IMPACT OF REGIONAL IMBALANCE ON COMMERCE AND INDUSTRY

Regional imbalance is the disparity in economic and social development of two regions. One region/city/area is stronger than another region/city/area. Regions develop when investments are made to set up industries, service sectors, educational institutions, health care facilities etc. In India after liberalization, the role of private sector has increased in investment decisions. Naturally, the investments will flow in regions which are favorable to return maximum return on investments. This rule is out the possibility of investments in poorly connected and geographically separated regions (for example mountains), and regions with hostile political environment. The maximum share in gained by the regions which have adequate physical and social infrastructure and a conductive environment. This results in development of one region as compared to the other region. Some consequences of this imbalanced development are: Migration, Social unrest, Aggregation of the imbalance etc., regional imbalance is directly adverse effect on Commerce and as well as industry.