trends are clear. The regional economic disparities have
been growing in India since 1970. Economic liberalization
process has not checked this divergence. In general the
Northwest, West and South are showing positive signs of
growth and investment. All these States enjoy higher than
national percapita income except AP (93%). The Eastern and
Northern parts of the country are lagging behind. All these
States have percapita income below 75% of national average,
with the exception of Rajasthan (81%) and West Bengal (85%).
The low-income States are registering lower growth rates
than the rest of India, increasing regional disparities.
the demise of the USSR and erstwhile Yugoslavia, India is
the only truly multi-ethnic, multi-national State with such
large regional disparities. While China has disparities,
its 85% Mandarin-speaking population with shared ethnicity,
history and culture, and the spectacular growth rates achieved
help it to overcome the pressures generated on account of
backwardness in large tracts of Central Asia and Tibet.
The dominant and authoritarian role of the monolithic Communist
Party also helps smoothen the wrinkles of regional disparities.
In India we are dealing with poorer states accounting for
almost half the population, and a modest national growth
rate. While migration is taking place to faster growing
regions, it is extremely limited due to linguistic and cultural
diversity, and less than welcome policies of various states.
As a result, even Mumbai city is showing declining trend
in population growth.
the post Second World War, there is no example of a democratic
society sustaining such huge regional disparities. If this
trend persists, there are clear and present dangers to India's
unity and integrity. Already insular regional chauvinism
has altered the political landscape of many states. It is
a tribute to our society's resilience that we could absorb
the plurality, linguistic diversity and economic disparity,
and remain a united country. But we need to focus special
attention on the Eastern and Northern region. We cannot
allow UP, Bihar, MP, Orissa and Assam to fall behind further.
what can we do? We have extremely non-discretionary fiscal
devolution in our federation. Even marginal increases in
allocation to poorer states recommended by the Eleventh
Finance Commission are resisted politically. In any case,
mere fiscal devolution does not guarantee proper deployment
of resources. But there is some good news. West Bengal,
with its agricultural growth and urbanization, can be the
engine of prosperity in the East. Rajasthan has shown significant
growth in recent years, and is now almost a middle-income
state. North and East have abundant water, fertile land
are three things required to stimulate investment and growth
- infrastructure, trading opportunities, and public order
and rule of law. Massive investments are needed to build
roads and bridges in Eastern UP, Bihar and Orissa. The Union
can finance infrastructure with a special package of large
low-interest loans, the utilization of which can be monitored
closely. This has to be outside the normal fiscal devolution.
It helps all of India. Yashwant Sinha, hailing from Bihar,
must take the lead and ensure infusion of massive resources
in his own home state. If farmers and traders have to transport
goods hundreds of kilometers for want of roads and bridges
there can only be subsistence and no growth. India's unity
demands that partisan politics be kept out of economic policies.
And yet we cannot subsidize waste, corruption and inefficiency.
But there is room for intelligent central intervention and
recent belated but aggressive steps to open up Eastern and
Northeastern India to Southeast Asia is wonderful news for
this region. We need the road and trading links with Thailand
and beyond. This will make Eastern India an extension of
ASEAN and spur growth and trade enormously.
there can be no growth without public order and rule of
law. Governance in UP and Bihar is in shambles, and medieval
conditions prevail. All parties should sit together and
evolve a comprehensive strategy to restore rule of law in
the region. Empowering panchayats even as they are made
accountable is one way. Far reaching police reform and creation
of local courts for speedy justice are vital. We can ignore
the growing regional disparities only at nation's peril.
All of us have a deep and abiding interest in the future
of all regions of India.