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Regional
Development and
Planning in
India
The choice of a specific location for the begin- 2004-05 has bypassed the majority and was not
ning of growth impulses depends on resource inclusive and no cross-sectional evidence to be-
endowment, cultural factors, concessions and lieve that growth in India is inclusive”. P P Ghosh
rebates by the state and so on. The history of et al., Centre for Economic Policy and Public Fi-
Indian planning since the third five-year plan sug- nance, Asian Development Research Institute, in
gests that new industries, especially public sector their article ‘Political Implications of Inter-State
undertakings (PSUs), were located in relatively Disparity’ published in 2009 in the Economic and
backward regions with the imaginative outcome Political Weekly, 2009, points towards skewed
of bringing growth across the regions and to cre- development and growing inter-state disparity.
ate a kind of ‘complex interaction across units of S Mahendra Dev et al., Centre for Economic and
production’. The outcome, however remains far Social Studies, in their book ‘India’s Development:
from bridging the gap between the core regions Social and Economic Disparities’ published in
and the hinterland. 2008 note similar findings about rural poverty
Development in the contemporary world is ratio across states.
dominated by neo-liberal states that promote It is also true that such disparities are larger in
decentralisation, deregulation, liberalisation and the poor countries and regions and, as Myrdal
a virtual global economy, resulting in more and noted, inequalities would be larger at the outset of
more people and regions are getting excluded. the development process. But, the reason behind
A major concern in development economics growing inequalities in a post-industrial phase
is to find a satisfactory answer to a basic ques- needs to be addressed anew. According to global
tion—why do different regions (countries/states/ economists, even in the most developed countries
districts) grow differently, leading to varying like USA or the industrial countries of Western
degrees of income and expenditure inequalities Europe, the same scenario was observed a few
and poverty. However, there is no single answer, decades ago, and is today on the increase again.
as there could be country or region specific factors The process of development is said to begin
such as governance, institutions, culture, method with the creation of external demand, surplus,
of intervention and so on, that play a dominant and, a comparative advantage. These, in combi-
role in determining the growth path. The great nation, are pre-conditions for a classical as well
inequality amongst different regions in terms as neo-classical conception of development. In
of economic performance and the distribution this scenario, relative deprivation of a region
of benefits of such economic development is an is bound to increase, and it has been suggested
undisputed reality. There are glaring examples of time and again that if the state intervenes or
various kinds of disparities at international, inter- when decentralisation begins, these disparities
state and interregional levels. The concentration of are likely to decrease. The reasons for disparities
development in terms of accumulation and afflu- have been cited as multifarious, ranging from
ence in a few parts of the world or in different parts race to environmental determinism and resource
of a nation continue to remain the norm rather endowment.
than the exception across the globe. Scholars like In United Kingdom, up to the mid-1970s, there
M H Suryanarayana, Indira Gandhi Institute of was a trend towards greater regional equality in
Development Research, Economics Programme, the distribution of income and wealth, but the
opine that, “tentative estimates, if valid, indicate next 25 years saw increasing regional inequali-
that the growth process between 1993-94 and ties. A similar situation has been reported from
the USA where, income inequality and concen- tries were located become deprived, with lots of
trated disadvantage have been on the rise since unemployed or retrenched labour force with old
the 1960s, as the affluent and poor are becoming technical know-how, unsuitable for employment
more concentrated than ever. India too, is facing in the new industries. Limitation of technological
similar conditions. change, missing link between production of raw
The idea of development in India was built materials and assembly of final product along
on the Nehruvian concept of modernity that with imbalance in industrial development has
was based on technological advancement and led to concentration of production and trading
industrialisation. The lack of profitability of activities in states which have traditionally de-
public sector industries has been partly ascribed veloped infrastructural facilities for large-scale
to the low rate of capacity utilisation – Bhilai, 65 production, manpower training and financial
per cent; Rourkela 48 per cent; Durgapur 30 per transaction.
cent during the 1970s. K Kalirajan et al. in their The regional dimension is important to address
2003 paper ‘Income inequality and convergence specific kinds of deprivation at different sites of
of income across Indian States’, and U Sankar’s exclusion like dam sites, highway sides, special
‘Economic reforms and liberalisation of the India economics zones , industrial sites, etc. In different
economy,’ 2003, highlight that it was the govern- parts of the country, the model of socialism, the
ment’s inability to maintain a high-rate of public mode of oppression, the mechanism of margin-
investment and its tendency to shift its pattern of alisation and processes that produce poverty and
expenditure away from development-oriented exclusion have been divergent.
projects that has had an adverse effect on the prof-
itability of industries. This resulted in a new form The author is Assistant Professor, Centre for the Study of
of concentration of industries in different parts Regional Development, Jawaharlal Nehru University,
of the country and the regions where such indus- New Delhi. bkchoudhary@mail.jnu.ac.in