Manufacturing: Production of goods in large quantities after processing the
raw materials into more valuable products is called manufacturing.
• A COUNTRY WITH HIGH LEVEL OF
MANUFACTURING ACTIVITIES BECOMES
PROSPEROUS
Contribution of Industry to National Economy
The share of manufacturing sector in the GDP (Gross Domestic
Product) has been stagnant at 17% over the last two decades.
The total contribution of industry to the GDP is 27% out of which
10% comes from mining, quarrying, electricity and gas.
The growth of the manufacturing sector had been 7% in the last
decade. Since 2003, the growth rate has been 9 to 10% per
annum. The desired growth rate over the next decade is 12%.
The National Manufacturing Competitiveness Council (NMCC)
has been set with the objectives of improving productivity through
proper policy interventions by the government and renewed
efforts by the industry.
Industrial Location
Some of the factors which affect the industrial location are as follows
Sometimes, industries are located in or near cities. Cities
provide markets and also provide services like banking,
insurance, transport, labour, consultants, etc. Many
industries tend to come together to make use of the
advantages of an urban centre. Such centre is then
called as agglomeration economy.
In the pre-independence period, most of the
manufacturing units were located in places which were
near the ports, e.g. Mumbai, Kolkata, Chennai, etc. As a
result, these belts developed as industrial urban centres
surrounded by huge agricultural rural hinterland.
According to their main role:
Basic or Key Industries: These industries
supply their products or raw materials to
manufacture other goods, e.g. iron and
steel, copper smelting, aluminum
smelting.
Consumer Industries: These industries
produce goods which are directly used
by consumers, e.g. sugar, paper,
electronics, soap, etc.
On the basis of capital
investment:
Small Scale Industry: If the
invested capital is upto Rs. one
crore, then the industry is called
a small scale industry.
Large Scale Industry: If the
invested capital is more than Rs.
one crore, then the industry is
called a large scale industry.
•Private Sector: These industries are owned and
operated by individuals or a group of individuals,
e.g. TISCO, Reliance, Mahindra, etc.
•Public Sector: These industries are owned and
operated by government agencies, e.g. SAIL, BHEL,
ONGC, etc.
•Joint Sector: These industries are jointly owned by
the government and individuals or a group of
individuals, e.g. Oil India Limited.
•Cooperative Sector: These industries are owned
and operated by the producers or suppliers of raw
materials, workers or both. The resources are
pooled by each stakeholder and profits or losses are
shared proportionately. AMUL which is milk
cooperative is a good example. The sugar industry
in Maharashtra is another example.
Based on the bulk and weight of
raw materials and finished goods:
Heavy Industries: Iron and steel.
Light Industries: Electronics
Textile Industry
The textile industry contributes 14% to industrial production in India. In terms of employment generation, this industry
is the second largest after agriculture. 35 million persons are directly employed in the textiles industry in India. The
contribution of textiles industry to GDP is 4%. This is the only industry in the country which is self-reliant and complete
in the value chain.
Cotton textiles were traditionally produced with hand spinning and handloom weaving techniques. Power-looms came
into use after the 18th century. During the colonial period, the competition of mill-made cloth from England destroyed
the Indian textiles industry.
At present, there are 1600 cotton and synthetic textile mills in India. Almost 80% of them are in the private sector. The
rest are in the public sector and cooperative sector. Additionally, there are several thousand small factories with four to
ten looms.
Production of Fabrics in India
2009
Mills
3.3
Powerlooms (in Hosiery) 84.1
Handlooms
11.3
Others
1.3
Total
100%
2010
3.5
84.1
11.1
1.3
100%