One of the major objectives of planning in India has been that of removing regional
disparities. During the pre-independence period, most of the industrial progress was limited to a few areas like the port towns. After the inception of planning in 1951, the government started paying special attention to those regions which were lagging behind and public sector industries were deliberately set up in those backward regions.
Four major steel plants were set up in the backward areas to accelerate economic development, provide employment to the workforce and develop ancillary industries.
For example, with the establishment of Bhilai Steel Plant in Madhya Pradesh, several new small industries have come up in that state.
The private businessmen hesitate to establish their enterprises in the backward areas due to lack of infrastructure facilities, skilled workforce, etc but these regions cannot be neglected in public interest. Therefore, the government located new enterprises in backward areas and at the same time prevented the mushrooming of private sector units in already advanced areas.