Freight equalisation policy

Freight equalisation policy was adopted by the Government of India (Union Government) to facilitate the equal growth of industry all over India (Indian Union). This meant a factory could be set up anywhere in India and the transportation of minerals would be subsidised by the Union Government. The policy was introduced in 1952, and remained in force until 1993.^[1] The policy hurt the economic prospects of the mineral-rich Indian states like Jharkhand, West Bengal, Madhya Pradesh, Assam, Chhattisgarh, and Odisha, since it weakened the incentives for private capital to establish production facilities in these states.^[2] As a result of the policy, businesses preferred setting up industrial locations closer to the coastal trade Indian states like Maharashtra, Gujarat, Tamil Nadu, Karnataka, and Andhra Pradesh and markets in the cities like Mumbai, Delhi, Bangalore, Chennai, Hyderabad, Ahmedabad, and Pune.^[1]