Following measures have been taken by the government to reduce regional inequalities:

(1) A share of taxes levied and collected by the Central Government (such as income tax and union excise duties) is transferred to the states. In working out this scheme of devolution of resources (transfer of money) special weight age is given to the extent of backwardness of a state.

(2) Special assistance is given by the Centre to the backwardness states for their State Development Plans.

(3) Special schemes are sponsored and fully funded by the central government for backward regions in states.