Dispersal of Industries in India

We find that there is great disparity in industrial development among different states of the country. The solution of this problem depends on the dispersal of industries. Dispersal of industries means location of industries in different regions of the country or the geographical decentralisation of the industrial activities. In this process of dispersal of industries backward regions are required to be given priority in the location of industries.
In this regard government has adopted the following important steps:

(i) In 1968, the government had identified 246 districts as backward districts and financial incentives and subsidies were given to industries set up in these districts.

(ii) In 1978, industrial licensing regulations were used to encourage regional dispersion of industries and large industrial houses were allowed to set up industries in the backward areas.

(iii) In 1981, the idea of ‘no industry’ districts was introduced and such districts were given top priority in all schemes and provided with infrastructural facilities for attracting new industries.

(iv) Through licencing policy, the MRTP companies were forced to locate industrial units in the backward areas.

(v) The thrust of the new industrial policy, 1991 is to shift industries away from big congested cities to the rural and backward areas.

Classification of Large Scale Industries

Classification of Large Scale Industries

A. On the Basis of Type of Output
According to type of output (or used-based classification) industries in India are broadly divided into four groups. They are:

(1) Basic industries. The basic industries are the industries which provide essential inputs to industrial and agricultural sectors of our economy. For example : Coal, Iron and Steel, Fertilisers, Cement, Aluminium, Electricity, Chemicals, Non-ferrous metals etc.

(2) Capital Goods industries. The capital goods industries are the industries which provide machinery and other capital equipments to the economy. For example Machinery. (industrial as well agricultural), Machine tools, Tractors, Harvesters, Power transformers, Motor vehicles, Electric motors, Electric cables, Heavy electrical equipments etc.

(3) Intermediate Goods industries. The intermediate goods industries are the industries which provide goods that are used in the process of production in other industries or as accessory to the capital goods. For example Cotton Spinning, T’res and tubes, Man made fibres, Petroleum products, Bolts, Nuts etc.

(4) Consumer Goods industries. Consumer goods industries are the industries which produce goods that arc directly required for the satisfaction of consumers’ wants. They can again be divided into two sub-groups
(i) Durable Consumer Goods industries. For example : Refrigerator, Air-conditioner, Television, Radio, Car. Scooter, Cycle industries etc.
(ii) Non-durable Consumer Goods Industries. They include industries producing sugar, tea, cotton textile, edible oil, paper etc.

B. On the Basis of Ownership

On the basis of ownership industries in India can be classified into three groups
(i) Private Sector Industries owned, controlled and managed by private individuals, institutions and organisations.
(ii) Public Sector Industries owned, controlled and managed by the Government.
(iii) Joint Sector Industries owned, controlled and managed jointly by private entrepreneurs and the Government.

Large Scale Industries During the Plan Period

The history of organised industry in India may be traced to 1854 when the real beginning of the cotton textile mill industry was made in Bombay. Besides this, jute and coal-mining also progressed about this time. During and after the First and Second World Wars several industries expanded rapidly and a number of new industries came up, such as steel, sugar, cement, glass, industrial chemicals, soap and vanaspati. But their production was neither adequate in quantity nor diversified in character. Thus on the eve of planning, India was industrially backward and the pattern of industries was oriented towards consumer goods.

Though First Five Year Plan was mainly an agricultural plan, however some steps were taken by the government to establish some large scale industries. During this period some prominent industries were set up, such as, Sindri Fertiliser Factory, Chittaranjan Locomotive Factory, Integral Coach Factory, Indian Telescope Industries etc. However, real progress began with the Second Five Year Plan. A base of heavy industry was sought to be created during the Second Plan period. Three new steel plants—Rourkela Steel Plant in Orissa, Bhila Steel Plant in Madhya Pradesh and Durgapur Steel Plant in West Bengal—were set up in the public sector. The capacity of the two existing steel plants working in the private sector was doubled. During this plan period top priority was accorded to the development of heavy electrical and heavy machine tools industries, heavy machine building and other engineering industries, iron and non-ferrous metals, fertiliser and chemical industries etc. During this period the output of many other industries, like bicycles, sewing machines, telephone and electrical goods also increased substantially. Since then number of measures were initiated by the government in subsequent plans with regard to the development of large scale industries in the country. In the Third Five-Year Plan, for building a sound capital base ar.il for self-reliant and self-sustained growth, special emphasis was laid on industries such as coal, oil, steel, electric power, machine-building and engineering goods.

In the Fourth Five-Year Plan, the performance of the industrial sector fell short of expectations both in terms of production and investment. The fifth plan had emphasis on rapid growth of core sector industries and increase in the production of export-oriented goods and articles of mass consumption. Industrial policy during the Sixth Five-Year Plan aimed at (a) optimum utilisation of existing capacities, (b) quantitative increase in output of consumer, intermediate and capital goods, and (c) improvement of productivity. This plan gave special emphasis to improve the functioning of infrastructure particularly coal, power and railways. The industrial policies in the Seventh Five-Year Plan were oriented towards; (a) ensuring adequate supply of wage goods and consumer articles of mass consumption; (b) maximising production of existing assets; (c) development of sunrise industries, such as, telecommunication, computers, micro-electronics, ceramic composite and bio-technology.

The Government has taken a number of steps to remove the difficulties and problems faced by our large scale industries. Some of the prominent steps are : creation of sound infrastructural base, encouragement to modernisation, protection to indigenous industries, provision for adequate supply of scarce raw-materials, special encouragement to export-goods industries, creation of financial institutions to meet out the requirements of long-term finance to industries, expansion of transport and communication facilities, provision for high skill training, upgradation of technology, increase in managerial efficiency, development and improvement in capital market etc.

The industrial policies in the Eighth Five-Year Plan were framed with a view to achieve three main objectives:
(a) Consolidating the gains already achieved during the eighties;
(b) Providing greater competitive stimulus to domestic industry;
(c) Globalising the Indian economy through its greater integration with the world economy.

Keeping in view these objectives, Eight Five-Year Plan has stressed the following reform measures—Curtailment of unnecessary interference by the government in the industrial sector of the economy, granting freedom to the industries in taking decisions according to the changing situations; making industries free from restrictions and control such as quota-permit, licence and export-import regulations. The Eighth Plan has almost achieved the target rate of industrial growth (7.5 per cent per annum).

Major Industries in India

The spatial distribution of industries can also be studied with respect to major industries with the aim of explaining the advantages they enjoy and lines of movement of raw materials and manufactured goods.


It is chiefly mineral-based industry and is the basis of modern industrialisation. India is today world’s fifth largest producer of iron, order up from 7th position few years back. Iron and steel is the foundation of modern machines, tools, transportation (rail, road, water, air). It is used in making super structures, bridges, tanks, agricultural implements and many products of daily use. Therefore, it is called a basic industry or key industry. It has great strength, toughness, elasticity and low cost of production. The production and consumption of steel is the index of the economic development of a country. Ours is truly an ‘age of steel.’
A modest beginning of the industry was made at Kulti (West Bengal) in 1870. The first modern steel plant was established in 1907 at Sakchi (Jamshedpur) in Jharkhand by Jamshedji Tata. India produces the cheapest steel in the world. India has large reserves of high grade iron ore, coking coal and limestone. These raw materials are found close to each other. India produces 226 lakh tonnes of steel. With the establishment of new steel plants, it is expected to reach 250 lakh tonnes of steel. All the steel plants except Jamshedpur are in public sector.

Centres of Production
a) Damodar Valley. This region has TISCO (Tata Iron and Steel Company) steel plant at Jamshedpur (Jharkhand) and IISCO (Indian Iron and Steel Company) steel plant at Kulti-Burnpul Chota Nagpur plateau (including West Bengal, Bihar, Orissa, Jharkhand, Chhattisgarh .and M.P.) is the natural core of this industry.

Geographical Factors for location:
(i) Availability of iron ore from Singhbhum region, (ii) Coking coal from Jharia and Raniganj, (iii) Limestone, manganese and quartz are available nearby, (iv) Damodar, Subamrekha, Kharkai provide water and sand, (v) Cheap labour from densely populated states of Bihar and West Bengal, (vi) Facilities of cheap transport, and port of Kolkata.

b) Visvesvaraya Iron and Steel Limited. This steel plant is located at Bhadravati (Karnataka). It produces alloy and special steel. Iron ore is obtained from Babu Budan Hills, charcoal from Kadur forests; water power from Jog falls; limestone from Bhandigudda mines.

c) Steel Centres in Public Sector. Four steel plants have been developed in the public sector, under HSL (Hindustan Steel Limited) with the collaboration of some foreign countries.
(i) Bhilai (Chhattisgarh)—With the help of Russia.
(ii) Rourkela (Orissa)—By German firm Krupps Demag.
(iii) Durgapur (W. Bengal)—With British aid.
(iv) Bokaro (Jharkhand)—With the help of Russia.
Geographical Factors for Location:
(i) Bhilai gets iron ore from DhaI/i Ra/hara hills, coal from Korba and Jharia coal fields; Manganese from Ba/ag/rat ranges and limestone from Nana’ani mines.

(ii) Durgapur gets iron ore from Sing/thhum; coal from RanrçwnJ limestone from Gangpur and water from D.VC
(iii) Rourkela gets iron from Bonaz. coal from Jharzi and Ranianf limestone from Binmirapin:
(iv) Bokaro, an ore based steel plant gets coal from Jhan, iron from KeonjZiar and water power from

d) New Steel Plants. The government has set up new steel plants at:
(i) Vishakhapatham (Andhra Pradesh)
(ii) Salem (Tamil Nadu)
(iii) Vijaynagar, (near Hospet, Kamataka).

The capacity of the different steel plants is being expanded. The production of pig iron and steel is being increased by setting up new industries, mini plants based on scrap iron. At present there are 200 mini steel plants in India producing 8.5 million tonnes of steel. India exports about 10 lakh tonnes of steel every year. In 1973, SAIL (Steel Authority of India Limited) has been established for the better management of these steel plants.


India has taken a giant leap forward in production of cotton by introducing a new variety of hybrid cotton. Cotton textile industry is one of the oldest industries in India as old as Indus valley civilisation. it was a simple cottage industry Spinning and weaving were the earliest crafts of primitive man. The industry owes its rapid development due to Industrial revolution. The first modern cotton mill was set up at Fort Gloster (Kolkata) in 1818. The real first cotton mill was established in 1854 in Mumbai. A large home market, manufacturing of textile machinery and abundant supply of cotton have led to the growth of this industry in India. There are about 1719 textile mills scattered over 80 towns and the annual production of cloth is about 3740 crore metres. 188 mills are in public sector, 146 mills in the corporation sector and 1235 mills in the private sector. India is the second largest producer of cotton textile in the world. The number of composite units is 378 while spinning mills are 770. The per capita availability of cloth is 30 metres.

Distribution of Cotton Textile Industry:

(i) Maharashtra. Muinbai is the oldest centre of cotton textile industry in India. Mumbai is known as “Cotton polis of India”. Nagpur, Pune, Sholapur, Amaravati are other centres. The following factors have led to the concentration of this industry at Mumbai:
(1) Early start (2) Large amount of capital (3) Long staple cotton from Gujarat and Maharashtra (4) Facilities of Mumbai as a port (5) Easy import of machinery (6) Humid climate (7) Cheap labour (8) Water power from Tata Hydro-electric works (9) Large ready market (10) Opening of Suez Canal route.
(II) Gujarat. Ahmedabad is the largest producer of cotton textiles in India. It is known as the “Manchester of India”.
Ahmedabad is situated in the heart of cotton growing area. Cheap land is also available.
(iii) Tamil Nadu. The development of hydro-electricity in the south and cultivation of long staple cotton led to the location of this industry in Southern India. Madurai, Coimbatore, Salem and Chennai are main centres.
(iv) West Bengal. Most of the mills are located at Koilcata in the Hooghly basin.
(v) Uttar Pradesh. Kanpur is the main centre and is called the “Manchester of Northern India”.
(vi) The dispersal of this industry has led to the growth of new centres like Bhopal, Gwalior, Bangalore, Phagwara, Bhiwani, Dethi and Kota.
Importance. (i) Cotton textiles is the oldest and the biggest industry in India. (ii) About 64 million workers are engaged in this industry. (iii) It has the largest amount of capital (Rs. 1300 crore) invested. (iv) It earns about a sum of Rs. 20,000 crore as foreign exchange by export of manufactured goods. (v) Many industries such as dyes, chemicals depend on cotton products.


Sugar is an important article of food. It has a universal demand. Sugar is one of the major agro-based industries of India. India is regarded as the birth place of sugarcane and sugar.

Importance. (i) India is the largest producer of suga in the world. (ii) It is the second largest industry of India with capital of Rs. 1000 crore. (iii) About 3 lakh workers are engaged in this industry. (iv) About two crore farmers depend upon this industry. (v) India exports about 5 lakh tonnes of sugar every year. (vi) Many industries such as alcohol, paper, wax, fertilizers, cattle feed are based on byproducts.

India is one of the oldest producers of sugarcane in the world. The home industry was granted protection in 1932. Since then, the industry has rapidly developed. There are about 460 sugar mills producing about 150 lakh metric tonnes of sugar. North India (U.P. and Bihar) produces about 60% of sugar in India.

Shifting of Sugar Industry to Southern India. U.P. is the largest producer of sugar in India despite the fact that ideal conditions for sugarcane are found in uthem India. But recently the industry is shifting towards the states of Maharashtra, Tamil Nadu and Andhra Pradesh in Peninsular India.

(i) The yield per hectare of sugarcane is high in southern India. (ii) The sucrose content in sugarcane is high in southern India as compared to that in northern India. (iii) The southern states have installed new mills, where productivity is high and cost of production is low. (iv) Climatic conditions are ideal in southern states. (v) The co-operative movement has helped to install new mills in these areas.
(i) Availability of sugarcane in Northern India. (ii) Cheap and skilled labour. (iii) Large demand. (iv) Availability of coal. (v) Cheap transport.

Main centres:

(1) U.P. Saharanpur, Muzaffarnagar, Meerut, Gorakhpur, Sitapur, Bareilly.
(2) Biliar. Champaran, Patna.
(3) Maharashtra. Abmednagar, Sholapur.
(4) Andhra Pradesh. Hyderabad.
(5) Punjab. Amritsar, Bhogpur, Phagwara, Batala, Nawanshahr.
(6) Ratlam (M.P.), Rohtak (Haryana), Madurai (Tamil Nadu).

Problems. Sugar industry is facing some problems. Yield of sugarcane is low. Sugar content is low. It is a seasonal industry. There is absence of industries consuming by-products of sugarcane. Cost of sugar is high.


In ancient period leaves and stones were used for writing. The word paper is derived from a plant called Papyrus. Paper making was invented in China in about 105 A.D. Later on paper making machines were invented in European countries. Machine made paper was first manufactured in India in 1870.

Importance. Paper is the basis of modem civilization. There is a great consumption of paper in developed countries. Paper is required for note books, magazines, books, newspapers etc. Different types of paper such as wrapping paper, art paper, bank paper, card board, news-print, duplicating paper etc. are manufactured. Different types of raw materials such as cotton, rags, wood pulp, bamboo, Sabai-Bhabar grass, waste of cotton, jute, bagasse are used for paper making.
‘PIie first paper mill was established in India in 1870 on the Hooghly river near Kolkata. At present there are 380 paper mifis in India, producing about 40 lakh tOnnes of paper annually. In India, prothiction of wood pulp is low.

Main centres
1. West Bengal. West Bengal is the largest producer of paper in India. The main centres are Titagarh, Raniganj, Naihati and Kolkata. This region has many favourable conditions.
(i) Bamboo is available from Sunderban Delta and Assam.
(ii) Grass comes from Bihar.
(iii) Coal from Jharia and Raniganj.
(iv) Large market due to dense population.
(v) Clean and soft water from Hooghly river.
(vi) Cheap transport.
2. Uttar Pradesh. Paper mills are found at Saharanpur, Meerut, Lucknow and Kanpur.
3. Madhya Pradesh. There is a newsprint mill at Nepa Nagar in M.P.

4. Ootakumund has a mill for the production of X-ray roll, and films and photo paper.

5. Other centres are Brajraj Nagar (Orissa), Dalmia Nagar (Bihar), Bangalore (Karnataka), Pune, Ballarpur (Maharashtra), Jagadhri (Haryana), Bhopal (Madhya Pradesh), Mukerian (Punjab).

The first jute mill was set up in india at Rishra near Kolkata in 1859. Thereafter, being an export- oriented industry, it made rapid progress. At the time of the partition of the country in 1947 most of the mills remained in India but three-fourths of the jute growing area went to East Pakistan, now Bangladesh. In 1997-98, there were 66 jute mills which produced 13,94,000 tonnes of jute goods and employed 25,000 workers. In the same year we exported 2,90,000 tonnes of jute goods which fetched us foreign exchange worth rupees 244 crore. The exports are decreasing due to a number of factors like declining demand for jute bags, high cost of manufactured goods, stiff competition in the export market and competition from synthetic substitutes both in the foreign market as well as in the home market. Centres of jute industry are Kolkata, Patha and Guwahati.


Woollen textile industry is located at Amritsar, Dhariwal and Ludhiana in Punjab; Mumbai in Maharashtra; Jamnagar in Gujarat Kanpur in Uttar Pradesh; Srinagar in Jammu and Kashmir, and Ban- galore in Kamataka. We produce about 14,000 tonnes of wool. The production of woollen cloth in 1950-51 was 60 lakh metres which increased to 220 lakh metres in 1997-98. We imported wool worth rupees 79 crore.


In India, silk is obtained from silk-worms reared on mulberry trees. The area under these trees is nearly 2,40,000 hectares which is mostly confined to Kamataka, Andhra Pradesh and Tamil Nadu. The silk textile centres are, Mysore and Bangalore in Karnataka, Kanchipuram in Tamil Nadu; Varanasi in Uttar Pradesh, Murshidabad in West Bengal, Amritsar in Punjab, Srinagar in Jammu and Kashmir, Kota in Rajasthan and Surat in Gujarat.

Synthetic fabrics are prepared from rayon, nylon, threne and dacron. Their fibres are developed from wood pulp, petroleum, coal etc. through chemical processes. These fabrics are durable. The chief centres of synthetic textiles are Mumbai, Surat, Ahmedabad, Gwalior, Delhi, Amritsar and Calcutta. In 1950-51, our country produced 9,510 lakh metres of synthetic fabrics. This production rose to 22,530 lakh metres in 1997-98.


Fibre is prepared from the husk of coconut. Ropes and mats are prepared from this fibre. The industry is concentrated in rural areas of Kerala. Mostly women work in the coir industry. It provides livelihood to well over 5 lakh people. In 1950-51, our country exported coir yarn and manufactures worth rupees 13 crore which rose to 33.5 crore rupees in 1997-98.


India is an agricultural country The use of fertilizer is increasing due to intensive agriculture and Green Revolution. The soils are becoming poor due to the lack of nitrogen. So it is essential to use fertilizers to maintain soil fertility and to increase the productivity of land.

The first fertilizer plant was set up in 1906 at Ranipeth (Tamil Nadu). In 1951, Sindri Fertilizer Plant in Bihar (now Jharkhand) was set up which became the largest plant in Asia. At present, there are 55 large fertilizer plants and 87 small plants producing 17 lath tonnes nitrogen and 26 lath tonnes phosphate. The four agencies FCI, NFL, HFL and IFFCS have set up different plants. Still we have to import fertilizers.

Despite tremendous increase in the production of fertilizers large quantity is imported every year to meet the ever increasing demand. By 2000 AD. the country’s needs are estimated to be around 200 laKh tonnes and by 2050 A.D. 400 lath tonnes of fertilisers. Mostly these plants are located near the availability of raw materials like coal and petroleum and big power plants that have enough electricity to produce fertilisers from the nitrogen of the atmosphere. But now these plants are being set up where natural gas is available as it provides valuable raw material. Fertiliser plants are in public, private, joint and cooperative sectors.


It has made tremendous progress due to construction work in the urban and rural areas. There are now 144 cement factories in production with a total installed capacity of about 1100 lakh tonnes as on June 1987. In 1997- 98, our country produced 830 lakh tonnes of cement.

The industry is both in private and public sectors. The basic raw material of the industry is limestone. Major centres of cement industry are Surajpur and Dalmi Dadri in Haryana, Lakheri in Rajasthan, Porbander in Gujarat, Dalmianagar in Bihar, Rajban in Himachal Pradesh.


Ours is the largest oilseeds and vegetable oil producing country in the world. Because of our large population we are the largest consumer of vegetable oil, as it is the cooking medium all over the country. The vegetable industry was set up in 1930 and it accounted for a nominal production. The production of vegetable oil in 1960-61 was 3,40,000 tonnes which rose to 64 lath tonnes in 1997-98 from 102 mills. The consumption rose to 72 lakh tonnes. Hence, there is need for import.
Vegetable industry draws its raw material from groundnut, sun flower seeds, mustard and rape seeds, coconuts and soyabeans. Gujarat is the largest producer of vegetable oil particularly the groundnut oil. The industry is widely spread owing to its vast market and availability of various kinds of oil seeds in different parts of the country.


Roads, Railways and Airways are the chief means of transport in India. Road transport is widespread than the railway and air transport. Since Independence we have made rapid progress in the production of commercial vehicles-buses and trucks and cars, motor cycles, scooters.

Commercial vehides such as trucks are made at Jamshedpur and Chennai. Passenger vehicles such as cars are manufactured at Kolkata, Mumbai and Faridabad.

Railway Equipment. It includes railway engines, wagons and coaches. Railway engines comprise three types, namely Coal or Steam engine, Diesel engines and Electrical engines. The coal or steam engines are on their way out and are being manufactured at Chittaranjan Locomotive Works in West Bengal. The railway engines/or metre gauge railway line are manufactured by TELCO at Jamshedpur. Goods wagons are produced at a number of places in India. Integrated coaches are manufactured at Perambur near Chennai and Kapurthala.

SHIP-BUILDING centres of India are located at Cochin, Goa, Mumbai, Vishakhapatnamand.Kolkata. Cochin shipyard developed with Japanese know-how is the largest and latest in our country It builds ships of 86,000 tonnes (DWT). Vishakhapatnam yard having capacity of building ships upto 45,000 (DWT), has built 89 ships since Independence. Dry docks repair big ships. We are pianning to manufacture aircraft carriers.
The aircraft industiy has been set up at Bangalore, Koraput (Orrisa), Hyderabad, Nasik (Maharashtra), Lucknow and Korba (Chhattisgarh). These centres specialise in making certain aircrafts for defence requirements. Our country has made jet trainer plane Kiran MK II, Chetak and Cheetah he1iaWtrs. Fighter airplanes are also prepared in India like Jaguar, MIG 21, MIG 27 etc.


A wide range of electrical goods are produced in India. Now we have also started manufacturing heavy equipments like transformers, electric motors, electrical traction motors, water turbines etc. The major centres of these industries are Hyderabad, Trichi, Bangalore, Bhopal, Jagdishpur, Ranipet and Haridwar.


This industry includes the manufacturing of radio and television sets, control instruments and industrial electronics, computer systems, communication and broadcasting equipment, electronic components, aerospace and defence equipment etc. In 1997-98 its production was worth 32,070 crore rupee.


We must protect our international border and should always be ready to defend our motherland from foreign invasion. Consequently we have started manufacturing defence equipment for our army, navy and airforce. We produce heavy tanks, battleship and supersonic war planes. We are also preparing ourselves to produce missiles.


The chemical industry includes the production of drugs, pesticides, paints, dyestuffs, etc. Pesticides include insecticides, fungicides, weedicides, rodenticides which are extremely important for agriculture and useful for public health purposes. Chemical industry ranks fourth, next only to iron and steel, engineering and textile industries. The pesticides industry has made steady progress since independence. The manufacture of pesticides in our country commenced in India in 1952 with the setting up of plant at Rishra near Kolkata. It was followed by DDT plant in 1954 at Delhi.



Our country is almost self-sufficient in basic bulk drugs. A wide range of bulk drugs and formulations are being exported to several countries including West European countries. We exported drugs worth rupees 194 crore.


Industries depending upon minerals such as salt, sulphur are called chemical Industries, but indusdepending on coal, oil are called petro-chemicals. The petro-chemical products are substituting the traditional raw materials like wood, glass, metal etc. The use of plastics in various industry is bringing about revolutionary changes. The petro-chemical industry has been of recent origin in India. The products are plastic raw materials, synthetic fibres, synthetic rubber etc. The production of
synthelic fibres which was 1.5 lakh tonnes in 1985 increased to 2.5 lakh tonnes in 1996-97. Similarly the xluction of plastic raw materials increased from 2.7 lath tonnes to 2.85 lath tonnes in 1996-97. The
centres of petro-chemical industry are located at Vadodara (Gujarat) and near Mumbai.


Small scale and cottage industries play an important role in the country’s economy. These industries decayed during the British rule. But after independence, these have developed at a very rapid rate. These are a source of employment and source of income to crores of artisans, villagers and farmers. These small units need small capital investments and help large scale industries. These industries include handicrafts, khadi, leather, machine tools etc. The industries developed in villages depending on local raw materials are known as cottage industry. These include handlooms, forest based industries, bee-keeping, pottery and carpentry
India produces a large number of handicrafts. Skilled and experienced labour is working in all parts of the country About 2 crore persons are working in different cottage and handicrafts. These industries provide full time or part time employment.

Handicrafts depend upon the skill of workers. The major handicrafts include carpet making, hand printing of cloth, wood carving, toy making, earthenware, metaiware, bamboo and cane work, stone carving, coin making.

(i) Textiles. Hand woven textiles, carpet making, lace work, zari, shawls.
(ii) Metaiware. Silver and gold ware, brass, copper and bronze ware.
(iv) Stone and glass work. Marble carving, bangles, precious stones, jewellery
(v) Wood work. Wood carving, decorative furniture.
(vi) Others. Gem cutting in Surat and Jaipur, enamelled ware in Jaipur, brass plates in Muradabad, metal plates in Thanjavur, bidriware objects in Bidar (Kamataka), wood work in Kashmh, ivory articles and coir industry in Kerala.


There was a time when self sufficiency in the industrial sector was the need of hour, but now-a-days with the development of the technology and increased production India is self-sufficient. We have many surplus products which can be exported. But now-a-days self-sufficiency is not enough. Specialization is increasing in many industries. There is strong competition in international market. Our goods must be at par in the international market. Then alone we will fetch foreign exchange and increase our national wealth, remove poverty and raise the standard of living of the people. Japan is a classic example of an efficient labour. So high degree of efficiency and competitiveness is our latest priority.

Types of Industries in India

Industries can be classified into many different types. Some of the important criteria for the classification of industries include the following:

1) On the basis of strength and size of labour force employed

a) Large Scale Industries : These industries employ a large number of labour force and have also, huge investment in plant and machinery. Iron and steel, heavy engineering, cotton, jute, textiles can be placed in this category.

(b) Medium Scale : These industries employ neither too large a labour force nor too small. Many electrical, electronics, radio, television, computer hardware and even cloth mills fall in this category

(c) Small Scale Industries : According to registration criteria, small scale industry has a capital investment of less than Rs. 1 crore. In India about 80% of all manufacturing units can be classified as small scale industries.
Small scale industries also include cottage and village industries like handloom sector.

(2) On the Basis of Raw Material used and Finished Goods

(a) Heavy Industries: These industries use raw materials in bulk, examples are iron and steel, heavy engineering, ship building etc.

(b) Light Industries : These industries use light raw materials and also produce light finished good. Light engineering and electronics, watches etc. are included in this category.

(3) On the Basis of Ownership

(a) Private Sector Industries : Industries owned by private individual or groups are private sector industries. These are chiefly of two types — Proprietary and Partnership concern and corporate units registered under the company law. Corporate units are very much like public sector units though owned by individuals under share-holding pattern.

(b) Public Sector Industries: These industries are owned by the state or its agencies. Examples are Bharat Heavy Electricals Limited, Indian Petrochemicals Limited. Now many public sector industries are being privatised under the scheme of Disinvestment in Public Sector Units.

(c) Joint Sector: These industries are jointly owned by the government and private forms. Oil India Limited is an example of joint sector enterprise.

(d) Cooperative Sector: Industries under this category are run by cooperatives like those of farmers, milk producers etc. Many Sugar Mills, Mother Dairy etc. are examples of cooperative sector industries.

(4) On the Basis of Raw Materials

(a) Agro-Based Industries : These industries chiefly use raw materials supplied by agricultural sector. Examples are cotton textiles, sugar, silk, jute, fruit preservation etc.

(b) Mineral Based Industries : Minerals like iron, mica, bauxite, cement form their basic raw material for manufacture of goods. Iron and Steel Industry, Aluminium Industry are examples.

Other categories include forest based industries, pastoral based (hides, skins, animal bones etc.) industries etc. Classification of industries is also done on the basis of size of capital or labour force, for example we say capital intensive or labour-intensive industry.

Factors Affecting Location of Industries

Spatial distribution as well as type of industry much depends on its location. Manufacturing is a secondary process of transforming raw materials into finished products. The manufactured goods are more useful and valuable than the raw material. The location of manufacturing industries depends on a number, of physical and socio-economic factors.

(1) Nearness of raw materials : Large quantities of raw materials are needed for industries. Therefore, industries are located near the source of raw materials. It saves the cost of transportation. Steel centers are developed where coal and iron are easily available. Jute mills in West Bengal and cotton textile mills in Maharashtra are located due to the availability of the raw materials.

(2) Power resources : Coal, oil and water-power are the main sources of power. Most of the industries are located around coal-fields. Aluminium industries and paper industries are located near hydro-electric stations.

(3) Means of transportation: Modern industries need cheap, developed and quick means of transportation. Cheap means of transportation are required for the movement of workers, raw materials and machinery to the factories and to the market.

(4) Climate : Stimulating climate increases the efficiency of the labourers. Cotton textile industry requires humid climate. Film industry needs good weather with clear blue skies. Aircraft industry needs clear weather.

(5) Skilled labour: Cheap and skilled labour is essential for the location of the industries. Glass industry at Ferozabad, sports goods industry at Jalandhar are located due to the availability of skilled labour.

(6) Nearness to market: Industries are located near the market for their manufactured goods. Urban and industrial centres with dense population provide a large market.

(7) Early start: Momentum of an early start leads to the location of an industry such as cotton textiles at Mumbai.

(8) Defence : Some industries are located with a military motive such as air craft industry at Bangalore.