OUR nation, as a republic, has just passed the half-century mark. The first 50 years of the Indian state have been quite remarkable in several ways, with many ups and downs. On the one hand we have succeeded in building a modern nation with matching institutions and a vibrant democracy and society. Indians have established their excellence in almost all walks of life. Our education system has produced world-class professionals who occupy top positions even in developed countries. On the other hand, a sizeable section of Indian society remains illiterate, ill-fed and ill-clad. Very many divisive forces are at work undermining the vitals of the nation. The Indian economy has been characterized as a sleeping giant that is yet to recognize its potential strength.

This article highlights a disturbing trend that has become more apparent during the last decade: widening socio-economic disparities across the Indian states. No doubt, considerable disparities in the level of development across the regions existed even 50 years ago. Indeed, one of the principal justifications for introduction of five year plans and the establishment of the Planning Commission was to ensure a process of regionally balanced and socially equitable development. Through public and directed private investments, as well as various other interventions and public policies, balanced development across the regions was pursued during the first four decades of planning. Though such policies were not an unadulterated success, a measure of regional balance in development was maintained.

The role of government in general, and the central government in particular, in the economic activities of the nation changed substantially since the initiation of economic reforms in 1991. The private sector, which was controlled and contained in various ways, has since then been encouraged to play a more important role. Market forces, rather than government directions, would decide the investment decisions - where to invest, what to produce, whom to sell to, and so on. The locations and priorities were to be market-determined rather than government-determined. The government would have to be a facilitator for private initiatives rather than an arbiter and expected to restrict its economic activities to areas that were purely in the domain of the government.

Indeed, the past history of the governments at the Centre and states is such that they have entered into areas and activities that are best left in the hands of private sector and at the same time have left out or neglected activities that only governments can undertake. Various manufacturing activities carried out by public sector undertakings are examples of the former whereas primary education and basic health services are typical examples of the latter.