Unit III We use various items to satisfy our...

Unit IIIUnit IIIUnit IIIUnit IIIUnit IIIChapter 8

MANUFACTURING

INDUSTRIES

We use various items to satisfy our needs.Agricultural products like wheat, rice, etc. areto be processed into flour, husked rice beforewe consume these. But besides bread and rice,we also require clothes, books, fans, cars,medicines, etc. and these are manufactured invarious industries. In modern times industrieshave become very important part of aneconomy. They provide employment to largelabour force and contribute significantly in thetotal national wealth/income.

TTTTTypes ofypes ofypes ofypes ofypes of Industries Industries Industries Industries Industries

Industries are classified in a number of ways.On the basis of size, capital investment andlabour force employed, industries areclassified as large, medium, small scale, andcottage industries. On the basis of ownership,industries are categorised as :(i) public sector, (ii) private sector, and (iii) jointand cooperative sector, Public sectorenterprises are government/state controlledcompanies or corporations funded bygovernments. Industries of strategic andnational importance are usually in the publicsector. Industries are also classified on thebasis of the use of their products such as :(i) basic goods industries, (ii) capital goodsindustries (iii) intermediate goods industries,and (iv) consumer goods industries.

Another method of classifying industriesis on the basis of raw materials used by them.Accordingly, these can be : (i) agriculture-based industries, (ii) forest-based industries,( i i i ) mineral-based industries, and(iv) industrially processed raw material-based industries.

Another common classification ofindustries is based on the nature of themanufactured products. Eight classes ofindustries, thus identified are : (1) MetallurgicalIndustries, (2) Mechanical EngineeringIndustries, (3) Chemical and Allied Industries,(4) Textile Industries, (5) Food ProcessingIndustries, (6) Electricity Generation,(7) Electronics and (8) Communication Industries.Sometimes, you also read about foot looseindustries. What are these? Have they anyrelationship with raw material location or not?

86 India : People and Economy

Market

Markets provide the outlets for manufacturedproducts. Heavy machine, machine tools, heavychemicals are located near the high demand areasas these are market orientated. Cotton textileindustry uses a non-weight-losing raw materialand is generally located in large urban centre,e.g. Mumbai, Ahmedabad, Surat, etc. Petroleumrefineries are also located near the markets as thetransport of crude oil is easier and severalproducts derived from them are used as rawmaterial in other industries. Koyali, Mathura andBarauni refineries are typical examples. Ports alsoplay a crucial role in the location of oil refineries.

Transport

Have you ever tried to find out the reasonsfor the concentration of industries in Mumbai,Chennai, Delhi and in and around Kolkata?It was due to the fact that they initiallybecame the nodal point having transportlinks. The industries shifted to interiorlocations, only when railway lines were laid.All major industrial plants are located on thetrunk rail routes.

Labour

Can we think of an industry without labour?Industries require skilled labour. In India,labour is quite mobile and is available in largenumbers due to our large population.

Historical Factors

Have you ever thought of the reasons foremerging Mumbai, Kolkata and Chennai asindustrial nodes? These locations were greatlyinfluenced by our colonial past. During theinitial phase of colonisation, manufacturingactivities received new impetus provided by theEuropean traders. Places like Murshidabad,Dhaka, Bhadohi, Surat, Vadodara, Kozhikode,Coimbatore, Mysore, etc. emerged as importantmanufacturing centres. In the subsequentindustrial phase of colonialism, thesemanufacturing centres experienced rapidgrowth due to competition from the goodsmanufactured in Britain and the discriminatorypolicies of colonial power.

Location of IndustriesLocation of IndustriesLocation of IndustriesLocation of IndustriesLocation of Industries

Can you guess the reasons for the location ofiron and steel industry in eastern and southernIndia? Why is there no iron and steel industryin U.P., Haryana, Punjab, Rajasthan andGujarat?

Location of industries is influenced byseveral factors like access to raw materials,power, market, capital, transport and labour,etc. Relative significance of these factors varieswith time and place. There is strong relationshipbetween raw material and type of industry. Itis economical to locate the manufacturingindustries at a place where cost of productionand delivery cost of manufactured goods toconsumers are the least. Transport costs, to agreat extent, depend on the nature of rawmaterials and manufactured products. A briefdescription of factors influencing the locationof industries are given below:

Raw Materials

Industries using weight-losing raw materials arelocated in the regions where raw materials arelocated. Why are the sugar mills in India locatedin sugarcane growing areas? Similarly, thelocations of pulp industry, copper smelting andpig iron industries are located near their rawmaterials. In iron and steel industries, iron oreand coal both are weight-losing raw materials.Therefore, an optimum location for iron and steelindustries should be near raw material sources.This is why most of the iron and steel industriesare located either near coalfields (Bokaro,Durgapur, etc.) or near sources of iron ore(Bhadravati, Bhilai, and Rourkela). Similarly,industries based on perishable raw materials arealso located close to raw material sources.

Power

Power provides the motive force for machines,and therefore, its supply has to be ensuredbefore the location of any industry. However,certain industries, like aluminium andsynthetic nitrogen manufacturing industriestend to be located near sources of powerbecause they are power intensive and requirehuge quantum of electricity.

Manufacturing Industries 87

In the last phase of colonialism, the Britishpromoted few industries in selected areas. Thisled to larger spatial coverage by different typesof industries in the country.

Industrial Policy

India, being a democratic country aims atbringing about economic growth with balancedregional development.

Establishment of iron and steel industryin Bhilai and Rourkela were based on decisionto develop backward tribal areas of thecountry. At present, government of Indiaprovides lots of incentives to industries locatingin backward areas.

Major IndustriesMajor IndustriesMajor IndustriesMajor IndustriesMajor Industries

The iron and steel industry is basic to theindustrial development of any country. Thecotton textile Industry is one of our traditionalindustries. The sugar Industry is based on localraw materials which prospered even in theBritish period. Besides the more recentpetrochemical Industry and the IT industry willbe discussed in this chapter.

The Iron and Steel Industry

The development of the iron and steel industryopened the doors to rapid industrialdevelopment in India. Almost all sectors of theIndian industry depend heavily on the ironand steel industry for their basicinfrastructure. Can we make tools to be usedin agriculture without iron?

The other raw materials besides iron oreand coking coal, essential for iron and steelindustry are limestone, dolomite, manganeseand fire clay. All these raw materials are gross(weight losing), therefore, the best location forthe iron and steel plants is near the source ofraw materials. In India, there is a crescentshaped region comprising parts ofChhattisgarh, Northern Orissa, Jharkhand andwestern West Bengal, which is extremely richin high grade iron ore, good quality coking coaland other supplementing raw materials.

The Indian iron and steel industryconsists of large integrated steel plants as

well as mini steel mills. It also includessecondary producers, rolling mills andancillary industries.

Integrated Steel Plants

TISCO

The Tata Iron and Steel plant lies very close tothe Mumbai-Kolkata railway line and about240 km away from Kolkata, which is the nearestport for the export of steel. The riversSubarnarekha and Kharkai provide water tothe plant. The iron ore for the plant is obtainedfrom Noamundi and Badam Pahar and coal isbrought from Joda mines in Orissa. Coking coalcomes from Jharia and west Bokaro coalfields.

IISCO

The Indian Iron and Steel Company (IISCO) setup its first factory at Hirapur and later onanother at Kulti. In 1937, the Steel corporationof Bengal was constituted in association withIISCO and set up another iron and steel producingunit at Burnpur (West Bengal). All the threeplants under IISCO are located very close toDamodar valley coal fields (Raniganj, Jharia, andRamgarh). Iron ore comes from Singhbhum inJharkhand. Water is obtained from the BarakarRiver, a tributary of the Damodar. All the plantsare located along the Kolkata-Asansol railwayline. Unfortunately, steel production from IISCOfell considerably in 1972-73 and the plants weretaken over by the government.

Visvesvaraiya Iron and Steel Works Ltd. (VISL)

The third integrated steel plant, the VisvesvaraiyaIron and Steel Works, initially called the MysoreIron and Steel Works, is located close to an ironore producing area of Kemangundi in theBababudan hills. Limestone and manganese arealso locally available. But this region has no coal.At the beginning, charcoal obtained by burningwood from nearby forests was used as fuel till1951. Afterwards, electric furnaces were installedwhich use hydroelectricity from the Jog Fallshydel power project. The Bhadravati riversupplies water to the plant. This plant producesspecialised steels and alloys.


Fig. 8.1 : India – Iron and Steel Plants


Fig. 8.2

Fig. 8.3

Fig. 8.4

Fig. 8.5

Fig. 8.6

Fig. 8.7

Fig. 8.8


After independence, during the SecondFive Year Plan (1956-61), three new integratedsteel plants were set up with foreigncollaboration: Rourkela in Orissa, Bhilai inChhattisgarh and Durgapur in West Bengal.These were public sector plants underHindustan Steel Limited (HSL). In 1973, theSteel Authority of India Limited (SAIL) wascreated to manage these plants.

Rourkela Steel Plant

The Rourkela Steel plant was set up in 1959 inthe Sundargarh district of Orissa incollaboration with Germany. The plant waslocated on the basis of proximity to rawmaterials, thus, minimising the cost oftransporting weight losing raw material. Thisplant has a unique locational advantage, as itreceives coal from Jharia (Jharkhand) and ironore from Sundargarh and Kendujhar. TheHirakud project supplies power for the electricfurnaces and water is obtained from the Koeland Sankh rivers.

Bhilai Steel Plant

The Bhilai Steel Plant was established withRussian collaboration in Durg District ofChhattisgarh and started production in 1959.The iron ore comes from Dalli-Rajhara mine(Fig. 8.6), coal comes from Korba and Kargalicoal fields. The water comes from theTanduladam and the power from the KorbaThemal Power Station. This plant also lies onthe Kolkata-Mumbai railway route. The bulkof the steel produced goes to the HindustanShipyard at Vishakhapatnam.

Durgapur Steel Plant

Durgapur Steel Plant, in West Bengal, was setup in collaboration with the government of theUnited Kingdom and started production in1962. This plant lies in Raniganj and Jhariacoal belt and gets iron ore from Noamundi (Fig.8.7). Durgapur lies on the main Kolkata-Delhirailway route. Hydel power and water isobtained from the Damodar Valley Corporation(DVC).

Bokaro Steel Plant

This steel plant was set up in 1964 at Bokarowith Russian collaboration. This plant was setup on the principle of transportation costminimisation by creating Bokaro-Rourkelacombine. It receives iron ore from the Rourkelaregion and the wagons on return take coal toRourkela. Other raw materials come to Bokarofrom within a radius of about 350 km. Waterand Hydel power is supplied by the DamodarValley Corporation.

Other Steel Plants

New steel plants which were set up in theFourth Plan period are away from the mainraw material sources. All the three plants arelocated in South India. The Vizag Steel Plant,in Vishakhapatnam in Andhra Pradesh is thefirst port based plant which started operatingin 1992. Its port location is of advantage.

The Vijaynagar Steel Plant at Hospet inKarnataka was developed using indigenoustechnology. This uses local iron ore andlimestone. The Salem Steel Plant in Tamil Naduwas commissioned in 1982.

Fig 8.9 : Production of Finished Steel

Apart from these major steel plants, thereare more than 206 units located in differentparts of the country. Most of these use scrapiron as their main raw material, and process itin electric furnaces.


The Cotton Textile Industry

The cotton textile industry is one of thetraditional industries of India. In the ancientand the medieval times, it used to be only acottage industry. India was famous worldwidefor the production of muslin, a very fine varietyof cotton cloth, calicos, chintz and otherdifferent varieties of fine cotton cloth. Thedevelopment of this industry in India was dueto several factors. One, it is a tropical countryand cotton is the most comfortable fabric for ahot and humid climate. Second, large quantityof cotton was grown in India. Abundant skilledlabour required for this industry was availablein this country. In fact, in some areas thepeople were producing cotton textiles forgenerations and transferred the skill from onegeneration to the other and in the processperfected their skills.

Initially, the British did not encourage thedevelopment of the indigenous cotton textileindustry. They exported raw cotton to their millsin Manchester and Liverpool and brought backthe finished products to be sold in India. Thiscloth was cheaper because it was produced atmass scale in factories in U.K. as compared tothe cottage based industries of India.

In 1854, the first modern cotton mill wasestablished in Mumbai. This city had severaladvantages as a cotton textile manufacturing

Fig 8.10 : Production of Cotton Textile

Handloom Cotton Textile IndustrySpinning yarn in powerloom

centre. It was very close to the cotton producingareas of Gujarat and Maharashtra. Raw cottonused to be brought to Mumbai port to betransported to England. Therefore, cotton wasavailable in Mumbai city itself. Moreover,Mumbai even then was the financial centre andthe capital needed to start an industry wasavailable there. As a large town, providingemployment opportunities attracted labour inlarge numbers. Hence, cheap and abundantlabour too was available locally. The machineryrequired for a cotton textile mill could be directly


Fig. 8.11 : Cotton Textile Industries


imported from England. Subsequently, twomore mills, the Shahpur Mill and the Calico Millwere established in Ahmedabad. By 1947, thenumber of mills in India went up to 423 butthe scenario changed after partition, and thisindustry suffered a major recession. This wasdue to the fact that the most of the good qualitycotton growing areas had gone to West Pakistanand India was left with 409 mills and only 29per cent of the cotton producing area.

After Independence, this industrygradually recovered and eventually flourished.In 1998, India had 1782 mills; of which, 192mills were in the public sector and 151 mills inthe cooperative sector. The largest number, thatis, 1,439 mills were in the private sector.

The cotton textile industry in India can bebroadly divided into two sectors, the organisedsector and the decentralised sector. Thedecentralised sector includes cloth producedin handlooms (including Khadi) andpowerlooms. The production of the organisedsector has drastically fallen from 81 per cent inthe mid-twentieth century to only about 6 percent in 2000. At present, the powerlooms onthe decentralised sector produce more than 59per cent and the handloom sector producesabout 19 per cent of all cotton cloth producedin the country.

Cotton is a “pure” raw material which doesnot lose weight in the manufacturing process.so other factors, like, power to drive the looms,labour, capital or market may determine thelocation of the industry. At present the trend isto locate the industry at or close to markets, asit is the market that decides what kind of clothis to be produced. Also the market for thefinished products is extremely variable,therefore, it becomes important to locate themills close to the market.

After the first mills were set up in Mumbaiand Ahmedabad in the second half of thenineteenth century, the cotton textile industryexpanded very rapidly. The number of unitsincreased dramatically. The Swadeshimovement gave a major impetus to the industryas there was a call for boycotting all Britishmade goods in favour of Indian goods. After1921, with the development of the railwaynetwork other cotton textile centres expanded

rapidly. In southern India, mills were set upat Coimbatore, Madurai and Bangalore. Incentral India, Nagpur, Indore, Solapur andVadodara became cotton textile centres. Cottontextile mills were set up at Kanpur based onlocal investment. Mills were also set up atKolkata due to its port facilities. Thedevelopment of hydro-electricity also favouredthe location of the cotton textile mills away fromthe cotton producing areas. The rapiddevelopment of this industry in Tamil Nadu isthe result of the abundant availability of hydelpower for the mills. Lower labour costs atcentres like Ujjain, Bharuch, Agra, Hathras,Coimbatore and Tirunelveli also causedindustries to be located away from cottonproducing areas.

Thus, the cotton textile industry is locatedin almost every state in India, where one or moreof the locational factors have been favourable.The importance of raw materials has given wayto market or to a cheaper local labour force orit may be the availability of power.

Presently, the major centres of the cottontextile industry are Ahmedabad, Bhiwandi,Solapur, Kolhapur, Nagpur, Indore and Ujjain.All these centres are the traditional centres andare located close to the cotton producingregions. Maharashtra, Gujarat and Tamil Naduare the leading cotton producing states. WestBengal, Uttar Pradesh, Karnataka, and Punjabare the other important cotton textile producers.(Fig. 8.11)

Tamil Nadu has the largest number ofmills and most of them produce yarn ratherthan cloth. Coimbatore has emerged as themost important centre with nearly half the millslocated there. Chennai, Madurai, Tirunelveli,Tuticorin, Thanjavur, Ramanathapuram andSalem are the other important centres. InKarnataka, the cotton textile industry hasdeveloped in the cotton producing areas in thenorth-eastern part of the state. Davangere,Hubli, Bellary, Mysore and Bangalore areimportant centres. In Andhra Pradesh, thecotton textile industry is located in the cottonproducing Telengana region, where most of themills are spinning mills producing yarn.The important centres are Hyderabad,Secunderabad, Warangal and Guntur.


In Uttar Pradesh, Kanpur is the largestcentre. Some of the other important centres areModinagar, Hathras, Saharanpur, Agra andLucknow. In West Bengal, the cotton mills arelocated in the Hugli region. Howrah, Serampur,Kolkata and Shyamnagar are the importantcentres.

Production of cotton cloth increased almostfive times from 1950-51 to 1999-2000. Cottontextile has been facing tough competition fromsynthetic cloth. What are the other problems ofcotton textile industry in India?

Sugar Industry

The sugar industry is the second most importantagro-based industry in the country. India is thelargest producer of both sugarcane and canesugar and contributes about 8 per cent of thetotal sugar production in the world. Besides,khandasari and gur or jaggery are also preparedfrom sugarcane. This industry providesemployment for more than 4 lakh personsdirectly and a large number of farmers indirectly.Sugar industry is a seasonal industry becauseof the seasonality of raw materials.

Development of the industry on modernlines dates back to 1903, when a sugar millwas started in Bihar. Subsequently, sugar millswere started in other parts of Bihar and UttarPradesh. In 1950-51, 139 factories were inoperation producing 11.34 lakh tonnes ofsugar. The number of sugar factories rose to506 and production to 176,99 lakh tonnesin 2000-01.

Location of the Sugar Industry

Sugarcane is a weight-losing crop. The ratio ofsugar to sugarcane varies between 9 to 12 percent depending on its variety. Its sucrosecontent begins to dry during haulage after ithas been harvested from the field. Betterrecovery of sugar is dependent upon its beingcrushed within 24 hours of its harvesting.Sugar factories hence, are located within thecane producing regions.

Maharashtra has emerged as a leadingsugar producer in the country and producesmore than one-third of the total production ofthe sugar in the country. There are 119 sugar

mills in the state in a narrow belt extending fromManmad in the north to Kolhapur in the south.There are 87 mills in the cooperative sector.

Uttar Pradesh is the second largestproducer of sugar. The sugar factories areconcentrated in two belts – the Ganga-Yamunadoab and the tarai region. The major sugarproducing centres in the Ganga -Yamuna doabare Saharanpur, Muzaffarnagar, Meerut,Ghaziabad, Baghpat and Bulandshahrdistricts; while Kheri Lakhimpur, Basti, Gonda,Gorakhpur, Bahraich are important sugarproducing districts in the Tarai region.

In Tamil Nadu, sugar factories are locatedin Coimbatore, Vellore, Tiruvanamalai,Villupuram and Tiruchchirappalli districts.Belgaum, Bellary, Mandya, Shimoga, Bijapur,and Chitradurg districts are the major producersin Karnataka. The industry is distributed in thecoastal regions i.e. East Godavari, West Godavari,Vishakhapatnam districts and Nizamabad, andMedak districts of Telangana alongwith Chittoordistrict of Rayalseema.

The other States which produce sugar areBihar, Punjab, Haryana, Madhya Pradesh andGujarat. Saran, Champaran, Muzaffarnagar,Siwan, Darbhanga, and Gaya are the importantsugarcane producing districts in Bihar. Therelative significance of Punjab has declined,although Gurdaspur, Jalandhar, Sangarur,Patiala and Amritsar are major sugarproducers. In Haryana, sugar factories arelocated in Yamuna Nagar, Rohtak, Hissar andFaridabad districts. Sugar industry iscomparatively new in Gujarat. Sugar mills arelocated in the cane growing tracts of Surat,Junagarh, Rajkot, Amreli, Valsad andBhavnagar districts.

Petrochemical Industries

This group of industries has been growing veryfast in India. A variety of products come underthis category of industries. In 1960s, demandfor organic chemicals increased so fast that itbecame difficult to meet this demand. At thattime, petroleum refining industry expandedrapidly. Many items are derived from crudepetroleum, which provide raw materials formany new industries, these are collectively


known as petrochemical industries. This groupof industries is divided into four sub-groups:(i) polymers, (ii) synthetic fibres, (iii) elastomers,and (iv) surfactant intermediate. Mumbai is thehub of the petrochemical industries. Crackerunits are also located in Auraiya (UttarPradesh), Jamnagar, Gandhinagar and Hajira(Gujarat), Nagothane, Ratnagiri (Maharashtra),Haldia (West Bengal) and Vishakhapatnam(Andhra Pradesh).

Three organisations are working in thepetrochemical sector under the administrativecontrol of the Department of Chemicals andPetrochemicals. First is the Indian PetrochemicalCorporation Limited (IPCL), a public sectorundertaking. It is responsible for the manufactureand distribution of the various petrochemicals likepolymers, chemicals, fibres and fibreintermediates. Second is the Petrofils CooperativeLimited (PCL), a joint venture of the Governmentof India and Weaver’s Cooperative Societies. Itproduces polyester filament yarn and nylon chipsat its two plants located at Vadodara and Naldhariin Gujarat. Third is the Central Institute of PlasticEngineering and Technology (CIPET), involved inimparting training in petro-chemical industry.

Polymers are made from ethylene andpropylene. These materials are obtained in theprocess of refining crude oil. Polymers are used

as raw materials in the plastic industry. Amongpolymers, polyethylene is a widely usedthermoplastic. Plastic is first converted intosheets, powder, resin and pellets, and then usedin manufacturing plastic products. Plasticproducts are preferred because of their strength,flexibility, water and chemical resistance and lowprices. Production of plastic polymers started inIndia in the late fifties and the early sixties usingother organic chemicals. The National OrganicChemicals Industries Limited (NOCIL),established in private sector in 1961, started thefirst naphtha based chemical industry inMumbai. Later, several other companies wereformed. The plants located at Mumbai, Barauni,Mettur, Pimpri and Rishra are the majorproducers of plastic materials.

About 75 per cent of these units are insmall scale sector. The industry also usesrecycled plastics, which constitutes about 30per cent of the total production.

Synthetic fibres are widely used in themanufacturing of fabrics because of theirinherent strength, durability, washability, andresistance to shrinkage. Industriesmanufacturing nylon and polyester yarns arelocated at Kota, Pimpri, Mumbai, Modinagar,Pune, Ujjain, Nagpur and Udhna. Acrylic staplefibre is manufactured at Kota and Vadodara.


Though plastics have become inseparableitems in our daily use and they have affectedour life style. But due to its non-biodegradablequality it has emerged as the greatest threat toour environment. Hence, use of plastic is beingdiscouraged in different states of India. Do youknow how does plastic adversely affect ourenvironment?

Knowledge based IndustriesKnowledge based IndustriesKnowledge based IndustriesKnowledge based IndustriesKnowledge based Industries

The advancement in information technology hashad a profound influence on the country’seconomy. The Information Technology (IT)revolution opened up new possibilities ofeconomic and social transformation. The IT andIT enabled business process outsourcing (ITES-BPO) services continue to be on a robust growthpath. Indian software industry has emerged asone of the fastest growing sectors in the economy.Exports of the Indian software and services sectorwere Rs. 78,230 crore in 2004-05 which isapproximately 30-32 per cent increase from theprevious year. The software industry hassurpassed electronic hardware production. TheIndian government has created a number ofsoftware parks in the country.

The IT software and services industryaccount for almost 2 per cent of India’s GDP.India’s software industry has achieved aremarkable distinction for providing qualityproducts. A large number of Indian softwarecompanies have acquired international qualitycertification. A majority of the multinationalcompanies operating in the area of informationtechnology have either software developmentcentres or research development centres inIndia. However, in the hardware developmentsector, India is yet to make any remarkableachievements.

A major impact of this growth has been onemployment creation, which is almost doubledevery year.

Liberalisation, Privatisation, GlobalisationLiberalisation, Privatisation, GlobalisationLiberalisation, Privatisation, GlobalisationLiberalisation, Privatisation, GlobalisationLiberalisation, Privatisation, Globalisation(LPG) and Industrial Development in India(LPG) and Industrial Development in India(LPG) and Industrial Development in India(LPG) and Industrial Development in India(LPG) and Industrial Development in India

The new Industrial Policy was announced in1991. The major objectives of this policy wereto build on the gains already made, correct the

distortions or weaknesses that have crept in,maintain a sustained growth in productivityand gainful employment and attaininternational competitiveness.

Within this policy, measures initiated are :(1) abolition of industrial licensing, (2) free entryto foreign technology, (3) foreign investmentpolicy, (4) access to capital market, (5) opentrade, (6) abolition of phased manufacturingprogramme, and (7) liberalised industriallocation programme. The policy has three maindimensions: liberalisation, privatisation andglobalisation.

The industrial licensing system has beenabolished for all except six industries related tosecurity, strategic or environmental concerns. Atthe same time, the number of industries reservedfor public sector since 1956 have been reducedfrom 17 to 4. Industries related to atomic energy,substances specified in the Schedule of theDepartment of Atomic Energy as well as Railwayshave remained under the public sector. Thegovernment also has decided to offer a part ofthe shareholdings in the public enterprises tofinancial institutions, general public andworkers. The threshold limits of assets have beenscrapped and no industry requires priorapproval for investing in the delicensed sector.They only need to submit a memorandum inthe prescribed format.

In the new industrial policy, Foreign DirectInvestment (FDI) has been seen as a supplementto the domestic investment for achieving ahigher level of economic development. FDIbenefits the domestic industry as well as theconsumers by providing technologicalupgradation, access to global managerial skillsand practices, optimum use of natural andhuman resources, etc. Keeping all this in mind,foreign investment has been liberalised and thegovernment has permitted access to anautomatic route for Foreign Direct Investment.The government has also announced changesin the industrial location policies. Industries arediscouraged in or very close to large cities dueto environmental reasons.

The industrial policy has been liberalisedto attract private investor both domestic andmulti-nationals. New sectors like, mining,telecommunications, highway construction and


Fig. 8.12 : Software Technology Parks


management have been thrown open to privatecompanies. In spite of all these concessions,Foreign Direct Investment has not been up tothe expectation. There has been a big gapbetween approved and actual foreign directinvestment, even though the numbers of foreigncollaborations are increasing. Larger parts of thisinvestment have gone to domestic appliances,finance, services, electronics and electricalequipment, and food and dairy products.

Globalisation means integrating theeconomy of the country with the worldeconomy. Under this process, goods andservices along with capital, labour andresources can move freely from one nation toanother. The thrust of globalisation has beento increase the domestic and externalcompetition through extensive application ofmarket mechanism and facilitating dynamicrelationship with the foreign investors andsuppliers of technology. In Indian context, thisimplies: (1) opening of the economy to foreigndirect investment by providing facilities toforeign companies to invest in different fields ofeconomies activity in India; (2) removingrestrictions and obstacles to the entry of multi-national companies in India; (3) allowing Indiancompanies to enter into foreign collaborationin India and also encouraging them to set upjoint ventures abroad; (4) carrying out massiveimport liberalisation programmes by switchingover from quantitative restrictions to tariffs in

the first place, and then bringing down the levelof import duties considerably; and (5) insteadof a set of export incentives, opting for exchangerate adjustments for promoting export.

A breakup of foreign collaborationapproval reveals that the major share went tocore, priority sectors while infrastructural sectorwas untouched. Further, gap betweendeveloped and developing states has becomewider. Major share of both domestic investmentas well as foreign direct investment went toalready developed states. For example, out ofthe total proposed investment by the industrialentrepreneurs during 1991-2000 nearly one-fourth (23 per cent) was for industriallydeveloped Maharashtra, 17 per cent forGujarat, 7 per cent for Andhra Pradesh, andabout 6 per cent for Tamil Nadu while UttarPradesh, the state with the largest populationhas only 8 per cent. In spite of severalconcessions, seven north-eastern states couldget less than 1 per cent of the proposedinvestment. In fact, economically weaker statescould not compete with the developed states inopen market in attracting industrial investmentproposals and hence they are likely to sufferfrom these processes.

Industrial Regions in IndiaIndustrial Regions in IndiaIndustrial Regions in IndiaIndustrial Regions in IndiaIndustrial Regions in India

Industries are not evenly distributed in thecountry. They tend to concentrate on certainlocations because of the favourable locationalfactors.

Industrial Regions and DistrictsIndustrial Regions and DistrictsIndustrial Regions and DistrictsIndustrial Regions and DistrictsIndustrial Regions and Districts

Major Industrial Regions (8)1. Mumabi-Pune Region, 2. Hugli Region, 3. Bangalore-Tamil Nadu Region, 4. Gujarat Region,5. Chotanagpur Region, 6. Vishakhapatnam-Guntur Region, 7. Gurgaon-Delhi-Meerut Region, and8. Kollam-Tiruvantapuram Region.

Minor Industrial Regions (13)1. Ambala-Amritsar, 2. Saharanpur-Muzaffarnagar-Bijnor, 3. Indore-Dewas-Uijjain, 4. Jaipur-Ajmer,5. Kolhapur-South Kannada, 6. Northern Malabar, 7. Middle Malabar, 8. Adilabad-Nizamabad,9. Allahabad-Varanasi-Mirzapur, 10. Bhojpur-Munger, 11. Durg-Raipur, 12. Bilaspur-Korba, and13. Brahmaputra valley.

Industrial Districts (15)1. Kanpur, 2. Hyderabad, 3. Agra, 4. Nagpur, 5. Gwalior, 6. Bhopal, 7. Lucknow, 8. Jalpaiguri,9. Cuttack, 10. Gorakhpur, 11. Aligarh, 12. Kota, 13. Purnia, 14. Jabalpur, and 15. Bareilly.


Fig. 8.13 : India – Major Industrial Region


Several indices are used to identify theclustering of industries, important among themare : (i) the number of industrial units, (ii)number of industrial workers, (iii) quantum ofpower used for industrial purposes, (iv) totalindustrial output, and (v) value added bymanufacturing, etc.

Major industrial regions of the country aregiven below in some details (Fig. 8.13).

Mumbai-Pune Industrial Region

It extends from Mumbai-Thane to Pune andin adjoining districts of Nashik and Solapur.Besides, industrial development has beenrapid in Kolaba, Ahmednagar, Satara, Sangliand Jalgaon districts. Development of thisregion started with the location of cottontextile industry in Mumbai. Mumbai, withcotton hinterland and moist climate favouredthe location of cotton textile industry.Opening of the Suez Canal in 1869 providedimpetus to the growth of Mumbai port.Machineries were imported through this port.Hydro-electricity was developed in theWestern Ghat region to meet the requirementsof this industry.

With the development of cotton textileindustry, chemical industry also developed.Opening of the Mumbai High petroleum fieldand erection of nuclear energy plants addedadditional pull to this region.

Besides, engineering goods, petroleumrefining, petrochemicals, leather, syntheticand plastic goods, drugs, ferti l isers,electrical, shipbuilding, electronics, software,transport equipments and food industriesalso developed. Important industrial centresare Mumbai, Kolaba, Kalyan, Thane,Trombay, Pune, Pimpri, Nashik, Manmad,Solapur, Kolhapur, Ahmednagar, Satara andSangli.

Hugli Industrial Region

Located along the Hugli river, this regionextends from Bansberia in the north toBirlanagar in the south for a distance of about100 km. Industries also have developed inMednipur in the west. Kolkata-Haora from thenucleus of this industrial region. Historical,

geographical, economic and political factorshave contributed much to its development. Itdeveloped with the opening of river port onHugli. Kolkata emerged as a leading centre ofthe country. Later, Kolkata was connected withinterior parts by railway lines and road routes.Development of tea plantations in Assam andnorthern hills of West Bengal, the processing ofindigo earlier and jute later coupled with theopening of coalfields of the Damodar Valley andiron ore deposits of the Chotanagpur plateau,contributed to the industrial development of theregion. Cheap labour available from thicklypopulated part of Bihar, eastern Uttar Pradeshand Orissa also contributed to its development.Kolkata, being the capital city of British India(1773-1911), attracted the British capital. Theestablishment of first jute mill at Rishra in 1855ushered in the era of modern industrialclustering in this region.

The major concentration of jute industryis at Haora and Bhatapara. The partition of thecountry in 1947 adversely affected thisindustrial region. Cotton textile industry alsogrew along with jute industry, paper,engineering, textile machinery, electrical,chemical, pharmaceuticals, fertiliser andpetrochemical industries have also developedwithin this region. Factory of the HindustanMotors Limited at Konnagar and diesel enginefactory at Chittaranjan are landmarks of thisregion. Location of petroleum refinery at Haldiahas facilitated the development of a variety ofindustries. Important industrial centres of thisregion are Kolkata, Haora, Haldia, Serampur,Rishra, Shibpur, Naihati, Kakinara,Shamnagar, Titagarh, Sodepur, Budge Budge,Birlanagar, Bansberia, Belgurriah, Triveni,Hugli, Belur, etc. However, industrial growth ofthis region has slowed down in comparison toother regions. Decline of the jute industry is oneof the reasons.

Bangalore-Chennai Industrial Region

This region witnessed most rapid industrialgrowth in post-Independence period. Till 1960,industries were confined to Bangalore, Salemand Madurai districts but now they have spreadover all the districts of Tamil Nadu exceptViluppuram. Since, this region is away from the


coalfields, its development is dependent on thePykara hydroelectric plant, which was built in1932. Cotton textile industry was the first totake roots due to the presence of cotton growingareas. Along with cotton mills, loom industryspread very rapidly. Several heavy engineeringindustries converged at Bangalore. Aircraft(HAL), machine tools, telephone (HTL) andBharat Electronics are industrial landmarks ofthis region. Important industries are textiles,rail wagons, diesel engines, radio, lightengineering goods, rubber goods, medicines,aluminium, sugar, cement, glass, paper,chemicals, film, cigarette, match box, leathergoods, etc. Petroleum refinery at Chennai, ironand steel plant at Salem and fertiliser plantsare recent developments.

Gujarat Industrial Region

The nucleus of this region lies betweenAhmedabad and Vadodara but this regionextends upto Valsad and Surat in the south andto Jamnagar in the west. Development of thisregion is also associated with the location of thecotton textile industry since 1860s. This regionbecame an important textile region with thedecline of the cotton textile industry at Mumbai.Located in cotton growing area, this region hasdouble advantage of the proximity of rawmaterials as well as of market. The discovery ofoil fields led to the establishment of petrochemicalindustries around Ankleshwar, Vadodara andJamnagar. The port at Kandla helped in the rapidgrowth of this region. Petroleum refinery atKoyali provided raw materials to a host ofpetrochemical industries. The industrialstructure is now diversified. Besides, textiles(cotton, silk and synthetic fabrics) andpetrochemical industries, other industries areheavy and basic chemicals, motor, tractor, dieselengines, textile machinery, engineering,pharmaceuticals, dyes, pesticides, sugar, dairyproducts and food processing. Recently, largestpetroleum refinery has been set up at Jamnagar.Important industrial centres of this region areAhmedabad, Vadodara, Bharuch, Koyali,Anand, Khera, Surendranagar, Rajkot, Surat,Valsad and Jamnagar.

Chotanagpur Region

This region extends over Jharkhand, northernOrissa and western West Bengal and is knownfor the heavy metallurgical industries. Thisregion owes its development to the discovery ofcoal in the Damodar Valley and metallic andnon-metallic minerals in Jharkhand andnorthern Orissa. Proximity of coal, iron ore andother minerals facilitated the location of heavyindustries in this region. Six large integratediron and steel plants at Jamshedpur, Burnpur-Kulti, Durgapur, Bokaro and Rourkela arelocated within this region. To meet the powerrequirement, thermal and hydroelectric plantshave been constructed in the Damodar Valley.Densely populated surrounding regionsprovide cheap labour and Hugli region providesvast market for its industries. Heavyengineering, machine tools, fertilisers, cement,paper, locomotives and heavy electricals are someof the important industries in this region.Important centres are Ranchi, Dhanbad,Chaibasa, Sindri, Hazaribag, Jamshedpur,Bokaro, Rourkela, Durgapur, Asansol andDalmianagar.

Vishakhapatnam-Guntur Region

This industrial region extends fromVishakhapatnam district to Kurnool andPrakasam districts in the south. Industrialdevelopment of this region hinges uponVishakhapatnam and Machilipatnam ports anddeveloped agriculture and rich reserves ofminerals in their hinterlands. Coalfields of theGodavari basin provide energy. Ship buildingindustry was started at Vishakhapatnam in1941. Petroleum refinery based on importedpetroleum facilitated the growth of severalpetrochemical industries. Sugar, textile, jute,paper, fertiliser, cement, aluminium and lightengineering are principal industries of thisregion. One lead-zinc smelter is functioning inGuntur district. Iron and steel plant atVishakhapatnam uses the Bailadila iron ore.Vishakhapatnam, Vijayawada, Vijaynagar,Rajahmundry, Guntur, Eluru and Kurnool areimportant industrial centres.


Gurgaon-Delhi-Meerut Region

Industries located in this region have shownvery fast growth in the recent past. This regionis located far away from the mineral and powerresources, and therefore, the industries arelight and market-oriented. Electronics, lightengineering and electrical goods are majorindustries of this region. Besides, there arecotton, woollen and synthetic fabrics, hosiery,sugar, cement, machine tools, tractor, cycle,agricultural implements, chemical andvanaspati industries which have developed onlarge scale. Software industry is a recentaddition. To the south lies the Agra-Mathuraindustrial area which specialises in glass andleather goods. Mathura with an oil refinery isa petrochemical complex. Among industrialcentres, mention be made of Gurgaon, Delhi,Shahdara, Faridabad, Meerut, Modinagar,Ghaziabad, Ambala, Agra and Mathura.

Kollam-Tiruvanantapuram Region

This industrial region is spread overT iruvanantapuram, Kollam, Alwaye,Ernakulam and Alappuzha districts.Plantation agriculture and hydropowerprovide industrial base to this region. Locatedfar away from the mineral belt of the country,agricultural products processing and marketoriented light industries predominate theregion. Among them, cotton textile, sugar,rubber, matchbox, glass, chemical fertiliser andfish-based industries are important. Foodprocessing, paper, coconut coir products,aluminium and cement industries are alsosignificant. Location of petroleum refinery atKochchi has added a vista of new industries tothis region. Important industrial centres areKollam, Tiruvanantapuram, Alluva, Kocchi,Alappuzha, and Punalur.

EXERCISESEXERCISESEXERCISESEXERCISESEXERCISES

1. Choose the right answers of the following from the given options.

(i) Which is not a factor of industrial location?

(a) Market (c) Population Density

(b) Capital (d) Power

(ii) The earliest Iron and Steel Company to be established in India was:

(a) IISCO

(b) TISCO

(c) Visvesvaraiya Iron and Steel Works

(d) Mysore Iron and Steel Works.

(iii) The first modern cotton mill was established in Mumbai because:

(a) Mumbai is a port

(b) It is located near cotton growing area

(c) Mumbai was the financial centre

(d) All of the above.

(iv) The nucleus of the Hugli Industrial Region is:

(a) Kolkata-Haora (c) Kolkata-Medinipur

(b) Kolkata-Rishra (d) Kolkata-Konnagar


(v) Which one of the following is the second largest producer of sugar:

(a) Maharashtra (c) Punjab

(b) Uttar Pradesh (d) Tamil Nadu

2. Answer the following questions in about 30 words.

(i) Why do you think that the iron and steel industry is basic to the industrialdevelopment of any country?

(ii) Name the two sectors of the cottage textile industries. How are theydifferent?

(iii) Why is the sugar industry a seasonal industry?

(iv) What is the raw material base for the petrochemical industry? Name someof the products of this industry.

(v) What is the major impact of Information Technology (IT) revolution in India?

3. Answer the following questions in about 150 words.

(i) How did the Swadeshi movement give a major impetus to the cotton textilesindustry?

(ii) What do you understand by liberalisation, privatisation and globalisation?How have they helped industrial development in India?

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