The relative lack of growth in the poor states like Uttar Pradesh, Bihar and Odisha over the past 30 years is a major contributor to India’s increasing inequality. Given that India contains nearly 18% of the world’s population, this divergence also has important consequences for global poverty and inequality.
Inter-States Inequality
The inter-State inequalities have been a cause of concern. These have been rising in the last three decades for two reasons. First, the rates of growth of State Domestic Product (SDP) of many of the States in the south, west and northern regions, like Punjab, Himachal Pradesh, Gujarat, Karnataka and Tripura, have been quite high as compared to some of the other States, like Uttar Pradesh (UP), Bihar and Rajasthan. Second, the rate of growth of population in some of the low PCI States has been fairly high. This has resulted in widening of PCIs and consumption in different States.
Inequality within States
The second nature of inequality has been within the States themselves. A number of these States of the Indian Union have large areas and growth in them is uneven. Even in some of the States with comparatively small geographical area, the levels of development are very uneven, especially in the Himalayan region of Nagaland, Mizoram, Arunachal Pradesh, Jammu & Kashmir (J&K), Himachal Pradesh and Uttarakhand.
The unequal levels of development in the larger States, including several regions like Vidarbha region of Maharashtra; Koraput, Bolangir and Kalahandi (popularly known as KBK districts) of Orissa; Bundelkhand region, Eastern UP and parts of Central UP, northern Bihar, tribal areas of Jharkhand and Chhattisgarh, Andhra Pradesh, Maharashtra, UP and north Karnataka are a few examples.
The fallacy of taking the State as a unit for judging economic advancement/laggardness has been well known for years. Human development reports (HDRs) of various States bring out starkly the extent to which intra-regional disparity prevails within the very advanced States.
For example, though Maharashtra, Karnataka and Andhra Pradesh are regarded as rapidly developing States, the fact of the matter is that there are a few pockets within these States which, due to their better physical and social infra structure, have been able to attract large investments and register a faster rate of economic growth. State-level analysis does not reveal anything about what might be taking place in different regions within States. In fact, intra-State disparities are as much a cause of concern as inter-State disparities.
Rural-Urban Inequality
The third nature of inequality is between the rural and the urban and within the rural societies and the urban societies themselves.
Inter-District Inequalities
There is considerable intra-district inequality too, with some blocks in a district better off than others. The poorer blocks in a district sometimes tend to be the ones populated by a greater percentage of Scheduled Tribes (STs) and Scheduled Castes (SCs).
