6.1.1. Classification of Industries

List the various manufactured products you use in your daily life such as – transistors, electric bulbs, vegetable oil, cement, glassware, petrol, matches, scooters, automobiles, medicines and so on. If we classify the various industries based on a particular criterion then we would be able to understand their manufacturing better.

This chunk introduces the concept of classifying industries based on the types of products they produce. It encourages students to think about the everyday products they encounter, such as electronic items, food items, and materials used for construction. The idea is that by grouping these industries in a structured way, we can better understand their functions, contributions, and characteristics in the manufacturing landscape.

Imagine walking through a supermarket. You can see various sections like the electronics section, the grocery section, and the hardware section. Each section is full of products that belong to different categories, just like industries. By classifying them, it helps us find what we need more easily and understand the role each type of product plays in our lives.

On the basis of source of raw materials used: • Agro based: cotton, woollen, jute, silk textile, rubber and sugar, tea, coffee, edible oil. • Mineral based: iron and steel, cement, aluminium, machine tools, petrochemicals.

Industries can be categorized based on the raw materials they utilize. Agro-based industries depend on agricultural products, like cotton for textiles and sugar from sugarcane. In contrast, mineral-based industries utilize raw materials extracted from the Earth, such as iron for steel and bauxite for aluminium. This classification helps us understand the relationship between natural resources and industrial production, and how these resources contribute to economic activities.

Think of a bakery as an agro-based industry. It uses ingredients like flour and sugar (raw agricultural materials) to make bread and cakes. Now, consider a steel factory, which relies on raw materials like iron ore—a mineral. Each type of industry relies on different sources, similar to how a cook chooses ingredients based on the dish they want to prepare.

According to their main role: • Basic or key industries are those which supply their products as raw materials to manufacture other goods e.g. iron and steel and copper smelting, aluminum smelting. • Consumer industries that produce goods for direct use by consumers – sugar, toothpaste, paper, sewing machines, fans etc.

This classification focuses on the purpose of the industries. Basic or key industries like iron and steel provide raw materials necessary for manufacturing various products. In contrast, consumer industries create products that are directly used by consumers—such as food items and daily supplies. Understanding this classification is crucial for recognizing the supply chain and how industries interact with each other.

Consider a restaurant as a basic industry. It provides the raw ingredients like vegetables and meats which are a necessity for preparing dishes. Now, think of a grocery store as a consumer industry—it sells ready-to-eat meals and packaged goods directly to customers. Each has its place and role in the food supply chain.

On the basis of capital investment: • A small scale industry is defined with reference to the maximum investment allowed on the assets of a unit. This limit has changed over a period of time. At present the maximum investment allowed is rupees one crore.

Industries are also classified based on the amount of investment they require. Small scale industries generally have a limit on the total investment they can make, which, at present, is set at one crore rupees in India. This classification helps in determining the scale of operation and the economic capacity of the industry.

Imagine a small cupcake bakery that operates from a home kitchen. This bakery is a small scale industry since it doesn’t require huge amounts of capital to start compared to a large commercial bakery that requires extensive investments in equipment and premises. Both serve different market needs based on their capacities.

On the basis of ownership: • Public sector, owned and operated by government agencies – BHEL, SAIL etc. • Private sector industries owned and operated by individuals or a group of individuals – TISCO, Bajaj Auto Ltd., Dabur Industries. • Joint sector industries which are jointly run by the state and individuals or a group of individuals. Oil India Ltd. (OIL) is jointly owned by public and private sector. • Cooperative sector industries are owned and operated by the producers or suppliers of raw materials, workers or both.

Industries can also be classified according to who owns and operates them. Public sector industries are government-owned, while private sector industries are owned by individuals or groups. Joint sector industries involve both the state and individuals in their operations. Cooperative sector industries are managed by producers who come together to pool resources. Understanding this ownership classification reveals the varying motivations and functions within the economy.

Consider a community garden as a cooperative sector industry; all the local gardeners work together to cultivate vegetables. In contrast, a large supermarket chain owned by a private company is an example of a private sector industry. A government-run health clinic illustrates a public sector industry, providing services without profit motive.

Based on the bulk and weight of raw material and finished goods: • Heavy industries such as iron and steel • Light industries that use light raw materials and produce light goods such as electrical goods industries.

This classification focuses on the physical characteristics of the goods and raw materials used. Heavy industries typically involve large scale processes and heavy materials, such as steel manufacturing. Light industries handle lighter materials and products, like electronic goods. This distinction helps in logistics and the management of resources in manufacturing.

Think of a heavy construction site where massive cranes and machines are used to lift heavy steel beams. This is like a heavy industry. Now, consider a small electronics store that sells mobile phones and gadgets—this represents a light industry. Both industries play crucial yet distinct roles in the economy.

Agro-based Industries: Cotton, jute, silk, woollen textiles, sugar and edible oil, etc. industries are based on agricultural raw materials. Manufacturing industry has not only assisted agriculturists in increasing their production but also made the production processes very efficient.

Agro-based industries rely on raw materials produced by agriculture for their manufacturing processes. They contribute significantly to the agricultural sector by enhancing production methods and efficiency. This classification emphasizes the interdependence of agriculture and industry, demonstrating how both sectors can benefit from each other.

Imagine a cheese factory that sources its milk from nearby dairy farms. The efficiency of the cheese production process relies heavily on the quality of raw materials provided by agriculture. Similarly, in agro-based industries, the manufacturing processes thrive on agricultural support, creating a beneficial relationship.

In the present day world of globalization, our industry needs to be more efficient and competitive. Self-sufficiency alone is not enough. Our manufactured goods must be at par in quality with those in the international market.

This final chunk emphasizes the need for industries to compete on a global scale. It suggests that merely being self-sufficient is not sufficient; industries must also focus on improving quality to meet international standards. This is crucial for sustaining economic growth and maintaining a strong presence in the global market.

Think of a smartphone brand that wants to succeed not just in its home country but also abroad. It works hard to match and exceed the quality of international competitors to attract buyers. Similarly, industries must strive for higher quality and efficiency to thrive in a globalized economy.

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