Asian Journal of Research in Business Economics and Management

Balanced regional development is essential for nation's social, economic and political sustainability. When regions develop unequally, resources possessed by the laggard regions go largely untapped and underutilized which reduces the development capacity of the nation as a whole. This holds true for India as well. The Economic literature suggests that industrial development of the backward regions can play an instrumental role in mitigating the problem of regional disparities by creating waves of economic expansion in the backward regions. The present study attempts to analyse the inter-state pattern of industrial development in India with the aim of bringing out the key factors behind industrial disparities across Indian states. To serve the purpose, composite indices of industrial development have been constructed which have been then regressed upon various possible determinants of industrial development across states of India. The study finds huge amount of inter-state disparities in industrial development in India with variations in degree of urbanisation and availability of technically skilled manpower as the two major causes behind this unwelcome trend.