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35541086 regional-imbalance

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  • 1. Regional ImbalanceBusiness Environment| Sujeet Kumar
  • 2. Topics to be covered • Concept of Regional Imbalance • Indicators of Regional Imbalance • Causes of Regional Imbalance • Measures to Remove Regional Imbalance • Tenth and Eleventh Five year Plan and Regional Imbalance • Survey Report • Review
  • 3. Concept of Regional Imbalance• “The co-existence of relatively developed and economically depressed states and even regions within each state is known as Regional Imbalance.”• Regional imbalance may be; – Natural – Man made – Inter-state or intra-sate, – Total or sectorial,• “Economic Backwardness” of a region indicated by symptoms like high population pressure on land, excessive dependence on agriculture, absence of large-scale urbanization, low productivity in agriculture and cottage industries, etc.
  • 4. Indicators of Regional Imbalance• Population• Per Capita Income• Growth Rate (Net State Domestic Product)• Infrastructure• Physical Quality of Life – Infant Mortality Rate – Literacy Rate
  • 5. Indicators of Regional Imbalance • Population Forward States Population as (48% of Total Population) per 2001 censusPunjab 2,43,58,999Maharashtra 9,67,52,247Haryana 2,11,44,564Gujarat 5,06,71,017West Bengal 8,01,76,197Karnataka 5,28,50,562Kerala 3,18,41,374Tamil Nadu 6,24,05,679Andhra Pradesh 7,62,10,007 Backward States (42% of Total Population)Madhya Pradesh 6,03,85,118Assam 2,66,55,528Uttar Pradesh 16,60,52,859Rajasthan 5,64,73,122Orissa 3,68,04,660Bihar 8,29,98,509
  • 6. Indicators of Regional Imbalance• Per Capita Income Per Capita Income Forward States at current prices Rank (2005-2006) in Rs. Punjab 36759 3 Maharashtra 37081 2 Haryana 38832 1 Gujarat 34157 4 West Bengal 25223 9 Karnataka 27291 7 Kerala 30668 5 Tamil Nadu 29958 6 Andhra Pradesh 26211 8 Average 31798 Backward States Madhya Pradesh 15647 3 Assam 18598 6 Uttar Pradesh 13262 2 Rajasthan 17863 5 Orissa (2004-2005) 16306 4 Bihar 7875 1 Average 14925
  • 7. Indicators of Regional Imbalance • Growth Rate (Net State Domestic Product) Annual Average Forward States Growth Rate 1990-91 Rank to 2004-05 Punjab 4.37% 11 Maharastra 6.06% 4 Haryana 5.37% 8 Gujarat 6.79% 3 West Bengal 6.88% 2 Karnataka 6.91% 1 Kerala 5.86% 5 Tamil Nadu 5.26% 9 Andhra Pradesh 5.65% 6Backward States Madhya Pradesh 1.78% 14 Assam 3.18% 12 Uttar Pradesh 2.79% 13 Rajasthan 5.11% 10Orissa (2004-2005) 5.52% 7 Bihar -0.99% 15
  • 8. Indicators of Regional Imbalance• Infrastructure Infrastructure Forward States Development Rank Index 1999 Punjab 187.6 1 Maharashtra 112.8 6 Haryana 137.5 4 Gujarat 124.3 5 West Bengal 111.3 7 Karnataka 104.9 8 Kerala 178.7 2 Tamil Nadu 149.1 3 Andhra Pradesh 103.3 9 Backward States Madhya Pradesh 76.8 14 Assam 77.7 13 Uttar Pradesh 101.2 10 Rajasthan 75.9 15 Orissa 81 12 Bihar 81.3 11 All India 100
  • 9. Indicators of Regional Imbalance • Physical Quality of Life – Infant Mortality Rate Infant Mortality RateForward States Rank (per thousand) in 2005 Punjab 44 4 Maharashtra 36 2 Haryana 60 9 Gujarat 54 6 West Bengal 55 7 Karnataka 50 5 Kerala 14 1 Tamil Nadu 37 3Andhra Pradesh 57 8Madhya Pradesh 76 15 Assam 68 11 Uttar Pradesh 73 13 Rajasthan 68 11 Orissa 75 14 Bihar 61 10 All India 58
  • 10. Indicators of Regional Imbalance• Physical Quality of Life – Literacy Rate Literacy Rate (2001) Forward States Total Rank Male Rank Female Rank Punjab 69.9 5 75.6 10 63.6 4 Maharashtra 77.3 2 86.3 2 67.5 2 Haryana 68.6 7 79.3 5 56.3 8 Gujarat 70 4 80.5 4 58.6 6 West Bengal 69.2 6 77.6 6 60.2 5 Karnataka 67 8 76.3 9 57.5 7 Kerala 90.9 1 94.2 1 87.9 1 Tamil Nadu 73.5 3 82.3 3 64.6 3 Andhra Pradesh 61.1 12 70.8 13 51.2 10 Madhya Pradesh 64.1 10 76.8 7 50.3 12 Assam 64.3 9 71.9 12 56 9 Uttar Pradesh 57.4 14 70.2 14 43 14 Rajasthan 61 13 76.5 8 44.3 13 Orissa 63.6 11 75.4 11 51 11 Bihar 47.5 15 60.3 15 33.6 15 All India 65.4 76 54.3
  • 11. Causes of Regional Imbalance• There are certain deterrent factors which come in the way of rapid development of a region; most important of them are: – Geographical Isolation, – Inadequacy of economic overheads like transport, labour, technology, etc• Pre-independence period• Post-independence period• Geographical Factors• Locational Preferences
  • 12. Measures to Remove Regional ImbalanceGeneral Measures: – transfer of financial resources from the Centre to the states. – Special area development programs – Measures to promote private investment.
  • 13. Measures to Remove Regional Imbalance• Backwardness and Resource Transfer Total Total assistance Percentage of assistance in to Backward Assistance of Plans all states (Rs. States (Rs. Backward Crore) Crore) States Sixth Plan(1980-85) 16560 7590 46% Seventh Plan (1985-90) 31420 13200 42% Eighth Plan(1992-97) 93830 35160 37% Ninth Plan (1997-2002) 185260 69990 38% Tenth Plan (2002-07) 254100 91080 36%
  • 14. Measures to Remove Regional Imbalance• Special Area Development Program – Specific Plan schemes to develop-prone areas – The Eleventh finance Commission identified criterion for resource transfer, • the relative distance of the per capita income of the state with the income of the state with highest per capita income • index of infrastructure development • On the basis of new formula, backward states and special category states, taken together would receive 61.2% of total resource transfer.
  • 15. Measures to Remove Regional Imbalance• Initiative to promote investment in backward areas – Central Government Incentives: – Income Tax Concession: – Central Investment Subsidy Scheme: – Transport Subsidy Scheme: – State Government Incentives: – Provision for developed plots with water and power with no-profit and no-loss basis – Exemption from payment of water charges for some year – Interest fee loans on sales tax dues – Exemption from payment of property taxes for some years – Monetary Assistance from State Financial Corporation, State Industrial Development Corporation (SIDCO) etc. – Concessional Finance by major financial institutions: – A lower rate of interest on rupee loans (9.5% as against 11.5%), – A longer period of repayment (generally 15 to 20 years, as against 10 to 12 years), – Participation in the risk capital or debenture issues, – Charging only half the normal rate of underwriting commission, waving of commitment charges, etc.
  • 16. Tenth and Eleventh Five Year Plan and Regional Disparities• Tenth Five year plan for less developed States – High level of Capital investment – Initiative towards the better governance and institutional reforms to make the targeted investment effective. – Rashtriya Sam Vikas Yojana- RSVY (national Equal Development Plan) to support the development initiatives in backward states and regions.• Eleventh Five year plan for less developed States – Pradhan Mantri Gram Swaranjayanti Swarozgar Yojana (PMGSY) – Indira Awas Yojana – National Rural Health Mission (NRHM) – Sarv Shiksha Abhiyan – Supplementary nutrition program
  • 17. Survey Report • North: Racing up Northern Zone Overall Consumer Primary Law & Primary Budget & Rank Agriculture Markets Education Order Health Infrastructure Investment Prosperity Delhi 1 3 2 4 4 1 1 2 2 Chandigarh 2 4 1 2 1 8 4 1 1 Punjab 3 1 3 5 6 4 2 4 3 Himachal Pradesh 4 8 4 1 2 2 3 3 4 Haryana 5 2 5 7 5 7 5 5 5 Uttrakhand 6 7 7 3 8 5 7 6 7 Jammu & Kashmir 7 9 6 6 7 3 6 8 6 Rajasthan 8 6 8 8 3 6 8 7 8Uttar Pradesh 9 5 9 9 9 9 9 9 9
  • 18. Survey Report • East: Depressing Eastern zone Overall Consumer Primary Law & Primary Budget & Agriculture Infrastructure Investment Rank Markets Education Order Health Prosperity Mizoram 1 7 2 2 1 3 2 1 1 Sikkim 2 9 3 1 3 1 3 5 5 Arunachal 3 10 4 7 11 4 5 2 2 Pradesh Nagaland 4 11 1 3 7 5 8 3 3 Manipur 5 4 9 4 12 2 7 10 6 Tripura 6 5 6 5 9 7 12 8 4 Assam 7 12 8 8 5 9 6 6 9Meghyalaya 8 6 5 6 13 6 11 4 7West Bengal 9 1 7 10 6 8 1 12 10Chhattisgarh 10 8 10 11 2 12 9 7 8 Orissa 11 3 12 9 4 10 4 11 12 Jharkhand 12 13 11 12 8 11 13 9 11 Bihar 13 2 13 13 10 13 10 13 13
  • 19. Survey Report • South: Stalling Southern Zone Overall Consumer Primary Law & Primary Budget & Rank Agriculture Markets Education Order Health Infrastructure Investment ProsperityPuducherry 1 1 1 3 2 7 6 1 1Tamil Nadu 2 2 5 5 4 1 2 2 4 Kerala 3 7 4 4 1 2 1 5 5Andaman & Nicobar 4 6 2 2 3 5 5 7 3 Karnataka 5 5 6 6 5 3 3 3 6Lakshadwee p 6 3 3 1 6 6 7 6 2 Andhra Pradesh 7 4 7 7 7 4 4 4 7
  • 20. Survey Report • West: Stagnant Western Zone Overall Consumer Primary Law & Primary Budget & Rank Agriculture Markets Education Order Health Infrastructure Investment Prosperity Goa 1 1 1 1 4 1 2 1 1 Gujarat 2 2 5 5 2 4 3 3 4 Maharastra 3 3 4 3 3 2 1 4 5 Daman & Diu 4 5 2 2 5 6 5 2 2 Dadar & Nagar Haveli 5 6 3 4 6 3 6 5 3Madhya Pradesh 6 4 6 6 1 5 4 6 6
  • 21. Review• Regional Disparities hinder the national development• Overall development of the states can bring the better future and prospects• Identification of the lagers and the concerned area is very vital for the removal of disparities• A well developed planning and strategy can remove the disparities• Resource transfer is an important weapon to fight against the regional disparities.