Regional Imbalance

Indian Economy & Policies

 Indicators of Regional Imbalance
1. Net State Domestic Product (NSDP)
 Indicators of Regional Imbalance
2. Trends in investment & financial assitance
– More than 2/3rd of investment proposals in the
post reform period were concentrated in the
forward states
– Loans and financial assistance was maximum in
the forward states
The already better off states are getting more
benefitted in the post reforms era
 Indicators of Regional Imbalance
3. Infrastructural disparities
 Indicators of Regional Imbalance
4. Social Infrastructure & Human Development
 Indicators of Regional Imbalance
5. Incidence of poverty
 Indicators of Regional Imbalance
6. Industrial development
– Maharashtra, Gujrat, Tamil Nadu & Karnataka accounted for
(year 2015-16)
• 44% of total factories
• 46% of invested capital
• 50% of NSDP
7. Agricultural development
– Punjab & Haryana contribute to 17% of total food grains
production
– Productivity per hectare in Punjab & Haryana combined is
times the national average
• Better irrigation facilities
• Better mechanisation
• Use of fertilisers
 Indicators of Regional Imbalance
8. Urbanisation
– % of urban population in Maharashtra(45%), Tamil
Nadu (48%), Gujrat (43%) and Karnataka (39%) is
much higher than national average (31%)
– Odisha (17%), Bihar (11%), Assam (14%)

9. Availability of power
– Per capital availability of power in Punjab (1916),
Tamil Nadu (1448), Maharashtra (1239) Kwh
– Per capital availability of power in UP (530), Bihar
(242) in 2016-17
 Causes of Regional Imbalances
• Historical reasons of British favouring development
of select regions (Mumbai, Kolkata, Chennai)
• Oppression of farmers by landlords & money lenders,
lack of land reforms, lack of irrigation led to the
largest block of population (farmers) remaining poor
• Availability of natural resources
• Locational advantages
• Local governance
• Tendency of private sector for investments in already
developed areas (better infrastructure, resources,
trained manpower etc.)
Govt. Policy to remove imbalances
Government planning and policies are aimed at
• Industrialisation of lagging regions
• Development of irrigation, agriculture and allied
activities
• Improving infrastructural facilities like transport,
communication in backward areas
• Transfer of resources from centre to states in form of
planned assistance, non plan assistance and
discretionary grants
• Special programs for development of backward
areas
 Measures to remove imbalances
• Financial support from centre to state takes into account the
backwardness
• Special area development programs
– assistance to develop hilly, tribal and drought prone areas
– Development programs for farmers and agricultural labourers
• Encouraging private investments in backward areas through
incentivisation
– Income tax concession
– Subsidy schemes
– Transport subsidy
– Industrial plots at subsidised rates
– Subsidy in power
• Finance at conessional interest rates by financial institutions