Coming to the question of why some places like Delhi and Maharashtra are receiving highest amount of FDI even without offering more incentives leads us to another interesting question of can states attract FDI without offering any policies or incentives. Answer for this can be found in the path dependency theories. As the industry concentrates geographically participants elsewhere are at a disadvantage, and thus there will be a tendency to move into the hub, further increasing its relative efficiency. Agglomeration economies are one of the reasons for the operation of this path dependency theory arguement. When there are agglomeration economies the forward and backward linkages are usually stronger. Thus the investors invest in a place where there is already investment to reap the benefits of agglomeration economics and forward and backward linkages. Lall and Chakravorty (2005) have found that new private sector industrial investments in India are biased toward existing industrial. Subrahmanian (2003) has found that there has not been a major change in the ranks of the states under the pro-market liberalised policies from what it was in the pre-reform period, "the already developed states continue to hold the top rank, which implies the continuation of the earlier pattern of the industrial development under the state-lead policy regime". Maharashtra was an industrialized state in the pre-independent era and thus given the path dependency arguement there is no wonder in the state attracting high FDI. Factors like governance, security, geographical location, availability of human resource etc., also play a role in attracting investments. This explains why more FDI is flowing into Delhi despite few policies and incentives.
Limitations of the Study:
Some of the major limitations of the study are as follows.
Data problems: There are some problems regarding the data used for the purpose of study. Some of the problems of ASI data are worth mentioning. Firstly, certain types of establishments such as software manufacturers and everything in the service sector are left out by the ASI since the definition of industry was set by the Factories Act. Secondly, the survey data are naturally subject to the problem of variation in response, and therefore, in coverage (Ahluwalia, 1991).
Exclusion of private domestic investment: The study has overlooked the role of private domestic investment, which is one of the components of private investment along with FDI, in aggravating the regional imbalance of manufacturing and service sector.
Neglect of certain factors: The study has not taken into consideration the role of factors like location factor, governance factor, security factor, etc., while estimating the policy indicator. Incentive is not the only factor which determines FDI amount. Thus to have an unbiased and clear cut picture of how incentives are aggravating regional imbalance one needs to take into consideration these factors also.(责任编辑：BUG)