Chapter - 6 Manufacturing Industries

Manufacturing - Production of goods in large quantities after processing from raw materials to more valuable products.

Importance of Manufacturing

• Manufacturing industries not only help in modernising agriculture, which forms the backbone of our economy, they also reduce the heavy dependence of people on agricultural income by providing them jobs in secondary and tertiary sectors.
• Industrial development is a precondition for eradication of unemployment and poverty from our country. It was also aimed at bringing down regional disparities by establishing industries in tribal and backward areas.
• Export of manufactured goods expands trade and commerce, and brings in much needed foreign exchange.
• Countries that transform their raw materials into a wide variety of furnished goods of higher value are prosperous.

Industrial Location

Industrial locations are influenced by availability of

1. a) raw material,
2. b) labour,
3. c) capital,
4. d) power and market, etc.

Manufacturing activity tends to locate at the most appropriate place where all the factors of industrial location are either available or can be arranged at lower cost.

• After an industrial activity starts, urbanisation follows. Thus, industrialisation and urbanisation go hand in hand. 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 offered by the urban centres known as agglomeration economies.

Classification of Industries

1) 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.

2) According to their main role:

• Basic or key industries which supply their products or 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.

3) 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.

4) 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. They pool in the resources and share the profits or losses proportionately such as the sugar industry in Maharashtra, the coir industry in Kerala.

5) 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 industrie

Agro Based Industries

Textile Industry: The textile industry occupies unique position in the Indian economy, because it contributes significantly to industrial production (14 per cent), employment generation (35 million persons directly – the second largest after agriculture) and foreign exchange earnings (about 24.6 per cent). It contributes 4 per cent towards GDP.

Cotton Textiles

• The first successful textile mill was established in Mumbai in 1854.
• Due to availability of raw cotton, market, transport including accessible port facilities, labour, moist climate, etc. contributed towards its localisation in Maharastra and Gujrat.
• India has world class production in spinning, but weaving supplies low quality of fabric as it cannot use much of the high quality yarn produced in the country. Weaving is done by handloom, powerloom and in mills.
• The handspun khadi provides large scale employment to weavers in their homes as a cottage industry.
• India has the second largest installed capacity of spindles in the world.
• India exports yarn to Japan. Other importers of cotton goods from India are U.S.A., U.K., Russia, France, East European countries, Nepal, Singapore, Sri Lanka, and African countries.
• We have a large share in the world trade of cotton yarn, accounting for one fourth of the total trade. However, our trade in garments is only 4 per cent of the world’s total.
• Most of the production is in fragmented small units, which cater to the local market. This mismatch is a major drawback for the industry. As a result, many of our spinners export cotton yarn while apparel/garment manufactures have to import fabric.

Jute Textiles

• India is the largest producer of raw jute and jute goods and stands at second place as an exporter after Bangladesh.
• Factors responsible for their location in the Hugli basin are: proximity of the jute producing areas, inexpensive water transport, supported by a good network of railways, roadways and waterways to facilitate movement of raw material to the mills, abundant water for processing raw jute, cheap labour from West Bengal and adjoining states of Bihar, Orissa and Uttar Pradesh. Kolkata as a large urban centre provides banking, insurance and port facilities for export of jute goods.
• Challenges faced by the industry include :

1. a) Stiff competition in the international market from synthetic substitutes and from other competitors like Bangladesh, Brazil, Philippines, Egypt and Thailand.
2. b) The internal demand has been on the increase due to the Government policy of mandatory use of jute packaging. To stimulate demand, the products need to be diversified.

• In 2005, National Jute Policy was formulated with the objective of increasing productivity, improving quality, ensuring good prices to the jute farmers and enhancing the yield per hectare.
• The main markets are U.S.A., Canada, Russia, United Arab Republic, U.K. and Australia. The growing global concern for environment friendly, biodegradable materials, has once again opened the opportunity for jute products.

Sugar Industry

• India stands second as a world producer of sugar but occupies the first place in the production of gur and khandsari. The raw material used in this industry is bulky, and in haulage its sucrose content reduces.
• 662 sugar mills in the country spread over Uttar Pradesh, Bihar, Maharashtra, Karnataka, Tamil Nadu, Andhra Pradesh and Gujarat along with Punjab, Haryana and Madhya Pradesh. Sixty per cent mills are in Uttar Pradesh and Bihar.
• This industry is seasonal in nature so, it is ideally suited to the cooperative sector.

Mineral based Industries

Industries that use minerals and metals as raw materials are called mineral based industries.

1) Iron and Steel Industry

• The iron and steel Industry is the basic industry since all the other industries — heavy, medium and light, depend on it for their machinery.
• Steel is needed to manufacture a variety of engineering goods, construction material, defence, medical, telephonic, scientific equipment and a variety of consumer goods.
• Production and consumption of steel is often regarded as the index of a country’s development. Iron and steel is a heavy industry because all the raw materials as well as finished goods are heavy and bulky entailing heavy transportation costs.
• Iron ore, coking coal and lime stone are required in the ratio of approximately 4 : 2 : 1.
• Most of the public sector undertakings market their steel through Steel Authority of India Ltd. (SAIL).
• We are not able to perform to our full potential largely due to:

(a) High costs and limited availability of coking coal

(b) Lower productivity of labour

(c) Irregular supply of energy and

(d) Poor infrastructure.

• Liberalisation and Foreign Direct Investment have given a boost to the industry with the efforts of private entrepreneurs.

2) Aluminium Smelting

• Aluminium smelting is the second most important metallurgical industry in India.
• It is light, resistant to corrosion, a good conductor of heat, malleable and becomes strong when it is mixed with other metals.
• It is used to manufacture aircraft, utensils and wires.
• It has gained popularity as a substitute of steel, copper, zinc and lead in a number of industries.
• Aluminium smelting plants in the country are located in Odisha, West Bengal, Kerala, Uttar Pradesh, Chhattisgarh, Maharashtra and Tamil
• Regular supply of electricity and an assured source of raw material at minimum cost are the two prime factors for location of the industry.

3) Chemical Industries

• The Chemical industry in India is fast growing and diversifying. It contributes approximately 3 per cent of the GDP.
• It is the third largest in Asia and occupies the twelfth place in the world in term of its size. It comprises both large and small scale manufacturing units.
• Rapid growth has been recorded in both inorganic and organic sectors. Inorganic chemicals include sulphuric acid (used to manufacture fertilisers, synthetic fibres, plastics, adhesives, paints, dyes stuffs), nitric acid, alkalies, soda ash (used to make glass, soaps and detergents, paper) and caustic soda.
• Organic chemicals include petrochemicals, which are used for manufacturing of synthetic fibers, synthetic rubber, plastics, dye-stuffs, drugs and pharmaceuticals.

4) Fertiliser Industry

• The fertiliser industry is centred around the production of nitrogenous fertilisers (mainly urea), phosphatic fertilisers and ammonium phosphate (DAP) and complex fertilisers which have a combination of nitrogen (N), phosphate (P), and potash (K).
• India is the third largest producer of nitrogenous fertilisers.
• After the Green Revolution the industry expanded to several other parts of the country. Gujarat, Tamil Nadu, Uttar Pradesh, Punjab and Kerala contribute towards half the fertiliser production.

5) Cement Industry

• Cement is essential for construction activity such as building houses, factories, bridges, roads, airports, dams and for other commercial establishments.
• This industry requires bulky and heavy raw materials like limestone, silica, alumina and gypsum. Coal and electric power are needed apart from rail transportation.
• The first cement plant was set up in Chennai in 1904.
• There are 128 large plants and 332 mini cement plants in the country. India produces a variety of cement.

6) Automobile Industry

• Automobiles provide vehicle for quick transport of good services and passengers. Trucks, buses, cars, motor cycles, scooters, three-wheelers and multi-utility vehicles are manufactured in India at various centres.
• After the liberalisation, the coming in of new and contemporary models stimulated the demand for vehicles in the market, which led to the healthy growth of the industry including passenger cars, two and three-wheelers’.
• Foreign Direct Investment brought in new technology and aligned the industry with global developments. The industry is located around Delhi, Gurgaon, Mumbai, Pune, Chennai, Kolkata, Lucknow, Indore, Hyderabad, Jamshedpur and Bengaluru.

7) Information Technology and Electronics Industry

• The electronics industry covers a wide range of products from transistor sets to television, telephones, cellular telecom, pagers, telephone exchange, radars, computers and many other types of equipment required by the telecommunication industry.
• Bangalore has emerged as the electronic capital of India. Other important centres for electronic goods are Mumbai, Delhi, Hyderabad, Pune, Chennai, Kolkata, Lucknow and Coimbatore.
• 30 per cent of the people employed in this sector are women.
• This industry has been a major foreign exchange earner in the last two or three years because of its fast growing Business Processes Outsourcing (BPO) sector.

Industrial Pollution and Environmental Degradation

Industries are responsible for four types of pollution:

• Air (b) Water (c) Land (d) Noise

Control of Environmental Degradation

(i) Minimising use water for processing by reusing and recycling it in two or more successive stages

(ii) Harvesting of rainwater to meet water requirements

(iii) Treating hot water and effluents before releasing them in rivers and ponds.

Treatment of industrial effluents can be done in three phases

(a) Primary treatment by mechanical means. This involves screening, grinding, flocculation and sedimentation.

(b) Secondary treatment by biological process

(c) Tertiary treatment by biological, chemical and physical processes. This involves recycling of wastewater.