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For the economic development to take place, certain industries like iron and steel plants, insurance etc. play very important role. But the investment is very high in these industries which forces the government to set up such industries. These industries are known as state owned enterprise and help the growth of the economy.

Industries producing semi-finished goods that are not consumed directly by the consumers but are sent to other industries for further processes are called intermediate goods industries. E.g. Industries producing yarn, steel sheets, machines, etc

1. State owned enterprises: Government should own and run such industries which require heavy investment and contains high risk at the same time it is important for development of industries.

2. Encouragement to private sector industries: To start and to run private sector industries, government provides help like land at concessional rate, electricity, water, tax breaks, cheap and enough finance and tries to make them competitive.

3. Import tariff: Import tariff means a policy of government such that foreign products become expensive and costlier than our domestic products. This way domestic products may become competitive to foreign products.

4. Technical skills and training: Government provides technical and professional training to domestic industries to sustain in competition in the period of liberalisation and globalisation.

5. Economic support: Government also provides various economic help to industries to reduce their production cost which enable them to sell their products in international market and having price benefits that maximise its demand.

6. Infrastructural services: By availling infrastructural facilities like road, water, electricity, banks, insurance, etc. industries can save their money, time and efforts to attain least cost levels and become competent and get encouragement to run industries.

7. Setting up various institutes and policies: Government helps industries by setting up various industrial policies like import-export policy, monetary policy, fiscal policy, tax policy, etc. to favour the industries. Government has also created institutes like IDBI, SIDBI, ICICI, IFCI, LIC, GIC, etc. to provide financial help to industries. Thus, government provides help and protection from all aspects to create suitable environment for industrial development.

1. Types of Industries on the basis of size of investment:

• Cottage industries: Industries with negligible use of electricity, machines and investment, e.g., khadi, khakhra, papad, incense stick, etc.
• Tiny industries: Labour-intensive industries along with the investment limit up to ₹ 25 lakhs, e.g., artistic products, leather, clay items, etc.
• Small-scale industries: Industries which have investment of more than ₹ 25 lakhs and less than ₹ 5 crores. Labour intensive and ancillary to big industries, e.g., Units producing tools, consumer goods, auto repair units, etc.
• Medium-scale industries: Industries which have investment of more than ₹ 5 crores and less than ₹ 10 crores. Labour intensive or capital intensive, e.g., machinery units, chemicals, electronic equipments, etc.
• Large-scale industries: Industries which have investment of more than ₹ 10 crores and utilise capital intensive production technique e.g., iron, railway equipments, big vehicles, etc.

2. Types of Industries on the basis of ownership:

• Public Sector Industries: Industries having ownership and administration under government control, e.g., railway, post, telephone, etc. They are classified in three categories:
  • Departmental Industires: Industries run directly by Government as its department, e.g., railway, post, etc.
  • Public Corporations: Owned by Central Government or State Government but administration under independent control of corporation, e.g., LIC, State Transport Corporation, etc.
  • Joint Stock Companies: Managed by government within prevailing company laws, e.g., BHEL, ONGC, IOC, etc.
• Private Sector Industries: Industries owned and managed by private sector, e.g., car, TV shoemaking, etc.
• Joint Sector Industries: Ownership rights of industries to people and firms in the form of shares having 51 % or more and remaining ownership rights in the control of government e.g., GSPC.
• Co-operative Sector Industries: Industries run on co-operative activities, e.g., shops of essential commodities, dairies, co-operative banks, IFFCO, KRIBHCO, etc.

3. Types of Industries on the basis of products:

• Consumer goods industries: Industries which directly satisfy the requirements of people, e.g., ghee, oil, soap, shampoo, powder, etc.
• Intermediate goods industries: Indus¬tries having semi-furnished production and still one stage of production remains, e.g., yarn, steel sheets, machineries, etc.

(a) Government has introduced import tariff i.e. high tax on the imports of foreign products to safeguard local products,
(b) Government provides various types of technical and professional training to domestic industries

In the year 1951, industrial sector had contributed of 16.6% in national income, which rose to 27% (at constant prices) in the year 2013-14.

The industrial sector builds excess products which can be exported to other countries. This helps India to earn foreign, exchange which in turn is very useful to import scarce products of the economy.

Industrialisation:

Industrialisation is a process. It means making rapid increase in industrial production by increasing investment and infrastructure facilities in the economy. The process of industrialisation is associated with mechanisation and modernisation.

Importance: Importance of industrial sector in India is due to the following reasons:

• It increases contribution in National Income: In 2013-14, industrial sector contributed 27 % (at constant prices) in National Income.
• It increases employment: In 2011-12, 24.3 % labourers were employed in industries. Small-scale industries used labour intensive production technique which substantially increased employment.
• It increases export income and earn foreign exchange: In 2013 – 14, industries 2 earned about – share of export income.
• It does balance economic development: It makes speedy and balanced development of economy by establishing public sector in less developed or backward areas.
• It helps in modernisation of agricult are: Industries can provide technology to help modernisation of agriculture.
• It strengthens economic structure: By producing iron, cement, machines, vehicles, safety instruments it reduces dependence on other nations and make India much stronger economically.
• It changes social structure: Due to industrialization new industrial culture emerged which change social structure and inspire economic development.

Correct option is (A) 5 crores-10 crores

Correct option is (C) Consumer goods industry

Large scale industries require huge investment and they cannot change their products and production methods as per the changes of market. In other words, with the change in market, large scale industry takes time to make the required changes

Correct option is (C) Agriculture sector

Correct option is (D) Both (A) and (B)

Correct option is (D) Australia

Australia is known as Agriculturally developed nation in the world.

Correct option is (B) Industrial sector

Correct option is (C) Both (A) and (B)

Correct option is (A) Saudi Arabia

Labour intensive production technique.

Correct option is (D) Large scale industries

Correct option is (A) Small scale industries

Labour intensive production technique is used by small scale industries where more labour is utilized instead of capital for production. In India, availability of labour is in excess. Thus, this technique helps to generate more employability in the nation.

Difference between labour intensive and capital intensive 

Correct option is (B) Because India has excess of labour which need to be employed anyhow

Correct option is (A) Air India

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 the administration 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.

Steps taken by government for developing industries:

1. State-owned enterprise:

• Certain industries such as infrastructural industries, iron and steel plants, insurance, etc. are called key industries of an economy. These industries form the platform for economic development.
• These industries require very huge amount of investment and skills and also are very risky. Hence, private sector fears entering such industries.
• Hence, government itself set-up such industries to boost and maintain the economy.

2. Encouragement to private sector industries:

• To encourage private sectors, government provide various type of assistance to private individuals like purchasing land at concessional rate, electricity, water, tax benefits and finance at lower rates.
• This way government encourages competition and creates a favourable market environment.
• Government has also given entry to private sector in several areas which initially were restricted to public sector only.

3. Import tariff:

• The rate of import duty (tax) charged for importing the goods is called the import tariff.
• To save the local companies from foreign companies, the government charges high import duty on foreign goods. This makes imported items costlier than the local made. As a result, the local industries can survive properly.

4. Technical skills and training:

• Government provides various types of technical and professional training to domestic industries. This helps them to upgrade their products and services at par with international products which in turn helps the local industries to compete against the foreign products.
• These trainings were given largely during the period of liberalization and globalization.
• By such trainings the government makes the local industries aware about new global technologies, goods, selling techniques, management, etc.
• Technical skills also help to create values in the domestic industries.

5. Economic help:

• Government provides various types of economic helps to industries to reduce their production cost.
• This helps the domestic industries to reduce their production costs and sell their products in international market at competitive prices with products of other countries.
• The various forms in which the government provides economic help could be providing concession on land rates, water, electricity, telephone, transport charges, etc. It may also provide finance at a subsidized rate and various other subsidies.

6. Basic facilities/services:

• Government provides basic facilities like road, water, electricity, banks, insurance, sewage and many more to develop industries.
• By availing these basic facilities industries can save their money, time and efforts to produce and sell products faster and more efficiently.

7. Establishing various institutions and policies:

• Government makes industrial policies and also makes necessary changes time to time to help industries grow properly.
• Government frames several favourable policies like import policy, export policy, monetary policy, fiscal policy, tax policy, etc.
• Government drafts laws like Industries Act, Company Act, Competition Act, etc. to prevent unfair competition.
• Government has also created institutions such as IDBI, SIDBI, ICICI, IFCI, GIC, etc. to provide financial help to various industries.
• It also makes efforts and policies to attract roreign investment in India.

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.

1. Consumer goods industries and
2. Intermediate goods industries

Small scale industries are very useful for generating employment, giving platform for manufacturing with small capital, industrialization in rural areas, developing backward areas, reducing regional imbalance and to maintain the adequate distribution of national income and wealth.

Industries provide latest technology that help in increasing productivity of land and labour. This leads to development of agriculture sector. For example, tractor, thresher, chemical based fertilizer, etc. are the industrial products of modern technology that have modernized agriculture. 

• Public sector units,
• Private sector industries
• Joint sector industries
• Cooperative sector industries

Industries that run on capital intensive production technique and with an investment of more than Rs. 10 crores are known as large scale industries. E.g. Industries producing railway coaches and engines, big vehicles, iron and steel, petroleum, etc.

• Cottage industry,
• Tiny industry,
• Small scale industry,
• Medium scale industry, and
• Large scale industry.

Employment generation:

• Since small scale industries are primarily labour intensive industries they have huge potential for generating employment.
• In the year 1994-95 small scale industries generated 191.40 lakhs employment opportunities. It rose to 249.33 lakhs in 2001-02 and it sharply increased to 1,012.59 lakhs in the year 2011-12.
• So, small scale industries have continuously increased their employment generation capacity which is serving like a blessing for the nation

Correct option is (C) More than 10 crores

Correct option is (A) 1013 lakhs

Correct option is (B) 27%

Correct option is (B) 24.3%