Classification of Industries: Types, Basis & Importance

Classification of Industries

Sl.No. Criteria Types of Industries Main Characteristics Examples
1 Sources of Raw Material (i) Agro-based Industries Use agricultural products as raw materials Cotton textile, Jute, Sugar, Paper industry
(ii) Mineral-based Industries Use minerals as raw materials Iron and Steel, Chemical, Cement industry
2 Ownership (i) Public Sector Owned and managed by Government Bokaro Iron & Steel Plant, Chittaranjan Locomotive Works
(ii) Private Sector Owned and managed by individuals or groups as companies Tata Iron and Steel, J.K. Cement, Apollo Tyres
(iii) Joint Sector Owned jointly by public and private sectors Maruti Udyog
(iv) Cooperative Sector Owned by cooperative societies of raw material producers Sugar Industry (Maharashtra), Amul (Gujarat), IFFCO (Kandla)
3 Function or Role (i) Basic Industry Finished products used as raw materials for other industries Iron & Steel, Petrochemicals
(ii) Consumer Goods Industry Finished products directly consumed by individuals Toothpaste, Soap, Sugar industry
4 Size of Industry (i) Large Scale Industry Huge investment, heavy machinery, large workforce, 24-hour operation Iron & Steel, Oil Refineries
(ii) Small Scale Industries Small investment, small factories, few workers Cycles, Electrical goods
(iii) Rural and Cottage Industries Owned by family members, handmade or small machine-based Jewellery, Handicrafts, Handlooms, Art work
5 Weight of Raw Materials & Finished Products (i) Heavy Industries Raw materials & finished products are heavy and bulky; high transport cost Iron & Steel, BHEL (Hardwar – heavy electrical generators)
(ii) Light Industries Raw materials & finished products are light in weight; low transport cost Watches, Readymade garments, Toys, Fountain pens
Note: This is not necessary for any particular industry to be included only in one category. Depending upon the classification, the same industry can become an example of different types of industries. For example, Bokaro Iron and Steel plant is a mineral based industry. It is in public sector. It is a basic industry. It is large scale industry and also an example of heavy industry.
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