Question

What is the role of ancillary industries in the growth of heavy engineering industries?

Answer 1

Hint: The delivery of finished products by small scale businessmen by working on the raw materials provided to them by various businessmen. The businessmen are also responsible for the transportation of the raw materials as well as the finished product.

Complete step-by-step solution:
The ancillary industry is an industry that has fixed investment in plants and machines that do not exceed 1 crore rupees. The ancillary industry manufactures parts, machinery, sub-assemblies, gears, intercedes, machinery, etc. These industries are also called tertiary or service industries. One of the most important ancillary industries in India is the Auto Ancillary industry. The Auto Ancillary sector from India is mainly fixated domestically and does not play a large role globally. But this tips the scale in its favor when we look at the treads it can make in terms of progress. An Auto Ancillary Industry is heavily reliant on the Automobile Industry. Luckily enough the Indian Automobile industry is the world’s fourth-largest, with the country currently being the world’s fifth-largest manufacturer of cars and seventh-largest manufacturer of commercial vehicles in 2019. The Auto Component Manufacturers account for 2.3 percent of India’s Gross Domestic Product (GDP) and employ as many as 1.5 million people directly and indirectly each. As of now, the turnover of the business remained at Rs 1.79 lakh crore (US 25.62 billion dollars) in FY20 (till September 2019) and the fare of auto parts developed 2.7 percent to arrive at Rs 51,397 crore (US 7.35 billion dollars) during a similar time.

Note: The Ancillary industry is likely to witness a second consecutive year of double-digit degrowth this fiscal mainly on account of disruption in operations due to the coronavirus pandemic and the subsequent lockdown, according to a report.