National demand and regional industrialization

Abstract

Interstate disparity in the industrial output has been increasing in India in spite of our planned efforts to reduce the same. Out policies in this regard were based on the growth theories emphasising the role of factor supplies, particularly investment. It is argued here that such an approach is most likely to lead to the wastage of scarce national resources in the sense of sacrificing growth without reducing the disparities. Indian data seem to support demand oriented theories which suggest quite different planning and policy measures to tackle the problem.