Large scale industry employs large number of persons and consumes vast quantity of power. Huge capital investment is needed. Adequate transport facilities are essential for both collection of a variety of raw materials from different places and distribution of finished products to consuming centres. Besides transport facilities large scale industry needs skilled laborers to operate the machines. In some cases, raw materials needed may be imported and finished products may also be exported. Large scale industry also needs banking and insurance facilities. Iron and Steel industry, textile industry, manufacture of heavy machinery, locomotives and railway rolling stock, automobiles, shipbuilding are some examples of heavy industry. Large scale industries are able to undertake mass production of goods at low cost. Large scale industries need adequate supply of skilled laborers for operating machines.
Large scale industries have a tendency to cluster together because the product of one industry becomes raw material for another industry. Products of many industries are assembled to produce final products like automobiles. Thus setting up of large scale industry leads to growth of urban centres.
Industries may also be classified according to the nature of raw materials used by them. Thus we have agro-based industries which derive raw materials from agriculture and process them into a variety of products. Agro-based industries are flour mills, rice mills, textile mills, sugar mills, and factories processing tea, coffee and rubber. Mineral-based industries refine ores and produce metals. Iron and steel industry, aluminium industry are examples of mineral based industries. Lumbering, manufacture of paper and newsprint are forest-based industries. Dairying, Woolen Textile industry are examples of animal based industry.
Industries are also classified on the basis of nature of products manufactured by them. Thus we have consumer goods industries, which produce articles of consumption like textiles, food products, leather goods and etc. Capital goods industries are involved in producing machine for manufacture of consumer goods. Capital goods industry produces textile machinery, which are used for manufacture of textiles. Metallurgical and Engineering industries produce metals like steel, copper, aluminium which are used for making a variety of products. Chemical and allied industries manufacture chemicals, fertilizers, paints and varnishes, drug and pharmaceuticals, etc. needed by different types of consumers.
Another method of classifying industries is based on the type of management, which owns the industry. Cottage industry and small scale industry are usually owned by a single owner or a few partners joining together. The scale of operation is small and the success of the industry depends on the owners. The scope for development is limited as capital invested is small.
Co-operative management has been quite successful in the field of agro-based in countries like Denmark and New Zealand. There are co-operative sugar factories and textile mills in India. The capital is invested by the members of co-operative society and the profits are shared by them.
Large industries are managed by public limited companies, which issue shares to the public and raise capital. They also raise loan from banks and other financial institutions. The profits earned are paid to the shareholders on the basis of number of shares held by them. Such companies are included under Private Sector.
In some countries heavy industries are started by the Government in the public sector as it involves huge capital investment and participation of other countries for technical assistance or supply of machinery. Defense units manufacturing equipment needed for defense such as tanks, aircraft, ships, etc. are in the public Sector. In India heavy industries like iron and Steel, oil refining, fertilizers, transports equipment, machine tools are in the public sector.
Recent development has been the emergence of joint sector with both public sector and private sector participation. Such combined participation is likely to have advantages of both sectors and produce better results.
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