Manufacturing Industries in Contemporary India

CONTEMPORARY INDIA – II

Definition of Manufacturing

  • Manufacturing is defined as the process of producing goods in large quantities through the transformation of raw materials into more valuable products.

  • Examples of manufacturing processes include:

    • Paper from wood.

    • Sugar from sugarcane.

    • Iron and steel from iron ore.

    • Aluminium from bauxite.

    • Cloth from yarn, which is itself an industrial product.

Secondary Sector of Economy

  • The workforce employed in secondary activities is responsible for converting primary materials into finished goods.

  • Examples of industries employing individuals in secondary activities:

    • Steel factories.

    • Automobile industries.

    • Breweries, textile, and bakery sectors.

  • While some individuals are employed in the provision of services, the chapter focuses mainly on manufacturing industries in the secondary sector.

  • The development of manufacturing industries is crucial for assessing the economic strength of a country.

Importance of Manufacturing Industries

  • The manufacturing sector is considered the backbone of both national development and economic advancement for several reasons:

    • Modernization of agriculture:

    • Manufacturing industries contribute to the modernization of agriculture, reducing dependence on agricultural income through job creation in secondary and tertiary sectors.

    • Eradication of unemployment and poverty:

    • Industrial development serves as a prerequisite for alleviating unemployment and poverty.

    • This philosophy underpinned the establishment of public sector industries and joint sector ventures in India, particularly aimed at diminishing regional disparities by creating industries in tribal and backward areas.

    • Export potential:

    • Exporting manufactured goods enhances trade and commerce, generating essential foreign exchange.

    • Economic prosperity through transformation:

    • Prosperity in countries is linked to their ability to transform raw materials into a diverse array of high-value finished products.

    • Relationship between agriculture and industry:

    • Agriculture and industry mutually reinforce each other; for instance, agro-industries increase agricultural productivity and depend on agriculture for raw materials while providing products to farmers.

Personal Observation Example

  • A described experience illustrates this concept:

    • On Diwali, Harish and his parents visited a market where they purchased various items. Harish observed the wide array of products available and wondered about the scale of production in these industries.

    • His father explained the manufacturing processes behind these items: large industries produce shoes and clothing using machines; small industries craft some utensils; and household artisans create items like diyas (earthen lamps).

Classification of Manufacturing Industries

  • Manufacturing industries can be classified based on various criteria:

    • Source of Raw Materials:

    • Agro-based Industries:

      • Examples: Textiles (cotton, wool, jute, silk), rubber, sugar, tea, coffee, and edible oils.

    • Mineral-based Industries:

      • Examples: Iron and steel, cement, aluminium, machine tools, and petrochemicals.

    • Main Role of the Industry:

    • Basic/Key Industries:

      • Industries that supply raw materials for other goods (e.g., iron, steel, copper smelting).

    • Consumer Industries:

      • Industries producing goods for direct consumption (e.g., sugar, toothpaste, paper, sewing machines).

    • Capital Investment:

    • Small Scale Industries:

      • Defined by a maximum investment limit on assets ($1$ crore).

    • Ownership:

    • Public Sector Industries:

      • Owned and operated by government agencies (e.g., BHEL, SAIL).

    • Private Sector Industries:

      • Owned by private individuals or groups (e.g., TISCO, Bajaj Auto Ltd., Dabur Industries).

    • Joint Sector Industries:

      • Operated jointly by the state and individuals or groups (e.g., Oil India Ltd.).

    • Cooperative Sector Industries:

      • Owned by producers or suppliers of raw materials; examples include sugar industries in Maharashtra and coir industry in Kerala.

    • Bulk and Weight of Raw Material and Finished Goods:

    • Heavy Industries:

      • Industries characterized by large raw materials and heavy final products (e.g., iron, steel).

    • Light Industries:

      • Using lighter raw materials to produce light goods (e.g., electrical goods).

Agro-based Industries

  • Agro-based industries focus on the production of goods from agricultural raw materials:

    • Examples include cotton, jute, silk, wool, sugar, and edible oil.

  • Contribution to agriculture:

    • Manufacturing industries enhance agricultural production efficiency.

    • Need for competitiveness in the global market drives efficiency in production processes.

Textile Industry Overview

  • The textile industry holds a significant place in the Indian economy due to its contributions to industrial production, employment, and foreign exchange earnings.

  • Unique characteristics of textile industry:

    • Self-reliant across the entire value chain, from raw material to high-value products.

Cotton Textiles

  • Historical context:

    • Hand spinning and weaving techniques were prevalent in ancient India.

    • The introduction of power looms in the 18th century changed traditional textile production.

  • Impact of colonialism:

    • Indian traditional industries faced setbacks during colonial times due to competition with mill-made cloth from England.

    • Cotton textile industry concentrated in Maharashtra and Gujarat because of:

    • Availability of raw cotton.

    • Market accessibility.

    • Moist climate suitable for processing.

    • Comprehensive link to agriculture.

  • Demand generation supports various industries: chemicals, dyes, packaging, engineering.

  • Spinning highly centralized, while weaving is decentralized to incorporate traditional skills.

Jute Textiles

  • India is the leading producer of raw jute and ranks second in the global export market, following Bangladesh.

  • Production primarily in West Bengal, along the Hugli river.

  • The historical establishment of the first jute mill in 1855 at Rishra, Kolkata.

  • Post-Partition challenges:

    • Significant jute-producing areas transferred to Bangladesh, altering domestic production dynamics.

Mineral-Based Industries

  • Industries relying on minerals and metals include:

    • Iron and Steel Industry:

    • Fundamental to other industries; serves as the backbone due to its dependency for machinery production.

    • Notable raw materials:

      • Required ratios: Iron ore, coking coal, limestone approx $4 : 2 : 1$.

    • Factors influencing the location: proximity to transportation, labor supply, urban centers.

    • Sugar Industry:

    • India ranks second globally in sugar production.

    • Significant location in Uttar Pradesh and Bihar, with key shifts towards southern states due to sugarcane’s higher sucrose content and climatic conditions promoting longer crushing seasons.

    • Aluminium Smelting:

    • Second crucial metallurgical industry in India; characterized by lightweight, corrosion resistance, and versatility in applications.

    • Location: presence of electricity supply and material accessibility.

    • Chemical Industry:

    • Rapidly growing sector with both organic and inorganic components.

      • Organic chemicals primarily stem from petrochemical plants.

      • Inorganic chemicals: sulphuric acid, soda ash, etc.

    • Fertilizer Industry:

    • Focuses on nitrogenous, phosphatic, and complex fertilizers.