Facilities: An enterprising spirit, innovation, technical know how and an industrious nature of population — all these factors taken together and a favorable government policy create a favorable atmosphere for the purpose of the establishment of industries. Heavy industries in India are the result of personal factors like enterprise, industrious nature of one man creating an industrial group or a family.
Natural Factors: Land, water, climate, source of raw materials and agricultural climate are some natural factors which are important for some industries like cotton textiles, sugar and jute. These industries depend on a good climate and source of natural raw materials.
Political Factors: The governmentâ€™s policy of licensing and encouraging the development of industries in underdeveloped regions determines the location of industries. Such a policy may cause the dispersal of industries. The location of defense industries depends on the political policy of the government. The governmentâ€™s policy of subsiding small industries in village areas will determine their location and dispersal in village areas. The governmentâ€™s policy of not allowing licenses to big units in cities will cause the dispersal of industries to underdeveloped areas.
Government Subsidies and Facilities: The government may encourage the dispersal of industries in underdeveloped areas by making capital, land, water and power available at subsidized rate. The government may give such facilities as development rebate, tax exemptions, price subsidies, banking, insurance and postal facilities at low rates, priority in transport and supply of raw material, etc. By giving these facilities, the government may bring about the development of industries in backward areas and this will result in the regional balancing of industries.
Historical and Religious Factors: Some industrial cities are of historical importance. Some of them are capital cities having religious importance — e.g. Benaras, Prayag, Kolhapur, Nasik, etc. Industries grow at these religious centres because these are places of historical importance.
Initial Start and Goodwill: Some industries get located at a place because some industrialists start the industry at that place at an early stage — e.g. Jamshedpur (Tatas) was developed into an industrial city; the iron and steel industry received its initial start there. The motor car industry was started at a place where Mr. Ford started his workshop. Once one industry is started, other industries also develop at that place. Government restrictions play a negative role in the location decision. Industries are not permitted to be started or expanded in certain developed urban areas. So certain industries are relocated from urban areas to rural or less developed or the divisions or branches of the industries established in urban areas are started in such rural or undeveloped areas.