Even after five decades of planned development, industrial activities in India have not
dispersed much across the various regions of the country. During the entire period 1959-60
to 1997-98, the two western States of Maharashtra and Gujarat have dominated Indian
industry. These two States together, account for a share of approximately 34 per cent in the
total value added by the country’s factory sector. On the other hand, the eastern States of
West Bengal, Bihar and Assam have been continually losing their prominence. West Bengal’s
share in value added by India’s factory sector declined from 20 per cent in 1959-62 to 5.3 per
cent in 1995-98. Some States lying in the northwest and central regions of the country
including Madhya Pradesh, Rajasthan and Uttar Pradesh have significantly increased their
shares in the country’s factory sector, as did the three southern States of Andhra Pradesh,
Tamil Nadu and Karnataka (see Table 1). This paper is an attempt to explain such regional
disparities in India’s industrial growth.