India has experienced rapid economic growth and globalization since the economic liberalization of 1991. This has caused a reorganization of spatial structures on a nation-wide scale and increased regional disparities between urban and rural areas. Therefore, we are required to reconsider India's economic development from the viewpoint of local scale development.

In this paper, we intend to examine the socio-economic changes by focusing on a state-level region. We selected the Uttarakhand State, one of the typical underdeveloped regions of India, as a study area. The state has experienced increasing underdevelopment and therefore formed money order economy that depends on money sent from migrant workers.

We made clear that the state has experienced a dramatic changes since its independence in 2000. It has shown a new development trends, such as large scale industrialization and tourist development since the economic liberalization of 1991. We determined that new state creation plays a special important role in the economic development, conducting new industrial policy, and supplying subsidies.