Industry
Industry refers to an economic activity that is concerned with production of goods, extraction
of minerals or the provision of services. Thus, we have iron and steel industry (production of
goods), coal mining industry (extraction of coal) and tourism industry (service provider).
Classification of Industries
Industries can be classified on the basis of raw materials, size and ownership.
1. Raw Materials:
Industries may be agro based, mineral based, marine based and forest based depending on
the type of raw materials they use.
Agro based industries use plant and animal based products as their raw materials. Food
processing, vegetable oil, cotton textile, dairy products and leather industries are examples
of agro-based industries.
Mineral based industries are primary industries that use mineral ores as their raw
materials. The products of these industries feed other industries. Iron made from iron ore
is the product of mineral based industry. This is used as raw material for the manufacture
of a number of other products, such as heavy machinery, building materials and railway
coaches.
Marine based industries use products from the sea and oceans as raw materials. Industries
processing sea food or manufacturing fish oil are some examples.
Forest based industries utilise forest produce as raw materials. The industries associated
with forests are pulp and paper, pharmaceuticals, furniture and buildings.
2. Size: It refers to the amount of capital invested, number of people employed and the volume
of production.
Based on size, industries can be classified into small scale and large scale industries.
Cottage or household industries are a type of small scale industry where the products are
manufactured by hand, by the artisans. Basket weaving, pottery and other handicrafts are
examples of cottage industry. Small scale industries use lesser amount of capital and
technology as compared to large scale industries that produce large volumes of products.
Investment of capital is higher and the technology used is superior in large scale industries.
Silk weaving and food processing industries are small scale industries. Production of
automobiles and heavy machinery are large scale industries.
3. Ownership: Industries can be classified into private sector, state owned or public sector,
joint sector and cooperative sector. Private sector industries are owned and operated by
individuals or a group of individuals. The public sector industries are owned and operated
by the government, such as Hindustan Aeronautics Limited and Steel Authority of India
Limited. Joint sector industries are owned and operated by the state and individuals or a
group of individuals. Maruti Udyog Limited is an example of joint sector industry. Co-
operative sector industries are owned and operated by the producers or suppliers of raw
materials, workers or both. Anand Milk Union Limited and Sudha Dairy are a success
stories of a co-operative [Link] of Agro-based industries:
Importance of Agro based industry
• Agro-based industries have to set up at rural areas where raw material may be available in
plenty – helps in the up-liftment of the rural economy.
• Provide rural population an opportunity for employment.
• Generate income and thereby improve economic condition of people – which in turn creates
potential for demand based industries.
• Provide an opportunity for the dispersal of industries instead of concentrating at a particular
place.
• Solve the problem of exploitation of farming community by traders and middlemen.
• Farmers could be assured of better price for their produce.
• Encourage to bring more and more areas under various crops – increase agricultural
production and improve nation’s economy.
• Transportation cost of agricultural products can be minimized – thereby help to minimize
cost of finished goods.
• Avoid wastage of perishable agricultural products.
• Help to develop backward areas based on their suitability for setting up agro-industries.
• Prevent migration of people from rural to urban areas.
TYPES OF AGRO-BASED INDUSTRIES
There are four types of agro-based industries.
1. Agro-produce processing units
They merely process the raw material so that it can be preserved and transported at cheaper
cost. No new product is manufactured. Ex: Rice mills, Dal mills, etc.
2. Agro-produce manufacturing units
Manufacture entirely new products. Finished goods will be entirely different from its original
raw material. Ex: Sugar factories, bakery, solvent extraction units, textile mills, etc.
3. Agro-inputs manufacturing units
Industrial units which produce goods either for mechanization of agriculture or for increasing
productivity come under this type. Ex: Agricultural implements, seed industries, pumpset,
fertilizer and pesticide units, etc.
4. Agro service centres
Agro service centres are workshops and service centres which are engaged in repairing and
servicing of pumpsets, diesel engines, tractors and all types of farm equipment.
