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Classification of Industries

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Classification of Industries - Lesson Summary

An industry is at the heart of a country’s economy; it includes manufacturing of goods, extraction of metals and provision of services. All the products available for use in the market are finished products, and are the result of some industry.

An industry can be classified on the basis of raw material, size and ownership.

Any material that we get from our natural surroundings to be used by an industry is called raw material. Plant- and animal-based products are used as raw material in food processing, vegetable oil, cotton textile, dairy and leather products, which are all examples of agro-based industries.

There is another type of industry that is based on the produce derived from forests. This is known as forest-based industry, and is responsible for producing paper, pharmaceuticals, furniture, equipment and buildings.

Industries are classified on the basis of ownership as well, i.e. privately owned, cooperative or state-owned. Privately owned industry means it is owned by an individual or a group like the Tata group. State-owned or public sector, means they are owned and operated by the government like Bharat Heavy Electricals Limited (BHEL).

A partnership between the state and an individual or a group is called the joint sector like Maharashtra Scooters Limited, which is a partnership between the Government of Maharashtra and the Bajaj Group.

The cooperative sector was formed to play a major role in the advancement of agriculture and related industries. In this sector, the state facilitates the producers, suppliers and even workers to own the enterprise like the Amul Dairy.

Industries are classified as large-scale or small-scale depending,  on the amount of capital invested, the number of people employed and the volume of production.

A small-scale industry needs a lesser amount of capital and technology inputs. A large-scale industry has automated production, and is capital- and manpower-intensive, requires heavy investment in plant and machinery. 


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