Localisation of industries causes the following problems:

1. Pollution:

Localisation of industries in a region causes pollution of environment. Air, Water and noise pollution increase in industrial areas. People living in these areas suffer from various diseases and their health declines.

2. Regional imbalance:

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When industries get localised in few regions, these regions make rapid economic progress. Other regions of the country remain economically backward. Lack of balanced regional development causes social and political instability in the country.

3. Recession in economy:

Decline in the demand for the products of localised industry may cause unemployment in the region.

4. Industrial disputes:

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Strikes, lookouts and other forms of industrial unrest is quite common in industrial belts.

5. Social evils:

Concentration of industries in a region creates industrial slums and un­healthy living conditions. Antisocial and criminal activities also increase in industrial areas. Rivalry between trade unions spoils the social and political environment.

Localisation at a glance causes:

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(i) Availability of raw material, power, water, suitable climate and other physical factors at specific places.

(ii) Adequate supply of skilled and cheap labour in some regions.

(iii) Nearness to big markets

(iv) Patronage of the Government and local authorities

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(v) Existence of similar and related industries in an area

(vi) Political stability and tax benefits in some states.

Advantages of localisations

1. Costs of production are reduced due to easy availability of required services like bank­ing, warehousing, insurance, transport, communications, tool rooms, repairs etc.

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2. Several subsidiary trades grow up in the vicinity of big industries. Localisation also serves as a source of new ideas.

3. A ready and continuous job market is available for special skills. Disadvantages

(i) Concentration of industries at one place increases demand for land and buildings. Hous­ing becomes an acute problem and slums grow up.

(ii) Cost of living goes up and pressure on local facilities such as education, health, sanita­tion, public transport increases.

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(iii) During depression and war, crises may arise due to heavy concentration of industrial units.