Industrially backward region is such which is devoid of industrial development. Si industrial development is the harbinger of economic development such area also remains economic backward. Consequently the quality of life of people is very bad and poverty level is very high.
Committee on Dispersal of Industries set up by the Small Scale Industries Board in 1960 was the first to identify the industrially backward areas for purpose of rural industrialisation. Thereafter Pandey Committee was set up in 1968 for the identification of industrially backward areas in the country.
This was followed by the setting up of the Wanchoo Committee in 1968 for suggesting financial and economic measures for removing such backwardness.
Pandey Committee used 6 variables for identifying the industrially backward regions. These are (a) per capita income, (b) per capita income from mining and industrial sources, (c) number of workers register in industries, (d) per capita consumption of electricity in industries, (e) length of surface roads in relation to population-size, and (0 lengths of surface roads in relation to area.
On the basis of these variables the Committee identified 1 Estates (Arunchal Pradesh, Assam, Bihar, Madhya Pradesh, Jammu and Kashmir, Himachal Pradesh, Nagaland, Orissa, Rajasthan and Uttar Pradesh) and all union territories, except Chandigarh, Delhi and Pondicherry, as industrially backward. All these states have 25 per cent less than the national average of all the six variables.
Industrially Backward Districts
The Pandey Committee (1968) has further examined the intra-regional variations so as to identify industrially backward districts on the basis of following six variables. These are (a) location of the district (beyond 80 km radius of the million city), (b) per capita income (districts with 25% less than the state average), (c) density of population, (d) consumption of electricity, (e) expansion of road and railway mileage, and (f) availability of water (surface and ground water). Using above criteria the Committee identified 238 districts in the country as industrially backward. These districts housing 60 per cent of the country’s population are also economically backward.
The Planning Commission surveyed the states of India in 1983 and identified 279 districts and 20 sub districts as industrially backward. Of these 131 were categorized as marginally developed, 55 slightly developed and 113 most backward.
These most backward districts lie in Eastern Uttar Pradesh, Assam, Western Rajasthan, central plateau region of Telangana, Western Ghat region and adjacent plateau region of Kerala.
The cause of backwardness are related to (a) environmental factors (terrain, relief, heavy rainfall, merge rainfall), (b) economic (low resource development), (c) cultural (low literacy, less skilled labour, low industrial temperament, and poverty), (d) infrastructural (paucity of basic infrastructure like transport, communication, electricity, raw material etc.), and (e) demographic (high rate of population growth, high fertility, ethnic tension etc.).
Various Five Year Plans have taken measures for the removal of industrial backwardness in the country. The Industrial Policy in 1956 has stressed for the dispersion of industries and promoted lying down of electric transmission line in backward areas.
It had some positive results in South India. In 1977 three positive steps were taken to remove industrial backwardness. These include: (1) Establishment of district industrial centers (DIC); (2) Development of tiny sector. Industry was given a ceiling that it could not develop in areas having a population beyond 50,000; and (3) Infrastructural facilities were improved under the anti poverty and rural development programmes.
The Wanchoo Committee made two important suggestions for the mitigation of industrial backwardness: (a) Government must provide land on liberal basis to entrepreneurs, and (b) subsidy should be given on transport. The Industrial Policy of 1980 proposed an industrial complex for every economically backward area and emphasised on the concept of economic federalism.
The Industrial Policy of 1991 and the 8th Five Year Plan proposed to give more emphasis on rural industrialisation. Accordingly 76 items have been exclusively reserved or rural industries. These cover eight major heads of industries: (a) power loom, (b) handloom, (c) Khadi, (d) village, (e) sericulture, (f) handicraft, (g) coir industry, and (h) remaining industries.
Under the policy of economic liberalisation the license system for starting new industries has been simplified. Maximum emphasis is being given on the development of infrastructural facilities. States are granting concessions to attract capital and locate industries in backward areas.