However, they could never explained why their exist differences in the level of income among different countries. Harrod and Domar also tried to answer the fundamental question when is an economy capable of steady growth at a constant rate? They arrived at a general conclusion that the national saving rate has to be equal to the product of the capital output ratio and the rate of growth of the (effective) labour force (Solow, AER 1988). In order to explain the cross country differences in income, Mankiw et al. (1992) formulated an augmented Solow Model taking into consideration the human capital as one of the determinants of growth. They found that the augmented Solow model fits the data better and yields an estimated capital share more in line with conventional wisdom (Bernanke&Giirkaynak, …show more content…
Going back to the 1960s and thereafter, the region has been segregated into different states in terms of language and culture. Then came the arrangement of autonomous district council to decentralise the political arrangement at the grass root level. To take care of the region in the development of industries and infrastructure, some kind formal organisational arrangements were made through North Eastern Council (NEC) and subsequently a separate Ministry Of Development for North Eastern Region (DONER) was created for better coordination between the region and the union government. However, the nature of economic development in this part of the country continues to be remaining in a state of grim and many have been questioning the efficacy of the economic policy practiced in this region. The problems of violence, insurgency, ethnic conflict, migration pressure, interstate disputes and other institutional deficiencies continue to haunt the region (Datta, 2001). The vision 2020 identifies the gap between the (NER) and the rest of the country in terms of various developmental