This article examines the nature of recent changes in India's underdeveloped regions, focusing on Uttarakhand State, which is a newly set up state separated from Uttar Pradesh and located in the Himalayan mountain range. Previous research has revealed the underdevelopment: lack of access, lack of jobs, workforce outflow, and lack of businesses or industries offering employment. Under economic liberalization, Uttarakhand has exhibited a conspicuous trend of economic growth. Large-scale industrialization has progressed since the 2000s, depending on new industrial policies to promote industry in the backward states, which were legislated by the government of India. Uttarakhand has captured a substantial amount of investment through this policy because of its good location on the periphery of the Punjab-Delhi Mega-Region. Other simultaneous initiatives to stimulate economic growth have also been implemented: development of the tourism industry, commercialization of farming, and urbanization. However, it is important to note that problems accompany the current economic growth. External capital from outside the state spearheads industrialization and tourism development, thus continuing the region's economic dependency. Industrialization has been heavily biased toward plain regions. Therefore, we should aim for endogenous and sustainable development, especially in the hill region.

This study was partly supported by a Grant-in-Aid for Scientific Research (A) 2013 (Representative: Hidenori Okahashi, Proposal Number: 23251020).