Development of Backward Areas

Identification of backward areas is a difficult task. In general, any area with relatively low per capita income and low per capita consumption is known as a backward area. At the time of formulation of the Fourth Five Year plan (1966-1971), the Planning Commission appointed a Study Group to suggest the criteria for identifying backwards areas. The group suggested the following criteria for the identification of backward areas:

  1. Total population and the density of population.
  2. A number of workers engaged in agriculture including agricultural labourers as a percentage, to total workers.
  3. Total area per agricultural worker.
  4. Net area is sown per agricultural workers
  5. Percentage of total irrigated area, to the net irrigated area.
  6. Percentage of area sown more than once, to the net sown area.
  7. Per capita (rural population) gross value of agricultural output.
  8. Establishments (manufacturing and repair)using electricity: (i) Total, (ii) Household, and (iii) Non-household.
  9. A number of workers per lakh of the population employed in registered factories.
  10. Mileage of surface roads: (i)Per 100 sq km, and (ii) Per lakh of population.
  11. A number of commercial vehicles registered in a district.
  12. Percentage of the literate population.
  13. Percentage of school-going children: (i) boys, and (ii) girls.
  14. Number of seats per million population for technical training: (i) craftsmen, and (ii) diploma level.
  15. Hospital beds per lakh of population.
  16. Per capita income.

On the basis of these criteria, 238 districts all over India were identified as backward districts. The various governments gave numerous fiscal and other incentives for the development of agriculture, industries, transport and social amenities in these districts. Some of the fiscal incentives given were as under:

  1. Grants for the minor irrigation projects, cottage and small industries, emphasis on roads, and electricity development.
  2. Grant of higher development rebates to industries located in backward areas.
  3. Grant of exemption from income-tax, including corporate tax for five years after providing the development rebate.
  4. Exemption from payment of import duties on plant and machinery, components, etc., imported by units set up in backward areas.
  5. Exemption from excise duties for a period of five years.
  6. Exemption from sales tax, both on raw materials and finished products to units set up in specified backward areas for a period of five years.
  7. Transport subsidy.
  8. Industrial estates, like Okhla (Delhi), Naini (Allahabad), Rajkot (Gujarat). Guindy and Virudhunagar (Tamil Nadu), Kanpur and Agra (Uttar Pradesh), Palghat and Trivandrum, Kottayam. Quilon and Trichur (Kerala) were established to encourage the growth of small scale industries.