Regional Economic Imbalances

Abstract

The importance of inflow of Foreign Direct Investment (FDI) in economic development of India is widely known, analyzed and well accepted in the post-liberalization era. But such inflows have created regional disparities within India owing to their concentration in select geographical locations (states) only. This should be brought into socio-economic discourses and policy formulation and as such, this chapter is an attempt to understand the linkage between FDI and regional economic growth of India. The chapter is divided into three parts.Part-1presents phases of evolution of FDI policies that made an impact on the business condition in India post independence,Part-2presents economic condition of various states and also discusses the FDI inflows to these states since 1991.In Part-3, some policy measures has been suggested to remove this anomaly in our development process so as to make economic development with FDI more stable and inclusive.