Is regional inequality among Indian states is a cause of individual income inequality or vice versa? Discuss.
In my view, regional inequality among the states and within the states is the major cause of individual income inequality. The differences in per capita incomes are a suitable indicator of imbalances and inequalities rather. The increased regional inequality results in either spatial imbalance (rural/urban inequality) or social imbalance (urban inequality within urban areas and rural inequality within rural areas). The decreased regional inequality brings down these spatial and social imbalances and then the different areas within a region are more economically, socially and geographically integrated and dependent on each other. This integration benefits all. As social and economic integration increases, all members of society benefit and this leads to reduction in personal income inequality.
In India, the benefits from the growth at the national level have not spread equally across different regions of the country and there is a clear divide between eastern and western states. Further, there is a clear divide within the states also. This has given rise to differences in the per capita income of the poorer and richer regions.
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