Importance of Manufacturing
- Manufacturing industries not only help in modernising agriculture, which forms the backbone of our economy, they also reduce the heavy dependence of people on agricultural income by providing them jobs in secondary and tertiary sectors.
- Industrial development is a precondition for the eradication of unemployment and poverty from our country.
- Export of manufactured goods expands trade and commerce, and brings in much needed foreign exchange.
- Countries that transform their raw materials into a wide variety of furnished goods of higher value are prosperous.
Contribution of Industry to National Economy
- Over the last two decades, the manufacturing sector's proportion of GDP has remained constant at 17 percent, out of a total of 27% for the industry, which includes 10% for mining, quarrying, power, and gas.
- This is substantially lower than certain East Asian economies, which have rates of 25 to 35 percent. Manufacturing has grown at a rate of roughly 7% per year on average over the last decade. Over the following ten years, a growth rate of 12% is desired.
- Manufacturing has been rising at a pace of 9 to 10% per year since 2003. Economists estimate that manufacturing will meet its target over the next decade if the government makes proper policy interventions and the industry redoubles its efforts to enhance productivity. With this goal in mind, the National Manufacturing Competitiveness Council (NMCC) was formed.
- Industrial locations are complex in nature. These are influenced by the availability of raw material, labour, capital, power and market, etc. It is rarely possible to find all these factors available in one place.
- Consequently, manufacturing activity tends to locate at the most appropriate place where all the factors of industrial location are either available or can be arranged at lower cost. After an industrial activity starts, urbanisation follows. Sometimes, industries are located in or near the cities.
- Thus, industrialisation and urbanisation go hand in hand. Cities provide markets and also provide services such as banking, insurance, transport, labour, consultants and financial advice, etc. to the industry.
- Many industries tend to come together to make use of the advantages offered by the urban centres known as agglomeration economies. Gradually, a large industrial agglomeration takes place.
Classification of Industries
Classification on the basis of source of raw materials used:
- Agro-based: cotton, woollen, jute, silk textile, rubber and sugar, tea, coffee, edible oil.
- Mineral-based: iron and steel, cement, aluminium, machine tools, petrochemicals.
Classification according to their main role:
- Basic or key industries that supply their products or raw materials to manufacture other goods. Example: iron and steel and copper smelting, aluminium smelting.
- Consumer industries that produce goods for direct use by consumers. Example: sugar, toothpaste, paper, sewing machines, fans etc.
Classification on the basis of capital investment:
- A small scale industry is defined with reference to the maximum investment allowed on the assets of a unit. At present, the maximum investment allowed is rupees one crore. If the investment is more than one crore in any industry then it is known as a large scale industry.
Classification on the basis of ownership:
- Public sector, owned and operated by government agencies– BHEL, SAIL etc.
- Private sector industries owned and operated by individuals or a group of individuals–Reliance, TATA, Bajaj Auto Ltd., Dabur Industries.
- Joint sector industries which are jointly run by the state and individuals or a group of individuals. Oil India Ltd. (OIL) is jointly owned by public and private sector.
- Cooperative sector industries are owned and operated by the producers or suppliers of raw materials, workers or both. They pool in the resources and share the profits or losses proportionately such as the sugar industry in Maharashtra, the coir industry in Kerala. Example: Amul, Lijjat Papd.
Classification based on the bulk and weight of raw material and finished goods:
- Heavy industries such as iron and steel
- Light industries that use light raw materials and produce light goods such as electrical industries.
- The textile sector is unusual in the Indian economy because it contributes significantly to industrial production (14%), employment (35 million people directly, second only to agriculture), and foreign exchange profits (about 24.6 per cent).
- It provides 4% to the country's GDP. It is the country's sole industry that is self-sufficient and comprehensive throughout the value chain, from raw materials to the highest value-added products.
- Cotton textiles were made in ancient India using hand spinning and handloom weaving techniques. Power looms were popular after the 18th century. During the colonial period, our traditional businesses experienced a setback since they couldn't compete with England's mill-made textiles.Cotton Industry in 18th Century
- In the country today, there are over 1600 cotton and human-made fibre textile factories. The private sector accounts for about 80% of these, while the public and cooperative sectors account for the remaining 20%. There are thousands of small enterprises with four to ten looms in addition to this. The cotton textile industry was initially focused in Maharashtra and Gujarat's cotton growing belt.
- The availability of raw cotton, the market, transportation, especially access to port facilities, labour, and a humid climate, among other factors, all led to its localization. Farmers, cotton boll pluckers, and workers in the ginning, spinning, weaving, dyeing, designing, packing, tailoring, and sewing industries all rely on this business for a living.
- The industry by creating demands supports many other industries, such as chemicals and dyes, mill stores, packaging materials and engineering works.
- India exports yarn to Japan. Other importers of cotton goods from India are U.S.A., U.K., Russia, France, East European countries, Nepal, Singapore, Sri Lanka, and African countries.
- India has the second largest installed capacity of spindles in the world, next to China, at around 34 million (2003-04). Since the mid-eighties, the spinning sector has received a lot of attention.
- We hold a significant portion in the global cotton yarn trade, accounting for one-fourth of the total. Our clothing trade, on the other hand, accounts for only 4% of global trade. Our spinning mills are globally competitive and capable of utilising all of the fibres we produce. The weaving, knitting, and processing operations are unable to employ most of the country's high-quality yarn.
- In these divisions, there are a few large, modern factories, but the majority of production is done in tiny, dispersed units that cater to the local market. This misalignment is a major flaw in the industry. As a result, many of our spinners export cotton yarn, while textile and garment producers must import fabric.
- Despite a huge increase in the production of high-quality long-staple cotton (9232 lakh bales in 2004-05), there is still a need to import. Power is inconsistent, and machinery in the weaving and processing industries, in particular, has to be modernised. Other issues include low labour production and intense competition from the synthetic fibre industry.
- India is the largest producer of raw jute and jute goods and stands at second place as an exporter after Bangladesh. There are about 70 jute mills in India. Most of these are located in West Bengal, mainly along the banks of the first jute mill that was set up near Kolkata in 1859 at Rishra. After Partition in 1947, the jute mills remained in India but three-fourth of the jute producing area went to Bangladesh. Jute Factory
- Factors responsible for their location in the Hugli basin are: proximity of the jute producing areas, inexpensive water transport, supported by a good network of railways, roadways and waterways to facilitate movement of raw material to the mills, abundant water for processing raw jute, cheap labour from West Bengal and adjoining states of Bihar, Orissa and Uttar Pradesh. Kolkata as a large urban centre provides banking, insurance and port facilities for the export of jute goods.
- The jute industry supports 2.61 lakh workers directly and another 40 lakhs small and marginal farmers who are engaged in the cultivation of jute and mesta. Many more people are associated indirectly.
- Challenges faced by the industry include stiff competition in the international market from synthetic substitutes and from other competitors like Bangladesh, Brazil, Philippines, Egypt and Thailand.
- However, the internal demand has been on the increase due to the Government policy of mandatory use of jute packaging. To stimulate demand, the products need to be diversified.
- In 2005, National Jute Policy was formulated with the objective of increasing productivity, improving quality, ensuring good prices to the jute farmers and enhancing the yield per hectare.
- The main markets are U.S.A., Canada, Russia, United Arab Republic, U.K. and Australia. The growing global concern for environment friendly, biodegradable materials, has once again opened the opportunity for jute products.
- India stands second as a world producer of sugar but occupies first place in the production of gur and khandsari. The raw material used in this industry is bulky, and in haulage its sucrose content reduces.
- There are over 460 sugar mills in the country spread over Uttar Pradesh, Bihar, Maharashtra, Karnataka, Tamil Nadu, Andhra Pradesh and Gujarat along with Punjab, Haryana and Madhya Pradesh. Sugar Production
- Sixty per cent of mills are in Uttar Pradesh and Bihar. This industry is seasonal in nature so, it is ideally suited to the cooperative sector.
- In recent years, there is a tendency for the mills to shift and concentrate in the southern and western states, especially in Maharashtra.
- This is because the cane produced here has a higher sucrose content. The cooler climate also ensures a longer crushing season. Moreover, the cooperatives are more successful in these states.
- Major challenges include the seasonal nature of the industry, old and inefficient methods of production, transport delay in reaching cane to factories and the need to maximise the use of bagasse.
Iron and Steel Industry
- All other industries—heavy, medium, and light—rely on it for their machinery, hence the iron and steel industry is the foundation. Steel is used to make a wide range of engineering and construction products, as well as defence, medical, telecommunications, and scientific equipment, as well as a wide range of consumer goods.
- Steel production and consumption are frequently used as indicators of a country's progress. Because all of the raw materials, as well as the completed goods, are large and bulky, iron and steel is a heavy industry with high transportation costs.Iron and Steel Factory
- Iron ore, coke, coal and limestone are required in the ratio of approximately 4: 2: 1. Some quantities of manganese, are also required to harden the steel.
- Today with 32.8 million tons of steel production, India ranks ninth among the world crude steel producers. It is the largest producer of sponge iron. Inspite of a large quantity of production of steel, per capita consumption per annum is only 32 kg.
- In the 1950s China and India produced almost the same quantity of steel. Today, China is the largest producer. China is also the world’s largest consumer of steel. In 2004, India was the largest exporter of steel which accounted for 2.25 per cent of the global steel trade.
- Chotanagpur plateau region has the maximum concentration of iron and steel industries. It is largely, because of the relative advantages this region has for the development of this industry. These include low cost of iron ore, high-grade raw materials in proximity, cheap labour and vast growth potential in the home market.
- Though, India is an important iron and steel producing country in the world yet we are not able to perform to our full potential largely due to:
- High costs and limited availability of coking coal
- Lower productivity of labour
- Irregular supply of energy and
- Poor infrastructure.
- We also import good quality steel from other countries. However, the overall production of steel is sufficient to meet our domestic demand. Liberalisation and Foreign Direct Investment have given a boost to the industry with the efforts of private entrepreneurs. There is a need to allocate resources for research and development to produce steel more computatively.
- In 2004, India produced over 600 million tons of aluminium. Bauxite, the raw material used in the smelters is a very bulky, dark reddish coloured rock. The flow chart given below shows the process of manufacturing aluminium.Aluminium Production
- Regular supply of electricity and an assured source of raw material at minimum cost are the two prime factors for the location of the industry.
- Aluminium smelting is the second most important metallurgical industry in India. It is light, resistant to corrosion, a good conductor of heat, malleable and becomes strong when it is mixed with other metals. It is used to manufacture aircraft, utensils and wires.
- It has gained popularity as a substitute for steel, copper, zinc and lead in a number of industries. There are 8 aluminium smelting plants in the country located in Orissa (Nalco and Balco), West Bengal, Kerala, Uttar Pradesh, Chattisgarh.
- India's chemical sector is rapidly expanding and diversifying. It accounts for about 3% of the country's GDP. It is Asia's third largest city and the world's twelfth largest in terms of population.
- It includes both large and small manufacturing facilities. Both the inorganic and organic industries have experienced rapid growth. Sulphuric acid (used to generate fertilisers, synthetic fibres, plastics, adhesives, paints, and dyestuffs), nitric acid, alkalies, soda ash (used to make glass, soaps and detergents, and paper), and caustic soda are examples of inorganic chemicals. These businesses can be found all across the country.
- Petrochemicals, which are used to make synthetic fibres, synthetic rubber, plastics, dyestuffs, medicines, and medications, are examples of organic chemicals. Near oil refineries and petrochemical facilities are organic chemical plants.
- The chemical industry is its own largest consumer. Basic chemicals undergo processing to further produce other chemicals that are used for industrial application, agriculture or directly for consumer markets.
- The fertiliser industry is centred around the production of nitrogenous fertilisers (mainly urea), phosphatic fertilisers and ammonium phosphate (DAP) and complex fertilisers which have a combination of nitrogen (N), phosphate (P), and potash (K).
- The third, i.e. potash is entirely imported as the country does not have any reserves of commercially usable potash or potassium compounds in any form. India is the third largest producer of nitrogenous fertilisers. Fertiliser Industry
- There are 57 fertiliser units manufacturing nitrogenous and complex nitrogenous fertilisers, 29 for urea and 9 for producing ammonium sulphate as a byproduct and 68 other small units produce single superphosphate.
- At present, there are 10 public sector undertakings and one in the cooperative sector at Hazira in Gujarat under the Fertiliser Corporation of India. After the Green Revolution, the industry expanded to several other parts of the country.
- Gujarat, Tamil Nadu, Uttar Pradesh, Punjab and Kerala contribute towards half the fertilizer production. Other significant producers are Andhra Pradesh, Orissa, Rajasthan, Bihar, Maharashtra, Assam, West Bengal, Goa, Delhi, Madhya Pradesh and Karnataka.
- Cement is required for a variety of construction projects, including the construction of homes, industries, bridges, highways, airports, dams, and other commercial structures. Limestone, silica, alumina, and gypsum are all bulky and heavy raw minerals used in this business. Apart from rail transportation, coal and electric power are required.
- The firm has strategically positioned plants in Gujarat with good access to the Gulf countries' market. In 1904, Chennai became the first city to build a cement mill. The industry grew when the country gained independence.Cement Industry
- Since 1989, when price and distribution were deregulated, as well as other regulatory reforms, the cement sector has made remarkable progress in terms of capacity, process, technology, and production. In the country, there are 128 major and small cement plants. Cement is produced in India in a variety of forms.
- Improvement in the quality has found the produce a readily available market in East Asia, Middle East, Africa and South Asia apart from a large demand within the country.
- This industry is doing well in terms of production as well as export. Efforts are being made to generate adequate domestic demand and supply in order to sustain this industry.
- Automobiles provide vehicle for quick transport of good services and passengers. Trucks, buses, cars, motorcycles, scooters, three-wheelers and multi-utility vehicles are manufactured in India at various centres.
- After the liberalisation, the coming in of new and contemporary models stimulated the demand for vehicles in the market, which led to the healthy growth of the industry including passenger cars, two and three-wheelers. This industry had experienced a quantum jump in less than 15 years. Automobile Industry
- Foreign Direct Investment brought in new technology and aligned the industry with global developments. At present, there are 15 manufacturers of passenger cars and multi-utility vehicles, 9 commercial vehicles, 14 two and three-wheelers.
- The industry is located around Delhi, Gurgaon, Mumbai, Pune, Chennai, Kolkata, Lucknow, Indore, Hyderabad, Jamshedpur and Bangalore.
Information Technology and Electronics Industry
- The electronics industry covers a wide range of products from transistor sets to television, telephones, cellular telecom, pagers, telephone exchange, radars, computers and many other types of equipment required by the telecommunication industry.
- Bangalore has emerged as the electronic capital of India. Other important centres for electronic goods are Mumbai, Delhi, Hyderabad, Pune, Chennai, Kolkata, Lucknow and Coimbatore. 18 software technology parks provide single window service and high data communication facility to software experts.
- A major impact of this industry has been on employment generation. Upto 31 March 2005, the IT industry employed over one million persons. This number is expected to increase eight-fold in the next 3 to 4 years.
- It is encouraging to know that 30 per cent of the people employed in this sector are women. This industry has been a major foreign exchange earner in the last two or three years because of its fast-growing Business Processes Outsourcing (BPO) sector. The continuing growth in hardware and software is the key to the success of the IT industry in India.
Industrial Pollution and Environmental Degradation
- Although industries contribute significantly to India’s economic growth and development, the increase in pollution of land, water, air, noise and the resulting degradation of environment that they have caused, cannot be overlooked.
Industries are responsible for four types of pollution:
The polluting industries also include thermal power plants.
- Air pollution is caused by the presence of high proportion of undesirable gases, such as sulphur dioxide and carbon monoxide.
- Dust, spray mist, and smoke are examples of airborne particulate materials that contain both solid and liquid particles. Chemical and paper companies, brick kilns, refineries, and smelting facilities, as well as the burning of fossil fuels in large and small factories that disregard environmental standards, all create smoke. Toxic gas leaks can be extremely dangerous and have long-term consequences.
- Air pollution adversely affects human health, animals, plants, buildings and the atmosphere as a whole.
- Water pollution is caused by organic and inorganic industrial wastes and affluents discharged into rivers. The main culprits in this regard are paper, pulp, chemical, textile and dyeing, petroleum refineries, tanneries and electroplating industries that let out dyes, detergents, acids, salts and heavy metals like lead and mercury pesticides, fertilisers, synthetic chemicals with carbon, plastics and rubber, etc. into the water bodies.
- Fly ash, phospo-gypsum and iron and steel slags are the major solid wastes in India. Thermal pollution of water occurs when hot water from factories and thermal plants is drained into rivers and ponds before cooling.
- Wastes from nuclear power plants, nuclear and weapon production facilities cause cancers, birth defects and miscarriages.
- Soil and water pollution are closely related. Dumping of wastes especially glass, harmful chemicals, industrial effluents, packaging, salts and garbage renders the soil useless. Rainwater percolates to the soil carrying the pollutants to the ground and the groundwater also gets contaminated.
- Noise pollution not only results in irritation and anger, but it can also cause hearing impairment, increased heart rate and blood pressure among other physiological effects. Unwanted sound is an irritant and a source of stress. Industrial and construction activities, machinery, factory equipment, generators, saws and pneumatic and electric drills also make a lot of noise.
Control of Environmental Degradation
Control of Environmental Degradation
Every litre of wastewater discharged by our industry pollutes eight times the quantity of freshwater. How can the industrial pollution of freshwater be reduced?
Some suggestions are:
- minimising use of water for processing by reusing and recycling it in two or more successive stages
harvesting of rainwater to meet water requirements
- treating hot water and effluents before releasing them in rivers and ponds.
Treatment of industrial effluents can be done in three phases:
- Primary treatment by mechanical means. This involves screening, grinding, flocculation and sedimentation.
- Secondary treatment by biological process
- Tertiary treatment by biological, chemical and physical processes. This involves recycling of wastewater.
Overdrawing of groundwater reserves by industry where there is a threat to groundwater resources also needs to be regulated legally. Particulate matter in the air can be reduced by fitting smoke stacks to factories with electrostatic precipitators, fabric filters, scrubbers and inertial separators.
Smoke can be reduced by using oil or gas instead of coal in factories. Machinery and equipment can be used and generators should be fitted with silencers. Almost all machinery can be redesigned to increase energy efficiency and reduce noise.
Noise absorbing material may be used apart from personal use of earplugs and earphones.
NTPC Shows the Way
NTPC is a major power providing corporation in India. It has ISO certification for EMS (Environment Management System) 14001. The corporation has a proactive approach for preserving the natural environment and resources like water, oil and gas and fuels in places where it is setting up power plants.
This has been possible through:
- Optimum utilisation of equipment adopting latest techniques and upgrading existing equipment.
- Minimising waste generation by maximising ash utilisation.
- Providing green belts for nurturing ecological balance and addressing the question of special purpose vehicles for afforestation.
- Reducing environmental pollution through ash pond management, ash water recycling system and liquid waste management.
- Ecological monitoring, reviews and online database management for all its power stations.