Regional Imbalances in India

When we talk about Regional Planning, a very obvious concern is the imbalance in development across regions. But in India, even understanding these regional imbalances comes with its own set of problems.

Let’s understand this:

⚠️ Why the Term “Regional Imbalance” Is a Misnomer

In most textbooks and reports, you’ll find the phrase “Regional Imbalances”. But scholars argue that in the Indian context, this term is actually misleading.

🧠 A more accurate term would be “Interstate Imbalances.”
Why?

Because:

• The data we have is mostly available at the state or district level.
• So technically, what we are comparing is not “regions” (which could be ecological, historical, or cultural zones), but states as administrative units.

Thus, what we call “regional disparity” is really an imbalance between states.

📉 Problem of Data – Not Everything Adds Up

Here lies a big problem for planners and researchers:

📊 (A) Data Is Not Comparable

• Different states use different methodologies to collect data.
• Even the price levels vary from state to state.
• The commodities included, and the weights assigned to them, differ.

🧠 So, when we say “State A has higher per capita income than State B”, we might not be comparing apples to apples.

🔍 (B) Indicators Are Inadequate or Misleading

The most commonly used indicator of development is: Per Capita Income (PCI)

But this single indicator is riddled with issues:

⚠️ Limitations of Per Capita Income as an Indicator

Let’s understand why Per Capita Income alone cannot paint the full picture:

🚫 Incomparability

• Price levels differ across states.
• Market baskets (i.e., the items used to calculate cost of living) vary.
• Weights assigned to commodities are not standardized.

This makes PCI calculations regionally inconsistent.

⚖️ It May Conceal Positive Factors

• Some underdeveloped regions may have better infrastructure or natural resources — but still show low PCI.
• There might be potential for development that PCI doesn’t reflect.

🛒 Barter and Non-Monetised Economy

• In some tribal and remote areas, barter exchange still exists.
• The economy isn’t fully monetised, so money-based indicators like PCI are not valid representations of actual economic activity.

🔁 So, What Other Indicators Can Be Used?

If Per Capita Income is not enough, planners and researchers must rely on a basket of indicators to assess regional disparities more holistically.

✅Some useful indicators include:

Indicator	What it Reflects
Industrial growth	Regional industrialisation levels
Agricultural growth	Productivity and farming progress
Literacy rates	Human capital and education access
Urban population %	Urbanisation and access to services
Workers in manufacturing %	Level of industrial employment
Total road length	Connectivity and infrastructure
Infant Mortality Rate (IMR)	Health conditions and service delivery

Using multiple indicators gives us a multi-dimensional view of development, which is more suitable for a country as diverse and complex as India.

Now, let’s recap a bit what we read till now in this section:

• The term “Regional Imbalances” should ideally be “Interstate Imbalances” due to the nature of data availability.
• The data is often not comparable, and Per Capita Income, while widely used, is an incomplete and potentially misleading indicator.
• A set of diverse indicators—economic, social, and infrastructural—must be used to accurately understand and address regional disparities in India.

📌 Reasons for Regional Imbalances in India

Even after decades of planning and reforms, India continues to experience stark regional imbalances. Some areas, like Maharashtra or Tamil Nadu, have become highly industrialized, while others, like Bihar or many northeastern states, still lag behind.

Let’s now understand — why do these imbalances persist?
Here’s a logical breakdown of the nine key reasons:

1️⃣ Historical Factors – Uneven Colonial Development

Let’s begin with history, because it often lays the foundation for present realities.

• During British rule, development was highly selective.
• The British invested only in areas that suited their economic interests — primarily those with trading potential and raw materials.
• As a result:
  • Regions like West Bengal (Kolkata), Maharashtra (Mumbai), and Chennai became centers of commerce and industry.
  • Other regions, particularly the interior and tribal areas, were neglected.

🧠 So, we inherited imbalanced geography of development right from the colonial period.

2️⃣ Geographical Factors – Terrain, Climate & Accessibility

Geography plays a natural role in development.

• Areas with rugged terrain, dense forests, steep slopes, or frequent floods face:
  • Higher costs of infrastructure
  • Difficulty in resource mobilization
  • Problems in governance and delivery

Examples:

• Himalayan states (Himachal, Kashmir, NE states) face natural challenges due to inaccessibility and ecological fragility.

📍 Geography can thus act as both a physical and economic barrier.

3️⃣ Locational Advantages – Favouritism by Nature & Policy

Some areas naturally enjoy locational advantages:

• Coastal states attract port-based industries, tourism, and trade.
• Northern plains offer flat terrain and fertile soils, ideal for agriculture and infrastructure.

Moreover, governments also prefer these regions for setting up projects because of these advantages.

🌍 So, location becomes destiny for many regions.

4️⃣ Inadequacy of Economic Overheads – Lack of Basic Infrastructure

“Economic Overheads” include:

• Transport & communication
• Power supply
• Banking and finance
• Technology access

These are essential preconditions for industrialization and growth.

💡 Private investors naturally flock to regions with existing infrastructure, creating a cumulative advantage.

But regions like:

• Bihar
• North-Eastern states
• Tribal hinterlands
  remain neglected due to the absence of such overheads.

5️⃣ Failure of the Planning Mechanism

Even though balanced regional development has been a stated goal since the Second Five-Year Plan, in reality:

• Planning often ended up benefiting already developed regions more.
• Funds, incentives, and attention did not trickle down effectively to backward states.

In short:

⚖️ The planning process reinforced the gap instead of bridging it.

6️⃣ Green Revolution – Regionalized Benefits

The Green Revolution changed Indian agriculture — but only for a few.

• It focused on highly irrigated, fertile areas like:
  • Punjab
  • Haryana
  • Western Uttar Pradesh

Why?

• The goal was to maximize food output and utilize limited resources efficiently.

But this marginalized other regions:

• Eastern India
• Central India
• Rain-fed and tribal regions

Thus, a region-specific success created a nationwide imbalance.

7️⃣ Lack of Ancillary Industries

Even where the government did invest in backward areas — e.g., setting up public sector units like:

• Rourkela (Odisha)
• Bhilai (Chhattisgarh)
• Bongaigaon (Assam)

— those areas still remained underdeveloped.

Why?

🧩 Because ancillary industries — the small-scale industries that support the big ones — never developed properly.

Without them:

• Local job creation remained low.
• The economic impact of large industries didn’t percolate into the wider region.

8️⃣ Lack of Motivation in Backward States

Here, the argument shifts from geography and policy to attitude and governance.

• Some backward states lack proactive governance.
• There is political manipulation, bureaucratic inefficiency, and short-term populism rather than a long-term development vision.

In contrast:

• States like Maharashtra, Gujarat, and Tamil Nadu are more industrially aggressive and investor-friendly.

🧠 So, a state’s own political will and administrative efficiency matter a lot.

9️⃣ Political Instability – A Barrier to Investment

Finally, regions affected by:

• Violence and insurgency
• Unstable governments
• Poor law and order

…naturally repel private investment.

Examples include:

• Parts of the North-East
• Central India’s Red Corridor
• Areas affected by ethnic unrest

🚫 Investors look for stability and security, and in its absence, they either avoid or withdraw from these areas.

📚 Final Reflection

To truly bridge the regional imbalance, India must:

• Invest more strategically in backward regions.
• Build infrastructure, not just announce policies.
• Focus on inclusive planning, peace-building, and capacity enhancement.