing construction and electricity and tertiary sector consists of services sector like transport, communication, banking, trade, insurance and tourism.

To enhance productivity of farmers and to regulate purchase and sale of farmer’s products, the Government has established a Regulated Market in the state. The Government has provided facilities for sale of farmer’s produce within the State at regulated prices. Sikkim has also been declared as Agricultural Export Zone enabling it to sell cardamom, ginger and flowers in the national and international markets.

Achieving the goal of an accelerated path of eco-friendly, sustainable development requires three fundamental pre-conditions. These are (i) empowering people with the right education and skills to enable them to benefit from recent developments in science and technology, (ii) building up the right infrastructure, particularly in roads and power, and (iii) fiscal consolidation and reform, which will constitute the core of economic restructuring.

The strategy consists of fostering a public-private sector partnership in key infrastructural areas with the application of science and technology. The state’s strength in horticulture and animal husbandry is to be promoted with the help of roads and power on the one hand, and education on the other. These two critical inputs are prerequisites for the application of science and technology in the state. Industry, especially service-oriented industries such as tourism and information technology, has tremendous potential that needs to be exploited through vibrant public-private sector partnerships.

Given the fact that the government is under severe fiscal stress, the role of the public sector needs to be redefined. The objectives of the public sector would be (i) the pursuit of economic stability, (ii) improving the delivery of services, (iii) promoting efficient utilisation of allotted resources and (iv) creating an enabling framework for private sector to invest in the state, while disseminating the message that “Sikkim is open for business.”

Development is about people, and importantly about people at the lower rungs of income distribution. Given the considerable level of income-poverty and the changing age-profile of the population, the aim of the Sikkikm’s development strategy is income generation for the young and the bottom half of the population mostly through providing opportunities for self-employment in services and small scale industry. While poverty may be expected to come down with rapid growth, empowering the poor with education and technical skills is not only a good in itself but will also accelerate the process of poverty alleviation.

The key goal is sought to be achieved through a two-pronged approach. The first relates to modem advances in science and technology that will enable Sikkim today to aspire for much more than just being an entrepot. Science has compressed distances and shrunk the world into a global village. “Distant and inaccessible” Sikkim is aiming to becoming a thriving centre of information technology, bio- medical and scientific research of tomorrow. Sikkim is seeking to benefit from science and technology in three areas.

First, the enormous hydroelectric potential from the run of the two snow-fed perennial rivers Teesta and Rangit can be harnessed to yield an estimated 8,000 MW of power valued at approximately Rs. 1,600 crore per annum. The pollution free nature of hydel power, the low variable costs of generation, and the growing demand-supply gap for electricity in the country argue in favour of such projects in Sikkim. Given the considerable cost of civil engineering works for hydroelectric power projects, the main challenge lies in strengthening the transmission linkage with the Eastern region grid improving the investment climate ( including through proper tariff policy and attracting investors -with the involvement of the Power Trading Corporation-to bear the costs and risks of such projects.

Second, with modem technology, it is possible to overcome the problem of accessibility that has historically thwarted Sikkim’s potential as a tourists’ paradise. Sikkim has tropical and temperate forests, alpine meadows and snow-capped peaks, including the spectacular Kanchenjunga (28,169 feet), the third highest peak in the world as its presiding deity. It is richly endowed with several lakes, two major rivers, the Teesta and Rangit, and an almost incredible treasure of flora and fauna and the religious, aesthetic and cultural traditions. Modem technology is being utilised to build roads, airlinks, cable cars, and comfortable tourist accommodations, so that Sikkim can become a recognisable centre on the international tourist map. Given the considerable investments needed for these purposes, the main challenge here again is how to attract investors who will not only fund these projects but also share the associated risks. Furthermore, rules have to be framed and enforced to promote tourism in an environmentally sustainable manner.

Third, the potential for a wide range of fruits, vegetables and flowers from Sikkim’s tremendous agro-climatic variation-from semi-tropical lowlands to temperate terraces-should be utilised through the strengthening of marketing machinery. Improved linkages with the rest of the country will allow Sikkim to attract tourists and to tap into the expanding domestic and global markets for orchids cut flowers and bulbs “winter” vegetables during summer and exotic fruits.
The vision, thus, is of a prosperous Sikkim with an effective public sector, thriving trade, abundant hydroelectric power, tourism, horticulture and floriculture and without poverty, illiteracy and unemployment.