Day 16 – Q 1. How does regional imbalance growth affect the economic interests of the nation? Explain. (10 Marks)

  • IASbaba
  • February 15, 2022
  • 0
GS 3, Indian Economy, TLP-UPSC Mains Answer Writing
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1. How does regional imbalance growth affect the economic interests of the nation? Explain. (10 Marks)

क्षेत्रीय असंतुलन वृद्धि राष्ट्र के आर्थिक हितों को कैसे प्रभावित करती है? समझाएं।


Candidates need to write about the regional imbalance in India. Explain how regional imbalance growth affects the national economic interest. 


Regional imbalance is an alarming issue in India, and it has been widening in spite of various policy initiatives by the government to develop backward areas. Disparities in social and economic development, employment, and infrastructure amenities across the regions and within regions have been a major challenge to policy makers and economists.


Regional imbalance growth impedes economic interest of nation in the following way:

  • Growth becomes unsustainable: depressed rural agricultural regions with poverty and unemployment lower purchasing power of people. As a result, overall demand in the economy comes down affecting other two sectors of economy.
  • Unproductive use of resources in backward regions: Additional financial support to special category states has not yielded any desired results and has further perpetuated poor governance. For example Bihar despite being mineral rich state has lower levels of development. Lack of education and health infrastructure result into poor social indicators. And hence the available human capital is unable to contribute to the growth of the region.
  • Concentration of industries in urban areas also affects economy: Overdeveloped urban areas with over saturated infrastructural capacities negatively affect industries by diseconomies of congestion and higher infrastructure cost thus lowering their competitiveness.
  • Concentration of investment by government and private sector in major cities are at risk due to natural calamities like cyclones. It results into massive economic losses at one go thus diversion of resources to rebuild these growth centres. For example coastal cities like Chennai are prone to cyclonic disturbances.
  • Lack of inclusive growth leads to rise in social unrest, conflicts and left wing extremism. Thus needs diversion of government resources towards security.
  • Growth of Regionalism: growing dissent against labours from other states affect industries. Example: recent migrant labour issue in Gujarat. Lack of cheap labour affects MSME’s.

Way forward and government recent initiatives to reduce regional imbalance:

  • The large weight given to “Income Distance” by 14th Finance commission is an important step towards plugging the gaps in per-capita income between states.
  • For North east region East West Corridor project, Special Accelerated Road Development Project (SARDP-NE) and Trans Arunachal Highway for increasing connectivity.
  • Backward Region Grant Fund (BRGF) is a Programme implemented in 272 identified backward districts in all States of the country to redress regional imbalances in development.
  • NITI Aayog’s Three Year Action Agenda underlines the specific action for North Himalayan states, North-Eastern states, Coastal regions and Islands and Desert & Drought prone areas this action plan should be diligently implemented.


India has met and mastered other major challenges and is pursuing its goal of higher Economic growth in all regions with the policies of structural adjustment programmes. India need to focus on deregulating sectors on which depends the livelihood of many of the poor and on improving the provision of resource allocation and creation of more employment to the underprivileged regions like Eastern and Central India.

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