Location of Indian cement industry

Abstract

The article examines four hypotheses about the location of the Indian cement industry: a) its location is not optimum, b) it is not evenly distributed throughout the country, c) it is becoming more and more dispersed over time, and d) recent changes are towards optimum location. These hypotheses are tested on the basis of various determinants of location and on two measures of location — location quotient and coefficient of localization. The findings endorse all the four hypotheses. In particular, the location coefficient has declined from 0.53 in 1960 to 0.46 in 1965. Madras and Bihar were the leading states in cement production in 1947, but in 1971 leading states were Madras, Madhya Pradesh, Gujarat, and so on. This change seems to have been effected by market forces, such as profitability. The government could perhaps expedite this process through measures such as a suitable licencing policy and tax incentives.