We find that there is great disparity in industrial development among different states of the country. The solution of this problem depends on the dispersal of industries. Dispersal of industries means location of industries in different regions of the country or the geographical decentralisation of the industrial activities. In this process of dispersal of industries backward regions are required to be given priority in the location of industries.
In this regard government has adopted the following important steps:
(i) In 1968, the government had identified 246 districts as backward districts and financial incentives and subsidies were given to industries set up in these districts.
(ii) In 1978, industrial licensing regulations were used to encourage regional dispersion of industries and large industrial houses were allowed to set up industries in the backward areas.
(iii) In 1981, the idea of ‘no industry’ districts was introduced and such districts were given top priority in all schemes and provided with infrastructural facilities for attracting new industries.
(iv) Through licencing policy, the MRTP companies were forced to locate industrial units in the backward areas.
(v) The thrust of the new industrial policy, 1991 is to shift industries away from big congested cities to the rural and backward areas.