Meghalaya is predominantly an agrarian economy. Agriculture and allied activities engage nearly two-thirds of the total workforce in Meghalaya. However, the contribution of this sector to the State’s NSDP is only about one-third. Agriculture in the state is characterised by low productivity and unsustainable farm practices. Despite the large percentage of the population engaged in agriculture, the state imports food from other Indian states. Infrastructural constraints have also prevented the economy of the state from creating high-income jobs at a pace commensurate with that of the rest of India. Meghalaya’s gross state domestic product for 2012 was estimated at ₹16,173 crore (US$2.3 billion) in current prices. According to the Reserve Bank of India, about 12% of total state population is below poverty line, with 12.5% of the rural Meghalaya population is below the poverty line; while in urban areas, 9.3% are below the poverty line.
a. Agriculture. Meghalaya is basically an agricultural state with about 80% of its population depending entirely on agriculture for their livelihood. Nearly 10% of the geographical area of Meghalaya is under cultivation. Agriculture in the state is characterized by limited use of modern techniques, low yields, and low productivity. As a result, despite the vast majority of the population being engaged in agriculture, the contribution of agricultural production to the state’s GDP is low, and most of the population engaged in agriculture remain poor. A portion of the cultivated area is under the traditional shifting agriculture known locally as Jhumcultivation. Meghalaya produced 230,000 tonnes of food grains in 2001. Rice is the dominant food grain crop accounting for over 80% of the food grain production in the state. Other important food grain crops are maize, wheat, and a few other cereals and pulses. Besides these, potato, ginger, turmeric, black pepper, areca nut, Bay leaf (Cinnamomumtamala), betel, short-staple cotton, jute, mesta, mustard and rapeseed etc. are some of the important cash crops. Besides the major food crops of rice and maize, the state is renowned for its horticultural crops like orange, lemon, pineapple, guava, litchi, banana, jack fruits and fruits such as plum, pear, and peach.
b. Industry. Meghalaya has a rich base of natural resources. These include minerals such as coal, limestone, sillimanite, Kaolin and granite among others. Meghalaya has a large forest cover, rich biodiversity, and numerous water bodies. The low level of industrialization and the relatively poor infrastructure base acts as an impediment to the exploitation of these natural resources in the interest of the state’s economy. In recent years two large cement manufacturing plants with production capacity more than 900 MTD have come up in Jaintia Hills district and several more are in pipeline to use the rich deposit of very high-quality limestone available in this district.
c. Resources and Power. Meghalaya has abundant but untapped natural resources, including coal, limestone, kaolin, feldspar, quartz, mica, gypsum, bauxite, and other minerals. Its sillimanite deposits (a source of high-grade ceramic clay) are reputedly the best in the world and account for almost all of India’s sillimanite output. Electricity is produced through several hydroelectric power plants in the state; however, during times when rainfall is scarce, power must be imported.
d. Manufacturing. Meghalaya has no heavy industries; small-scale industries include the manufacture of cement, plywood, and foodstuffs.
e. Transportation. Internal communications are poor, and many areas remain isolated. There are no railways in Meghalaya. A national highway runs through the state from Guwahati (Assam) in the north to Karimganj (Assam) in the south. Shillong is served by a domestic airline handling short-haul, low-capacity routes at Umroi, about 18 miles (30 km) from Shillong; and in 2008 an airport opened at Tura, in the western part of the state. Meghalaya is a landlocked state with many small settlements in remote areas. The road is the only means of transport. While the capital Shillong is relatively well connected, road connectivity in most other parts is relatively poor. A significant portion of the roads in the state is still unpaved. Most of the arrivals into the Meghalaya take place through Guwahati in neighbouring Assam, which is nearly 103 km away. Assam has a major railhead as well as an airport with regular train and air services to the rest of the country. When Meghalaya was carved out of Assam as an autonomous state in 1972, it inherited a total road length of 2786.68 km including 174 km of National Highways with road density of 12.42 km per 100 square kilometer. By 2004, total road length has reached up to 9,350 km out of which 5,857 km were surfaced. The road density had increased to 41.69 km per 100 square kilometer by March 2011. However, Meghalaya is still far below the national average of 75 km per 100 km2. To provide better services to the people of the state, the Meghalaya Public Works Department is taking steps for improvement and up-gradation of the existing roads and bridges in phased manner.
(1) Road Network. Meghalaya has a road network of around 7,633 km, out of which 3,691 km is black-topped and the remaining 3942 km is graveled. Meghalaya is also connected to Silchar in Assam, Aizawl in Mizoram, and Agartala in Tripura through national highways. Many private buses and taxi operators carry passengers from Guwahati to Shillong. The journey takes from 3 to 4 hours. Day and night bus services are available from Shillong to all major towns of Meghalaya and also other capitals and important towns of Assam and the northeastern states.
(2) Railway. Meghalaya has a railhead at Mendipathar and regular train service connecting Mendipathar in Meghalaya and Guwahati in Assam, has started on 30 November 2014. The Cherra Companyganj State Railways was a former mountain railway through the state. Guwahati (103 kilometres (64 mi) from Shillong) is the nearest major railway station connecting the north-east region with the rest of the country through a broad gauge track network. There is a plan for extending the rail link from Guwahati to Byrnihat (20 kilometres (12 mi) from Guwahati) within Meghalaya and further extending it up to state capital Shillong.
(3) Aviation. State capital Shillong has an airport at Umroi 30 kilometres (19 mi) from Shillong on the Guwahati-Shillong highway. A new terminal building was built at a cost of ₹30 crore (US$4.0 million) and inaugurated in June 2011. Air India Regional operates flights to Kolkata from this airport. There is also a helicopter service connecting Shillong to Guwahati and Tura. Baljek Airport near Tura became operational in 2008. The Airports Authority of India (AAI) is developing the airport for operation of ATR 42/ATR 72 type of aircraft. Other nearby airports are in Assam, with Borjhar, Guwahati airport (IATA: GAU), about 124 kilometres (77 mi) from Shillong.