The problem of regional imbalances is highly critical for almost all the countries of the world. There have always existed a variety of inter-regional and inter-state variations in terms of all macro indices linked with economic and social issues.
THE PROBLEM of regional imbalances is highly critical for almost all the countries of the world. There have always existed a variety of inter-regional and inter-state variations in terms of all macro indices linked with economic and social issues. There is what is known as ‘declining areas’ or ‘special areas’ within the frontiers of each country. These typical areas qualify for special government assistance to uplift them from a state of stagnation or near stagnation, resulting from local unemployment, industrial imbalance, declining industries, over-population, and a variety of other economic and social ‘pulling’ factors.
The problem is highly alarming in developing countries most of which suffer from acute and lasting differences in prosperity between geographical regions. This phenomenon of regional income differentials is termed as ‘regional dualism’ or in American terminology as ‘North-South problem’. India is no exception to this. The time series data set on various economic and social indices surely supports the hypothesis of regional imbalances in the country.
Such regional imbalances fall within the domain of what we term as ‘regional economics’. In order to emphasise its inter-disciplinary nature it is also sometimes called ‘regional analysis’ and also ‘regional science’. Apart from economics, it also heavily draws on demography, history, geography, sociology and other disciplines.
The foremost problems of regional economics are concerned with (a) classifying regions, (b) measuring the inter-regional differences in prosperity/poverty, and (c) pulling, through economic and other measures, the declining areas so that are bestowed with equitable and balanced distribution of national prosperity and well being.
This brief paper focuses on the first two problems and offers a few solutions on the basis of what is available in the existing literature.
Let us first look at the first problem, which refers to identifying or defining ‘regions’. Three different approaches are available. The first approach considers ‘homogeneity’ of regions with respect to either economic, social, geographic or other features, or their combinations. The homogeneity can also be in terms of statistical compilations.
The second approach is that of ‘polarisation’ and defines regions on the basis of their being linked (in certain ways through say, trade, government help) with some central urban place.
The third approach is concerned with ‘administrative coherence’ and classifies regions on the basis of their identity with say, the available leadership.