Regional gaps: why some states surge ahead

India's states differ enormously in income, health and schooling. Southern and western states such as Goa, Maharashtra, Tamil Nadu, Karnataka and Gujarat have higher per capita incomes, better infrastructure and stronger industrial bases, while large northern and eastern states such as Bihar, Uttar Pradesh and Jharkhand lag on most indicators, despite faster population growth. These gaps have persisted for decades and, on some measures, widened as the richer states grew faster after 1991. Regional inequality is therefore a central fact of Indian development, not a footnote.

History explains part of the pattern. Colonial investment concentrated in port cities and their hinterlands; land tenure systems differed, with zamindari areas faring worse than ryotwari areas in later studies; and early industrial policy located large public plants in a few states. Geography matters too: coastal states trade more easily, while landlocked and flood- or drought-prone regions face higher costs. Governance adds a third layer: states that invested early in primary schooling, public health and administration — Kerala's social investments and Tamil Nadu's public health system are the classic examples — built human capital that later attracted investment.

The Constitution provides two correctives. The Finance Commission recommends transfers of central tax revenue to states, with weight given to population, income distance, area and demographic performance, so that poorer states receive more per person from the divisible pool. Centrally sponsored schemes fund health, schooling, rural roads and housing across states, and programmes such as the Aspirational Districts programme target the most lagging districts rather than whole states. Special category status, once given to hill and border states, offered higher central assistance, though the Finance Commission framework has since changed how such support is structured.

Migration is the other equaliser, and it is double-edged. Workers from poorer states build the cities and industries of richer ones and send money home, which raises household incomes in source areas. But it also drains skilled workers and leaves source states dependent on remittances rather than local jobs. Closing regional gaps requires both: transfers and investment in lagging regions, and the freedom for people to move — while ensuring that destination cities provide housing, schooling and health care to migrants rather than treating them as temporary outsiders.