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Classification of Industries

Classification of Industries


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Published by: Bhagyashree Dhimmar on Mar 29, 2011
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Classification of Industries


A leading, industrially advanced developing country, India has large, medium and small industrial units of production in almost all branches of the industry. Since the time of the independence in 1947, a significant feature of the Indian economy has been the rapid growth of the small industry sector. The small industry sector is considered to have a major role in the Indian economy due to its 40 percent share in the national industrial output along with an 80 percent share in industrial employment and nearly 35 percent share in exports. The small scale industries sector has been assigned an important role in the industrialization of the country by the previous and current governments of India. There are no clear official definitions of small scale industry. Small scale industries are usually distinguished from the large-scale and medium-scale industries on the basis of size, capital resources and labor force in the units. At one time the government of India had grouped small-scale industrial undertakings into two categories - those using power but employing less than 50 persons and those not using power and employing less than 100 persons. However, capital investment on plant and machinery by units is considered as main criteria for distinguishing between the large and small industries. An industrial unit can be classified as a small-scale unit only if it meets the capital investment limits set by the government of India (GoI)

 USE based

 Process on product  Capital investment  Input  Ownership

Fertilizer is regarded as basic input for the agriculture. these are industries which provide bases for development of other industries. equipment or tools.  CAPITAL GOODS INDUSTRIES: Capital goods industries are those industries which produce machinery. They are used to produce consumer goods (and other goods) and services.e.g. oil and electricity are also regarded as basic industries because growth of modern industry depends on the supply of these vital inputs. Coal. they require heavy capital investment E.Classification of Industries  Pollution control board of India • Use Based Classification • • • • Basic industries Capital Goods industries Intermediate Goods industries Consumer Goods industries  BASIC INDUSTRIES: Basic industries are those industries which provide essential inputs for the development of other industries and the economy. A capital good is one which is instrumental in producing other goods or services. In other words. The capital goods industries are capital intensive in nature. For example. Hand tools and machine tools. specialized equipments. the iron and steel industry forms a basis for the development of the engineering industry.  INTERMEDIATE GOODS INDUSTRIES: [2] .. Electric Motors. The capital goods do not directly serve any consumption requirement. Heavy Vehicles etc. i.

Consumer durables. Consumer non-durables are those goods which are used up at once or within a relatively short period. soap. cigarette. E. Tyers & Tubes. • Consumer Durable Serve the consumer over relatively long periods. Bolts. • Secondary.g. like car. bicycle.Classification of Industries Intermediate goods are goods which have already undergone manufacturing process but which form inputs for other industries as material for further processing. television. from the land or sea. electric fan. Mining. • Classification Based On Process On Product • Primary. like food stuffs. • Quaternary PRIMARY INDUSTRY:  These extract raw materials. on the other hand. part or component. [3] . nuts. elc. spring Metal etc  CONSUMER GOODS INDUSTRIES: The consumer goods industries are those industries the output of which serve the final consumption requirements. farming and fishing. refrigerator. electric bulb. forestry. screws. etc. Cotton Spinning. • Tertiary. The consumer goods may be broadly classified into Consumer Durables and Consumer Non-durables. quarrying. A distinguishing characteristic of the consumer durables is that their life or service may be extended by repairs. Manmade fibers. which are natural products untreated by people. • Consumer Non-durable Goods which are used up at once or within a relatively short periods. serve the consumers over a relatively long period.

office. of any class of the rural population.  VILLAGE INDUSTRIES: A village industry means any industry which forms the normal occupation. According to the Planning Commission. Shell are involved in all four.  TERTIARY INDUSTRY : Provide services for people. • Classification Based On Capital Investment • Tiny • Small • Medium • Large • Very Large . in the main.1 –10 Crore . village industries are those small industries which are. whole-time.g. shops. e.10 – 100 Crore . whether. e. R & D industries now found in Science Parks Some companies. The small-scale industries located in village areas. The employment provided by the [4] .25-100 lakh . thus.g. an integral part of the village economy. come under the village industries category.Over 100 Crore Flow Home industry → Cottage Industry → Tiny industry → Small scale industry → Medium scale industry → Large scale industry → Very large scale industry.  QUATERNARY INDUSTRY: These are high tech.Classification of Industries  SECONDARY INDUSTRY : These manufacture or process raw materials into something different. These industries increase as countries and people become wealthier. banking.25 lakh . education.

 COTTAGE INDUSTRY: A cottage industry (also called the Domestic system) is an industry – primarily manufacturing – which includes many producers. For tiny it is Rs [5] .Classification of Industries village industries is mainly seasonal. working from their homes. Ban and Rope Making.5 million. Handicrafts .g. Leather and Hides Tanning. Rs 7. Kohlu(Village Oil Presses ). ancillary units and export – oriented units to Rs 6 million. The first effort in the direction of developing village industries and of reviving the old industries started with the Swadeshi movement launched by Mahatma Gandhi. The business operators would travel around. and the seasons vary from industry to industry as well as from area to area. Such limits in respect of "TINY" ENTERPRISES would now be increased from the present Rs 200 thousand to Rs. or typically to ship to another market. delivering it to people who would work on them.  TINY INDUSTRIES: Government have already announced increase in the investment limits in plant and machinery of small scale industries. typically part time. lace-making or household manufacturing. 500 thousand. Gur and Khandsari. Limit in plant and machinery for determining the status of SSI/Ancillary units as on date is Rs 10 million. irrespective of location of the unit. Handloom Weaving. Cottage industries were very common in the time when a large proportion of the population was engaged in agriculture. The term originally referred to home workers who were engaged in a task such as sewing. and Rs 200 thousand respectively. E. buying raw materials. and then collecting the finished goods to sell. because the farmers (and their families) often had both the time and the desire to earn additional income during the part of the year (Winter) when there was little farming work to do.Shoes and Leather Goods Manufactures.

resources and local self sufficiency Removes regional discrepancies Integration with large sector  MEDIUM-SCALE INDUSTRIES: [6] . Surgical Instruments. the size and scope of the small scale industries sector has been considerably widened.g. Nuts and Bolts. Dyeing. The socio-economic significance of the role of small-scale industries in relation to the economic development of the country has been more fully realized in the postindependence period. Consequent upon the revision of the definition of the small-scale industry. Radio Assembling Advantages of Small scale industry: • • • • Provide employment opportunities Promoting local talent. Plastic Goods. Electrical Goods. Paints and Varnishes. Cotton Ginning and Oilseed Crushing.  SMALL SCALE INDUSTRIES: The small scale industries sector has progressively acquired a prominent place in the development activities of the country. Washing and Finishing.Classification of Industries 2. E. It is reflected in the two Industrial Policy Resolutions of the Government of India adopted in 1948 and 1956 as well as in the progressive allocations made for the development of this vital sector in the Five-Year Plans. Agricultural Implement.5 million and for Small Scale Service and Business Enterprises(SSSBE) Rs 500 thousand. Calico Printing. thus enabling a large number of industrial units to avail themselves of increased assistance and facilities. Umbrella Ribs.

financial.g. low ordering cost. Automobile Parts. The definition has to be notified by the SSI Ministry for it to become operational "The proposal for having a definition for medium industry has been accepted by the SSI Ministry. man power and a have influx of capital assets.Classification of Industries Under the new definition. a medium-scale industry will be one with investment in plant and machinery of Rs 1 crore to Rs 10 crore. Indian economy is heavily dependent on these large industries for its economic growth. Nylon and Staple Spinning. High Discount. All the heavy industries of India like the Iron and steel industry. marketing and managerial economies • Input Based Classification [7] . However in recent years due to the IT boom and the huge amount of revenue generated by it the IT industry can also be included within the jurisdiction of the large scale industrial sector. The term ‘large scale industries’ is a generic one including various types of industries in its purview. Diesel-Oil Engine and Parts. Last but not the least the telecoms industry also forms and indispensable component of the large scale industrial sector of India. generation of foreign currency and for providing job opportunities to millions of Indians.  LARGE-SCALE INDUSTRIES: Large scale industries refers to those industries which require huge infrastructure. textile industry. Scooters. bulk purchase Expertise knowledge back up Wide distribution channels Integration with Technical. The Finance Ministry had already agreed to the SIDBI suggestion. Sewing-Machines and Parts. Advantages of Large scale industry: • • • • High bargaining power. Machine-Tools." a top Finance Ministry official said. E. automobile manufacturing industry fall under the large scale industrial arena.

• Based On Ownership • Central Government [8] ..  FOREST-BASED: Forest-based industries are those which use forest products as their major inputs. pesticides. like the plywood industry. paper industry. etc. are regarded as chemical-based industries as chemicals are their major or basic inputs. which depend mostly on marine products like fish are generally regarded as marine-based industries  METAL-BASED: Metal-based industries. paints and varnishes. as the name indicates. like the sugar.Classification of Industries • • • • • Agro based Forest based Marine based Metal based Chemical based  AGRO-BASED: An agro-industry is one which uses agricultural product as the major input. are those industries which are based on metals. etc  MARINE-BASED: Industries. aromatics. jute textile and cotton textile industries. like the engineering industries. drugs and medicines.  CHEMICAL-BASE: Industries like fertilizers. dye-stuffs.

g. Ministries are usually subordinate to the cabinet. E. Income tax Departments  PRIVATE SECTOR: [9] . GSPC  STATUTORY CORPORATIONS: Statutory Corporation are public enterprises into existence by a Special Act of the Parliament. GIDC (Gujarat Industrial Development Corporation)  GOVERNMENT DEPARTMENTS: A ministry (government department) is a department of a government. E..Classification of Industries • • • • • State Government Statutory Corporation Government departments Private Sector Joint Sector  CENTRAL GOVERNMENT: Central government industries are the industries which are controlled by central government.g. nuclear energy based power plant.g. The Act defines its powers and functions. rules and regulations governing its employees and its relationship with government departments. led by a minister. E. GNFC.  STATE GOVERNMENT: State government industries are the those industries which are controlled by State government E.g. . and prime minister. president or chancellor. Indian Railways . GSRTC (Gujarat State Road Transport Corporation).

Pulp and Paper (Paper manufacturing with or without pulping). Flour mills (excluding Domestic Aatta Chakki). Hotels and restaurants. Chlor alkali.g. Reliance Industries. [10] . E. Dyes and Dyeintermediates.g. E. Cotton spinning and weaving..Classification of Industries In economics. Malted food. E.g. TISCO.. ABG shipyard  JOINT SECTOR:  The principle of joint sector where in Government and private entrepreneurs join hands to establish new enterprises is indeed an old one for India. Fertilizer. AIR INDIA • Classification Based On Pollution Control Board In India • • • Red industries Orange industries Green industries  RED INDUSTRIES: Industries identified by Ministry of Environment & Forests. Pharmaceuticals (Basic) (excluding formulation). E. Automobile servicing and repairs stations. Manufacture of mirror from sheet glass and photo framing. Pesticides (Technical) (excluding formulation)  ORANGE INDUSTRIES: According to pollution control board 'Orange' represents moderately polluting industries. Government of India as heavily polluting and covered under Central Action Plan consider as Red Industries. the private sector is that part of the economy which is both run for profit and is not controlled by the state or government.g.

Bakery products. www. An illustrative list is provided. BIBLIOGRAPHY: 1. All those industries or processes which are not covered under the "Red" and/or "Orange" category. Rice mullors. as the case may be.org 2.in/classification.ask. www.com 5. biscuits. Supari (Betel nut) and masala grinding.delhigovt.in/Forms/rog. Groundnut decorticating (dry).nic. confectionery.pdf 4.gov. Industrial Economics by Francis Cherunilam [11] .dpcc. www. Steeping and processing of grains. Dal mills. www.htm 3. Cottage/Village category suggested under notification of the state government/union territory for issuance simplified NOC/Consent from Pollution Control Board/Pollution control committee.wikipedia. Chilling plants and cold storages.gpcb. Mineralised water.Classification of Industries  GREEN INDUSTRIES: Industries in Small Scale.

Classification of Industries [12] .

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