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Day 28 – Q 3. How does regional imbalance in India impede overall economic development? Analyse.

3. How does regional imbalance in India impede overall economic development? Analyse.

भारत में क्षेत्रीय असंतुलन कैसे समग्र आर्थिक विकास में बाधा डालता है? विश्लेषण करें।


Regional imbalance is the disparity in the economic and social development of two regions. Regional imbalances mean wide differences in per capita income, literacy rates, health and education services, levels of industrialization between different regions.


Lack of infrastructure facilities, adverse geo-climate conditions, low investment rate, high rate of growth of population, and low levels of urbanization and industrialization are causes of regional imbalances.

Regional imbalance impedes economic development in the following way:

1) Growth becomes unsustainable: depressed rural agricultural regions with poverty and unemployment lower purchasing power of people. As a result, overall demand in the economy comes down affecting other two sectors of economy.

2) Unproductive use of resources in backward regions:

  • Additional financial support to special category states has not yielded any desired results and has further perpetuated poor governance.                                                                                                                                Example: Bihar despite being mineral rich state has lower levels of development.
  • Lack of education and health infrastructure result into poor social indicators. And hence the available human capital is unable to contribute to the growth of the region.

3) Concentration of industries in urban areas also affects economy:

  • Overdeveloped urban areas with over saturated infrastructural capacities negatively affect industries by diseconomies of congestion and higher infrastructure cost thus lowering their competitiveness.
  • Concentration of investment by government and private sector in major cities are at risk due to natural calamities like cyclones. It results into massive economic losses at one go thus diversion of resources to rebuild these growth centres.                Example: coastal cities like Chennai are prone to cyclonic disturbances.

4) Lack of inclusive growth leads to rise in social unrest, conflicts and left wing extremism. Thus needs diversion of government resources towards security.

5) Growth of Regionalism: growing dissent against labours from other states affect industries. Example: recent migrant labour issue in Gujarat. Lack of cheap labour affects MSME’s.


In India today, a large number of inter-state, inter-community and to a great extent centre-state tensions are because of the persistence of regional imbalances. The need for the balanced development, therefore, is important in the interest of both national integration and people’s welfare through economic development.

Best answer: Deepika Sharma

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