2. Unit-1
• Meaning of industry and industrialization,
Significance of industrialization in India
• Factors hampering industrial development of
India/ Problems of industrialization
• Meaning and importance of location,
• Factors affecting industrial location
• Classification of industries
3. What is Industry?
• Industry is characterized by the conversion of
raw materials into final product with the help of
human efforts working with machines.
• Raw material human labor + machines
(process) final product
• Ex. Cotton weaving, bleaching, dying with
help of labor cloth = cotton textile industry
• Ex. Cement industry, Jute industry, oil industry,
ship building industry, sugar industry,
9. • Cotton is spun in small villages with very
simple tools such as Charkha or handloom, all
managed manually , it is called ‘Cottage
industry’
• Human efforts play an important role
10. Industrialization
• It refers to large scale modern industries which are
characterized by the use of-
- complex modern machinery
- A large number of people handling machines
- Factory system of production
- Mass production of goods and services at rapid speed
- Use of electricity or such power
- Wide domestic and often foreign markets for goods
produced in such factories or plants
11. Why industrialization in India?
1. Substitute for agricultural product:
- ex. Man-made fibers for cotton yarn, synthetic
rubber, plastic wrappings and materials
2. To reduce unemployment and poverty
3. Value addition process in India
- Using raw material in India only to prepare final
product, which increase income of people
4. To raise income of people engaged in agriculture
12. 5. Modernization of India's agricultural sector:
- By increase in the supply of industrial goods i.e.,
tractors, electrical engines, pump, hybrid seeds etc.
6. More self reliance
- Reduction in imports, less dependence in foreign
countries
7. To develop defense system
- Vast network of modern industries are required to
produce bombs, warships, missiles, rifles and guns
etc.
8. Decreasing importance of agriculture
13. Factors hampering rapid industrial
development of India
1. Economic factor:
- Lack of infrastructure facilities (transport,
communication, training insti., fin. Insti.)
- Lack of power
2. Socio-demographic environment:
- Rapid growth of population -> low per capita
income -> low rate of saving -> Low rate of
investment, poverty
- Variety of cast, religion, culture in India, only
certain castes and community will associate with
industry and commerce. Hindrance to
entrepreneurs
14. - Mentality on life is influenced by fatalism, theory
of Karma (deeds of past life)
3. Public administrative machinery:
- Lack of decision making ability, bureaucratic
delays, corruption, waste of various types of
resources and inefficient implementation of
developmental schemes.
4. International environment:
- Developed countries may put restrictions on
exports of capital goods and equipment for
countries like India
15. Industrial Location
Definition:
• Facility or Plant location is a place where a factory,
warehouse, office or any business enterprise is
built
• Selection of a location depends on the type of
business.
• The objective of selection of a location is to obtain
the maximum efficiency and effectiveness by
minimizing operating cost and achieve maximum
revenues.
16. Reasons for Plant/Facility Location
1. Starting new business
2. Introduction of new product or service
3. Insufficient capacity
4. Changes in technology
5. Mergers
6. Changes in input resources
7. Shifts in geographical demand may occur
8. govt.
17. Importance of Location Decision
1. Efficiency and effectiveness
• Efficiency and effectiveness are dependent
upon location.
• Location affect the operating cost such as
production and distribution costs.
• In service, it affects the demand and
effectiveness of the entire operation.
18. 2. Long term commitment
• Involve huge amount of capital.
3. Fixed Cost
• Involve the cost of constructing or purchasing new
plant, renovating (if renting).
4. Revenues
• Revenue may depend on having the facility near the
potential customer.
5. Variable Costs
• Cost of labor, and material also depend on location.
19. Factors influencing industrial location
1. Land and raw material:
- Land includes water, forest wealth, rivers, coastline,
wind etc.
- Rent of land
- Climate and transportation
- Ex. Moist climate suites textile industry of Mumbai
- Ex. Fishing industry-
coastline area,
paper industry- bamboo
tree area
20. 2. Labour:
- Skilled, semiskilled, unskilled
- Labor union
- Rate of wages
3. Capital and finance:
- Nearness of bank
- Rate of interest
- Relation with bank personnel
21. 4. Proximity of markets:
- Perishable and heavy products units should be
near to market
5. Availability of transport:
- water, road, rail
- Ex. Steel plant at Vishakhapattanam
6. Power:
- Coal for iron and steel
- Electricity at reasonable rates
- Other sources i.e., wind, water, solar etc.
