Development and regional disparity

The first principle

Economic growth increases the income a country produces, while human development increases what its people are able to be and do: live long and healthy lives, learn, and earn a decent living. Growth becomes human development only when it reaches people through jobs, public services and fair distribution across groups and regions. Where those channels are weak, a country can grow fast while many of its people and places lag behind, and that gap is the subject of this note.

The core

Growth and human development

• The Human Development Index (HDI) of the United Nations Development Programme (UNDP) combines life expectancy, years of schooling and per capita income. The Human Development Report 2025 ranked India 130 of 193 countries with an HDI of 0.685 for 2023, in the medium human development group, although India is among the five largest economies.
• India's income rank is far higher than its health and education ranks, which shows that income has run ahead of capability.

Why human development lagged behind growth

• Pattern of growth. Growth since 1991 has been led by services and capital intensive industry rather than labour intensive manufacturing, so it created few good jobs; economists called this jobless growth, and about 46 per cent of workers are still in agriculture (PLFS 2023 to 2024).
• Low public spending. Public spending on health has stayed near 2 per cent of Gross Domestic Product (GDP) and on education near 4 to 4.6 per cent, below the 6 per cent goal of the National Education Policy 2020, so families pay heavily out of pocket.
• Schooling without learning. Enrolment is nearly universal, but the Annual Status of Education Report (ASER) 2024 found that only about 23 per cent of Class 3 children in rural India could read a Class 2 text.
• Gender gaps. Low female workforce participation, early marriage in some states and anaemia in more than half of women (National Family Health Survey 5) hold back half the population.
• Nutrition. Stunting among children under five was 35.5 per cent in NFHS 5, which lowers learning and earnings for life.
• The Kerala and Gujarat contrast. Kerala invested early in schooling, health and land reform and has high human development with modest industrial growth, while Gujarat achieved fast industrial growth with weaker gains in nutrition and child health. Each model has limits, since Kerala depends on remittances and has high youth unemployment, but together they show that growth and human development need separate, deliberate effort.

Dimensions

What regional disparity means

• Regional disparity is a persistent difference in levels of income, living standards and opportunity between regions of the same country. It is measured by per capita state income, poverty rates, the HDI or MPI of states, and indicators such as infant mortality and literacy.
• Per capita net state domestic product in Goa, Sikkim and Delhi is roughly eight to ten times that of Bihar, and within states the gap between, say, Vidarbha and western Maharashtra, or north and south Karnataka, is just as sharp.

Disparity is not diversity

• Diversity is a difference in kind, such as language, food, faith or landscape, where no region is better or worse off and the aim is to protect it. Disparity is a difference in level, where some regions are measurably behind others and the aim is to reduce it. Diversity enriches a nation, while disparity, if it persists, breeds migration, resentment, regionalism and sometimes violence, as in the left wing extremism belt.

Causes of regional disparity

• Colonial legacy. Ports and presidency towns such as Bombay, Madras and Calcutta drew investment, while the permanent settlement in Bengal and Bihar left a legacy of landlordism and low farm investment.
• Geography. Hilly, forested, drought prone or flood prone regions face higher costs of roads, power and markets.
• Infrastructure and investment. Private capital follows existing roads, ports, power and skilled labour, so early leaders keep pulling ahead.
• Governance. States differ in the quality of administration, law and order and public services, which shapes both investment and human development.
• Fiscal transfers. The Finance Commission uses "income distance" (45 per cent weight under the Fifteenth Finance Commission) to give more to poorer states, but transfers cannot fully offset weak own revenue and capacity.

How serious is it?

• The gap is wide and has not closed since liberalisation, because richer states attracted most private investment; however, multidimensional poverty fell fastest in the poorest states between 2015 to 2016 and 2019 to 2021, which shows that basic services can narrow the gap even where incomes diverge.

In practice

Aspirational Districts Programme

• Launched by NITI Aayog in January 2018, the programme targets 112 of the most backward districts. Its core strategy has three parts, often called the 3Cs. Convergence means pooling central and state schemes at the district level so that the same family receives health, nutrition, schooling and credit together. Collaboration brings together central prabhari officers, state governments, the district collector, NGOs, firms and citizens. Competition ranks districts every month on improvement ("delta ranking") across 49 indicators in five themes, published on the Champions of Change dashboard.
• The themes and weights are health and nutrition (30 per cent), education (30 per cent), agriculture and water resources (20 per cent), financial inclusion and skill development (10 per cent) and basic infrastructure (10 per cent). A UNDP appraisal found that these districts improved faster than comparable ones.
• The Aspirational Blocks Programme (January 2023) applies the same model to 500 blocks with about 40 indicators.

Government, NGOs and the private sector working together

• Each actor brings something the others lack: the government brings scale, money and legal authority; NGOs bring trust, local knowledge and innovation; and firms bring capital, technology and management.
• Section 135 of the Companies Act, 2013 requires companies with a net worth of ₹500 crore, a turnover of ₹1,000 crore or a net profit of ₹5 crore to spend 2 per cent of their average net profit of the previous three years on corporate social responsibility (CSR) in areas listed in Schedule VII. CSR spending is now about ₹30,000 crore a year.
• Akshaya Patra serves midday meals in government schools, combining government grain and funds with NGO kitchens and corporate donors. Pratham developed the "Teaching at the Right Level" method, which several state governments adopted. In health, public private partnerships run dialysis units under the Pradhan Mantri National Dialysis Programme, and the Ayushman Bharat insurance scheme uses private hospitals.
• The most productive collaboration is one where the government sets goals and funds at scale, NGOs design and reach the last mile, and firms contribute money and technology, with joint monitoring of outcomes, as in the Aspirational Districts model. The risks are CSR money concentrating in a few rich states, NGOs losing independence, and private partners chasing profit; transparency and outcome based contracts reduce them.

Digital initiatives in education

• DIKSHA (2017), the national school platform, carries textbooks with QR coded content in many languages; SWAYAM (2017) offers free online university courses; and PM eVIDYA (May 2020) united these with one television channel per class, radio and podcasts during the pandemic. UDISE plus collects school data online, which improves planning.
• The digital divide limits their reach. The National Sample Survey (NSS) 75th round (2017 to 2018) found that only about 4 per cent of rural households had a computer and about 15 per cent had internet access, and girls get less access to the family phone than boys. Digital tools therefore help most when they support teachers in classrooms rather than replace them.

Issues and way forward

• Jobs. Labour intensive manufacturing, food processing and tourism create work where people live; the Economic Survey has argued for this repeatedly.
• Public investment in people. Raising health spending to 2.5 per cent of GDP (National Health Policy 2017) and education to 6 per cent (National Education Policy 2020) is the most direct way to close the human development gap.
• Foundational learning. The NIPUN Bharat mission (2021) should be judged by learning outcomes, not enrolment.
• Balanced regional growth. Capacity building in lagging states, and transfers tied to outcomes, help these states use funds well.

Common confusions

• Growth and development. Growth is a rise in output; development is a rise in well being and capabilities.
• HDI and MPI. The HDI ranks countries on averages; the MPI counts the share of people deprived in several dimensions.
• Aspirational and backward districts. The programme deliberately avoids the word "backward" and ranks districts on improvement, not on level.
• CSR and philanthropy. CSR is a legal obligation for qualifying companies; philanthropy is voluntary.

For the exam

• Keyword bank: human development, capability, HDI, jobless growth, learning poverty, regional disparity, income distance, diversity versus disparity, Aspirational Districts, delta ranking, convergence, collaboration, competition, CSR, DIKSHA, digital divide.
• Previous year questions: Practise the previous year questions on this topic →
• Use in an answer:
  • Introduction (data): India is among the five largest economies yet ranks around 130th on UNDP's Human Development Index, a gap that shows growth has not fully turned into human capability.
  • Introduction (report): NITI Aayog's MPI shows multidimensional poverty ranging from about 34 per cent in Bihar to under 1 per cent in Kerala, which captures the scale of regional disparity in one comparison.
  • Conclusion: Growth must be made human through jobs, health and learning, and regional disparity reduced by building capacity where it is weakest, as the Aspirational Districts model attempts.
  • Conclusion: Development works best as a partnership in which the state provides scale, civil society provides reach and trust, and business provides resources and technology.