The National Democratic Alliance (NDA) government is prioritizing the development of eastern India as part of its overall strategy to build a developed India by 2047. Finance Minister Nirmala Sitharaman recently stated that the freight equalisation policy, which existed for four decades up to 1992-93, weakened the incentive for industries to be set up close to mining regions, affecting the development prospects of mineral-rich eastern states. This policy, which aimed to encourage factories to be built anywhere in India by subsidizing mineral transportation costs, had disastrous effects on eastern India as it weakened incentives to set up industries close to mining regions, encouraging factories to be set up further away and negatively impacting these states’ economic prospects. As a result, people moved out of the region in search of employment. The Modi government has eliminated this policy and has invested in the revival of state-run fertilizer plants in the region. As a result of these measures, the number of left-wing extremism incidents in the region has decreased by 76% since 2010. The combined capacity of the three fertilizer plants in Barauni, Sindri, and Gorakhpur adds up to 38.1 million tonne a year. The urea plant at Barauni in Bihar was revived at a cost of 9,500 crore. The government’s focus on eastern India has been a consistent priority for the Modi government, which is captured in the interim budget for 2024-25.
NDA Government Prioritizes Eastern States in Development Strategy, Eliminates Freight Equalization Policy
