Question

Write a short note:

Classification of industries based on capital investment

Answer 1

1. Large-scale industries: They require huge amount of capital, equipment and other infrastructure. In India, the industries requiring an investment of more than 10 crores are large-scale. Iron and steel, power, cotton textiles, etc. are large-scale industries.

2. Micro, small and medium industries:

1. In micro industries, investment for plant and machinery does not exceed ₹ 25 lakh and investment for equipments does not exceed ₹ 10 lakh. In small industries, investment for plants and machinery does not exceed ₹ 5 crores and investment for equipments does not exceed 2 crores. In medium industries, investment for plant and machinery does not exceed ₹ 10 crores and investment for equipments does not exceed ₹ 5 crores.
2. Pens, dairy products etc. are produced by micro industries. Bottles, small toys etc. are produced by small industries. Manufacturing of cycle, T.V. etc. is done by medium industries.

3. Cottage or household industry: It is the most basic type of manufacturing characterised by manual production, using locally available raw materials at a very small scale or at home. The goods are generally produced for consumption and for sale in the local markets. Little capital and transport cost is involved. Potters, weavers, blacksmiths, carpenters and craftsperson are some of the major groups engaged in a cottage industry. These industries require good skills. Their importance has increased in the present times. Some of these products have great demand abroad and are exported. For example, Paithani Sarees, Indian quilts, etc.