The states across India do not show a uniform growth trend. The Economic Survey pointed out that while the health trends across states are converging, the income and consumption pattern shows a sharp divergence. The progress of the country depends on the progress of each of its individual states.

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Causes Responsible for Regional Imbalances :

• Natural Resources
  • India’s different regions are endowed with different natural and human-based resources.
  • Some states such as West Bengal, Jharkhand, Odisha, Chhattisgarh etc. are endowed with better mineral resources while others such as Punjab and Haryana have better irrigation facilities
• Manmade / Historical Reasons
  • Neglect of some regions and preference of other regions in terms of investments and infrastructure facilities.
  • Historical factors that go back to mughal era and became prominent in British Era, have also contributed to regional inequities.
• Government Polices
  • Faulty planning process inherited from colonial rule in the post-independence era
  • Despite of the pro-backward areas policies and programmes, considerable economic and social inequalities exist among different States
  • Inter-state disparities in growth of GSDP have increased post economic reforms period.
  • Red tapism, corruption, lack of ease of doing of business environment and political and administrative inefficiency
• Geography
  • Factors like climate, water ways, terrain and soil are important for development
  • For e.g. coastal states have done well due to their developed ports and waterways for trade in comparison to the inland regions.
• Social factors
  • The poor and illiterate sections of less developed regions has high fertility rate thus growing population
  • Incapacity of the states to harness rich demographic dividend due to less developed job market.
• Economic factors
  • High input cost due to inadequate infrastructure and lack of demand driven market
  • Infrastructure like robust transport system is inefficient in poorer states.

Regional Disparities and Social Conflicts:

• In India, the growing threat of left extremism, which has been repeatedly acknowledged as the gravest security threat to Indian state, has its roots in economic deprivation and inequality in access to resources.
• It has also been recognised that growing social inequality corrodes social cohesion and can destabilise states. Some recent research has found that the likelihood of a country remaining mired in poverty or achieving sustainable growth has a strong relation to the average life expectancy of the citizenry. There, it is argued, that a shorter average lifespan leaves less time to reap the returns on investment in human capital.
• Inequality also breeds economic inefficiencies and limits productivity. Research by IMF has shown that income inequality slows growth, causes financial crisis and weakens demand. In a recent report, the Asian Development Bank has similarly argued that if emerging Asia’s income distribution had not worsened over the past 20 years, the region’s rapid growth would have lifted an additional 140 million people out of extreme poverty.
• More worryingly, rising inequality is seen as a contributing cause for the rise of authoritarian leaders, often with a divisive agenda fuelled by sectarianism, xenophobia and nationalism.
• Rising inequality can lead to conflict, both at social and at national level. Research has shown that in contrast to oligarchic regimes; democracies avoid serious political turbulence only so long as they ensure that the relative level of inequality between the rich and the poor does not become excessively large.
• Other studies, similarly, indicate that social conflicts are indeed likely to break out in situations where there are large inequalities between different groups. Some studies have concluded that ethnic groups with incomes much lower than a country’s average per capita income are more likely to engage in civil war.

Way forward:

• Union and State Governments should adopt a formula for Block-wise devolution of funds targeted at more backward areas.Co-operative and Competitive Federalism must be promoted.
• Governance needs to be particularly strengthened in more backward areas within a State. Aspirational Districts Program is a step in the right direction.
• The concept of Special Category States was introduced in 1969 (Fifth Finance Commission) for providing special assistance to disadvantaged states with a low resource base, difficult terrain, low population density, inadequate infrastructure and non-viable state finances.
• The Planning Commission also adopted an area-specific approach in its planning strategy and introduced multiple centrally sponsored programmes.
• The Tribal Development Programme, the Hill Area Development Programme, the Western Ghats Development Programme were initiated, catering to geographically homogeneous and backward regions.
• The mandate and role of the Niti Aayog should be redefined and enhanced to evolve models aimed at balanced regional development.
• Implementation of GST will reduce disparities among the state’s leading to more “convergence”.
• Business friendly environment in terms of single window clearances, transparency in regulation, tax benefits and providing adequate infrastructure.
• Given the constraints of fiscal space, seeking greater engagement of multilateral agencies, both traditional and non-traditional, like the World Bank, the Asian Development Bank, the New Development Bank as well as the Asian Infrastructure Investment Bank would be helpful.
• Special infrastructure programmes designed for the more backward states will have multiplier benefits.
• Solving problems specific to backward region –Naxalism; patriarchy; discrimination based on sex and caste
• By increasing the literacy levels and also providing basic health amenities, to a certain extent the disparities could be reduced.
• Female literacy is the best antidote to rising total fertility rate (TFR) and female labour participation an effective way to boost per capita inc
• Scientific and technological developments -Prudent interlinking of rivers; internet access through innovative projects like project loon; prospect of cloud seeding in drought prone areas; e-education; e-health etc
• Skill development –less than 5% of labourers in India have any skill certification; more attention to skill development particularly in less developed states