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It is well known that there are widespread disparities in the levels of economic and of social development between the different regions of our nation. Generally, it is recognized that interregional economic disparities increase, at least in the initial stages of national economic development. As a result, governments everywhere used to initiate deliberate policy measures to reduce these disparities. But with the reaffirmation of faith in the market mechanism in the liberalized economic scenario the world over now, there is a tendency to withdraw such measures.
We have witnessed a lot of changes in our economic policy in recent years. From a closed economic set-up having considerable faith in centralized planning and with commanding heights reserved for the public sector, our economy has now become a highly liberalized and globalized with great faith in the efficacy of the market mechanism. It is hence a matter of considerable importance and interest to know the manner in which inter-regional disparities in the levels of economic and social development can change the nation over time in the next two decades. The disaggregated sectorial analysis of regional change here seems to hold some insights in this regard
The manufacturing industry has, almost since times immemorial, been looked upon as the panacea for the development of the backward regions in all parts of the world including India. While there were some indications of inter-state convergence in the pre-reform period, there is no definite evidence either way for the post-reform one. If we consider small scale or unregistered cooperative movements, while there are no signs of convergence or divergence in the pre-reform period, there are more definite signs of divergence in the post-reform one.
As regards, regional disparities have arisen in agriculture and allied sectors. Agriculture and unregistered cooperative movements are the two sectors having a tremendous impact on the growth of employment of people in the region and hence on income accruing to people in most state economies. In the agricultural sector, there is no evidence of any inter-state convergence in the post-reform era.
There is evidence to suggest that infrastructural development is of great help in promoting regional development. A detailed analysis of the development of industry at the state level in India also indicates that infrastructural development is particularly helpful for the development of both registered and unregistered manufacturing.
We at Shruth and Smith Foundation wish to highlight the above and provide a clear ‘Agenda of Action’ to converge the agricultural sector as well as registered and unregistered cooperative movements through the economies of all states at a national level. We aim to work continuously towards a comprehensive description of social upliftment and policies.
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