Economy - Industry

Economy - Industry

Introduction

• The classification of industries can be done on the basis of
  • Size, capital investment, and labor force employed, industries are classified as large, medium, small scale, and cottage industries.
  • Ownership, industries come under public sector, private sector, joint, and cooperative sector.
  • Industries are also classified on the basis of the use of their products such as basic goods industries, capital goods industries, intermediate goods industries, and consumer goods industries.
  • On the basis of raw materials used by the industries − industries are categorized as agriculture-based industries, forest-based industries, mineral-based industries, and industrially processed raw material-based industries.
  • Location of industries is influenced by several factors like access to raw materials, power, market, capital, transport, and labor, etc.
• Industries of strategic and national importance are usually in the public sector.
• The establishment of iron and steel industry in Bhilai (Chhattisgarh) and Rourkela (Odisha) were based on decision to develop backward tribal areas of the country.

Iron and Steel Industry

• The major raw materials for the iron and steel industries are iron ore, coking coal, limestone, dolomite, manganese, and fire clay.
• Major iron and steel industries in India are −
  • The Tata Iron and Steel plant (TISCO);
  • The Indian Iron and Steel Company (IISCO);
  • Rourkela Steel Plant;
  • Bhilai Steel Plant;
  • Durgapur Steel Plant; and
  • Bokaro Steel Plant.
• Some other major iron and steel industries are −
  • Vizag Steel Plant, in Vishakhapatnam in Andhra Pradesh is the first port based plant which established in 1992.
  • The Vijaynagar Steel Plant in Karnataka was developed by using indigenous technology.
  • The Salem Steel Plant in Tamil Nadu was commissioned in 1982.
• The Rourkela Steel plant was set up in the year 1959 in the Sundargarh district of Odisha in collaboration with Germany.
• The Bhilai Steel Plant was established in 1959 with Russian collaboration in Durg District of Chhattisgarh.
• Durgapur Steel Plant was established in 1962 in West Bengal, in collaboration with the government of the United Kingdom
• Bokaro steel plant was set up in 1964 at Bokaro with Russian collaboration.
• Pittsburg is an important steel city of the United States of America. The steel industry at Pittsburgh enjoys locational advantages. Some of the raw material such as coal is available locally, while the iron ore comes from the iron mines at Minnesota, about 1500 km from Pittsburgh.

Cotton Industry

• India was famous worldwide for the production of muslin, a very fine variety of cotton cloth, calicos, chintz, and other different varieties of fine cotton cloth.
• In 1854, the first modern cotton mill was established in Mumbai.
• At present, the major centers of the cotton textile industry are Ahmedabad, Bhiwandi, Solapur, Kolhapur, Nagpur, Indore, and Ujjain.
• Tamil Nadu has the largest number of mills; however, most of them produce yarn rather than cloth.
• Davangere, Hubballi, Ballari, Mysuru, and Bengaluru are important cotton growing regions in Karnataka.
• Osaka is an important textile centre of Japan, also known as the ‘Manchester of Japan’. The textile industry at Osaka depends completely upon imported raw materials. Cotton is imported from Egypt, India, China and USA.

Sugar Industry

• With more than one-third of the total production, Maharashtra has emerged as a leading sugar producer in the country.
• Uttar Pradesh is the second largest producer of sugar.

Petrochemical Industry

• Many items are derived from crude petroleum, which provide raw materials for many new industries; hence, these are collectively known as petrochemical industries.
• Petrochemical industries are categorized as polymers, synthetic fibers, elastomers, and surfactant intermediate industries.
• Mumbai is the hub of petrochemical industries.
• Three organizations, which are working in the petrochemical sector under the administrative control of the Department of Chemicals and Petrochemicals are −
  • The Indian Petrochemical Corporation Limited (IPCL);
  • The Petrofils Cooperative Limited (PCL);
  • The Central Institute of Plastic Engineering and Technology (CIPET).
  • The National Organic Chemicals Industries Limited (NOCIL), established as private sector in 1961.

Information Technology

• The Information Technology (IT) revolution opened up new possibilities of economic and social transformation.
• The IT software and services industry account for almost 2% of India’s GDP.
• India is also doing wonders in the field of supercomputers, its computes got success to feature in top 500 ranks, e.g; PARAM SHIVAY, PARAM Yuva etc.
• Silicon Valley is a part of Santa Clara Valley, located next to the Rocky Mountains of North America. The area has temperate climate with the temperatures rarely dropping below 0 degrees centigrade.
• Bangalore is located on the Deccan Plateau from where it gets the name ‘Silicon Plateau’. The city is known for its mild climate throughout the year. There are other emerging information technology hubs in metropolitan centres of India such as Mumbai, New Delhi, Hyderabad and Chennai. Other cities such as Gurgaon, Pune, Thiruvanthapuram, Kochi and Chandigarh are also important centres of the IT industry. However, Bangalore has always had a unique advantage, as a city with highest availability of middle and top management talent.

Industrial Policy

The highlights of the Industrial Policy, 1991 are:

1. Industrial licensing will be abolished for all projects except for a short list of indus­tries (18 selected sectors mentioned in Annexure II). The exemption from licensing will apply to all substantial expansion of existing units. The existing and new in­dustrial units will be provided with a broad banding facility to enable them to produce any article so long as no addi­tional investment in plant and machin­ery is involved.
   However, the small-scale industries taking up manufacture of those products reserved for small sector will not be subjected to compulsory licensing pro­cedures. As a result, all existing registra­tion schemes (like delicensed registration, exempted industries registration, DGTD registration) will be abolished. Now, en­trepreneurs are required to fill an infor­mation memorandum of new projects and substantial expansion.
2. The policy provides for automatic clear­ance for import of capital goods in cases where the foreign exchange availability is ensured through foreign equity.
3. As for the MRTP Act, the policy states that the pre-entry scrutiny of investment de­cisions by the so-called MRTP companies will no longer be required.
4. The policy intends to scrap the asset limit of the MRTP companies.
5. The policy envisages disinvestment of government equity in public sector to mutual funds, financial institutions, gen­eral public and workers. For the first time, sick public units has come under the pur­view of the Board of Industrial and Finan­cial Reconstruction (BIFR) for their re­vival. A social security mechanism to pro­tect workers’ interests in such affected public sectors has been proposed in this policy. Pre-eminent place of public sec­tor in 5 core areas like arms and ammu­nition, atomic energy, mineral oils, rail transport and mining will, however, con­tinue.
6. Reservation for the public sector, as on 2008, is very limited (just 2)—covering only manufacturing involving certain substances relevant for atomic energy (as well as production of atomic energy) and provision of railway transport.
7. In order to invite foreign investment in high priority industries, requiring large investments and advanced technology, it has been decided to provide approval for direct foreign investment up to 51 p.c. for­eign equity in such industries.
8. In a departure from the present locational policy for industries, the policy provides that in locations other than cities of popu­lation of more than one million, there will be no requirement for obtaining indus­trial approvals except for industries sub­ject to compulsory licensing.

Industrial Regions

• India has eight major industrial regions namely (as shown on the map given below) −
  • Mumbai-Pune Region,
  • Hugli Region,
  • Bengaluru-Tamil Nadu Region,
  • Gujarat Region,
  • Chhotanagpur Region,
  • Vishakhapatnam-Guntur Region,
  • Gurgaon-Delhi-Meerut Region, and
  • Kollam-Thiruvananthapuram Region.