MODULE-5 structure of industries

Importance and role of Industries Development of India 1. Utilisation of natural resources 2. Balanced sectoral development 3. Enhanced capital formation 4. Increase national income 5. Increase in job opportunities 6. Lesser pressure on land 7. Supplementing export 8. Attaining economic stability 9. Accumulation of wealth 10. Development of markets 11. Attaining self reliance

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Economic

Structure of the Industries

Industries can be classified on the basis of : I. Use

1) Consumer goods a) Durable goods b) Non-durable goods 2) Intermediate goods 3) Basic goods 4) Capital goods

II. Type of Ownership

1) Public sector 2) Joint Sector 3) Private Sector

III. Structure by the Size of Capital:

1) Large 2) Medium 3) Small 4) Ancillary 5) Tiny

IV. Organization of Industries:

1) Public Limited and Private Limited 2) Joint Sector

ELECTRONICS INDUSTRY

The electronics industry constitutes nearly 8% of the manufacturing sector in India. It is one of the fast growing and labour intensive industries in the country. Total employment in the industry had increased from 1,30,000 persons in 1981 to 3,45,000 persons in 2000.

 The electronics industry comprises six categories, namely 1. Consumer electronics 2. Instrumentation and industrial electronics 3. Data processing systems and other office equipment 4. Communication and broadcasting equipments 5. Strategic electronics 6. Electronics components. Consumer electronics, with colour TV industry in particular, continued to witness phenomenal growth. All renowned global brand of companies have either established production facilities in the country or are present in the market through technical/

financial collaborations thus giving the consumer a wider choice in terms of product features, technology quality and competitive prices. IT and electronics industry is having a wide prospect for its future development in India. Production of electronics items registered steady growth over a period of three years, form 2005-06 to 2007-08. Export earnings of the electronics hardware and computer software have gone up from Rs. 1,13,725 crore in 2005-06 to Rs. 1,75,700 crore in 2007-08.

SWOT Analysis of Electronic Industry

STRENGTH Labour-intensive industry, which suits the requirements of abundant labour resource in India. Transformation from manual assembly to automation may reduce the employment opportunities

WEAKNESS

OPPORTUNITY

Domestic firms get motivated to achieve international competitiveness due to trade liberalisation
Survival of SSIs

THREAT

AUTOMOBILE INDUSTRY In recent year, the automobile industry attained considerable growth especially during the post liberalisation period. During the post liberalisation period, with the entry of new manufacturers including multinational into the automobile sector along with state of the art technology, a huge expansion of the automobile industry has taken place in our country. Some of the leading Indian automobile companies like Tata motors, Maruti Udyog etc. have already gone for collaboration with leading multi-nationals of the automobile sector for technology transfer. The product spectrum of automobile industry in India is consisting of passenger cars, multi-utility

vehicles, commercial vehicles, two wheelers and three wheelers. Total volume of production and export of the automobile industry in India is increasing considerably in recent years. The automobile sector recorded growth of 13.6% in 2006-07. In 2007-08, the industry registered negative growth rate of -2.3%. However, in 2008-09, the industry witnessed a modest growth of 3.0%. The export of all segment of automobiles increased from 1.68 lakh in 2000-01 to 15.30 lakh in 2008-09. In 2008-09, India exported 3.36 lakh passenger cars, 37 thousand commercial vehicles, 148,000 three wheelers and 10.04 lakh two wheelers.

 This reflects the competitive capability of automobile industry of the country. It is estimated that the automobile industry generated direct and indirect employment of 10.5 million people, of which, direct employment is estimated at 5 lakhs and indirect employment of nearly 10 million people
STRENGTH
Decline in prices and more number of models for consumers

WEAKNESS
i) Dominance of MNCs over domestic firms ii) Dependent on imports for capital goods like radiators

OPPORTUNITY THREAT
Consumers sovereignty and big firms reap the benefits Small players producing automotive components face challenges.

TEXTILE INDUSTRY

Indian textiles industry contributes six percent to the GDP. It directly employs about 33 lakh workers and, in addition, gives employment to several million families

 India earns about 27% of its foreign exchange through textile exports. The textile industry also contributes nearly 14% of the total production of the country. Indian textile industry can be divided into several segments, some of which are: - Cotton textiles - Silk textiles - Woolen textiles - Readymade garments - Hand-crafted textiles - Jute and coir The two flagship schemes of the Ministry of Textiles, namely, the Technology Upgradation Fund

Scheme (TUFS) launched in 1999, and the Scheme for Integrated Textile Parks (SITP) launched in 2005, have been approved for continuation in the Eleventh Five Year Plan. Export of textiles grew to $26.8b in FY2010 from $17.6b FY06 Although the export demand has increased, there is severe competition for Indian units from countries like China, Vietnam and Bangladesh. Changes in the rules of international trade in textiles and the ongoing domestic policy reforms have provide more opportunities for Indian garment units in post-2004, with the removal of the quantitative restrictions on textiles and clothing as per the Agreement of Textiles and Clothing (ATC) of WTO.

 North America and West Europe together account for nearly 70% of Indias exports of textiles and both have removed the licensing restriction on imports since 1st January 2005.

SWOT Analysis
STRENGTH i) Traditional export item of India
ii) Near perfect competition in the industry WEAKNESS 80% units are very small and tiny, in which the cost of production would be high compared to large units. Small units cant achieve economies of scale Export demand is likely to increase with the removal of Quantitative restrictions by all member countries of WTO in 2005 as per the agreement on Textiles and clothing. Competition from countries like Bangladesh and Vietnam. Garments export growth rate in India has slowed down in recent years

OPPORTUNITY

THREAT

DEVELOPMENT OF PRIVATE SECTOR

The private sector of Indian economy in the past few years have delineated significant development in terms of investment and in terms of its share in the gross domestic product. Indian government has considered plans to take concrete steps to bring affect poverty alleviation through the creation of more job opportunities in the private sector of Indian economy, increase in the number of financial institutions in the private sector, to provide loans for purchase of houses, equipments, education, and for infrastructural development also.

As of the figures of the last decade, India has had a remarkable growth in private sector investment. The liberal trade and investment policies and the country's infrastructure have provided the environment for higher investment and growth in private sector. Recent Trends in Private Participation Growth in Telecom Sector As of the figures of 2001-06, there has been an incredible increase in the investment in the telecommunication sector in India and as a result there has been immense growth in the telecom industry.

64% of the investment in this sector in South Asia has been in this sector. The subscriber base has increased as a result which is reflected in their figures:

Growth in Energy and Water Sectors

This sector also has attracted a large investment from the private industries. Figures as of 2001-06 registered 17% investment in the sector.

Growth in Transport Sector This sector has also become an important area of investment by the private enterprises. As of figures of the year 2006, there has been an investment of 34% alone in the transport sector.

Role of private sector The dominant sector Importance for development Extensive modern industrial sector Potentialities due to personal incentive in small sector

Problems of the Private Sector Profit generation is the main motive Focus on consumer durables sector Infrastructure bottlenecks Contribution to trade deficit Industrial disputes Problems relating to finance and credit Threat from foreign competition

MULTINATIONAL CORPORATIONS

A Multinational Corporation (MNC) is a corporation or enterprise that manages production establishments or delivers in at least two countries.

Organization of MNCs: 1. Branches 2. Subsidiary companies 3. Joint Ventures

4. Franchise Holders
5. Turnkey projects Reasons for the growth of MNCs 1. Expansion of market territory 2. Marketing superiorities 3. Financial superiorities 4. Technological superiorities 5. Product innovations