Regional Development is a core concept in Indian planning and governance, defined as a planned effort to improve the economic, social, and infrastructural conditions of less-developed geographic areas to reduce inequalities within the country. The goal is not equal development for all regions, but the fullest realization of each area's potential so that the benefits of overall economic growth are shared by all inhabitants.
The concept's origin in India is closely tied to the early years of planned development, with the Second Five Year Plan (1956-1961) documents stating that the pattern of development must be devised to lead to balanced regional development. This was necessary to address the problem of uneven development, which was a legacy of historical factors like British policies favoring port cities and resource-rich areas. The objective was to accelerate economic growth, utilize local resources, promote employment, and maintain political stability by reducing regional disparities.
The mechanism for achieving this involves a multi-pronged approach, including fiscal transfers and targeted schemes. The Finance Commission uses a devolution formula that incorporates factors like income distance to allocate larger shares of central taxes to backward states. A key scheme was the Backward Regions Grant Fund (BRGF), an Indian government program launched on February 19, 2007, to address regional imbalances by providing untied grants to local bodies in identified backward districts. The BRGF subsumed the earlier Rashtriya Sam Vikas Yojana (RSVY), which was introduced in 2003-04. The BRGF provided financial resources to bridge critical gaps in local infrastructure and strengthen governance at the Panchayat and Municipality levels, as per Parts IX and IX-A of the Constitution.
The BRGF was a major mechanism until it was de-linked from central support in 2015-16. This change followed the recommendations of the Fourteenth Finance Commission, which significantly enhanced the States' share in central taxes from 32% to 42%, giving states greater autonomy to finance their own developmental schemes. The concept of regional development now connects strongly to the NITI Aayog's initiatives, such as the Aspirational Districts Programme (ADP), launched in 2018, which focuses on the rapid transformation of 112 most under-developed districts through a strategy of Convergence, Collaboration, and Competition.