Although India has undergone rapid economic development in the last 20 years, it has great variations in wealth within the country.
Generally, the states in the south and west (with the exception of Rajasthan) have a far higher level of development than the states in the north and east.
These disparities are due to several reasons:
These reasons led to the positive multiplier effect in the south and the west where a high level of development created a well-educated work force. This then attracted foreign investment from transnational corporations, further increasing the wealth of the south and the west. In contrast, the north and east of India are landlocked, therefore cannot directly trade internationally. This deters foreign investors from these regions. This can result in a lack of schools, transport networks and employment opportunities causing young people to move out of the region towards successful cities. This is known as brain drain.