New Delhi: According to Finance Minister Nirmala Sitharaman The eastern region of India, which historically suffered due to the freight equalisation policy, is now a focal point of the National Democratic Alliance (NDA) government’s development strategy, . Speaking at a televised press briefing in Patna on Tuesday, Sitharaman highlighted the adverse impacts of the policy and the current efforts to revitalize the region.
Historical Impact of the Freight Equalisation Policy
What was the impact of the freight equalisation policy on the development of eastern states?
Sitharaman explained that the freight equalisation policy, which aimed to standardize mineral prices across the country for four decades up to 1992-93, significantly weakened the incentive for industries to set up close to mining regions. This policy, designed to subsidize mineral transportation costs, meant that coal mined in Bihar cost the same in Mumbai. As a result, industries were discouraged from establishing operations near mining areas, adversely affecting the economic prospects of mineral-rich eastern states and leading to migration in search of employment.
Focus on Eastern India
How has the focus shifted towards eastern India in recent years?
The finance minister stated that the region, which once suffered due to the freight equalisation policy, is now at the core of the NDA government’s development agenda. “Today we say, we also said it in Parliament on the day of the vote on account, we are building a developed India by 2047 and that journey of progress will be powered by all the eastern states,” Sitharaman said. She emphasized that the focus on eastern India has been a consistent priority for the Modi government, as reflected in the interim budget for 2024-25.
Reduction in Left-Wing Extremism
What measures have been taken to address security challenges in the region?
Sitharaman reported a significant reduction in left-wing extremism in the region, with a 76% decrease in incidents in 2022 compared to 2010. This reduction has improved the overall security and investment climate in the eastern states, making them more attractive for development and investment.
Revival of Fertilizer Plants
How has the government revitalized industrial infrastructure in the region?
The finance minister highlighted the revival of state-run fertilizer plants in the region as an example of the government’s commitment. The combined capacity of the fertilizer plants in Barauni, Sindri, and Gorakhpur totals 38.1 million tonnes per year. The urea plant at Barauni in Bihar was revived at a cost of ₹9,500 crore, boosting agricultural productivity and creating employment opportunities in the region.
Through addressing historical policies that hindered development and implementing targeted strategies, the NDA government aims to ensure that the eastern region becomes a cornerstone of India’s journey towards becoming a developed nation by 2047.
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