The basic policy followed by the Indian Government since independence in regard to location of industries is the achievement of balanced regional growth of the country. Balanced regional development has been a vital part of India economic planning. Different way have been followed to achieve balanced industrial policy statements made by the Government form time to time have also emphasized the need of balanced regional development.

The objective of Government policy on location is balanced regional development through decentralization of industries. It is felt that balanced regional development will lead to the achievement of the following benefits:

(i)    Reduction of regional disparities in the distribution of income and wealth.

(ii)    Removal of poverty in backward areas and increase in the standard of living of the people.

(iii)    Provision of employment opportunities on an equitable basis.

(iv)    Optimum utilization of national resources.

(v)    Control over the problems of slums, overcrowding, congestion of traffic, etc.

Another important justification of Government’s regulation of industrial location is to prohibit setting up chemical and other industries carrying hazards to human life near the populated areas so that the tragedies of the kind of Bhopal Gas Case (1984) do not occur again.

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