Manufacturing GVA and employment remain concentrated in a handful of States. Discuss the causes and suggest measures for more balanced regional industrialisation.

According to the Annual Survey of Industries (ASI) 2024-25, five States (Maharashtra, Gujarat, Tamil Nadu, Karnataka and Uttar Pradesh) produce over 54% of registered-manufacturing GVA. Five States also hold about 56% of factory employment [1]. This concentration comes from advantages that have built up over decades. Reversing it needs deliberate spatial policy.

Causes of concentration

• Historical and geographic head-start: colonial-era port cities such as Mumbai and Chennai lowered the cost of inputs and exports. Later investment followed these early industrial belts.
• Agglomeration economies: established clusters already have suppliers, skilled labour and markets. Tamil Nadu alone has 41,221 factories, the most of any State [1].
• Capital-intensive sector mix: basic metals, motor vehicles, chemicals, pharmaceuticals and food products produce over 45% of GVA [1]. These industries cluster where capital and ancillary units already exist. Maharashtra has 15.92% of GVA but only 13.08% of jobs [1].
• Infrastructure and logistics deficits: poor multimodal connectivity raises costs for inland States. This is why PM Gati Shakti targets connectivity to economic zones [3].
• Uneven State capacity: leading States offer quicker land allotment, reliable power and single-window clearances.
• Thin industry at the periphery: Manipur, Meghalaya, Nagaland, Sikkim and Tripura have so few factories that the ASI surveys every unit there under its census scheme [2].

Measures for balanced industrialisation

• Plug-and-play industrial cities: in 2024, 12 nodes were approved under the National Industrial Corridor Development Programme across 10 States, including Gaya (Bihar), Agra and Prayagraj (UP) [4].
• Region-specific incentives: UNNATI 2024 (₹10,037 crore) supports new and expanding units in all eight North-Eastern States [5].
• Connectivity-first planning: use the Gati Shakti master plan to cut logistics costs for landlocked States [3].
• Labour-intensive clusters with upgrading: UP's share of factories rose from 8.51% to 9.35% while its GVA share slipped [1]. Skilling and technology support must follow the new units.
• Cooperative federalism: States should build land banks, reform power supply and make clearances faster.
• Targeted data: ASI samples are designed State by State and district by district [2]. This allows lagging districts to be identified and tracked.

Industrial concentration comes from history, agglomeration and infrastructure; it is not inevitable. Corridor-led, connectivity-first and region-specific policies, backed by reforms in the States, can spread factories and jobs inland. This would advance SDG 9 (inclusive industrialisation) and SDG 10 (reduced inequalities). It would also serve Article 38(2), which directs the State to reduce inequalities between regions.