Regional Disparities: Problematic for Economic Growth Author :  CA  A. K. Jain Balanced regional development is essential for sustainable and inclusive economic growth. When growth is concentrated in a few regions while others lag behind, national productivity suffers, social tensions rise, and development outcomes remain uneven. In India, regional disparities have emerged as a persistent and structural challenge, limiting the country’s ability to realize its full economic potential. Wide variations in income, infrastructure, human development, and industrialization across states continue to distort growth and weaken national cohesion. India’s regional imbalance has historical roots. Colonial economic policies concentrated infrastructure, industry, and administrative functions in select regions, leaving large parts of the country underdeveloped. Post-independence planning aimed to reduce these imbalances through public investment and regional development strategies. While some progress was achieved, results remained uneven due to implementation gaps, governance differences, and varying initial conditions. Economic liberalization further accentuated regional disparities. Market-oriented reforms benefited regions with better infrastructure, skilled labor, urban centers, and governance capacity. States that were able to attract private investment and integrate with global markets grew rapidly, while others struggled to compete. As a result, growth became increasingly concentrated in a few states and metropolitan areas, widening inter-state and intra-state gaps. Infrastructure disparities play a central role in shaping regional outcomes. Regions with reliable transport, power, digital connectivity, and urban infrastructure attract investment and talent. Lagging regions, burdened by poor connectivity and inadequate public services, face higher costs and lower productivity. This creates a self-reinforcing cycle where developed regions continue to advance while backward areas fall further behind. Human capital differences further exacerbate regional inequality. States with better education, healthcare, and skill development systems produce a more productive workforce, supporting higher growth. In contrast, regions with weak social indicators struggle to attract investment and generate employment. Migration from lagging regions to more developed states reflects these imbalances but also creates pressure on urban infrastructure and services in destination areas. Fiscal capacity and governance quality significantly influence regional development. States with stronger revenue bases and administrative capacity can invest more effectively in infrastructure and social services. Weaker states face fiscal stress, limiting their ability to implement development programs. Differences in policy implementation, institutional efficiency, and political stability further widen performance gaps. Regional disparities also have social and political consequences. Persistent underdevelopment fuels unemployment, poverty, and social unrest in lagging regions. Perceptions of neglect and inequality can undermine trust in institutions and strain federal relations. Economic imbalance thus becomes not only a development issue but also a challenge to social cohesion and political stability. The economic cost of regional imbalance is substantial. When large parts of the country underper form, national productivity and demand remain constrained. Growth concentrated in limited regions increases vulnerability to localized shocks and limits resilience. A more balanced growth pattern would expand markets, enhance labor mobility, and improve overall economic efficiency. Addressing regional disparities requires a targeted and coordinated strategy. Public investment must prioritize lagging regions, focusing on infrastructure, education, healthcare, and connectivity. Developing regional growth centers and strengthening small and medium towns can spread economic activity beyond major metros. Industrial policies should encourage investment in backward areas through incentives and infrastructure support. Improving governance and institutional capacity at the state and local levels is equally important. Strengthening administrative systems, enhancing transparency, and building implementation capacity can improve outcomes. Fiscal transfers should be designed to support equity while encouraging performance and accountability. Human capital development must be central to regional strategy. Investing in quality education, healthcare, and skills in lagging regions can break the cycle of underdevelopment. Technology-enabled service delivery can help overcome geographic constraints and improve access. In conclusion, regional disparities remain problematic for India’s economic growth because they reflect uneven development and wasted potential. Sustainable growth requires integrating lagging regions into the development process, not merely accelerating growth in already advanced areas. By adopting region-sensitive policies and strengthening cooperative federalism, India can achieve more balanced, inclusive, and resilient economic growth. ---------------------------------------------------- Author of this article, C.A. Anil K. Jain( caindia@hotmail.com ) is a highly acclaimed Chartered Accountant with over four decades of professional experience. He is widely recognized for his expertise in financial and asset planning, taxation, international investments, and business growth strategies. Beyond advisory work. He actively contributes to national economic discourse through policy representations to the Government of India, frequent appearances on television and radio, and extensive writing. He is also the author of the acclaimed books Bharat: The Development Dilemma and River Water Recharge Wells, reflecting his commitment to India’s economic development and sustainable water solutions.