Answer the following in 200 words:

How are industries classified? Explain

Industries are classified on the basis of:

• Raw material: Further it is divided in three types of industry as agro-based industry, mineral based industry and forest-based industry depending upon the type of raw material is using the industry. It can be agriculture production, mineral ore or any forest raw material like wood.

• Location: On the basis of location we have Raw material-oriented industry, market-oriented industry and footloose industry. Raw material-oriented industries are located close to their source like sugarcane industry. Market oriented industries are located near to markets as the product is perishable in nature like Dairy industry and Glass items industry. Footloose industry can be located anywhere as raw material required is not heavy weight.

• Size: Large scale industry, cottage industry, Small scale industry and Medium scale industries is the classification based on the size of industry. Size of industry’s establishment in terms of investment and labour force determines the type of industry.

• Production Process: There are two types of industries on the basis of process involved in production. Heavy industry produces on large scale and heavy products which also requires intensive processing of raw materials like Cement industry whereas Light industry produces light products using light weight raw material and it is also more consumer oriented like watch industry.

• Nature of work: Processing, Manufacturing and assembling industries are divided on the basis of nature of work of industry. Processing and manufacturing industries produce semi-finished and finished goods from raw materials respectively. Assembling industry assembles two or more finished products.

• Nature of ownership: Public sector has the ownership of government like SAIL whereas private sector has ownership of individuals or small groups like Reliance. These are two types of industries of this classification.