Types of industries on the basis of investment:
On the basis of investment, industries are classified into five types. They are discussed below.
1. Cottage industry:
An industry run only by the family members using simple tools and with very less use of electricity, machine and investment is called cottage industry.
Example:
Industries producing khadi cloth, papad, khakhra, incense sticks, etc.
2. Tiny industries:
Industries which run on labour intensive production technique along with the investment limit up to ? 25 lakhs are known as tiny industries.
Example:
Industries producing artistic products made from metal, leather and clay.
3. Small scale industries (SSI):
- Industries that run on labour intensive production technique and with an investment of ₹ 25 lakhs to ₹ 5 crores are called small scale industries (SSI).
- These industries work as ancillary industries for bigger industries.
Example:
Industries producing tools and simple consumer goods like bread and biscuits, furniture, garments, etc.
4. Medium scale industries:
Industries that run on either labour intensive production technique or capital intensive production technique and with an investment of ₹ 5 crores to ₹ 10 crores are known as medium scale industries.
Example:
Industries producing machinery, chemicals, electronic equipment, etc.
5. Large scale industries:
Industries that run on capital intensive production technique and with an investment of more than ₹ 10 crores are known as large scale industries.
Example:
Industries producing railway coaches and engines, big vehicles, iron and steel, petroleum, etc.
Industries on the basis of ownership can be divided as follows:
1. Public Sector Units (industries):
Industries which are owned and managed by the government or say the industries that have ownership and administration of government are known as Public Sector Units (PSUs).
Example:
Railways, Telecommunication, Post, Insurance, etc.
Public sector units are further classified in three categories.
They are:
(A) Departmental industries:
- The industries run, financed and managed by government departments are called departmental industries.
- The minister of the specific department is the ultimate in-charge of such an enterprise. Civil servants look after the operations.
- Government decides the management of expenditure and income of such industries through its budget.
Example:
Railways, post and telegraph, radio and television broadcasting, etc.
(B) Public corporations:
- An industrial unit owned by either central or state government but established for administering certain public programs or for a specific purpose is called a public corporation.
- Government plays the supreme role in administratipn and decision of such industries.
Example:
Life Insurance Corporation (LIC), state transport corporation, Air India and fertilizer producing and selling units are examples of public corporations.
(C) Government company:
- A company owned by central and/or state government is called a government company. It operates as per the Company Law, 2013.
- Either whole of the capital or majority of the shares are owned by the government. In some cases, private investment is also encouraged but at least 51% shares are held by the government.
- These units do not work under direct control of government.
Example:
Hindustan Machine Tools, Oil and Natural Gas Limited, Indian Oil Corporation, etc.
2. Private sector industries:
- Industrial units owned and run by private sector or say private owners are known as private sector industries.
- Such industries might be owned by private individuals or partners.
Example:
Units manufacturing car, TV, shoes, etc.
3. Joint sector industries:
- Industries owned jointly by the government and the private individuals who have contributed in the capital and managed by private individuals are called joint sector industries.
- Government gives ownership rights of such industries to people and institutes but holds 51% or more shares of that company. So, even when the industry is a joint sector one, the government has the control over it.
Example:
Gujarat State Petroleum Corporation (GSPC).
4. Co-operative Sector Industries:
Industries that run on co-operative basis with an aim to stop exploitation of small (marginal) owners, to stop exploitation of laborers or to stop exploitation of consumers and to provide benefit to all are known as industries of co-operative sector.
Example:
Amul, IFFCO, KRIBHCO, etc.
Types of industries on the basis of products:
1. Consumers goods industries:
Industries that produce goods used directly by the consumers are called consumer goods industries.
Example:
Industries producing ghee, oil, cosmetics such as soaps and shampoo, etc.
2. Intermediate goods industries:
Industries producing semi-finished goods that are not consumed directly by the consumers but are sent to other industries for further processing are called intermediate goods industries.
Example:
Industries producing yarn, steel sheets, machines, etc.
