REGIONAL DISPARITIES IN INDIA

A Project Submitted to

ARMY INSTITUTE OF LAW, MOHALI

In partial fulfillment of the requirements for the award of degree of

B.A. L.L.B.

SUBMITTED TO SUBMITTED BY

Ms. Ekjyot Gujral Esha Ahlawat

(Prof of Economics) 2246

PUNJABI UNIVERSITY, PATIALA (PUNJAB)

2023-24
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DECLARATION

It is certified that the project work presented in this report titled “Regional Disparities in
India” embodies the result of original work carried out by me. All ideas and references have
been duly acknowledged.

Esha Ahlawat

2246
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ACKNOWLEDGEMENT

In preparation of my assignment. I had to take help and guidance of some respected persons
who deserve my deepest gratitude. As the completion of my assignment gave me much
pleasure, I would like to show my gratitude to Ms. Ekjyot Kaur Gujral for giving me
guidance through numerous consultations. I would also like to extend my gratitude to all
those who helped me directly or indirectly during the completion of this project.

I would like to thank my family and peers, whose constant support and motivation kept me
encouraged to work towards the completion of this assignment. I also extend my heartfelt
thanks towards Army Institute of Law, Mohali and Dr Tejinder Kaur. Principal, for providing
me with an opportunity to make my project on such an interesting and engaging topic.
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INDEX

S. NO. TOPIC PAGE NO.

1. Introduction 05

2. What is regional Disparities ? 05

3. History of Regional Disparities 05

4. Impact of Regional Disparities 06

5. Regional Disparities in India 07

6. Causes of Regional Disparities 08

7. Conclusion 11

8. Bibliography 12
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INTRODUCTION

In a world increasingly characterized by the interplay of complex global systems, it's

common to find disparities across different regions within a nation. This discrepancy, widely
known as Regional Imbalance, impacts nations and their economies, creating an economic
and social dichotomy that calls for effective solutions. But, what is Regional Imbalance?

WHAT IS REGIONAL DISPARITIES ?

Regional Imbalance is the unequal distribution of resources, wealth, development, and

opportunity across different regions within a country. This disparity is often reflected in the
contrast between urban and rural areas, or between various geographical regions. The
concentration of industries, employment opportunities, and wealth in certain regions often
leads to regional imbalance. This divergence is further intensified by factors like population
density, educational attainment, and government policies.

HISTORY OF REGIONAL DISPARITIES: A BACKWARD GLANCE

Understanding the history of regional imbalance is crucial to realize its roots and the
chronology of events that contributed to this economic disparity. Looking at the global
canvas, the history of regional imbalance dates back to the dawn of industrialization.

When countries embraced the industrial revolution, it led to rapid growth in certain regions,
while others lagged due to factors such as lack of resources, low population, or limited access
to technological advancements. As a result, developed regions witnessed an influx of
population from less developed areas, which led to the concentration of wealth, industry, and
power, eventually manifesting as regional imbalance.

In India, the roots of regional imbalance can be traced back to the British colonial era. The
British introduced modern industries primarily in regions with accessibility to ports or raw
materials, which created industrial hubs like Kolkata, Mumbai, and Chennai. Post-
independence, attempts were made to rectify this imbalance through the establishment of
public sector industries in backward regions. However, these attempts had limited success, as
the legacy of colonial policies and the complexity of regional disparities posed significant
challenges. The era of liberalization and globalization further intensified regional imbalances,
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with industries preferring regions with established infrastructure, skilled manpower, and
favorable policies.

Hence, the history of regional imbalance is not just a tale of economic disparity but a
testimony to the influence of industrialization, colonial legacy, and policy decisions on the
geographical distribution of wealth and development. This understanding lays a firm
foundation for addressing regional imbalance, guiding us towards more balanced, equitable,
and sustainable policies in the future.

IMPACT OF REGIONAL DISPARITIES: A MULTI-DIMENSIONAL

EXAMINATION

The impact of regional imbalance seeps into every layer of society and economy, resulting in
a complex network of implications. Let's delve into the multidimensional impact this socio-
economic phenomenon has on nations and their people.

● Economic Consequences
At the economic level, regional imbalance contributes to unequal wealth distribution, creating
prosperous regions while others lag in poverty. This dichotomy leads to economic
inefficiency and can significantly stymie national growth. It also results in skewed investment
patterns, as businesses tend to favor prosperous regions, further deepening the economic
divide.

● Social Ramifications
On the social front, regional imbalance fosters discontent and can fuel tensions between
different regions, thereby threatening social harmony. Regions left behind may feel
marginalized and ignored, fostering sentiments of injustice and social inequality. These
feelings can precipitate unrest and conflict, destabilizing societal cohesion.

● Demographic Implications
A significant demographic implication of regional imbalance is migration. People from less
developed regions often migrate to prosperous areas in search of better opportunities, leading
to overpopulation and pressure on resources in developed regions, and depopulation in less
developed ones. This demographic shift has substantial implications for urban planning,
housing, and social services.
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● Environmental Impact
Often overlooked, the environmental impact of regional imbalance can be profound. The
excessive concentration of industries and population in specific areas leads to environmental
degradation, including air and water pollution and depletion of natural resources. Conversely,
neglected regions might suffer from underutilization of their environmental resources.

Therefore, the impact of regional imbalance goes far beyond mere economic disparity,
influencing social dynamics, demographic trends, and the environment. Recognizing these
far-reaching impacts can help frame comprehensive and sustainable strategies to mitigate
regional imbalance and foster balanced, inclusive growth.

REGIONAL DISPARITIES IN INDIA: A CASE STUDY

To bring this concept closer to reality, let's examine regional imbalance in India, a country
with diverse geographical, cultural, and economic landscapes. India is a stark illustration of
regional imbalance, with its metropolitan cities burgeoning with opportunities while many
rural areas languish in poverty.

THE SCENARIO IN INDIA

o Economic Disparity: States like Maharashtra and Tamil Nadu have a significantly
higher Gross State Domestic Product (GSDP) compared to states like Bihar and Uttar
Pradesh. This demonstrates the uneven economic development across the country.
o Education and Healthcare: Literacy rates and access to quality healthcare are
markedly different across regions. Southern states fare much better than their
counterparts in the northern belt.
o Infrastructure Development: The difference in infrastructure is stark, with better road
connectivity, electricity availability, and water supply in some regions.

These variations underline the profound regional imbalance in India and its repercussions on
the nation's socio-economic fabric.
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CAUSES OF REGIONAL DISPARITY

Historical Factor
The British government and industrialists developed only those regions of the country
which possessed rich potential for prosperous manufacturing and trading activities. Thus
port cities like Bombay, and strategically important areas like Calcutta and Madras received
initial development.
In the absence of proper land reform measures and proper industrial policy, the country
could not attain economic growth to a satisfactory level.

Geographical Factors
The difficult terrain surrounded by flood prone areas, hilly terrain, rivers and dense forests
leads to increase in the cost of administration, cost of developmental projects, besides
making mobilization of resources particularly difficult.
Himalayan states like Himachal Pradesh, Northern Kashmir, Uttarakhand, North-Eastern
states remained mostly backward due to its inaccessibility and other inherent difficulties.

Location Specific Advantages

Due to some locational advantages like availability of irrigation, raw materials, market, port
facilities etc. some regions are getting special favour in respect of site selections of various
developmental projects e.g. oil refineries are mostly located in close to sea.

Early Mover Advantage

New investment in the private sector has a general tendency to concentrate much on those
regions having basic infrastructural facilities.
Term-lending institutions and commercial banks tend to concentrate investments in the
relatively more developed States.

Failure of Planning Mechanism

Local needs; one size fits all approach, lack of adequate resources, poor implementation of
plans, lack of planning capacity at state level reduced capacity of Planning Commission to
ensure balanced development.
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Restricted Success of Green Revolution

 Green revolution improved the agricultural sector to a considerable extent through the
adoption of new agricultural strategy of high yielding variety seeds, assured irrigation,
provision of technical knowhow etc
 However, the benefit of green revolution were restricted to Punjab, Haryana and
western Uttar Pradesh as this belt had advantage of irrigation facilities, were
traditionally wheat growing states, with adequate policy support from State
Governments which other areas lacked and couldn’t reap benefits of Green Revolution.

Law and Order Problem

 Extremist violence, law and order problem etc. have been obstructing the flow of
investments into backward regions besides making flight of capital from backward
states. Government Interventions to Reduce Regional Disparities

Higher resource transfers from the Centre to the Backward States via;
 Planning Commission (before 2014) mainly in the form of plan transfers, and
 Finance Commission in the form of non-plan transfers. Since 1969 a Special Category
status was introduced which was in operation till 13th Finance commission to provide
greater percentage of grants to such states from Centre.

 The large weight given to "Income Distance" by 14th Finance commission is an

important step towards plugging the gaps in per-capita income between states.

Development Programmes
 River valley projects and multi-purpose projects e.g. Narmada Dam for dry parts of
Gujarat and Madhya Pradesh, proposed Ken-Betwa inter river link project for
Bundelkhand region etc.
 Programmes of agriculture, community development programme, Drought Prone Areas
Programme, irrigation and power, transport and communications and social services
aimed at providing basic facilities and services to people in all the regions. Provision
of Facilities in Areas which Lag Behind Industrially
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Programmes For The Expansion Of Village And Small Industries

 Village and small industries are spread all over the country and various forms of
assistance provided by the Central and State Governments are made available in the
areas according to programmes undertaken.
 Industrial estates have been set up in all States, and increasingly, they are being located
in smaller towns and rural areas.

Diffusion of industrial activity and infrastructure

 In the location of public sector projects, the claims of relatively backward areas have
been kept in view wherever this could be done without giving up essential technical and
economic criteria.
 For North east region East West Corridor project, Special Accelerated Road
Development Project (SARDP-NE) and Trans Arunachal Highway for increasing
connectivity.

 There is an on-going major rail construction programme in the NER. 25 rail projects are
under way in the region of which 11 are national projects.

 Subsidies, exemptions and tax breaks given to industries for investing in backward
regions. For instance North East Industrial and Investment Promotion Policy (NEIIPP
2007) for Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland,
Sikkim, and Tripura; Special Package Scheme for Himachal Pradesh, Uttarakhand and
J&K.

Schemes for Development of Backward Areas

 The Backward Region Grant Fund (BRGF) is a Programme implemented in 272
identified backward districts in all States of the country to redress regional imbalances
in development.
 BRGF consists of two funding window namely Development Grant and Capacity
Building.

 Pradhan Mantri Khanij Kshetra Kalyan Yojana (PMKKKY) has been launched in
September 2015 for the welfare of tribals and tribal areas and other affected by mining.

Competitive Federalism
 Competitive federalism means spirit of competition among two or more states in the
matters of trade, investment and commerce.
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 States compete with each other to attract funds and investment, which facilitates
efficiency in administration and enhances developmental activities.

CONCLUSION

 India’s geographical diversity and different levels of development across regions mean
that location specific targeted action would be required in less prosperous regions to
ensure that a minimum acceptable level of prosperity.

 There is need to invigorate civil society in these areas as it is now well accepted in
developmental studies that the region with higher social capital tends to develop more
rapidly and sustainably.

 NITI Aayog’s Three Year Action Agenda underlines the specific action for North
Himalayan states, North-Eastern states, Coastal regions and Islands and Desert &
Drought prone areas this action plan should be diligently implemented.
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BIBLIOGRAPHY

1. https://testbook.com/ias-preparation/regional-imbalances
2. https://www.drishtiias.com/to-the-points/paper3/regional-development-disparity