What is the reason behind Assam being transformed into a lucrative source of revenue for the Colonial administration?

Demand of railway sleepers

The correct answer is Option (2) → Demand of railway sleepers

The advent of the railways in Bengal marked an important turning point, which saw the conversion of its forest policy in Assam (Assam was then part of the Bengal province) from one of laissez faire into one of active intervention. The demand for railway sleepers transformed the forests in Assam (this included all the present-day seven sister states) from an unproductive wilderness into a lucrative source of revenue for the colonial administration.

The demand for railway sleepers was a significant factor driving the colonial administration to intervene more actively in forest management in Assam. The construction of railways required large quantities of timber, leading to increased logging and exploitation of forest resources, which necessitated a shift in forest policy towards active intervention and regulation.