Industrial Houses & Complexes including Public Sector Undertakings | Geography Optional for UPSC (Notes) PDF Download

Industrial Houses in India

A conglomerate, in simple terms, refers to a company that operates in multiple industries. It consists of a parent organization that oversees various business entities, each operating in different sectors.
On the other hand, Industrial Houses, also known as Business Groups, are collections of public or private companies that operate in various industries. These business groups play a vital role in a country's economy and significantly contribute to its Gross Domestic Product (GDP). In many developing economies, numerous business groups define the industrial landscape. For instance, in India, family-owned businesses make up 90% of the country's enterprises, playing a crucial role in the nation's economic development.
The Indian economy operates as a mixed system, where both public and private entities participate in the development process. As a result, industrial houses and complexes can be classified into two categories based on ownership:

1. Public Industrial Houses: These are owned and operated by government entities, contributing to the country's economic growth and providing essential services or products to the public.
2. Private Industrial Houses: These are owned and managed by private individuals or organizations, participating in various industries and contributing to the nation's overall economic development.

Background (of Business Groups)

• India's industrialization process has been heavily influenced by family-owned enterprises that have played a pivotal role in the country's economic development. Many of these industrial houses have existed since pre-independence days, and despite the numerous changes in economic policy throughout the years, family-owned businesses still dominate the Indian economy.
• In 1947, India was an open economy, but by the mid-1950s, big business had become a negative term, and the government soon placed regulatory limits on the growth of large firms. By the 1970s, public sector firms were at the center of the economy. However, in 1991, the P V Narasimha Rao government implemented reforms and liberalized the economy, making big businesses and foreign capital desirable once more.
• Throughout these changes, 15 of the top 20 business groups in India have remained family-owned. However, there has been significant churn within these businesses, with many of today's top groups having been relatively small in the early 1950s or being products of post-independence economic growth. Only three groups that were among the top 20 in 1951 – Tata, Birla (AV), and Mahindra – still hold their positions today.
• Experts attribute this churn to the adaptability factor of these family-owned groups. Those that adapted to new environments, such as the 1956 industrial licensing or post-1991 market reforms, continued to grow, while others fell off the radar. For instance, the 1969 anti-trust Monopolies and Restrictive Trade Practices (MRTP) Act limited the growth of big businesses, directly impacting prominent family-owned groups. This, however, paved the way for newcomers like the Om Prakash Jindal group to capitalize on growth restrictions placed on incumbents like Tata Steel.
• Furthermore, the 1970s saw the rapid rise of the Dhirubhai Ambani group, which grew by tapping into opportunities in sectors where old money in corporate India was scarce, such as synthetic textiles and petrochemicals. In total, 16 of today's top 20 business groups are products of post-independence economic growth, accounting for two-thirds of combined assets and nearly 70% of combined revenues of the top 20.
• The 1991 economic reforms further accelerated this churn, with nine of the current top 20 business groups owing their rise to the opportunities provided by the reforms. These changes included the abolition of industrial licensing, free cross-border movement of capital, and the opening of sectors such as banking, infrastructure, and telecom for the private sector. This led to the rapid growth of business groups such as Bharti, Adani, GMR, HDFC, and the Jaypee group.
• The global software boom also played a role in the rise of Infosys and Wipro, which became the 15th and 16th largest business groups, respectively. Tata Consultancy Services has become the most profitable and valuable company in the Tata group, while Tech Mahindra is the group's second-largest business after farm equipment and automotive.

The Tata

• Being one of the oldest industrial houses in India this industrial house has iron and steel as well as an automobile (heavy) as its traditional areas of interest. But in the coming times, it has diversified in a great many areas/sectors such as pharmaceuticals, cement, publishing, power, finance, hotel, insurance, software, refrigeration, air-conditioning, telecommunication, etc. Its Tata Consultancy Services, a software development, and export company, is the largest software services company in the country. Its recent foray into the four-wheel segment has been able to make historic news around the world with the launching of the $ 2500 car—the Nano.

The Birla

• The Birlas, though they have gone for divisions, are among the oldest industrial houses in India like the Tatas. Their traditional areas of activities have been textile, paper, paraffin, cement, aluminium, and automobiles. In the last few decades, they have diversified in other areas too such as machine tools, pharmaceuticals, telecommunications, consumer durables, and nondurables, etc.

The Goenka

• One among the oldest industrial houses of the country, this has business interests in the areas such as power generation and distribution, textile, pharmaceuticals, machine tools, entertainment, etc.

The Bajaj

• Among the oldest business families of India, they are known around the world for their commendable product the Bajaj Scooter, which is competent enough to fight out the international competition in the segment. Of late, they diversified into the areas of bikes also. Their areas of activity expand to electric and home appliances, entertainment, etc. Recently, they announced their intentions of entering the automobile sector with one of the cheapest cars in the world (after Tata’s Nano).

The Escorts

• One among the oldest industrial houses, this organization has been popular in the country for its contributions in three areas especially—manufacturing the most popular and lone motor-bike brand `Rajdoot’, a heart-oriented hospital, and the ‘Eicher’ brand of tractor.

The UB Group

• This group is amongst the oldest and the leading industrial houses of India with its traditional interest in the alcoholic drinks sector. Of late, it has also started diversifying in the areas such as airlines, infrastructure, hospitality, and real estate segments.

The Firodias

• Being one of the oldest industrial houses the Firodias have attained specialization in the field of manufacturing automobiles ( four-wheelers and two-wheelers) generators sets, etc.

The Godrej

• Amongst the top, oldest, and reputed industrial houses of the country, this organization has contributed in the areas of detergents, refrigeration, almirahs, furniture, air-conditioning, and lock industries providing the highest of the standards.

The Ambanis (The Reliance)

• Though the group is now divided between two brothers, the industrial house is considered rags to riches story and represents the rise of a new entrepreneurial class in the country. It has paraffin and synthetic yarn as its traditional interests; today it has diversified in more than a dozen traditional and new industrial areas such as power, petroleum, textile, garments, hospitality, telecommunication, pharmaceuticals, software, banking, insurance, etc.

The Kirloskars

• This industrial house is famous for manufacturing high-class heavy and light machine tools. it has a place of pride in locomotion. The credit for producing India’s first diesel pump set goes to this industrial house. it has brought about a revolution in farm mechanization by manufacturing India’s first tractor. Its compressors are known for high-quality performance. It is also producing cars in collaboration with Toyota.

The Infosys

• The main industries of this house are electronics and software for which it is a well-reputed house. Besides this house is making a significant contribution in the fields of education and social work.

The Wipro

• The doyen of the sunrise industries, this industrial house of India is primarily involved in the field of software development and export including the production of computer peripherals. This is also a leading company in the field of business process outsourcing (BPO).

The Bharati

• Bharti Enterprises was founded by Sunil Bharti Mittal in the year 1976. The company has its headquarters in New Delhi and is operational in 16 countries across Africa and Asia. The company has businesses in the field of telecommunications, agribusiness, financial services, and manufacturing. It has its presence in many sectors but its largest revenue comes from the telecom industry. Some international companies like Singtel, IBM, Ericsson, Nokia Siemens, and Alcatel-Lucent are the current key partners of the company in telecom. Its charitable arm, the Bharti Foundation is reaching out to 2,40,000 students and engaging 8,000 teachers across 13 Indian states to revolutionize the education sector.

The Becon

• The main field of activity is Biotechnology. Although a comparatively newcomer in the industrial field, It has carved a niche for itself.

The Ranbaxy

• This is among the leading drug and pharmaceutical industries of India, having a reputation of international standards. The industrial house has been an inspiration for a great number of new drug-makers in the country.

The Thapars

• This house is famous for paper, sugar, and some allied industries.

The Jagjit Group

• This industrial house is famous for textiles and sugar industries apart from distilleries.

The Sarabhais

• This industrial house is mainly concerned with the drugs and pharmaceutical industries for which they are renowned all over the world.

Hamdard

• This industrial house is has done a pioneer work in the Unani tradition of medicines in India and has the high tradition of medicines in India and has the high tradition of preserving, pursuing, and propagating this stream of medicines.

The Dabur

• Its primary activity is the manufacturing of Ayurvedic medicines for which it has earned a name for itself.

The Baidhyanath

• Like the Dabur, this industrial house is also known to preserve and propagate Ayurvedic medicines and is quite renowned in this field.

Manipal Group

• Manipal Group was founded in the year 1953. Manipal Group provides education and healthcare services in India and internationally through its subsidiaries. The group has been imparting world-class education for over six decades. Manipal Healthcare manages 11 hospitals including 8 teaching hospitals, making it Asia’s largest healthcare management group. MNE Technologies Pvt Ltd is the only Asian group of companies solely dedicated to providing integrated biomedical equipment maintenance and management.

The Oberois

• This industrial house is well known for its mark in the hospitality industry. It has built high-class hotels in different parts of India and in different countries in the world.

The Arya Vaidyashala

• This industrial house is known as the harbinger of the Ayurvedic tradition in India and also runs a hospital dealing with Ayurvedic treatment and naturopathy.

The Jaypee

• This is one of the major real estate and construction companies of India which has earned the reputation of construction major roads and bridges within the stipulated time.

Bombay Dying

• Bombay Dyeing & Manufacturing Company Limited (Bombay Dyeing) is the flagship company of the Wadia Group, engaged primarily in the business of Textiles. Bombay Dyeing is one of India’s largest producers of textiles.

The Arvind Mills

• Arvind Limited (formerly Arvind Mills) is a textile manufacturer and the flagship company of the Lalbhai Group. This company is one of the largest producers of Jeans cloth and supplies this cloth to almost all the major brands in the world.

The Modi

• Gujarmal Modi founded the Modi Group. this is also one of the oldest industrials houses in India. The famous industrial town of Modinagar in Uttar Pradesh owes its origin and growth to this industrial house. the main industries are set up by this industrial house are textiles, ready-made garments, carpets, sugar, pharmaceuticals, tyres and tubes, hospitality, etc.

The Sriram

• This house has a wide variety of industries which include textiles, ready-made garments, fertilizers, electricity, home appliances, generator sets, pharmaceuticals, hospitality, etc.

The Singhania

• This is also one of the oldest industrial house of India. The main industry run by this house are textiles, pharmaceuticals, machine tools, tyres and tubes, and entertainment.

The Ansals

• The Ansals are one of the largest and oldest real estate developers and their activities can be seen in most of the cities of India.

The Pioneer

• This company is doing a pioneer job in the development of high-yielding varieties of seeds and is promoting hybrid seed-based farming in India. This company is also credited with producing different types of pesticides and herbicides.

The Pantnagar

• This company is also producing better seeds and helps in the success of the green revolution. Apart from seeds, this company produces various pesticides and herbicides.

The ACC

• This is the organization of cement-producing companies and is known as Associated cement company (ACC). It produces high-quality cement which has great demand in the market. The company has contributed a lot in boosting the construction activity in the country.

Hinduja Group

• Hinduja Group was founded in the year 1914 by Parmanand Deepchand Hinduja. It was founded in the year 1914. Its product range is Oil & Gas, Media & Telecom, Financial Services, ITES. It is headquartered in London, United Kingdom. Companies under this group are involved in a wide range of activities including foundries, import-export, trading, motor vehicles, banking, call centers, and healthcare, etc. It is one of the top 10 Business Groups in India.

• Mahindra Group 
  It was established in 1945 and headquartered in Mumbai, India, is a multinational conglomerate with operations across more than 100 countries. The group's diverse portfolio includes aerospace, agribusiness, aftermarket, automotive, components, construction equipment, defense, energy, farm equipment, finance and insurance, industrial equipment, information technology, leisure and hospitality, logistics, real estate, retail, and two-wheelers. 
• Renowned as one of India's most esteemed industrial houses, Mahindra Group leads the market in utility vehicles and tractors within the country. The group is organized into six Strategic Business Units: Automotive; Farm Equipment; Infrastructure; Trade and Financial Services; Information Technology; and Automotive Components (Systech).

TVS Group 

• It was founded in 1911 by T. V. Sundaram Iyengar and headquartered in Madurai, is a leading supplier of automotive components in India and one of the nation's most respected business groups.
• The group currently encompasses more than 50 companies operating in a wide range of industries, from two-wheeler and automotive component manufacturing to automotive dealerships, finance, and electronics.

Conclusion

Frequently Asked Questions (FAQs) of Industrial Houses & Complexes including Public Sector Undertakings

What is the difference between a conglomerate and an industrial house in India?

A conglomerate is a multi-industry company, overseeing multiple business entities in entirely different industries. An industrial house, or business group, is a public or private structure business that forms a group of various companies dealing in different segments. Both conglomerates and industrial houses contribute significantly to India's economy and GDP.

How have family-owned businesses shaped the Indian economy?

Family-owned businesses have played a crucial role in the development of the Indian economy, with 90% of businesses in India being family-owned. These businesses have adapted to various changes in the economic environment, such as the 1956 industrial licensing or post-1991 market reforms, to continue their growth and maintain their dominance in the market.

Can you name some of the oldest and most prominent industrial houses in India?

Some of the oldest and most prominent industrial houses in India include the Tata, Birla, Goenka, Bajaj, Escorts, UB Group, Firodias, Godrej, Ambanis (Reliance), and Kirloskars.

How has the growth of the IT industry in India affected the prominence of industrial houses?

The growth of the IT industry in India has led to the emergence of new industrial houses, such as Infosys and Wipro. These companies have become major players in the software development and export sector and have contributed significantly to India's economic growth.

How have the 1991 economic reforms in India impacted the growth of industrial houses?

The 1991 economic reforms in India accelerated the growth of industrial houses by abolishing industrial licensing, allowing free cross-border movement of capital, and opening up sectors such as banking, infrastructure, and telecom for private sector participation. This led to the rapid growth of business groups such as Bharti, Adani, GMR, HDFC, and the Jaypee group, among others.