Regional disparities in India

Meaning of Regional Disparities/Imbalances

• Regional Imbalances implies that there is difference in ‘economic development’ of different regions.
In India ‘region’ means a state or district or union territory. Regional imbalances may be inter-state
or intrastate.
• Regional imbalances or disparities means wide differences in per capita income, literacy rates, health
and education services, levels of industrialization, infrastructural facilities etc. between different
regions. Regions may be either States or regions within a State.
• It refers to difference in economic development and uneven economic achievement in different
geographical regions.
• It is reflected by the indicators like per capita income, the proportion of population living below the
poverty line, the percentage of urban population, percentage of population engaged in agriculture
vis-à-vis engaged in industries, infrastructural development of different states.
• The co-existence of relatively developed & economically depressed states and even regions within
each state is known as regional Disparity or regional imbalance. In general regional disparities or
imbalances we meant wide differences in per capita income, literacy rates, availability of health and
education services, levels of industrialisation, infra structural facilities etc between different regions.

Regional imbalances may be:

(i) Natural Regional Imbalances:
These are the imbalances in inter regional or intra-regional development due to unequal distribution of
natural resources by the nature. Each region is different from the other region in respect of natural
resources, water capacity, forest etc.
(ii) Man Made Regional Imbalances:
There may be some regions where more efforts have been made for development by giving preference
for investment and other development efforts like – subsidies, grants, special status etc.
Types of Disparities/Imbalances
1. Global Disparity (Disparity between Nations)
2. Inter-State Disparity (Disparity between States)
3. Intra-State Disparity (Disparity within States)
4. Rural-Urban Disparity (Disparity between Rural & Urban)
Causes of Regional Imbalances or Disparities in India:

1.Historical factors: British regime

Regional imbalances in India started from its British regime. British industrialists mostly preferred to
concentrate their activities in two states like West Bengal and Maharashtra and more particularly to
three cities like Calcutta, Bombay and Madras and neglecting the rest of the country to remain
backward. The uneven pattern of investment had resulted in uneven growth of some areas keeping other
areas neglected.
2.Geographical factors : Natural factors
Geographical factors play an important role in the developmental activities of a developing economy.
Adverse climate and floods are also responsible factors for poor rate of economic development of
different regions of the country which is shown by low productivity and lack of industrialization. Natural
factors resulted in uneven growth of different regions of India.
3. Failure of planning: Although balanced growth has been accepted as one of the major objectives of
economic planning in India, since the second plan on wards, but it did not make much headway in
achieving this object.
4. Financial: Small and Medium enterprises which are important engine of growth and productivity have
not been able to access finance in rural areas.
5. Infrastructure
6. Disparities in Socio-Economic Development
7. Political instability
Political instability in the form of instable Government, law and order problem etc. have been obstructing
the flow of investment into these backward regions besides making flight of capital from these backward
states. Thus this political instability prevailing in some backward regions of the country are standing as a
hurdle in the path of development of these regions.
8. Predominance of Agriculture:
9. Lack of Motivation on the Part of Backward States
Growing regional imbalances in India have also resulted from lack of motivation on the part of the
backward states or industrial development while the developed states like Maharashtra, Punjab,
Haryana, Gujarat, Tamil Nadu etc. are trying to attain further industrial development, but the backward
states have been showing their interest on political interferences and manipulations instead of industrial
development.
10. Locational Advantages
Due to some locational advantages, some regions are getting special favour in respect of site selections
of various developmental projects. Regional imbalances arise due to such locational advantages accrue
to some regions and the locational disadvantages to some other regions.

Indicators of Regional Imbalances in India

1.State Per Capita Income: The most significant indictor of regional imbalance or disparity among the
different states of India is the difference in per Capita income state income .
Among 28 states and 5 union territories Goa has the highest NSDP Per capita ( 2019-20 ) 24,66,285 and
Bihar has the smallest NSDP PC746,644.Telegana , Karnataka , Kerala , Haryana , Tamil Nadu and
Gujarat achieved higher percapita income compared with UP , Jharkhand , Assam , Manipur and Madhya
Pradesh .
The gap in per –capita incomes between the richest and the poorest states has grown over the past few
decades . at the beginning of the millennium , the per capita income of the five richest states was 145 %
higher than that of the bottom five states . That difference rose to 289 % in 2010-11 , and further to 322
% in 2018-19 .
2.Inter - State Disparities in Agricultural and Industrial Development: In spite of various attempts for
industrialization , agriculture continues to be the most important economic activity from the point of
view of output & employment in most of the States in India . The impact green revolution has been
confined to relatively small areas .
Inter – state disparities in agricultural & industrial development in India are majorly in the states like
Punjab , Haryana & parts of Uttar Pradesh . Yet Punjab & Haryana have recorded high rate of
productivity due to its high proportion of irrigated area & higher level of fertilizer use . On the other hand
, states ; like Assam . Bihar , Orissa and Uttar Pradesh have been lagging behind in respect of the pace of
industrialization

3. Intra-State imbalance: There is a growing tendency among most of the advanced states concentrate
its development activities towards relatively more developed urban, and metro cities of the states while
allocating its industrial and infrastructural projects by neglecting the backward areas.

4. Spatial Distribution of Industries: The country as a whole has achieved industrial development at a
fair rate , since independence , but the spatial distribution of such industries & their development
between various states remained almost uneven .
States like Punjab, Haryana, Maharashtra, Gujarat, Kerala, and Karnataka have achieved considerable
development in its industrial sector. But West Bengal could not keep pace in its industrial growth as
much as other industrially developed states.
5. Population below poverty line: Percentage of population living below the poverty line in different
states is another important indicator of regional imbalance.
while some states like Goa , Maharashtra have about 5 % of population living below the poverty line ,
states like Uttar Pradesh , Madhya Pradesh & Bihar have 29,31 & 33 percent of population living below
the poverty line . With all India average of 21.6 percent in 2013 they were 11 states whose percentage of
population lying below the poverty line exceeded the all India average.

6. Degree of Urbanization: In respect of urbanization the percentage of urban population to total

population is an important indicator. The all India percentage share of urban population stands at
27.81% in 2001 and 31.6 in 2011.

7. Per Capita Consumption of Electricity: Punjab, Gujarat, Haryana, Maharashtra etc., having higher
degree of industrialization and mechanization of agriculture, have recorded a higher per capita
consumption of electricity than the economically backward states like Assam, Bihar, Orissa, Madhya
Pradesh and Uttar Pradesh.

8. Employment Pattern: Another important indicator of regional imbalance is unemployment rates in

different states While Haryana has the highest unemployment rate Madhya Pradesh and Orissa have the
lowest unemployment rates . High unemployment within states indicates slow development & wastage
of human resources .Rajasthan, Maharashtra, Gujarat, Haryana, Punjab, Tamil Nadu and West Bengal
are maintaining a higher average daily employment of factory workers per lakh of population as
compared to that of lower average maintained in industrially backward states like Assam, Orissa, Uttar
Pradesh.

9. Foreign Direct Investment:

High FDI States: Maharashtra, Dadra nagar Haveli, Daman & Div, Delhi, Haryana, Tamilnadu,
Pondicherry, Karnataka, Gujarat, Andhra Pradesh. Medium FDI States: West Bengal, Sikkim, Andaman &
Nikobar islands, Rajasthan, Chandhighadh, Punjab, Haryana, Himachal Pradesh, Madhya Pradesh,
Chatiishghadh, Kerala, Lakshadweep.
Low FDI States: Goa, Orissa, UP, Uttaranchal, Assam, Arunachal Pradesh, Manipur, Meghalaya,
Mizoram, Nagaland, Tripura, Bihar and Jharkhand.

10. Human Development Index:

It is a composite statistic of life expectancy, education, and income per capita indicators. It is also an
important indicator of regional disparities.
Kerala, Delhi, H.P, Goa, Punjab are very highly developed. NE (excluding Assam), Tamilnadu, Haryana,
J&K, Gujarat, Karnataka are highly developed. West Bengal, Uttarakhand, Andhra Pradesh, Assam,
Rajasthan are medium developed. UP, Jharkhand. M.P, Bihar, Chhattisgarh are low developed, which
clearly shows regional imbalances between the States in India.

11. Literacy Rate :

Literacy rate is another indicator of regional imbalances . Today while Kerala has the highest literacy rate
of 93 percent , Bihar has lowest rate of about 73 percent only . The gap of 201 percentage points
increases the regional imbalance through evils like more unemployment among the illiterate , which
increases poverty & hinders development.

Consequences of Regional Imbalances

1.Inter-States and Intra State Agitations: Uneven regional development or regional imbalances lead to
several agitations with in a State or between the States. The erstwhile combined State of Andhra
Pradesh can be sited as the best example of the consequences of intra-state regional imbalance in terms
of development. According to HDI (2005-06), Telangana Region had only 3 districts namely Hyderabad,
Ranga Reddy and Karimnagar with in 10 HDI Ranks. Whereas, Seemaandhra Region had 6 districts (i.e.
double the districts than the Telangana had with in 10 HDI Ranks), namely Krishna, Guntur, Nellore,
Chittore, West Godavari, and Kadapa. There were several agitations for separate Telangana State for
several decades from 1969-2014 finally it was formed as a separate State on 2-06-2014 as 29th State of
India. Still now and then, there are agitations for separate Vidhrbha State in Maharashtra and Bodoland
movement in Assam for separate Bodo State for Bodos.
2. Migration: Migration takes from backward areas to the developed areas in search of livelihood. For
example, migration from rural to urban. Because, urban areas will provide better quality of life and more
job opportunities when compared to rural.
3. Social Unrest: Differences in prosperity and development leads to friction between different sections
of the society causing social unrest. For example Naxalism. Naxalites in India function in areas which
have been neglected for long time for want of development and economic prosperity.
4. Pollution: Centralization of industrial development at one place leads to air, sound and water
pollution.
5. Housing & Water Problem: Establishment of several industries at one place leads to shortage of
houses as a result rental charges will increase abnormally. For example, Mumbai, New Delhi, Chennai
and Hyderabad and over population leads to water crisis.
6. Frustration among Rural Youth: In the absence of employment opportunities in rural and backward
areas leads to frustration especially among educated youth.
7. Under-Developed Infrastructure: Rural and backward areas do not have 24 hours power, proper
houses, safe drinking water, sanitation, hospitals, doctors, telephone and internet facilities.
8. Aggregation of the imbalance: Once an area is prosperous and has adequate infrastructure for
development, more investments pour-in neglecting the less developed regions. So an area which is
already prosperous develops further.
For examples, the rate of growth of the metropolitan cities like Mumbai, Delhi, Kolkata, Chennai,
Bangalore and Hyderabad is higher compared to other metro cities of India.

Suggestions:
1. Identification of the Backward Areas and Allocation of funds: First of all, government must identify
all the backward areas within the country and special attention should be paid by preparing and
implementing special plans and models suited to these for the overall development. Due care also to be
taken by allotting sufficient funds.
2. Need for Investments in Backward Areas: Government and the private sector must realize that
regional disparities can be removed only, if greater attention is paid towards backward areas, which
need more investments. It is also important to formulate special policies and programmes for the
development of backward areas like - north- eastern regions.
3. Good Governance: Good governance refers to equitable distribution of the gains of development to all
the regions without any prejudice so that over all development takes place in a country. Thus, the better
the governance, the less would be the disparities in country.
4. Political Will: Political will is vital for the balanced regional development i.e. to remove regional
imbalances in a country.
5. Incentives: Incentives should be provided for promoting investments in the backward regions.
Incentives may be broadly divided in to
(a) Central Government Incentives: Income Tax concession, Tax Holiday, Central Investment Subsidy
Scheme, Transport Subsidy Scheme should be provided to all the identified backward and Hill areas to
correct the regional imbalances.
(b) State Government Incentives: In order to attract private sector investment in backward regions, the
State Governments have also been offering several incentives in different forms. The State Governments
should review all these schemes time to time for further development of their backward regions.
6. Promoting New Financial Institution in Backward Region: In order to accelerate the pace of
industrialization in backward areas, the Government of India should promote new financial institutions.
Government must see that these Institutions functional well for all round development of the backward
areas.
7. Setting Up of Regional Boards: As per Article 321 D of Indian Constitution, Regional Boards with
necessary legal powers, funds should be instituted to remove regional disparities in the States.
8. Growth Corridors comprised of education zones, agricultural zones and industrial zones should be
operationalized for the rapid development of backward areas in the states.
9. Strict restrictions on usage of productive agricultural lands for nonagricultural purposes to be
implemented. If required, permissions for non-agricultural usage should be granted only after the
farmers have been guaranteed a better life.
10.Usage of natural resources for the development of tribal areas to be implemented. There should be
guaranteed share for the tribals in the income generated from the use of natural resources.
11. A composite criteria for identifying backward areas (with the Mandal/Block as a unit) based on
indicators of human development including poverty, literacy and infant mortality rates, along with
indices of social and economic infrastructure should be developed by the NITI Aayog.
12. Devolution of funds: Union and State Governments should adopt a formula for Mandal/ Block-wise
devolution of funds targeted at more backward areas.
13. Strengthening of local governments and making them responsible and accountable.
14. A system of rewarding States (including developed States) achieving significant reduction in intra-
State disparities should be introduced.
15. Additional funds for Infrastructure: Additional funds need to be provided to build core infrastructure
at the inter-district level in less developed States and backward regions. The quantum of assistance
should be made proportionate to the number of people living in such areas.
16. Greater share of central pool of funds should be allocated to backward states.
17. Provision of Grant-in-aid by the Central Government to the backward states.
18. Launching of Special Area Programmes like Desert Development Programme, Drought Prone Area
Programme, etc.
19. Propagation and use of improved dry farming technology.
20. Provision of infrastructural facilities in backward districts.
21. Development of forward and backward linkages in the backward regions.
22. Special grants are to be given to the backward and tribal areas.
23.Schools to be opened providing free and compulsory education to remove illiteracy.
24. Hospitals and dispensaries to be set up to give medical care to the people.
25.Water facilities to be provided for domestic purposes and agriculture.
26.Cottage and small industries are to be promoted to provide employment opportunities.
27. Roads and railway lines have to be laid down to link different places.
28. Shedding Caste and Religion politics and marching towards “Balanced Regional Development” is the
need of the hour to reduce “Regional Imbalances in India”.
29. Government must speedup developmental works in backward areas.

Conclusion:
Regional imbalance is a threat to the goal of inclusive growth and reduction of poverty. The growing
regional disparities have dampened the speed of further economic reforms, and hence may pose a
barrier to India’s future economic growth. Regional disparities will result in regional tensions, which in
turn may lead to popular agitations and at some times militant activities also. Regional disparities in
economic and social development which exist within some of the States due to the neglect of certain
backward regions have created and creating demand for separate States.