Regional disparity refers to the unequal distribution of income, infrastructure, and opportunities across different regions of a country. Despite economic reforms since 1991, India continues to exhibit significant inter-state and intra-state inequality, with prosperity concentrated in a few developed states while lagging regions struggle to catch up.
Extent of Regional Disparites in India:
- Income Gap: Delhi’s per capita income is 250.8% of the national average, while Bihar remains below 50%. Odisha improved from 55.8% (2000–01) to 88.5% (2023–24), showing limited convergence.
- Sectoral and Spatial Imbalance: Western and Southern states such as Maharashtra, Gujarat, Karnataka, and Tamil Nadu contribute over 30% of India’s GDP, while Eastern states lag far behind.
- Industrial Concentration: Over 60% of India’s FDI inflows go to Maharashtra, Karnataka, and Gujarat, reinforcing regional concentration.
Factors Behind Widening Regional Disparities:
(a) Historical and Geographical Factors
- Colonial-era port cities such as Mumbai, Kolkata, and Chennai gained early industrial advantage.
- Difficult terrain and recurrent floods in Bihar and the North-East raise project costs and limit industrialization.
(b) Economic and Policy factors:
- Uneven Industrial Growth: Economic reforms favoured already industrialized states with robust infrastructure. For e.g., Gujarat’s ports and power availability attracted industries, while Bihar lagged.
- Sectoral Bias of Reforms: Post-1991 growth centered on IT and services, benefiting urban centres like Bengaluru and Hyderabad while leaving agrarian areas behind.
- Infrastructure Deficit: Poor transport and power connectivity in hinterlands restricts mobility of capital and labour.
- Fiscal Inequalities: Developed states mobilize higher revenues, enabling greater social spending.
Steps to ensure balanced regional development:
- Targeted Infrastructure Push: Develop transport, power, and digital connectivity in lagging regions (e.g., Eastern India, NE). For example, Eastern Peripheral Expressway improved connectivity and spurred local growth.
- Fiscal and Governance Reforms: Introduce performance-based funding linked to development outcomes. Strengthen local governance for efficient resource use.
- Promote Decentralized Industrialization: Encourage industrial clusters, SEZs, and MSME growth in backward states, on the lines of DMIC’s success in Madhya Pradesh and Rajasthan.
- Agriculture and Rural Transformation: Invest in irrigation, value chains, and agri-processing, using Rural Infrastructure Development Fund (RIDF) to boost rural economies.
Conclusion:
India must pursue a multi-pronged strategy, combining fiscal devolution, decentralized planning, and good governance to achieve equitable national progress.
‘+1’ Value Addition:
- Economic Survey 2023–24: 10 states contribute nearly 80% of India’s exports.
- World Bank (2022): Regional inequality in India is among the highest in Asia.
- NITI Aayog’s ADP (2024): Over 50 districts improved composite indicators by 20%+ since 2018.
- Divergence between Punjab (stagnating agriculture) and Haryana (industrial diversification) reflects ‘Dutch Disease’ effects in agrarian economies.
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