Industries

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  • Primary materials into finished goods or Secondary activities or manufacturing.
  • Economic strength of a country is measured by the development of manufacturing industries.
  • Iron and steel industry (production of goods), coal mining industry (extraction of coal) and tourism industry (service provider).
Importance of Manufacturing
  • Reduce the heavy dependence of people on agricultural income by providing them jobs in secondary and tertiary sectors.
  • Eradication of unemployment and poverty.
  • Bringing down regional disparities by establishing industries in tribal and backward areas.
  • Export of manufactured goods & brings in much needed foreign exchange.
  • India’s prosperity lies in increasing and diversifying its manufacturing industries.
Contribution of Industry to National Economy
  • 17% of GDP – out of a total of 27% for the industry which includes 10% for mining, quarrying, electricity and gas.
  • Lower in comparison to some East Asian economies, where it is 25 to 35%.
  • Growth Rate 7% per annum. Since 2003, 9 to 10% per annum.
  • National Manufacturing Competitiveness Council (NMCC).
Classification of Industries
Based on Raw materials
  • Agro based industries – Use plant and animal based products. Ex: Food processing, vegetable oil, cotton textile, dairy products and leather industries.
  • Mineral based industries – Use mineral ores. heavy machinery, building materials and railway coaches.
  • Marine based industries – Sea and oceans as raw materials. Ex: Sea food, Fish oil.
  • Forest based industries – Forest produce. Ex: pulp and paper, pharmaceuticals, furniture and buildings.
  • Industrial processed raw material based industries.
Basis of the use of their products
  • Basic or key industries: Raw material to Manufacture Other Goods. Ex: Iron and steel and copper smelting, aluminum smelting.
  • Capital Goods
  • Intermediate Goods Industries
  • Consumer industries. Ex: sugar, toothpaste, paper, sewing machines, fans etc.
Based on Size
  • Amount of capital invested, number of people employed and the volume of production.
    • Small scale industries. Max investment of 1 Crore. Ex: Cottage industry.
    • Medium scale industries
    • Large scale industries. Ex: Food processing industries, Automobiles and Heavy machinery.
Based on Ownership
  • Private sector industries - owned and operated by individuals or a group of individuals. Ex: TISCO, Bajaj Auto Ltd.,
  • Public sector industries - owned and operated by the government. Ex: Hindustan Aeronautics Limited, Steel Authority of India Limited, BHEL etc.
  • Joint sector industries - owned and operated by the state and individuals or a group of individuals. Ex: Maruti Udyog Limited, Oil India Ltd (OIL).
  • Co-operative sector - owned and operated by the producers or suppliers of raw materials, workers or both. Ex: Anand Milk Union Limited and Sudha Dairy, coir industry in Kerala & sugar industry in Maharashtra.
Based on the bulk and weight of raw material and finished goods
  • Heavy industries. Ex: iron and steel
  • Light industries. Ex: Electrical goods industries.
Common Classification of Industries
  1. Metallurgical Industries,
  2. Mechanical Engineering Industries,
  3. Chemical and Allied Industries,
  4. Textile Industries,
  5. Food Processing Industries,
  6. Electricity Generation,
  7. Electronics and
  8. Communication Industries
Factors affecting Location of Industries
  • Availability of raw material, labour, capital, power and market etc.
  • Location in or Near the city, Cities provide markets and also provide services such as banking, insurance, transport, labour, consultants and financial advice, etc. to the industry.
  • Many industries tend to come together to make use of the advantages of fered by the urban centres known as agglomeration economies.
  • Raw Materials - weight-losing raw materials are located in the regions where raw materials are located. Ex: Sugar Mill. Industries based on perishable raw materials are also located close to raw material sources.
  • Power – Ensured before the location of any industry, aluminium and synthetic nitrogen manufacturing industries. power intensive and require huge quantum of electricity.
  • Market -  Heavy machine, machine tools, heavy chemicals are located near the high demand areas. non-weight-losing raw material and is generally located in large urban centre, e.g. Mumbai, Ahmedabad, Surat, etc. Petroleum refineries are also located near the markets. Ports also play a crucial role in the location of oil refineries.
  • Transport - Nodal point having transport links. Industries shifted to interior locations, only when railway lines were laid
  • Labour - Industries require skilled labour.
  • Historical Factors - Influenced by our colonial past. Manufacturing centres experienced rapid growth due to competition from the goods manufactured in Britain and the discriminatory policies of colonial power.
  • Industrial Policy - Economic growth with balanced regional development. Ex: iron and steel industry in Bhilai and Rourkela were to develop backward tribal areas of the country. Provides lots of incentives to industries locating in backward areas.
  • Pre-Independence period, location point of view for overseas trade.
  • Government policies and specialised labour also influence the location of industry

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