Identification of Backward Areas

Abstract

The 1969 report on the Identification of Backward Areas, initiated by the Planning Commission of India following deliberations in the National Development Council, presents a structured framework to address persistent regional imbalances in industrial development across States and Union Territories. Recognizing the uneven spatial distribution of industries and economic opportunities, the report constituted two working groups—one to define objective criteria for identifying backward regions and another to recommend fiscal and financial incentives to stimulate industrialization in such areas. Building upon earlier efforts such as the recommendations of the Dispersal of Industries Committee (1960), the document proposes measurable indicators including low per capita income, limited industrial and mining output, low factory employment ratios, inadequate electricity consumption, poor transport connectivity, and under-utilization of natural resources. It further refines identification at the district level, particularly targeting areas beyond a specified radius from established industrial centers and those significantly below state averages in income and secondary and tertiary employment. The report advocates selective and phased implementation, prioritizing the most backward districts within industrially lagging states to ensure effective allocation of resources. Recommended policy measures include tax concessions, financial assistance, improved access to credit, facilitation of foreign exchange, and preferential support for industries with minimal foreign exchange requirements. Overall, the document provides an empirically grounded and policy-oriented approach aimed at promoting balanced regional growth, reducing economic disparities, and fostering sustainable industrial development across India’s diverse regions.