Classification of Industries- Geography Guide for Class 8
Information about Classification of Industries
Title | Classification of Industries |
Class | Class 8 |
Subject | Class 8 Geography |
Topics Covered |
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The literal meaning of manufacturing is 'to make a product by hand', but it has attained a wider meaning in the present scenario.
- The conversion of raw material into more useful and valuable commodity with the help of machines or tools is called manufacturing.
The common example is processing of iron ore to get steel, cotton to get cloth, wood to get pulp and then, paper. It is important to understand that more the raw material is changed in its form through processing, greater is its value and utility. For instance, the value and utility of iron ore increases multifold when it is converted to steel. Its value further enhances when it is transformed into machines and tools.
Importance of Manufacturing Industries
Industry not only converts raw material into a much useful finished product, but in this process, it performs multiple tasks. In short, the manufacturing process transforms natural resources into useful and saleable products. It also generates scope for employment and increases national earnings through local and foreign trade. An industrial labourer earns more wages than an agricultural labourer. Thus, industries play an important role in making a country economically prosperous.
Classification of Industries
Manufacturing industries are classified into various groups on the basis of their size, nature of finished products, sources of raw material and their ownership.
Size:
- Cottage or Household
- Small Scale
- Large Scale
Nature of finished products:
- Basic
- Consumer
Source of raw materials:
- Agro-based
- Forest based
- Animal based
- Mineral based
Ownership:
- Public Sector
- Private Sector
- Joint Sector
- Co-operative Sector
On the Basis of Size
The size of an industry is determined by the capital input, number of labourers employed and the value of production. Accordingly, these industries are sub-grouped into three categories:
1. Cottage or Household Industry
These are the smallest manufacturing units. In cottage industry, a craftsman manufactures the goods by using locally available raw material. She/He carries out the work at home where the family members join in making the goods, for example, potter, blacksmith, weaver and craftsman, etc.
2. Small Scale Industry
Small scale industry is an extended form of a cottage industry. The manufacturing is done by machines in addition to manpower. It requires small machines driven by power, small amount of capital investment and less human labour. The basic raw material is obtained from outside, if not available in local market; and its finished products are sold in open market through traders. For example, paper goods, toys, furniture, edible oils, leather products, etc.
3. Large Scale Industry
Large scale industry uses heavy machinery, which is driven by power. It requires a wide variety of raw materials, large scale investment and work force to manufacture the final products. The examples of such industries are iron and steel, textile, heavy machines and tools, ship-building, petrochemicals, etc.
On the Basis of Finished Product
The industries are grouped into two sub-categories. They are:
1. Basic Industry
Finished products of this industry are used as raw material for other industries. For instance, iron and steel industry produces steel which is used in the manufacturing of machine tools. Thus, iron and steel industry becomes a basic industry.
2. Consumer Goods Industry
This industry produces goods for direct use by consumers. Edible oils, tea, soap, bread, biscuits, radio, television, etc., are some of the examples of consumer goods industry.
On the Basis of Source of Raw Material
The industries are grouped into four categories:
1. Agro-based Industry
The industries using agricultural products as their raw material are known as agro-based industries like tea, sugar, cotton textile, vegetable oil, etc.
2. Forest based Industry
The industries which use forest products as their raw material are called forest based industry. Paper, furniture, packing material, medicines from medicinal plants, etc., are the common examples of forest based industry.
3. Animal based Industry
These industries use animal products as raw material like milk, egg, leather, fish, etc.
4. Mineral based Industry
These industries are dependent on minerals as their raw material, for example, iron and steel, copper smelting, petrochemical, cement, etc.
On the Basis of Ownership
The industries are divided into four groups:
1. Public Sector
When the ownership and management of an industry is in the hands of the government or its department, it is called public sector industry. The government establishes and runs these industrial units. Bhilai Steel Plant, Bharat Heavy Electricals Ltd are some of the examples of the Public Sector Industry.
2. Private Sector
This type of industry is owned and managed by an individual, family or a corporate body. Individuals invest their own capital, or capital is raised through loans or public issues to establish these industries and they manage them as private enterprise, for example, TISCO (Tata Iron and Steel Co.) at Jamshedpur, Reliance at Ahmedabad and Vadodara, Birla Mills at Delhi, etc.
3. Joint Sector
It is owned and managed jointly by the government and private sector. Some examples of such industries are Indian Oil Ruchi Biofuels LLP, Indian Oil PETRONAS Private Ltd., Avi-Oil India Ltd, etc. Co-operative Sector: It is owned and managed by a group of people belonging to a co-operative society. Amul of Gujarat and Lijjat Papad of Maharashtra (Women Co-operative) are some of the examples.
These days several Multi-National Companies (MNCs) like Pepsi, Coca Cola, etc., are setting their operations in India. They bring large foreign investment, better technology and produce standard quality products at low cost and thus, generate large competition in the local (domestic) market and can become a threat to the country's own industry.