Ensuring Balanced Industrial Distribution in India

For Prelims: India's Industrial Sector, Information technology, Service sector, Production-Linked Incentive, PM Gati Shakti- National Master Plan , Start-up India, Make in India 2.0, Special Economic Zones 

For Mains: Challenges Associated with the Industrial Sector in India, Recent Government Initiatives for Growth of the Industrial Sector

Source: TH 

Why in News?

The Standing Committee on Finance (SCoF) has urged the Government to develop an action plan to evenly distribute industries across all States to ensure balanced and equitable economic development. 

• The Committee observed that while industry is a State subject, the Central Government’s role remains vital in shaping national industrial policy.

Key Observations & Recommendations of SCoF

• Key Observations:  
  • Stalled Disinvestment & PSE Policy: Despite the Dec 2021 policy to privatise/close loss-making CPSEs in non-strategic sectors for fiscal prudence, no proposals have been approved; disinvestment plans remain stagnant. 
  • Low Investment Rate vs Growth Needs: India’s investment rate is around 31% of GDP over the next decade. 
  • Weak State Incentives: While industry is a State subject, central initiatives are crucial,  however, incentives for States to reform their PSUs have been underutilised and largely ineffective. 
  • Fiscal Stress of States: High indebtedness of many States constrains their ability to invest in infrastructure, industrial development, and balanced growth. 
• Key Recommendations: 
  • Structural & Industrial Reforms: Fast-track disinvestment/closure of non-strategic, loss-making CPSEs, strengthen central incentive packages for State PSU reforms.  
    • Also prepare a national action plan to ensure balanced industrial growth, reducing regional disparities and promoting equitable development. 
  • Fiscal & Investment Strategy: Mobilise public & private investment to raise the investment rate to 35% of GDP (for sustaining 8% GDP growth) while introducing tailored fiscal reforms for highly indebted States that balance debt reduction with continued infrastructure & social sector investment. 

What are the Key Factors Responsible for Uneven Industrial Growth? 

• Historical Factors: Uneven industrial growth in India traces back to the British colonial era, which concentrated industries in select regions for strategic trade and port access.  
  • Eg: Jute was centred in Bengal (Kolkata) and cotton textiles in Maharashtra (Mumbai). Post-independence, this regional industrial imbalance persisted, leaving many areas underdeveloped. 
• Geographical & Infrastructure Factors: Industrial growth is influenced by geography and infrastructure. Difficult terrains like the Himalayan states and North-East face poor connectivity, power shortages, and high setup costs, limiting large-scale industries.  
  • In contrast, coastal and plain regions like Tamil Nadu, Gujarat, and Maharashtra benefit from better infrastructure such as major ports (Mumbai, Kandla), highways, and industrial corridors, creating favourable conditions for industrial expansion and supporting their industrial leadership. 
• Skilled Manpower Availability: Industrial clusters like Bengaluru (IT sector) and Chennai (automobiles) attract skilled workers supported by universities and technical institutes.  
  • States like Jharkhand and Chhattisgarh, with limited educational infrastructure and vocational training, struggle to grow skill-intensive industries. 
• Policy & Planning Disparities: Industrial growth is influenced by targeted policy support. The Green Revolution benefited Punjab, Haryana, and western UP, fostering agro-industrial expansion, while eastern and central regions lagged. 
  • States with proactive industrial policies, like Tamil Nadu, attract industries, unlike those with less supportive frameworks. 
• Agglomeration Effects: Industries tend to cluster to leverage scale economies, skilled suppliers, and logistics advantages, reinforcing regional disparities. 
  • Eg: Tamil Nadu’s automobile and electronics industries and Gujarat’s textile clusters. Peripheral states like Odisha and Assam, lacking these advantages, struggle to develop industrial hubs and attract investment. 

What are the Key Implications of Industrial Imbalance in India? 

• Regional Inequality & Developmental Gaps: States with higher industrial concentration, like Maharashtra, Gujarat, and Tamil Nadu generally have higher income, employment, infrastructure, and GDP (Maharashtra (Rs 45.3 lakh cr, 2024-25), UP (Rs 25.5 lakh cr, 2023-24), and Tamil Nadu (Rs 17.3 lakh cr, 2024-25) 
  • In contrast, states like Bihar ( GDP 8.5 lakh cr, 2023-24), Jharkhand (Rs 2.9 lakh cr, 2023-24), and most North-Eastern regions having fewer industries and lower industrial output, result in uneven economic development and wider gaps in living standards. 
• Migration & Urban Stress: Industrial hubs attract workers from underdeveloped regions for jobs, higher wages, and better amenities, causing inter-state migration. 
  • Cities like Mumbai, Bengaluru, and Delhi face overcrowding, housing shortages, traffic congestion, pollution, and slum expansion, leading to social and environmental pressures. 
  • As per EAC-PM (2023), India had 40.2 crore domestic migrants, with major migration hubs including Mumbai, Bengaluru Urban, Howrah, Central Delhi, and Hyderabad. 
• Fiscal Disparities & Resource Imbalances: States with concentrated industries earn higher tax revenues, royalties, and investment inflows, boosting their ability to fund infrastructure, healthcare, and education.  
  • Less-industrial states mostly depend on central transfers, face budget deficits, and have limited public investment, widening inter-state developmental gaps. 
    • Eg: Top 5 industrial states- Maharashtra, Karnataka, Delhi, Tamil Nadu, Gujarat contributed 72% of direct taxes in FY24, while UP, Bihar, MP contributed just 5%, revealing severe fiscal imbalances. 
• Federal Friction & Policy Challenges: Uneven industrial growth can cause tensions between the Centre and States over resources, investment policies, and financial incentives.  
  • Advanced states may seek greater autonomy, while lagging states demand special packages, challenging cooperative federalism and coordinated economic governance. 
• Socio-Political & Economic Implications: Persistent industrial imbalance can cause regional discontent, political marginalisation, and social unrest.  
  • It also shapes investment patterns, as businesses prefer areas with better infrastructure, skilled labour, and industrial ecosystems, creating a cycle of underdevelopment in lagging regions. 

What are the Key Government Initiatives for Boosting Industrial Growth in India? 

• Production-Linked Incentive (PLI): To scale up domestic manufacturing capability. 
• PM Gati Shakti- National Master Plan: Multimodal connectivity infrastructure project. 
• Bharatmala and Sagarmala Project: To Improve connectivity (road & sea) 
• Start-up India: To catalyse Startup culture in India 
• Make in India 2.0: To transform India into a global design and manufacturing hub. 
• Atmanirbhar Bharat Campaign: To cut down import dependence 
• Special Economic Zones: To create additional economic activity and boost the export of goods and services. 
• MSME Innovative Scheme: To promote the complete value chain from developing ideas into innovation through incubation and design interventions

What Measures Should be Taken for Ensure Balanced Industrial Growth in India?

• Industrial Location Policy & Incentives: Formulate a comprehensive industrial location policy to guide investments toward underdeveloped and lagging regions, including priority zones and strategic sector allocation. 
  • Offer tax breaks, capital subsidies, concessional loans, reduced GST, and investment-linked deductions to make less-industrial states competitive with industrially advanced hubs like Maharashtra, Gujarat, and Tamil Nadu. 
• Targeted Infrastructure Development: Invest in transport corridors, industrial parks, logistics hubs, reliable power, and digital infrastructure in industrially-backward states. 
  • Initiatives such as Industrial Corridors, Special Economic Zones (SEZs), and Dedicated Freight Corridors can reduce industrial setup costs and attract industries to remote regions, including the North-East and Eastern India. 
• Skill Development & Human Capital: Set up technical institutes, vocational centres, and reskilling programs in less-developed regions.  
  • Schemes like Skill India and PM Kaushal Vikas Yojana can provide a ready workforce for industrial clusters, supporting skill-aligned growth. 
• Cluster-Based & Ecosystem Development: Promote sector-specific industrial clusters for economies of scale, supply chain integration, and innovation. 
  • Eg: Textile clusters in Bihar, electronics in the North-East, and agro-industrial hubs in Eastern India, boosting local entrepreneurship, employment, and sustainable development. 
• Policy Coordination & Centre-State Collaboration: Strengthen cooperative federalism by aligning central policies with state industrial plans, ensuring resources, regulatory support, and investments.  
  • Provide incentive packages and reforms as per state capacities to promote equitable industrialisation. 

Conclusion 

India’s uneven industrial growth arises from historical, geographical, infrastructural, and policy factors. Ensuring balanced industrialisation needs Centre–State coordination, with focus on infrastructure, skill development, fiscal incentives, and cluster-based growth, reducing regional disparities and boosting competitiveness.

Drishti Mains Question:

Industrial imbalance in India has perpetuated regional inequality and fiscal disparities, hindering inclusive growth. Discuss its key implications and suggest policy measures for achieving balanced and equitable industrialisation.

UPSC Civil Services Examination, Previous Year Questions (PYQs) 

Prelims

Q. In the ‘Index of Eight Core Industries’, which one of the following is given the highest weight? (2015)

(a) Coal production 
(b) Electricity generation  
(c) Fertilizer production  
(d) Steel production 

Ans: (b)

---

Mains 

Q.1 “Industrial growth rate has lagged behind in the overall growth of Gross-Domestic-Product(GDP) in the post-reform period” Give reasons. How far are the recent changes in Industrial Policy capable of increasing the industrial growth rate? (2017) 

Q.2 Normally countries shift from agriculture to industry and then later to services, but India shifted directly from agriculture to services. What are the reasons for the huge growth of services vis-a-vis the industry in the country? Can India become a developed country without a strong industrial base? (2014)

Bonded Labour

Source: TH 

Why in News?  

The Haryana Human Rights Commission flagged a case of a 14-year-old allegedly held as bonded labour and abandoned after a serious injury, calling it a violation of human dignity and sparking discussion on bonded labour. 

Bonded Labour 

• The term ‘bonded labour’ has been defined by the National Commission on Labour as “labour which remains in bondage for a specific period for the debt incurred”. Individuals are forced to work for creditors, either without pay or for minimal wages. 

What are the Key Constitutional and Legal Frameworks Prohibiting Bonded Labour in India? 

• Constitutional Dimensions: 
  • Article 21: Guarantees the right to life and personal liberty, which includes living with dignity. 
  • Article 23: Explicitly prohibits human trafficking and forced labour, declaring it unconstitutional. 
  • Article 24: Prohibits employment of children below 14 years in factories, mines, or hazardous occupations. 
  • Directive Principles of State Policy: Article 42 aims to ensure just and humane working conditions. Article 43 calls for the State to secure a living wage and decent working conditions.
    • Additionally, Article 46 promotes the educational and economic interests of Scheduled Castes, Scheduled Tribes, and weaker sections, who are disproportionately affected by bonded labour, thereby aiming to protect them from exploitation.
• India’s Legal Framework: 
  • Bonded Labour System (Abolition) Act, 1976: Abolishes bonded labour, frees bonded labourers from obligations, and criminalises such practices. 
  • Child and Adolescent Labour (Prohibition and Regulation) Act, 1986 (amended 2016): Prohibits children under 14 from working, and restricts adolescents (14–18 years) from hazardous occupations. 
  • Juvenile Justice (Care and Protection of Children) Act, 2015: Provides for care, protection, rehabilitation, and reintegration of children in need. 
  • Bharatiya Nyaya Sanhita (BNS), 2023: Addresses the offense of unlawful compulsory labor, providing legal provisions to prevent and punish forced labor practices.
• International Legal Obligations: 
  • United Nations Convention on the Rights of the Child (CRC), 1989: Article 32 mandates protection of children from economic exploitation and hazardous work. 
  • International Labour Organization Conventions: Convention 182 (Worst Forms of Child Labour, 1999) – ratified by India. 

What are the Systemic Drivers Behind Bonded Child Labour in India? 

• Mnemonic: BONDAGE 
• B - Bureaucratic Inefficiency: Poor enforcement of laws and regulations makes bonded labor persistent. 
  • Labour trafficking spans states, but enforcement is localized with no real-time tracking or sharing of missing children databases across states. 
• O - Overwhelming Poverty: Families living in extreme poverty often resort to bonded child labour as a means of survival, driven by the need to meet basic economic demands. 
• N - No Education: Lack of education opportunities forces children into labor instead of schooling. 
  • Additionally, child work is often seen as acceptable in rural settings, especially if disguised as “apprenticeship”. 
• D - Debt Traps: Families often fall into debt, and children work to repay loans with high interest rates. 
• A - Agricultural and Allied Sectors: Large informal sectors like agriculture exploit children for cheap labor. 
• G - Gender Discrimination: Gender inequality exacerbates the exploitation, as girls are often more vulnerable to bonded labor. 
• E - Exploitation by Employers: Employers in unregulated sectors exploit weak laws and poor enforcement, forcing children to work in harsh and exploitative conditions. 

What Measures are Needed to Effectively Curb Bonded Child Labour? 

• Mnemonic: RESCUE 
• R - Revive Law Enforcement: Strengthen enforcement of the Bonded Labour System (Abolition) Act, 1976, by mandating State Governments to establish Vigilance Committees with legal authority and digital tracking of complaints. 
• E - Educate Children: Ensure access to education for all children, as guaranteed under Article 21A of the Constitution, preventing exploitation and promoting dignity.  
  • Provide vocational education and skill development programs to offer viable employment alternatives. 
• S - Support Families: Expand welfare schemes like Public Distribution System (PDS) and Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) to provide financial stability to vulnerable families.  
  • Implement direct cash transfers to reduce reliance on children's income and break the cycle of debt bondage. 
• C - Create Awareness: Raise awareness about human dignity and the legal prohibitions on child labor and exploitation, as outlined in the Universal Declaration of Human Rights (UDHR), 1948, which prohibits slavery and servitude in all forms. 
• U – Unite Communities: Build community awareness by encouraging collective responsibility so exploitation is socially unacceptable and harder to hide. 
• E - Empower NGOs: Collaborate with NGOs to implement the Central Sector Scheme for Rehabilitation of Bonded laborers (2021), focusing on the social and economic reintegration of freed bonded laborers. 

Related Keywords for Mains 

• “Childhood, Not Chains”: End bonded labour and protect minors’ rights. 
• “Dignity Over Duty”: Treat humans as ends, not tools of profit. 
• “Education, Not Exploitation”: Ensure every child’s right to learn. 
• “Protect Today, Prosper Tomorrow”: Safeguard children to secure society’s future. 
• “Laws in Action, Not Just Words”: Enforce anti-bonded labour and child protection laws. 
• “Justice for All, Inequality for None”: Break cycles of caste and social exploitation. 
• “Care, Not Cruelty”:Society must uphold the duty of care to vulnerable minors. 
• “From Slavery to Freedom”:Abolish bonded labour, empower communities. 

Drishti Mains Question:

Bonded labour and exploitation of minors violate human dignity and perpetuate social inequality. Discuss.

Green Hydrogen

Source: DTE

Why in News? 

A new report has positioned India as a potential global leader in the green hydrogen economy, with the capacity to capture 10% of the worldwide market and export 10 million tonnes annually by 2030.

What is Green Hydrogen (GH2)? 

• About: Green Hydrogen refers to hydrogen produced through electrolysis, where renewable energy sources like solar, wind, or hydro are used to split water molecules (H₂O) into hydrogen (H₂) and oxygen (O₂). 
  • It can also be produced via biomass gasification, a process that converts biomass into hydrogen-rich gas. 
• Applications: Its uses include a wide range of applications such as Fuel Cell Electric Vehicles (FCEVs), aviation and maritime transport, and various industrial sectors like fertilizers, refineries, and steel. 
  • It also holds potential in road and rail transport, shipping, and power generation. 
• India’s Green Hydrogen Ambitions: Through policies like the National Green Hydrogen Mission, Green Hydrogen Certification Scheme, and development of Green Hydrogen Hubs at Kandla, Paradip, and Tuticorin, India MAPS its Green Hydrogen Ambitions as follows: 
  • M – Market Leadership: Capture 10% of the global GH2 market by 2030, projected to cross 100 MMT. 
  • A – Abatement of Emissions: Enable ~50 MMT CO₂ reduction annually, aligning with India’s NDC and net-zero goals. 
  • P – Powering Production: Develop 5 MMT per annum of GH2 production capacity by 2030. 
  • E – Employment Creation: Generate 6 lakh+ green jobs across the GH2 value chain, from R&D to production, storage, and export. 
• Other Types of Hydrogen: 

                    

What are the Key Challenges in India’s Green Hydrogen Ecosystem?  

India’s Green Hydrogen journey is hindered by a CAGE that restricts its scaling potential: 

C – Cost Barrier: Early-stage Green Hydrogen costs nearly $4–4.5/kg, much higher than grey hydrogen, limiting competitiveness. 

A – Access to Capital: High upfront investments in electrolysers and renewable capacity deter private players. 

G – Gaps in Infrastructure: Lack of transport pipelines, storage, and refuelling networks slows adoption. 

E – Economic Viability Issues: Delayed carbon pricing mechanism makes fossil fuel-based hydrogen artificially cheaper, undercutting Green Hydrogen. 

What Measures can India Adopt to Boost Green Hydrogen Adoption?  

To break free from the CAGE, India must step on the POWER pedal: 

P – Pricing Carbon: Accelerating the introduction of a carbon tax/market mechanism to level the field with fossil fuels. 

O – Obligation Mandates: Enforce Green Hydrogen Purchase Obligations in hard-to-abate sectors (steel, fertilisers, refining). 

W – Widen Infrastructure Base: Build electrolyser capacity, storage, transport pipelines, and export corridors with partners like EU, Japan, S. Korea. 

E – Economic Reallocation: Shift subsidies from fossil fuels to GH2, and provide tax incentives & viability gap funding. 

R – Risk Pooling through Demand Aggregation: Create pooled procurement platforms with payment security mechanisms to ensure bankable contracts and competitive pricing. 

Keywords for Mains  

• “Hydrogen is the New Oil” – Fuel of the future. 
• “Act Green, Trade Clean” – Export corridors for sustainable growth. 
• “Sustainability is the Truest Dharma” – Green energy as ethical responsibility. 
• “Green Hydrogen is India’s Tryst with Clean Destiny.” 

Integrated Air Defence Weapon System Under Mission Sudarshan Chakra

Source: IE 

The Defence Research and Development Organisation (DRDO) successfully conducted the first flight tests of the Integrated Air Defence Weapon System (IADWS), under Mission Sudarshan Chakra. 

• Mission Sudarshan Chakra: Announced on the 79th Independence Day, it is a national security initiative that aims to develop an indigenous Iron Dome-like air defence system (with advanced technologies, and multi-layered defence systems) by 2035 to protect critical civil and defence infrastructure 
  • The mission aims to neutralize enemy attacks and enable swift counterstrikes, ensuring rapid, precise defence and strengthening India’s strategic autonomy. 
• IADWS: It is an advanced, indigenous multi-layered air defence system with QRSAM (Quick Reaction Surface-to-Air Missiles), VSHORADS (Very Short Range Air Defence System), and DEW (Directed Energy Weapon) (a laser-based high-energy system). 
  • Controlled by a Centralised Command and Control Centre, IADWS ensures real-time detection and neutralization of targets like Unmanned Aerial Vehicles (UAVs), and missiles.  
  • IADWS builds on India’s use of S-400, Barak-8, and Akash systems during Operation Sindoor to intercept Pakistani drones and missiles. 
  • Its successful flight tests mark a major step in strengthening India’s self-reliant and integrated air defence capabilities.

Read more:   India’s Advancements in Ballistic and Air Defence Systems 

UN High Commissioner for Refugees

Source: TH

The United Nations High Commissioner for Refugees (UNHCR) has temporarily suspended voluntary repatriation of Sri Lankan Tamil refugees from India after arrests of returnees in Sri Lanka. 

• United Nations High Commissioner for Refugees (UNHCR) 
  • About: UNHCR is the UN Refugee Agency, established in 1950 by the UN General Assembly to assist people displaced after World War II. 
    • It is headquartered in Geneva, Switzerland with operations in 137 countries. 
  • Legal Basis: Guided by the 1951 Refugee Convention and 1967 Protocol, which defines refugees and sets global standards for their rights and protection. 
  • Functions: It provides refugee protection, humanitarian aid, promotion of durable solutions (asylum, repatriation, integration, resettlement), and support to states in framing refugee policies under international law. 
• 1951 Refugee Convention & 1967 Protocol 
  • About: It forms the foundation of international refugee law, defining a refugee as a person outside their home country, unable/unwilling to return due to a well-founded fear of persecution (based on race, religion, nationality, political opinion, or social group).  
  • Mandate: It upholds the core principle of non-refoulement, ensuring refugees are not returned to danger, while granting rights to housing, education, work, and legal protection. 
    • Refugees must respect host country laws, though those guilty of war crimes or serious crimes are excluded from protection. 
  • India and UNHCR: India is not a signatory to the 1951 Refugee Convention or 1967 Protocol. Refugees are managed under general immigration laws.  
    • Despite this, India has hosted major refugee groups- Sri Lankan Tamils, Tibetans, Afghans, Rohingyas and collaborates with UNHCR on humanitarian grounds.

Read More: Refugees and Ethics 

Palmyra Palm Trees

Source: DTE

Odisha has restricted the felling of Palmyra palm trees due to their ecological and social benefits. 

Palmyra Palm Tree (Borassus flabellifer) 

• About: It is indigenous to South and Southeast Asia, highly drought-resistant and recognised as the State Tree of Tamil Nadu. 
  • It is found mainly in Odisha, Andhra Pradesh, West Bengal, and Tamil Nadu. 
  • It is revered in Tamil culture as Karpaga Vruksham (“celestial tree that gives everything”), and its palm leaf manuscripts were vital in preserving Tamil language and literature for centuries. 
• Ecological Role:  Its fruits (tala) ripen in July–August, serving as food for elephants during lean seasons and reducing human-elephant conflicts, its tall structure acts as a natural lightning conductor, lowering monsoon fatalities. 
  • Its deep root system aids groundwater recharge, drought resilience, and soil erosion prevention along water bodies and coasts. 
• Significance: Its fruit kernel (nungu) serves as a mineral-rich summer coolant, while palm sugar (panai karuppatti) & jaggery, and beverages like padaneer (sap) and toddy offer healthier traditional alternatives to modern products.  
  • Leaves support roofing, mats, and handicrafts, and its wood provides construction material and fuel.  

Read More: Prioritising Oil Palm Plantation 

Pseudomonas Aeruginosa

Source: TH 

A recent study found that Pseudomonas aeruginosa bacteria can have two different gene expressions (bistable gene expression) in identical cells, with some cells having certain genes "on" and others having them "off." 

• The glpD gene, which helps the bacteria use glycerol, shows variable expression- in some cells, it is active (on), increasing infectivity, while in others, it is inactive (off). 
• This variability is a form of epigenetic inheritance, meaning that gene expression can be passed down without changes to the DNA. 

Pseudomonas Aeruginosa

• About: It is a Gram-negative, aerobic, non-spore-forming, rod-shaped bacterium, widely found in the environment like in soil & water, especially freshwater. 
• Infection Potential: Can infect both healthy (immunocompetent) and weakened (immunocompromised) hosts. 
  • It  can cause community-acquired infections (folliculitis, puncture-wound osteomyelitis, pneumonia, and otitis externa). 
  • It is responsible for 30% of hospital-acquired infections (HAIs) in India such as ventilator-associated pneumonia, catheter-related urinary tract infections, and bloodstream infections. 
  • It feeds on plastic surfaces, and is a major cause of keratitis (eye infection) and fatal burn infections, thriving in ICU patients. 
• Antibiotic Resistance: It is highly resistant due to its built-in resistance (like tough outer membrane and efflux pumps) and acquired resistance (mutations, plasmids, transposons, integrons).  
• Only a few antibiotics remain effective such as tobramycin, amikacin, etc.
  

Read More: Antimicrobial Resistance: The Urgent Call for Action