Question

In how many types the industries can be classified on the basis of size? Explain any two.

Answer 1

Hint: There are four types. They are significant contributors to the economy. It depends on the amount of capital invested.

Complete Answer:
Industries are classified on different basis such as raw materials, size and ownership. If we talk about the basis of size, then there are four types of industries, i.e. large scale industries, small scale industries, medium industries and cottage industries. Industries on the basis of size differ from others due the amount of capital invested, number of individuals employed and the volume of production.

The two types of industries on the basis of size are:
1. Large scale industries: It is defined as those industries where the requirement of capital investment exceeds from 10 crores or above. There are a large number of individuals employed in the industry and have high volume of sales. For Example, Tata Iron and Steel Company and the commodities manufactured are cotton, jute or textile industries, banking, tourism etc.
2. Small scale industries: It is defined as those industries where the requirement of capital investment ranges between 2 to 5 crores. There are small number individuals employed in the industries and receive low volume of sales. For example, the Lac industry and the commodities manufactured are food supply, coaching class etc.

Note: The other two types of industries on the basis of size are medium industries and cottage industries.
- Medium industries are defined as those industries where the requirement of capital ranges between 5 to 10 crores. For example, leather industries.
- Cottage industries are defined as those industries where the requirement of capital is very nominal and can be run with the help of family members. In case if the industries are situated in villages or any rural area then it is known as urban cottage industries. For example, basket weaving, pottery etc.