In this article we will discuss about the balanced regional development in India. Learn about:- 1. Introduction to Balanced Regional Development 2. Nature of Balanced Regional Development 3. Objectives 4. Need 5. Strategies 6. Policies 7. Problem of Balanced Regional Disparities in India 8. Role of Government in Infrastructure Development in India 9. Problem of Income Inequalities in India 10. Other Details.
Balanced Regional Development in India: Introduction, Nature, Objectives, Need, Strategies, Policies, Role and Problems
1. Balanced Regional Development – An Introduction:
Each and every developed and developing nations have their own problems of regional development. Some parts of the country are highly developed and some parts are severely affected by lack of resources and facilities. Some regions are quite rich in natural resources but they are poor because they are unable to utilise their existing resources.
Similarly some regions are lacking in natural resources even then they are ensuring their development through technological development. So there is a need for stability in the development process of the country by adopting the process of balanced regional development of the country.
Balanced development of different parts of the country, extension of the benefits of economic progress to the less developed regions and widespread diffusion of industry are among the major aims of planned development. Expansion of the economy and more rapid growth increase progressively the capacity to achieve a better balance between national and regional development.
In striving for such a balance, certain inherent difficulties have to be met, especially in the early phases of economic development. In the interest of development itself, the maximum increase in national income should be achieved and resources obtained for further investment. The process is a cumulative one, each stage determining the shape of the next.
In some fields, as in industry, intensive and localised development may be inevitable. In other areas, also efforts are required to provide for more dispersed advance in sectors like agriculture, small industries, power, communications and social services. Sufficient investment is also needed in economic and social overheads to create numerous promising centres for growth.
Once a minimum in terms of national income and growth in different sectors is reached, it becomes possible to provide in many directions for a larger scale of development in the less developed regions. A large country with extensive natural resources, viewing each phase of its development in the perspective of a long-term plan. It is obvious to realise a high and sustained rate of growth but also to enable its less developed regions to come up to the level of the rest.
2. Balanced Regional Development – Nature:
Balanced regional development does not mean equal development of regions in the State. It simply implies the fullest realization of a region’s potential so that the benefits of overall economic growth are shared by the inhabitants of the region.
The present wave of globalisation is expected to free the Indian consumer from the exploitation of the incompetent domestic producers. The challenge posed by globalisation must be converted into an opportunity under the multilateral trade system. The New Economy producers in the software sector are already doing it. Those in the Old Economy sector must be facilitated to accept this challenge and to adapt to the new trade environment.
“Globalisation has to deliver what working people and their families everywhere aspire to – a decent job, security and a voice in the decision making process.” Globalisation is the only process through which we can remove regional imbalances. It ensures free flow of investment opportunities to exploit the natural resources and unemployed population of poor regions of the country. The objective should, therefore, be to make globalisation work and not to shoot it down, which will render living conditions in the developing world even more unacceptable.
3. Balanced Regional Development – Objectives:
The main objectives of regional development are to increase in national income and more balanced development of different parts of the country – are thus related to one another and, step-by-step, it becomes possible to create conditions in which resources in terms of natural endowment, skill and capital in each region are fully utilised.
In each region the nature of the problem and the impediments to rapid development in particular fields should be carefully studied and appropriate measures devised for accelerated development. The essential object should be to secure the fullest possible utilisation of the resources of each region, so that it can contribute its best to the national pool and take its due share from the benefits accruing from national development.
4. Balanced Regional Development – Need:
Need for balanced regional development arises due to following reasons:
1. To Accelerate the Development of Economy:
Balanced regional development is required to ensure accelerated pace of development. It also facilitates the development of every region based on the availability of natural resources in that particular area. Maximum utilization of manpower available in that area can also be ensured for the development.
2. To Develop the Economy Smoothly:
It facilitates hassle-free development of the economy. If all areas are equally developed then there is possibility of mutual co-operation in these areas. In case of regional imbalances, lower level of income of backward areas will succeed in diluting the growth achieved by the developed areas.
It will affect the goods and service being produced in the developed areas. Secondly with the help of balanced regional development barriers affecting transport and supply of goods etc. can be also removed. It will also help in minimizing the inflationary pressure in the economy.
3. To Develop and Conserve Resources:
The major objective of regional development is to ensure maximum utilization of available local resources. Process of regional development also put control on the destructive use of resources. Establishment of different industrial units makes possible for the better utilization and conservation of natural and human resources available at local level.
4. To Promote Large Employment Opportunities:
Availability of regional disparities in underdeveloped economy encourages income employment and production at low level. Establishment of industries in different areas and development of infrastructure facilities in backward areas create more employment opportunities. It also improves per capital production and income.
5. To Maintain Political Stability:
Balanced Regional Development is also required to maintain political stability. If regional disparities are exist in some areas and increase in income in other areas then it may become a danger point for the nation as a whole. Backward areas demand separation from the main stream to fulfill their dream of development.
6. To Defend the Country:
Regional development is quite important from the point to save the country from foreign aggression. If all areas are equally developed and industries are quite dispersed then air attack can be faced without any hurdles. If some regions have been developed and industries are concentrated in some areas the external aggression can put the economy in problem. Thus, balanced regional development is necessary from the view point of National Defence and its safety.
7. To Control Social Evils:
With the help of balanced regional development concentration of industries in big towns and cities can be easily controlled and it also helps in removing social evils in these areas. Industrial concentration encourages different types of pollution and thus, adversely affects the health and efficiency of people living in that particular area. Cost of living also increases which ultimately improves poverty and public unrest. Balanced Regional Development is necessary to control all these social evils.
5. Balanced Regional Development – Strategies:
Main strategies for balance regional development are as follows:
(i) The growth potential of each region should be fully developed, but in the precise manner in which this goal is achieved and the stages of growth will not be identical.
(ii) Some regional factors, such as those connected with physical features and geographical location, cannot be easily altered, but there are others which can be influenced by raising levels of education and skill, developing power and, generally, by applying science and technology on a larger scale.
(iii) Large scale industries, specially basic and heavy industries, frequently serve as a spearhead of intensive and broad-based development.
(iv) However, not all regions can offer equally favourable conditions for the development of industry.
(v) It is also possible to over-estimate the significance of the location of large industrial units in relation to the living standards of the bulk of the population.
(vi) To initiate infrastructure development and diversified programmes, the basic and capital goods industries and other large industries.
(vii) Keeping in mind the availability of related raw materials possibility to develop other industries need to be fully explored, such as labour intensive industries of the traditional type, small scale industries of the modern type, agricultural processing industries, forest industries, assembly operations and recreational industries.
(viii) Each region should endeavour to identify, plan for and promote industries which are specially suited to its conditions and for which it can provide relatively greater facilities.
6. Balanced Regional Development – Policies:
The policies and programmes meant for regional development are as follows:
(i) The priority was given to programmes like agriculture, community development, irrigation, specially minor irrigation, local development works, etc. which spread over the entire area within the shortest possible time;
(ii) Ensuring provision of facilities such as power, water supply, transport and communications, training institutions, etc. in areas which were lagging behind industrially or where there was greater need for providing opportunities for employment;
(iii) Launching programmes for the expansion of village and small industries;
(iv) In the location of new enterprises, whether public or private, consideration given to the need for developing a balanced economy in different parts of the country in particular, this aspect was to be kept in view where the location of an industry was not determined almost entirely by the availability of raw materials or other natural resources.
(v) The regional aspects of development were dealt with in three different ways-
(a) Through the plans of States emphasis was given to programmes which had a direct bearing on the welfare of the people in different parts of the country,
(b) Special programmes were undertaken in particular areas where development had either received a temporary setback, or was being held back by certain basic deficiencies,
(c) Steps were taken to secure more dispersed development of industry which, in turn, creates conditions for development in several related fields.
(vi) Programmes of agriculture, community development, village and small industries, irrigation and power, communications and social services have the widest coverage, and aim at providing basic facilities and services to people in all regions.
(vii) Special schemes were formulated for particular areas which had difficult problems to face. The programme included medium as well as minor irrigation schemes, construction of embankments for flood protection and land reclamation and contour bunding schemes.
(viii) 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. The location of several important projects like the steel plants has been determined on the basis of expert study and on economic considerations.
(ix) While in the selection of sites for basic capital and producer goods industries, proximity to raw materials and other economic considerations have naturally been important, it was felt that in a wide range of consumer goods and processing industries, it was possible to foster regional patterns of development.
These include cotton textiles, sugar, light engineering industries such as bicycles, sewing machines, electric motors, radio receivers, re-rolling of steel and non-ferrous metals from billets and semis, moulded plastics and manufacture and further processing of bulk drugs from penultimate products.
(x) To some extent the development of new processes and new uses of raw materials has assisted in the spread of industry. Thus, a beginning was made with the use of bagasse as raw material for paper, and a number of paper factories based on the use of bagasse have been approved for being set up in sugarcane growing areas. In encouraging better use of local resources care had been taken to ensure that a balance is maintained between regional distribution and considerations of economy in production.
(xi) 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 the programmes which are undertaken. Industrial estates have been set up in all States, and increasingly they are to be located in the smaller towns and rural areas.
(xii) It provides extensive opportunity for the development of different parts of the country. In drawing up these plans, the broad objectives have been to enable each State to contribute its best towards increasing agricultural production, to secure the largest measure of increase in income and employment feasible, to develop social services, in particular, elementary education, water supply and sanitation and health services in the rural areas, and to raise the levels of living for the less developed areas.
(xiii) Efforts were made to enlarge the possibilities of development in areas which have in the past been relatively backward. Thus, for instance, the intensive development of agriculture, extension of irrigation, village and small industries, large-scale expansion of power, development of roads and road transport, provision for universal education for the age- group 6-11 years and larger opportunities for secondary, technical and vocational education, improvements in conditions of living and water supply, and programmes for the welfare of scheduled tribes and castes and other backward classes will go a long way to provide throughout the country the foundations for rapid economic development.
(xiv) Poverty and under-employment are specially acute in areas with heavy pressure of population and in those with scanty development of natural resources. The large programme of rural works will help expand opportunities for work in these as well as other areas. In some parts of the country there will be considerable development in plantation industries, specially tea, coffee and rubber. Large industrial projects, river valley projects and others described later will also serve as vital centres for future growth.
(xv) Location for basic industries has generally to be based on technical and economic considerations. Moreover, in the case of industries which may be able to export a significant proportion of their output, in the national interest the location of new or additional capacity has to be guided by the need to secure economies of scale and to enhance the ability to compete in foreign markets.
7. Problem of Balanced Regional Disparities in India:
Even today India suffers from several problems like those of regional disparities and income inequalities. It is because, India presents a picture of extreme regional disparities in terms of such indicators of economic development/growth as per capita income, the proportion of population living below poverty line, working population in agriculture for living, the percentage of urban population of total population, percentage of workers in manufacturing industry and services sectors.
Indian economy is richly endowed with productive resources and potential of achieving a stage of self-sustained growth. In India, inter-regional disparities are so wide and persisting that they cannot be ignored. Economic activities which spell prosperity are not evenly spread throughout the country. In some states industries, financial institutions are concentrated whereas in some states or regions even infrastructure like roads, banks, electricity and water are not available.
In some regions infrastructure facilities are in huge quantities, but there is no proper use. Per capita State Domestic Products (SDP) are in variation. Some States such as Punjab, Haryana, Maharashtra are having higher per capita SDP whereas M.P., Bihar, Jharkhand have less per capita SDP.
Bihar, J&K, M.P. and Orissa recorded a lower growth rate and this contributed to the slow growth in their per capita income. An important reason contributing to widespread regional economic disparities in India is the effect of Green Revolution and uneven development of infrastructural facilities.
The planning commission has tried to overcome the problem of regional disparities in the following three ways:
(i) The recognition of backwardness a factor to be taken into account in the transfer of financial resources from the centre to states;
(ii) Special area development programmes directed at development of backward areas;
(iii) Measures to promote private investment.
Income Inequalities in India is another important problem.
This problem arises because of two things:
(a) In a market economy such inequalities lead to inequalities of economic opportunity.
(b) Distribution of income and wealth is closely linked to distributive justice.
In India, incidence of inequality and poverty go hand in hand. Both are widespread and feed each other.
The major trends in this regard are given below:
(a) The number of poor below poverty line has increased in absolute terms.
(b) The structure of economic system generates inequalities.
(c) Trends of public budgets and evasion of taxes strengthen inequalities in India.
8. Role of Government in Infrastructure Development of India:
Infrastructure (also termed as social overheads) has always been recognised as one of the crucial determinants of developmental level of an economy. It comprises those facilities for conducting various productive economic activities, which are not industry-specific. That is to say, these facilities are not designed to serve individual industries. They are there to aid and promote all kinds of economic activities. By their very nature, they tend to be commercially nonviable, but the economy cannot progress and sustain its developmental level without them.
Infrastructure is commercially non-viable because of:
(i) Long gestation period;
(ii) High capital investment;
(iii) Low rate of profitability;
(iv) Pilferage of facilities.
The very nature of “socialist-democratic welfare state” enshrined in the Constitution of India implies that Government has a spectacular role to play in developing the infrastructure for laying the foundation for economic and industrial development. Facilities like transportation, communication, information technology, roads, education, supply of power, fuel, water, etc., as well as development of human resources, facilities for education, training and development and overall socio-economic development of the people are the responsibility of Government.
Even since the independence, Government of India has made substantial investment on all these aspects; particularly plan outlay was very significant in these areas. An all-round progress in different segments of infrastructure has been recorded. This is true both of physical and social infrastructure. Expansion of different modes of transportation and communication has been phenomenal.
The generation of electricity has multiplied by number of time. Increased in irrigation facilities has been very large. Banking facilities has also been increased substantially. Rapid spread of education health and other services again bear the testimony to this.
But state has its own limitation. The supply of infrastructure fallen short of requirements due to lack of financial resources. The available infrastructure suffers from low productivity, underutilisation of and misutilisation of available infrastructure.
The limitations of the public infrastructure the Government took initiative to change the policy in the year 1991. In the post reform period beginning with 1991 there has been a paradigm shift in the government’s attitude vis-a-vis infrastructure. The Government of India has opened infrastructure sector particularly banking, power, communication, insurance etc., for private sector participation.
In post-reform era, in addition to taking steps to improve the performance of infrastructure provision under their direct control, government is responsible for creating policy and regulatory framework that safeguard the interests of the poor, improve environmental conditions and coordinate cross-sectoral interactions-whether services are produced by public or private providers. Government is responsible for developing legal and regulatory framework to support private involvement in the provision of infrastructure services.
The income inequalities and poverty are the important problems before the policy makers in under developed and developing economies like India.
This problem of income inequalities in India arises because of two things:
(i) In a market economy such inequalities lead to inequalities of economic opportunity.
(ii) Distribution of income (and wealth) is closely linked to distributive justice.
In India, incidence of inequality and poverty go hand in hand. Both are widespread and feed each other.
The major trends, in this regard, are given below:
(a) The number poor below poverty line has increased in absolute terms.
(b) The structure of economic system generates inequalities.
(c) Trends of public budgets and evasion of taxes strengthen inequalities in India.
Post Reform Period Effect:
The major factors which attributes to income inequalities are as under:
(a) Shift in earnings from labour to capital income;
(b) The rapid growth of service sector particularly banking, financial institutions, insurance and real estate with a consequent explosion in demand for skilled workers; and
(c) A drop in the rate of labour absorption during the reform period associated with an increase in regional inequality especially in the incidence of rural poverty.
Thus, the government is making all efforts through their poverty eradication programmes and other measures under plans to reduce the income inequalities.
In the present era of economic development, no economy can stand alone and immune from the developments in the foreign countries. Each and every country is therefore legitimately affected by what happens in the rest of the world. The international transmission effect is more-speedy, more substantial and more sustained than ever before. Now each country specially developing economy like India is trying to survive in the context of global scenario. Globalisation has given a new orientation to the world economies.
Globalisation deals with opening up of the economy for world market by attaining international competitiveness. It simply indicates interaction of the country relating to production, trading and financial transactions with the developed industrialised countries of the world. It offers both challenges and opportunities to the developing countries.
To maintain their economic and political identity, developing countries are trying to reorganise their economic, legal, social and political structure for facing the challenges of international competitiveness. India is also reorienting itself to globalise its systems for improving its international competitive strength.
Indian economy had experienced major policy changes in early 1990s. The new economic reform, popularly known as, Liberalization, Privatization and Globalization (LPG model) aimed at making the Indian economy as fastest growing economy and globally competitive. The series of reforms undertaken with respect to industrial sector, trade as well as financial sector aimed at making the economy more efficient.
With the onset of reforms to liberalize the Indian economy in July of 1991. This period of economic transition has had a tremendous impact on the overall economic development of almost all major sectors of the economy, and its effects over the last decade can hardly be overlooked. Besides, it also marks the advent of the real integration of the Indian economy into the global economy.
All the countries of the world developed in equally. Some countries are highly developed economically and some other countries are still developing and some more are under developed.
Several factors are responsible for such variations among the nations besides political factors as mentioned below:
(i) The availability of sufficient natural resources,
(ii) The quality of human resources and also its quantity,
(iii) Abundance of financial resources, and
(iv) Technological skills, efficient management skills among the people.
Regional imbalances are the by-products of above factors. The problem of regional imbalances is highly critical for almost all the countries of the world. There have always existed a variety of inter-regional and inter-state variations in terms of all macro indices linked with economic and social issues. There is what is known as ‘declining areas’ or ‘special areas’ within the frontiers of each country.
These typical areas qualify for special government assistance to uplift them from a state of stagnation or near stagnation, resulting from local unemployment, industrial imbalance, declining industries, over-population, and a variety of other economic and social ‘pulling’ factors. The problem is highly alarming in developing countries most of which suffer from acute and lasting differences in prosperity between geographical regions. This phenomenon of regional income differentials is termed as ‘regional dualism’. India is no exception to this.
In India, regional imbalance has been one of the major concerns before policy makers and planners. There had been a huge gap between active and vibrant regions and hinterland during pre-independence period in terms of availability of facilities and this has resulted in the form of unequal levels of development both in terms of economic and human.
The foremost problems of regional development are concerned with- (a) classifying regions, (b) measuring the inter-regional differences in prosperity/poverty, and (c) pulling, through economic and other measures, the declining areas so that are bestowed with equitable and balanced distribution of national prosperity and well-being.
One of the main consequences of regional imbalances is the migration of people to the developed areas. For instance many skilled people from India migrate to the developed nations. Similarly within India, people from rural areas or under developed regions have been migrating to highly developed cities or regions.
Hence the Mumbai city has been facing the menace of population pressure on its resources. Violence, law and order problems are the other consequences of such migrations to the developed regions from the under developed or developing regions. Almost all the major cities in India do face the very high intensity of population. Some of such cities are New Delhi, Kolkata, Chennai, Mumbai, Bangalore, Hyderabad, Pune, Ahmedabad, etc.
There have been demands for separate States in India since independence. For instance demands for a separate Telangana State in Andhra Pradesh, a separate Vidharbha State in Maharashtra. In the recent past a separate Chhattisgarh State was created from Madhya Pradesh, Jharkhand from Bihar and Uttaranchal from Uttar Pradesh.
These demands for separate States are mainly due to lack of economic development in such regions. The economic development of a particular region is measured based on per capita income, gross State domestic product, poverty, unemployment, etc. In India, Bihar, Orissa, Rajasthan, Madhya Pradesh, and Uttar Pradesh, north eastern States are comparatively backward economically when compared to the remaining States. Maharashtra, Gujarat, Tamil Nadu and Punjab are comparatively highly developed.
In Andhra Pradesh State, there are three regions namely the coastal region, the Rayalaseema region and the Telangana region. Among these three regions, the Telangana is most backward due to lack of resources, negligence by successive governments, poor quality of infrastructural facilities, etc.
This era of reforms has also ushered in a remarkable change in the Indian mindset, as it deviates from the traditional values held since Independence in 1947, such as self-reliance and socialistic policies of economic development, which mainly due to the inward looking restrictive form of governance, resulted in the isolation, overall backwardness and inefficiency of the economy, amongst a host of other problems.
This, despite the fact that India has always had the potential to be on the fast track to prosperity. Now that India is in the process of restructuring her economy, with aspirations of elevating herself from her present desolate position in the world, the need to speed up her economic development is even more imperative.
And having witnessed the positive role that Foreign Direct Investment (FDI) has played in the rapid economic growth of most of the Southeast Asian countries and most notably China, India has embarked on an ambitious plan to emulate the successes of her neighbours to the east and is trying to sell herself as a safe and profitable destination for FDI.
The process of globalization not only includes opening up of world trade, development of advanced means of communication, internationalization of financial markets, growing importance of MNCs, population migrations and more generally increased mobility of persons, goods, capital, data and ideas but also infections, diseases and pollution.
It is the integration of economies of the world through uninhibited trade and financial flows, as also through mutual exchange of technology and knowledge. Ideally, it also contains free inter-country movement of labour.
In context to India, this implies opening up the economy to foreign direct investment by providing facilities to foreign companies to invest in different fields of economic activity in India, removing constraints and obstacles to the entry of MNCs in India, allowing Indian companies to enter into foreign collaborations and also encouraging them to set up joint ventures abroad; carrying out massive import liberalization programs by switching over from quantitative restrictions to tariffs and import duties.
11. Suggestions for Removing Regional Disparities:
Following steps are to be taken to remove regional disparities:
1. Review of the Problem:
Neutral evaluation is necessary for the problem of regional disparities. The Central Government or State Government both are required to use any equal measurement to identify the level of regional disparities.
2. Arrangement of Adequate Capital:
The Central Government should sanction adequate fund to the State Government for the development backward areas. The Central Government should take its own initiative for the development of big projects in the identified area. However, funding and other facilities are to be supplemented by the Central Government to the State Government. More State Government should be made accountable for the development of backward areas.
3. Special Development Programme:
Separate development programme for each area should be prepared on the basis of Techno-economic survey of the area. These development programmes should integrate the project like use of technology in agriculture, water conservation, food control, transport and telecommunication etc. Social and institutions reforms should also be included in these programmes.
4. Establishment of Industrial Estates:
Industrial estates should be developed to remove regional disparities. New industrial infrastructure policy should be formulated to enable the small towns to have big industrial estates. It will facilitate the removal of regional disparities. At the initial stage, government should provide all support for the development of industrial estates.
5. Arrangement of Integrated Programme:
Integrated development programme should be prepared for the development of village and small industries in backward areas. All infrastructural facilities like power, water supply, transport, communication training institutions and finance etc. are to be arranged by the State Government.
6. Development of Growing Point:
Establishment of growing points is the best incentives for industrial development in backward areas. This type of policy assures the establishment of urban dwellings will encourage migration of labour from neighbouring villages to the cities for livelihood. It will reduce manufacturing or construction costs and increases the inflow of income earned from cities for the funding of rural development. It will also ensure new thoughts and new product techniques for the development of rural areas.