BACKBONE OF DEVELOPMENT

BACKBONE OF DEVELOPMENT

Manufacturing sector is considered the backbone of development in general and economic development in particular mainly because -

*   Manufacturing industries not only help in modernising agriculture, which forms the backbone of our economy, they also reduce the heavy dependence of people on agricultural income by providing them jobs in secondary and tertiary sectors.

*   Industrial development is a precondition for the eradication of unemployment and poverty from our country. This was the main philosophy behind public sector industries and joint sector ventures in India. It was also aimed at bringing down regional disparities by establishing industries in tribal and backward areas.

*   Export of manufactured goods expands trade and commerce and brings in much needed foreign exchange.

*   Countries that transform their raw materials into a wide variety of finished goods of a higher value are prosperous. India’s prosperity lies in increasing and diversifying its manufacturing industries as quickly as possible.

Agriculture and industry are not exclusive of each other. They move hand in hand. For instance, the agro-industries in India have given a major boost to agriculture by raising its productivity. They depend on the latter for raw materials and sell their products such as irrigation pumps, fertilizers, insecticides, pesticides, plastic and PVC pipes, machines and tools, etc. to the farmers. Thus, the development and competitiveness of the manufacturing industry has not only assisted agriculturists in increasing their production but also made the production processes very efficient.

In the present day world of globalisation, our industry needs to be more efficient and competitive. Self-sufficiency alone is not enough. Our manufactured goods must be at par in quality with those in the international market. Only then, will we be able to compete in the international market?

Source: This topic is taken from NCERT TEXTBOOK

CONTRIBUTION TO NATIONAL ECONOMY

CONTRIBUTION TO NATIONAL ECONOMY

Over the last two decades, the share of the manufacturing sector has stagnated at 17 percent of GDP – out of a total of 27 percent for the industry which includes 10 percent for mining, quarrying, electricity and gas.

This is much lower in comparison to some East Asian economies, where it is 25 to 35 percent. The trend of growth rate in manufacturing over the last decade has been around 7 percent per annum. The desired growth rate over the next decade is 12 percent. Since 2003, manufacturing is once again growing at the rate of 9 to 10 percent per annum. With appropriate policy interventions by the government and renewed efforts by the industry to improve productivity, economists predict that manufacturing can achieve its target over the next decade. The National Manufacturing Competitiveness Council (NMCC) has been set up with this objective.

Source: This topic is taken from NCERT TEXTBOOK

INDUSTRIAL LOCATION

INDUSTRIAL LOCATION

Industrial locations are complex in nature. These are influenced by the availability of raw material, labour, capital, power and market, etc. It is rarely possible to find all these factors available at one place. Consequently, manufacturing activity tends to locate at the most appropriate place where all the factors of industrial location are either available or can be arranged at a lower cost. After an industrial activity starts, urbanisation follows. Sometimes, industries are located in or near the cities. Thus, industrialisation and urbanisation go hand in hand. Cities provide markets and also provide services such as banking, insurance, transport, labour, consultants and financial advice, etc. to the industry. Many industries tend to come together to make use of the advantages offered by the urban centres known as agglomeration economies. Gradually, a large industrial agglomeration takes place.

Figure 6.1: Industry – Market Linkage

In the pre-Independence period, most manufacturing units were located in places from the point of view of overseas trade such as Mumbai, Kolkata, Chennai, etc. Consequently, there emerged certain pockets of industrially developed urban centres surrounded by a huge agricultural rural hinterland.

Figure 6.2: Ideal location of Industry

The key to the decision of the factory location is the least cost. Government policies and specialised labour also influence the location of the industry.

Source: This topic is taken from NCERT TEXTBOOK