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Manufacturing Industries In India: Introduction

Updated on December 25, 2014

Introduction

Generally speaking, the process of transformation of natural resources into a finished, ready-to-use product, utilizing the full potential of the resources is called manufacturing. For example, sugarcane juice is made into sugar; wood pulp into paper; iron ore into steel, crude oil into petrol, diesel and shrubs, seeds, flora and fine chemicals into pharmaceuticals/drugs. One of the apparent yardsticks of a country's economic development is the extent of industrial development over the years.

India's industrial Development in Retrospect

The history of Indian industry takes us back to ancient time when only Indians were masters of weaving fine clothes and construction work of most elaborate form. Some of our historical monuments like Qutub Minar in Delhi, the Golconda Fort of Hyderabad and countless famous temples of South India are the living testimony of this fact. The traditional industries like painting, crafts, dyeing, engraving, weaving fine silks and cotton textiles were a great attraction and a matter of envy for foreign traders. However, this industry suffered a major setback as a consequence of the Industrial Revolution of Great Britain. The skilled manual labour was replaced by machines as the former could not compete with fine and low-cost manufacturing goods. Slowly the artisans and their skills gave way to modern industry.

Industrial Development in India

  1. The process of industrialization in India was mainly initiated by the British entrepreneurs with the establishment of cotton textiles and jute industries during the middle of 19th century. In fact, the real beginning of the modern industry is recognized by the setting up of the cotton textile industry at Bombay (now Mumbai) in 1854. Later, the Indian entrepreneurs entered the field and started cement and iron and steel industries.
  2. By the time the First World War broke out, India had some of the important industries like cotton, jute, cement, paper and iron and steel. However, the productivity was very low.
  3. The Second World War gave further impetus to Indian industries. The chemical industries, ordnance factories and aircraft companies were set up. A wide variety of engineering industries such as machine and tools for manufacturing and processing of cotton, tea and oil, electrical equipment and plastic industry flourished.
  4. The post-war period was marked by several ups and downs and overall decline in production. The Partition of the country in 1947 brought a severe blow to jute and cotton industry. Further, India lost her artisans and skilled labour that had to migrate to Pakistan.
  5. Immediately after Independence, the need for improving the industrial front was felt. It was realized that rapid industrialization was the only way to meet the situation. This led to the formation of Industrial Policy Resolution of April 6, 1948, in which the Government of India spelt out the policy which it proposed to pursue in the industrial field.
  6. Although since Independence the country's rapid progress in industrialization and diversification of industrial structure, as a result of the various Five-Year Plans, has been revolutionary in comparison to the preceding century of slow, uneven and haphazard growth, it has yet to overcome its greatest enemies, namely poverty, illiteracy and unemployment while also catering to the basic needs of its people. Hence, promoting its industries should be the country's first priority.

Need for Rapid Industrialization in India

  1. As per the latest Census, the Indian population has crossed the one billion mark. We have an average population density of 368 persons per sq km. Therefore, India cannot support its masses on agriculture alone. Besides, industrialization also promotes and supports agriculture.
  2. The problem of unemployment is increasing with increase in population. Industrialization is the only solution which provides employment on a large-scale.
  3. In the present Space Age, when the world is moving at a very fast pace, India has to keep up with the advanced technology and enter international trade which is possible only through rapid industrialization.
  4. India has to reduce dependence on foreign countries and become self-sufficient if it has to enter international competition.
  5. For national security purposes, India has to promote the industries which cater to defence departments. India has to maintain its balance of trade, that is, the total value of its exports should be greater than the total value of its imports.

All the above points emphasize the need to promote rapid industrialization in India.


Factors Affecting the Location Of Industries

Broadly speaking, the infrastructure of an industry depends on the following:

  1. Geographical factors involving raw materials, power supply, water, labour, transport, market, site and climate.
  2. Non-geographical factors like capital, government policies, bank and credit facilities and an efficient organization.

Geographical Factors Affecting The Location Of Industries

Raw materials are the resources supplied to industries for subsequent manufacturing processes. For example, agricultural products, minerals, timber, etc. At times the location of an industry is determined by the location of the raw materials required; for example, sugar industry is always located in the close vicinity of sugarcane fields, iron and steel industry is located near the iron ore and coalfields as the transport cost reduces considerably. Some industries such as toys, watches, etc., are not established in relation to their raw material requirement. They have a wide range of location depending on their demand in the market. These are called ‘foot-loose’ industries.

Power supply is the most important requirement of a modern industry. Thermal and hydroelectric power are the main sources of electric power. Most of the industries tend to concentrate near the source of energy. For example, the Tata Iron and Steel Industry at Jamshedpur and the aluminium producing unit at Korba (Chhattisgarh).

Water supply is vital for proper functioning of some industries like chemical, food processing and textiles. Hence, they are located near the sources of water like a river or canal. However, a serious consequence of this is the pollution of water resources, owing to industrial waste being invariably dumped into it. As a result, the water becomes unfit for any other purpose.

Transport is necessary to bring in the heavy raw material and supply of the finished product to its destination. The development of railways in India connecting the port towns with hinterland determined the location of many heavy industries around Calcutta (now Kolkata), Mumbai and Madras (now Chennai). Many industries are also located near navigable rivers, canals and sea coasts. Main aim is to save the cost of transportation.

The survey of market and demand is necessary setting up an industry. The entire process of manufacturing is useless until the finished product reaches its market. For example, woollens have a better market scope in the north which experiences extreme cold, while in south, which practically has no winter, the demand for the woollens will be nearly negligible. Secondly, nearness to market saves on transportation cost. Moreover, a ready market is essential for perishable commodities.

Labor is a very important requirement for any industry. Mostly small-scale industries tend to be set up near the areas where abundant supply of labor is available. In case of large-scale industry such as iron and steel, the whole township is set up in order to provide necessary supply of labor.

Climate affects the location of certain industries such as cotton textile industry. This needs warm and humid climate because the thread manufactured tends to break in dry climate. For example, Mumbai in Maharashtra is the most important cotton textile centre. The extreme type of climate is not suitable for development of industries as it affects the efficiency of the workers. Moderate climate is more congenial from this point of view.

Non-Geographical Factors Affecting The Location Of Industries

Capital is one of the most important factors while setting up an industry as most of the industries are capital-intensive and require a huge investment. Mostly financiers and capitalists are available in major cities. That is why most of the major cities are industrial centres.

Efficient and enterprising organization and management is essential for running an industry as it tackles labour problems and avoids strikes and lockouts. It is more important for a large-scale industry. Technical know-how is also necessary, especially in the highly specialized industry.

Mostly major cities have good banking and credit facilities which are necessary for setting up large-scale industries.

The government plays an important role in planning and location of industries besides solving problems of public, pollution and other disparities. Government also sets up industrial zones where it supplies land, water and electricity.

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© 2014 Rachit Bhargava

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    • Ahdilarum profile image

      Ahdilarum 2 years ago

      well, nicely written about the manufacturing industries. I liked it.

    • JYOTI KOTHARI profile image

      Jyoti Kothari 2 years ago from Jaipur

      Hi Rachit,

      Thanks for a well thought and well written article about the topic. Rated this up and useful.