Growing Economic Disparities and Threats to Federalism
There are significant differences in economic performance among Indian states, with some (like Maharashtra) thriving while others struggle.
The disparities lead to dissatisfaction among wealthier states, which feel they contribute more to the national economy than they receive in return.
This threatens the cooperative spirit of federalism in India.
Role of Liberalization
Since the liberalization in 1991, states like those in the south and west have performed better economically.
Wealthier states attract more private investment, while poorer states lag due to less investment and support from the government.
Key Concerns
Investment tends to flow to developed areas with better infrastructure and governance, leaving poorer regions behind.
The shift to a market-driven economy has favored the organized sector, neglecting the unorganized sector where many poor workers are employed.
Poor governance and corruption in lagging states exacerbate economic disparities and deter investment.
Way Forward
To address the growing divide, both central and state governments must improve governance, increase public spending on social services, and focus on uplifting the unorganized sector.
Strategies should aim to boost demand in poorer states, which can, in turn, attract private investment.
By promoting equitable development across states, the overall unity and stability of the nation can be enhanced.
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