Industry is a process by which the raw Materials are changed into finished products. Many raw materials are not fit for human Consumption. Therefore, there is a need for Conversion. This transformation of commodities from one form to another form is the essence of Manufacturing industry or the secondary group of economic activities. Arrival of Science and Technology helped the man to fabricate raw Materials into finished products. The economic Strength of a country is always measured by the development of manufacturing industries. Therefore, any country in the world is basically Depends on the effective growth of industries for its economic development.

Economic Activity:

Any action that involves in the production, Distribution, consumption or services is an Economic activity.

Basics of Economic Activities:

The following are the major and Fundamental economic activities.

1. Primary Economic Activities

(e.g., Raw cotton production)

2. Secondary Economic Activities

(e.g., Spinning mill)

3. Tertiary Economic Activities

(e.g. Trade, Transport)

4. Quaternary Activities (e.g. Banking sector)
5. Quinary Activites (e.g. Judicial sector)

Primary Economic Activity:

These are the Economic activities which have been originated in the very beginning. It includes the activities Such as, forestry, grazing, hunting, food gathering, Fishing, agriculture, mining, and quarrying.

Secondary Economic Activity:

 Secondary Activities are those that change raw materials into usable products through processing and manufacturing. Bakeries that make flour into Bread and factories that change metals and Plastics into vehicles are examples of secondary Activities.

Tertiary Economic Activity:

Tertiary Economic activities are those that provide Essential services and support the industries to Function. Often it is called service industries; this level includes the transportation, finance, Utilities, education, retail, housing, medical and other services. We are educated by school. Since, school is doing service, it comes under Tertiary activity

Quaternary Economic Activity:

Quaternary Activities are associated with the creation and Transfer of information, including research and Training. Often called information industries, this level has been dramatic growth as a result Of advancements in technology and electronic Display and transmission of information. E.g., we watch television. The programs are telecasted from television stations. It is an example of Quaternary activity.

Quinary Economic Activity:

Quinary Economic activities refer to the high level decision Making processes by executives in industries, Business, education, and government. This Sector includes top executives or officials in the Fields of science and technology, universities, Health care etc. In our house, our parent Purchase household articles and make decisions by themselves in some situations. Similarly, the Council of ministers take decisions to introduce various people welfare schemes in the state. These two are examples of quinary activities.

Factors responsible for Location of Industries:

Industrial locations are complex in Nature. They are influenced by the availability of many factors. Some of them are: Raw Materials, Land, Water, Labour, Capital, Power, Transport, and Market. The locational factors of industries are grouped into Geographical factors and Non-Geographical factors.

Geographical Factors:

Raw Material:

Bulky goods and weight losing materials cannot be transported for long Distances. Therefore, industries like iron and Steel and sugar industries are located near the Place of availability of iron ore and sugar cane respectively. Steel Plant in Salem is located Near Kanjamalai, where iron ore is available. Similarly, Sugar industries are located near the Sugarcane growing areas.

Power:

Power is base and essential to run the Entire industry. Power is mostly generated from The conventional sources like coal, mineral oil,And water. So, any one of these sources must Be located near the industries to fulfil its power Requirement.

Labour:

Availability of cheap and skilled Labour is another important requirement for Labour intensive industries (e.g., Tea industry).

Transport:

It is needed for transporting raw Materials to the industries and also for sending the finished products to the market. Availability Of easy transportation always influences the Location of an industry. So, the junction points of waterways, roadways and railways become Active centres of industrial activity.

Storage and Warehousing: The finished Goods should reach the market at the end of the process of manufacturing. Hence, such finished products should be stored at suitable Storage or warehouse till the goods are taken to the market.

Topography:

The site that is selected for the establishment of an industry must be flat. So, it can be well served by different modes of Transport.

Climate:

 Climate of the area selected for an Industry is also one of the important factors of location of industries. Extreme climate Condition is not suitable for the successful Industrial growth. Moreover, there are certain Industries which require a specific climate. Example: Cool- humid climate is ideal for cotton Textile industry. As Coimbatore and Tiruppur Have such type of climate, many cotton textile Industries are located in this zone.

Water Resources:

Availability of water is another important factor that influences

The industrial location. Many industries are established near rivers, canals, and lakes for this reason. Iron and steel industries, textile Industries and chemical industries require plenty of water, for their proper functioning.

Non-Geographical Factors:

Capital: Capital or huge investment is needed for the establishment of industries without which no industry can be established.

Availability of Loans:

In most cases, it is not possible to start an industry with enough capital In hand. So, the investors seek loan to start the Industries. Thus, the organizational set up which Provides loan and insurance are required.

Government Policies/Regulations:

Government policies are another important Factor that influences industrial location. The Government sets certain restriction in the Allocation of land for industries in order to reduce regional disparities, to control excessive Pollution and to avoid the excessive clustering of industries in big cities. So, the policies also affect the industrial locations.

Classification of Industries:

Industries are classified on various bases in the following ways.

 On the basis of Raw Materials:

Agro Based Industries: These industries use Plant and animal based products as their raw Materials. Example: Food Processing, Vegetable Oil, Cotton Textile, Dairy Products, etc.

Mineral Based Industries: These are the industries that use mineral ores as their Raw materials. Iron made from iron ore is the Product of mineral based industry. Cement, Machine Tools, etc. Are the other examples of Mineral based industries?

Marine Based Industries:

These industries Use products from the sea and oceans as raw Materials. Example; Processed Sea Food, Fish Oil manufacturing units etc.

Forest Based Industries: These industries Use forest products as their raw materials. Example: Pulp & Paper, Furniture and Some Pharmaceuticals industries, etc.

On the basis of Size and Capital:

Large Scale Industries: The capital required for the establishment of an industry is more than one crore the industry is called as large scale Industry. Iron & steel, Oil refineries, Cement and Textile industries are the best examples for large scale industries.

Small Scale Industries: The capital required for the establishment of an industry is less than one crore; the industry is called as small scale Industry. Silk weaving and household industries belong to this category.

Apart from the above cited industries, Cottage or household industries are also a type of small scale industry where the products are manufactured by hand, by the artisans with the Help of family members. These industries are also classified and grouped as miscellaneous Categories. Example: Basket weaving, Pot Making, handicrafts etc.

On the basis of Ownership:

Private Sector Industries:  These types of industries are owned and operated by Individuals or a group of individuals. Example: Bajaj Auto, Reliance, etc

Public Sector Industries:

These type of Industries are owned and operated by the Government. Hindustan Aeronautics Limited (HAL), Bharat Heavy Electricals Ltd (BHEL), Steel Authority of India Ltd (SAIL) are the Examples of Public sector industries.

Joint Sector Industries:

These types of Industries are owned and operated jointly by The Government and Individuals or a Group of Individuals. Example: Indian Oil Sky Tanking Ltd, Indian Synthetic Rubber Ltd, Mahanagar Gas Ltd, Maruti Udyog etc.,

Co-operative Sector Industries:

Industries Of this kind are owned and operated by the Producers or suppliers of raw materials orWorkers or both. Anand Milk Union Limited (AMUL) is the best example of the Co-operative Sector.

Agro based industries:

These industries draw their raw materials from agricultural sector. The following part discusses the agro based industries in India.

Cotton Textile Industry:

Textile is a broad term which includes Cotton, jute, wool, silk and synthetic fibre Textiles. This sector in India is the second largest In the world.Traditional sectors like hand loom, Handicrafts and small power-loom units are the Biggest source of employment for millions of People in rural and semi urban areas.Currently, India is the third Largest producer of cotton and Has the largest loom arc and ring Spindles in the world. At present, Cotton textile industry is the largest organized modern industry of India.

The higher concentration of textile mills in And around Mumbai makes it as “Manchester of India”. Presence of black cotton soil in 179 India – Resources and IndustriesMaharastra, humid climate, presence of Mumbai port, availability of hydro power, good Market and well developed transport facility Favour the cotton textile industries in Mumbai.

The major cotton textile industries are concentrated in the states of Maharashtra, Gujarat, West Bengal, Uttar Pradesh and Tamil Nadu. Coimbatore is the most important centre

In Tamil nadu with 200 mills out of its 435 and Called as “Manchester of South India”. Erode, Tirupur, Karur, Chennai, Thirunelveli, Madurai, Thoothukudi, Salem and Virudhunagar are the other major cotton textiles centres in the state.

Jute Textiles:

Jute is a low priced fibre used mainly for making package materials like gunny bags. Today jute is blended with cotton and wool to produce textiles. This is the second important Textile industry in India after cotton textiles. Jute is the golden fibre which meets all the standards of goods packing with its natural, renewable, Bio degradable and eco-friendly products.

The first jute mill in India was established at Rishra near, Kolkata in 1854 by the English man George Auckland. India tops in the production Of raw jute and jute goods and second in The export of jute goods next to Bangladesh.Jute production includes gunny bags, canvas, Pack sheets, jute web, carpets, cordage, hessians And twines. Now jute is also being used in plastic Furniture and insulation bleached fibres to blend with wool. It is also mixed with cotton to make.Carpet and blankets.

 The major jute producing areas are in West Bengal and concentrated Along the Hooghly River within the radius of six Kilometre of Kolkata. Titagarh, Jagatdat, Budge-Budge, Haora and Bhadreshwar are the chief Centres of jute industry. Andhra Pradesh, Bihar, Uttar Pradesh, Assam, Chhattisgarh and Odisha are the other jute goods producing areas.

National jute board is headquarter at Kolkata.

Silk Industry:

India has been well known for the Production of silk since the ancient times. India is the second largest producer of raw silk next Only to China. Karnataka is the largest producer of Silk. Other major producers of silk are West Bengal, Jammu Kashmir, Bihar, Jharkhand, Chhattisgarh, Uttar Pradesh, Punjab, Assam and Tamil nadu states.

Sugar Industry:

Sugar can be produced from sugar cane, Sugar-beets or any other crop which have sugar Content. In India, sugar cane is the main sourceOf sugar. At present this is the second largest agro Based industry of India after cotton textiles. India is the world’s second largest producer of sugar Cane after Brazil. Sugar industry is decentralized and located near the sugarcane growing areas as They are weight loosing and bulky to transport.Uttar Pradesh is the largest producer of Sugar, producing about 50% of the country’s Total.

Other major producers are Maharashtra, Uttar Pradesh, Karnataka, Andhra Pradesh, Tamil nadu, Bihar, Punjab, Gujarat, Haryana and Madhya Pradesh states. These states account for more than 90% of the sugar mills and sugar Production.

Forest based industries:

Forest provides us with different types of Material which are used as raw material for certain industries like paper, lac, sports goods, Plywood etc.

Paper industry:

Paper Industry produces numerous types of papers that comes in various use such as sheet Paper, paper boxes, tissues, paper bags, stationery, Envelopes and printed-paper products such as Books, periodicals, and newspapers. In India the Soft wood is the principal raw material used for making paper especially newsprint and high Class printing papers. Paper is the pre-requisite for education and literacy and its use is an index Of advancement in these two fields as well as the Overall well being of the society.The first successful effort was made in 1867 with the setting up of the Royal Bengal Paper mills at Ballyganj near Kolkata. The Raw Material for paper industry includes wood Pulp, bamboo, salai and sabai grasses, waste Paper and bagasse.

 West Bengal is the largest Producer of paper in the country followed by Madhya Pradesh, Odisha and Tamil nadu

The first paper mill of India was started in 1812 at Serampore in West Bengal.

Mineral based industries:

Mineral based industries use both Metallic & non metallic minerals as raw Materials. The major mineral based industry of country is the iron steel industry.

Iron and steel industries:

Iron and steel industry is called a Basic metallurgical industry as its finished Product is used as raw material by host of other industries. Several industries like Engineering, heavy machines and machine Tools, automobile, locomotives and railway Equipment industries use iron and steel as their primary raw material. Due to this, the steel producing capacity of a country is generally taken as an indicator of its level of Industrial development.

The modernization of the industry was Started in 1907 with the establishment of Tata Iron and Steel Company at Sakchi, now called Jamshedpur. Iron and steel industry of India is Mainly concentrated in the states of Jharkhand, West Bengal and Odisha. Proximity to the coal Fields of Jharia, Raniganj, Bokaro and Karanpura and the iron ore mines of Mayurbhanj, Keonjar And Brona are responsible for this. This area alsoHas sufficient deposits of limestone, dolomite, Manganese and silicon which are required for The industry.

Automobile Industry:

India is set to emerge not only as a Large domestic market for automobile Manufacturers, but also as a crucial link in The global automotive chain. It is one of the Most dynamic industrial groups in India.

The first automobile industry of India was Started in 1947. The industry is the Premier Automobiles Ltd located at Kurla (Mumbai). It was followed by the Hindustan Motors Ltd At Uttarpara (Kolkata) in 1948.

 At present, India is the 7^th largest producer of automobile Manufacturers which include two wheelers, Commercial vehicles, passenger car, jeep, Scooty, scooters, motor cycles, mopeds and Three wheelers. Major centres are at Mumbai, Chennai, Jamshedpur, Jabalpur, Kolkata, Pune, New Delhi, Kanpur, Bengaluru, Sadara, Lucknow and Mysuru.Tata Motors, Maruti Suzuki, Mahindra & Mahindra and Hindustan Motors are the Largest passenger car manufacturers of Indian Companies in the country. Presence of foreign Car companies such as Mercedes Benz, Fiat, General Motors, Toyota and the recent entry Of passenger car manufacturers BMW, Audi, Volkswagen and Volvo makes the Indian Automobile sector a special one. Tata Motors, Ashok Leyland, Eicher Motors, Mahindra & Mahindra and Ford Motors are the major Indian Companies which manfacture commercial Vehicles. MAN, ITEC, Mercedes-Benz, Scania And Hyundai are the foreign companies engage In the manfacture of commercial vehicles.

Two-wheeler manufacturing is dominated by Indian companies like Hero, Bajaj Auto and TVS.

Chennai is nicknamed as the “Detroit Of Asia” due to the presence of major Automobile manufacturing units and allied Industries around the city.

Electrical and Electronic Industries:

Heavy electrical industries manufacture Equipment used for power generation, Transmission and utilization. Turbines for steam And hydro power plants, boilers for thermal Power plants, generators, transformers, switch Gears etc. Are the chief products of this industry.

The most important company in the field of Heavy electrical is Bharat Heavy Electricals Ltd (BHEL). It has its plants at Hardwar, Bhopal, Hyderabad, Jammu, Bengaluru, Jhansi and Tiruchirappalli. This Industry covers a wide Range of products including television sets, Transistor sets, telephone exchanges, cellular Telegram, computers and varied equipments for Post and railway, defence and meteorological Department.

Bengaluru is the largest producer of Electronic goods in India, hence it is called as The “Electronic Capital of India”. The other Major producers of electronic goods centers are Hyderabad, Delhi, Mumbai, Chennai, Kolkata, Kanpur, Pune, Lucknow, Jaipur and Coimbatore.

Software Industry:

India is home to some of the finest software Companies in the world. The software companies In India are reputed across the globe for their Efficient IT and business related solutions. The Indian Software Industry has brought about a tremendous success for the emerging economy.In India, software industry began in 1970 With the entry of Tata Consultancy Services (TCS). Along with this, L & T, Infotech, i-Flex, Accenture, Cognizant, GalexE Solutions India Pvt Ltd and ITC Infotech are the major software Industries in the country.

 At present, there are More than 500 software companies all over

India. It exports software service to nearly 95 Countries in the world.

The main centres of IT parks are located In Chennai, Coimbatore, Thiruvananthapuram, Bengaluru,Mysuru,Hyderabad,Visakhapatnam, Mumbai, Pune, Indore, Gandhi Nagar, Jaipur, Noida, Mohali and Srinagar.

Major challenges of Indian Industries:

Industries in India face many problems. Some major problems are listed below.

1. Shortage and fluctuation in Power Supply.
2. Non- availability of large blocks of land.
3. Poor access to credit.
4. High rate of interest for borrowed loan.
5. Non- availability of cheap labourers.
6. Lack of technical and vocational training For employees.
7. Inappropriate living conditions nearby Industrial estates

Investment models:

• Public Investment Model: In this model Government requires revenue for investment that mainly comes through taxes.
• As the world is facing the prospect of an extended period of weak economic growth, by enhancing public-sector investment large pools of savings can be channelized into productivity.
• Properly targeted public investment can do much to boost economic performance, generating aggregate demand quickly, fueling productivity growth by improving human capital, encouraging technological innovation, and spurring private-sector investment by increasing returns.
• Though public investment cannot fix a large demand shortfall overnight, it can accelerate the recovery and establish more sustainable growth patterns.
• Private Investment Model: For a country to grow and increase its production investment is required. Presently tax revenue of India is not adequate to meet this demand so government requires private investment.
• Private investment can be source from domestic or international market.
• From abroad private investment comes in the form of FDI or FPI.
• Private investment can generate more efficiency by creating more competition, realization of economies of scale and greater flexibility than is available to the public sector.
• Public-Private Partnership Model: PPP is an arrangement between government and private sector for the provision of public assets and/or public services. Public-private partnerships allow large-scale government projects, such as roads, bridges, or hospitals, to be completed with private funding.
• In this type of partnership, investments are undertaken by the private sector entity, for a specified period of time.
• These partnerships work well when private sector technology and innovation combine with public sector incentives to complete work on time and within budget.
• As PPP involves full retention of responsibility by the government for providing the services, it doesn’t amount to privatization.
• There is a well defined allocation of risk between the private sector and the public entity.
• Private entity is chosen on the basis of open competitive bidding and receives performance linked payments.
• PPP route can be alternative in developing countries where governments face various constraints on borrowing money for important projects.
• It can also give required expertise in planning or executing large projects.
• Models of Public Private Partnership (PPP):
• Commonly adopted model of PPPs include Build-Operate-Transfer (BOT) ,Build-Own-Operate(BOO), Build-Operate-Lease-Transfer (BOLT), Design-Build-Operate-Transfer (DBFOT), Lease-Develop-Operate (LDO), Operate-Maintain-Transfer (OMT), etc.
• These models are different on level of investment, ownership control, risk sharing, technical collaboration, duration, financing etc.
• BOT: It is conventional PPP model in which private partner is responsible to design, build, operate (during the contracted period) and transfer back the facility to the public sector.
• Private sector partner has to bring the finance for the project and take the responsibility to construct and maintain it.
• Public sector will allow private sector partner to collect revenue from the users. The national highway projects contracted out by NHAI under PPP mode is a major example for the BOT model.
• BOO: In this model ownership of the newly built facility will rest with the private party.
• On mutually agreed terms and conditions public sector partner agrees to ‘purchase’ the goods and services produced by the project.
• BOOT: In this variant of BOT, after the negotiated period of time, project is ransferred to the government or to the private operator.
• BOOT model is used for the development of highways and ports.
• BOLT: In this approach, the government gives a concession to a private entity to build a facility (and possibly design it as well), own the facility, lease the facility to the public sector and then at the end of the lease period transfer the ownership of the facility to the government.
• DBFO: In this model, entire responsibility for the design, construction, finance, and operation of the project for the period of concession lies with the private party.
• LDO: In this type of investment model either the government or the public sector entity retains ownership of the newly created infrastructure facility and receives payments in terms of a lease agreement with the private promoter.
• It is mostly followed in the development of airport facilities.