[Dec 2007, Volume 4 Quarterly Issue] Pdf File size - The IIPM Think ...

Anu Singh,
Professor of Economics, Alliance
Business Academy, Bangalore
Market Economy And The State Of Regional
Disparities In India
"By definition, a government
has no conscience. Sometimes
it has a policy, but
nothing more."
-Albert Camus
Economic and social regional
disparities in India among different
segments of the society
have been the major force behind adopting
planning process in India. With the
establishment of planning commission
in March 1950, India launched the process
of state led ‘growth with social justice’
its prime concern of over all development
of India and of all its states. The
first three decades of planned development
involves massive investments in
backward regions, moreover various
public policies encouraged private investments
in regions which are not very
economically sound. Capital and other
subsidies were seen as the best way of
addressing regional imbalance through
capital formation as well as income and
employment generation. It’s considered
to be the responsibility of the government,
in promoting balanced development
in which all states should get opportunity
to develop evenly through
direct investment in public sector units.
In spite of these commendable efforts
and policy interventions, considerable
level of regional disparities remained at
the end of the Seventies. The accelerated
economic growth since the early
Eighties appears to have aggravated regional
disparities. In 1991 after the balance
of payment crises Indian government
followed the policy regime of
Liberalization, Privatization and Globalization
(LPG), which resulted in a
tremendous increase in GDP and per
capita Income. India today is the fourth
largest economy, in the world in Purchasing
Power Parity (PPP) dollars, after
the US, China and Japan, and has
the third largest GDP in the entire continent
of Asia. It is also the second largest
among emerging nations. India is
also one of the select three markets in
the world which proffers high prospects
for growth and earning potential in
practically all areas of business. The reforms
generated results are quite commendable
at all India level and demonstrated
very great picture of our nation.
But the question is whether these
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