New Delhi: Dr. Manmohan Singh showed worry over the country’s rural-urban and inter-regional fraction in the growth process, and emphasized on the need for financial plans that would bridge up these instabilities.

While inaugurating the golden jubilee celebrations of the Institute of Economic Growth, Mr. Singh state that there was a historic permanence in the model of disparity in regional growth.

He said, “We have to move from a situation where people are migrating to where jobs exist to (a situation) where jobs migrate to where people live. nter regional imbalances in developments have both economic and political causes and consequences.”

Mr. Singh also said that as compared to central, eastern and north eastern India, historical parts of north western, western and southern India has grown much faster.

He added that the Central Government has initiated various actions to bridge over the territorial instabilities, while State Governments will also play an active role in bridging the regional divide.

“Can the Central Government alone reduce that imbalance if concerned States will not do their bit,” he demanded.

On the matter of Government subsidies, Mr. Manmohan told that there is a need to re-look subsidies, which failed to accomplish the objective of reducing inequities.

“We spend far too much money funding subsidies in the name of equity, with neither equity objective nor efficiency objective being met,” he said.

Stressing on the need of investments in social as well economic infrastructure, Dr. Singh said, “We need policies that will make public investment more productive and encourage private investment. We need rapid expansion of labour-intensive manufacturing industries. The investments we are making in rural infrastructure, rural education and healthcare and in promoting non-farm employment in rural areas should help (but) there is much that the State Governments will have to do in this regard.”

While commenting that the India’s mixed economy model often became a “mixed up economy,” the Prime Minister said, “Experiences of that past should not discourage us from once again looking for a new middle path to development that combines the efficiency considerations of market with the equity considerations of a liberal policy.”