Notes for Modern History (Post-Independence)
Economic Imbalances and Regionalism
- Economic inequality among different states and regions could be a potential source of trouble. However, this problem has not so far given rise to regionalism or feeling of a region being discriminated against.
- Steps taken in initial years after independence to reduce economic inequality among states:
- A major government instrument in bringing this about was the transfer of financial resources to the poorer states. Important in this respect was the role of the Finance Commission.
- Planning was also seen as a powerful instrument that could be used to remove regional inequality . The Planning Commission allocated greater plan assistance to the backward states.
- Government incentives have been provided to the private sector to invest in backward areas.
- Following nationalization of banks in 1969, the expansion of the network of their branches was used to favour backward areas.
- Economic mobility of population through migration of unskilled labour from the backward regions and of skilled labour to them can also contribute to the lessening of regional disparity.
- One sector where the principle of the reduction of regional disparity has not been kept in view is that of investment in irrigation and subsidies to agricultural development. This has been especially so since the 1960s when the Green Revolution began and investment in rural infrastructure and technological innovation was concentrated in Punjab, Haryana and western U.P.
- Despite govt efforts, regional inequality among states has persisted on a wide scale. However, this regional inequality has not given rise to regionalism because:
- Politically important Hindi-speaking states of the Indian heartland are economically backward. On the other hand, Punjab, Haryana, Gujarat and Maharashtra are the high-income states. It is, therefore, impossible to talk of the Hindi-belt states’ domination of the others.
- On the other hand, the backward Hindi-belt states wield so much political clout that it is impossible for them to accuse the central government or non-Hindi states of dominating or discriminating against them.
- Another reason for the lack of regionalism and feeling of discrimination among the poorer states has been the consciousness of their intelligentsia that their poverty and backwardness are basically the result of the actions of their own political and administrative classes.
- It is necessary to first contain regional inequality within politically and economically reasonable and acceptable limits and then to gradually move towards its elimination. From the beginning, the national government felt a responsibility to counter this imbalance in regional development.