Industrialists are generally attracted towards the places where other industries are already located. They do so because they will get a large number of external economies form such places. The entrepreneurs decide the location of their units by keeping in view the economic considerations only. They do not think in terms of social cost-benefit. The leads to the concentration of industries at particular places. There are many disadvantages of concentration of industries at particular places. There are many disadvantages of concentration of industries in a few areas from the point of view of the society. These are listed below:

(i)    Concentration of industries gives rise to the problems of housing, transport, health, etc. in the industrial areas.

(ii)    There is overcrowding and congestion of traffic in industrial centers.

(iii)    The economic condition of labour-class in such areas in miserable. They get low wages because of over supply of labour which occurs as a result of migration form rural areas. They have to live in slums and unhealthy conditions. The condition of labour in Bombay, Calcutta and other industrialized cities needs no elaboration.

(iv)    In India, concentration of industries in a few big cities has taken place at the cost of other areas. Thus, backward regions remain backward as major part of the investment takes place in big cities.

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