IDENTIFICATION OF BACKWARD AREAS IN INDIA

IDENTIFICATION OF BACKWARD AREAS IN INDIA

Dispersal of industries to prevent locational concentra­tion has been one of the objectives of the industrial policy and the licensing mechanism. The 1960 Committee on Dispersal of Industries was the first to identify backward areas for the purpose of rural industries. In 1969, the Planning Commission set up two working groups. The one under B. D. Pande was to identify backward areas and formulate a set of criteria for this purpose. The other one under N. N. Wanchoo was to suggest fiscal and financial incentives to stimulate industrialisation of backward areas.

Based on the Pande Committee's ~:riteria for backward states and districts, the Planning Commission outlined the following conditions for identification of backward areas for the purpose of rural industrialisation:

1. per capita foodgrains or commercial" crop produc­tion;
2. ratio of agricultural workers in total population; 3. per capita industrial output;
4. number of persons per lakh population in secondary and tertiary activities;
5. peT capita electricity COJ1,sumption;
6. length of surfaced roa-ds or railway mileage per
population.

As per these criteria, there were ten industrially back­ward states-Assam, Nagaland, Himachal Pradesh, Rajasthan, Uttar Pradesh, Bihar, Orissa, Jammu and Kashmir, Andhra Pradesh, Madhya Pradesh-and all the union territories (including all the North-Eastern states and Goa) except Delhi, Chandigarh and Pondicherry. In all, 238 districts were id.entified as backward, comprising 60 per cent of the country's area and population.

The major incentives given by the centre to backward areas include (i) concessional refinance scheme of IDBI, (ii) interest subsidy, (iii) technical consultancy services; (iv) seed margin assistance; (v) income tax relief; (vi) special facility for importing raw materials; (vii) central investment sub­sidy (discontinued under new economic policy). Also, the states can provide land at concessional rates, relief fro sales tax, concessional rates for power, etc.

More Recent Criteria According to these criteria, total of 253 backward districts have been identified. The have been put into tl;\ree categories­

A: No Industry Districts These include hilly and trib areas which have no large and medium industry. There a 87 such districts- Madhya Pradesh has 18, Uttar Prade~ has 11. Maharashtra, Tamil Nadu and Kerala have non

B : Backward Areas in Backward States These a eligible for central investment and subsidy. There are! such districts.

C : Backward Areas in Other States These are eligib for concessional finance and are from neither A nor There are 112 such districts.

These districts are entitled to investment subsidy at the following rates­

A: 25 per cent, subject to a maximum of Rs 25 lak
B : 15 per cent, subject to a maximum of Rs 15 lak
C : 10 per cent, subject to a maximum of Rs 10 lak