Question

Answer the following question in detail.

Explain the classification of industries based on ownership.

Answer 1

Secondary activities include manufacturing, processing and construction industries. The Place where conversion of products obtain from primary activities, into final products takes place is called 'factory'. Manufacturing industries are broadly classified on the basis of size, source of raw materials, nature of products, and ownership.

Classification based on ownership are as follows:

1. Public sector: Public sector industries are owned by the State. The government makes all investments and the marketing of the goods produced is through government agencies. Bharat Heavy Electrical Limited (BHEL) is an example.
2. Private sector: Private sector enterprise is owned by a private individual or a partnership of private individuals. Profits derived from the sale of output belong to the individual, who owns the manufacturing unit and who makes all the capital investments in it e.g. Tata Iron and Steel Company (TISCO).
3. Joint sector: This involves an industry owned and managed jointly by the government and an individual or individuals or between two and more governments. The amount of investment and share of the profits depends on the level of involvement of both sides. For example, MNGL (Maharashtra Natural Gas Limited). 
4. Cooperative sector: A group of individuals pool resources to set up and manage an industrial venture on a cooperative basis. All profits and losses are shared among the members of the cooperative unit. Many textile, sugar and milk units function as cooperatives. Example, AMUL.
5. MNCs: When operations of a privately owned industry or public owned industry extend to more than one country, such industries are called multi-national corporations (MNCs). They have headquarters in the main country where they are registered. For example, Hindustan Lever in the private sector has its headquarters in London. Oil and Natural Gas Corporation (ONGC) in the public sector has headquarters in Dehradun. Factors like cheap labour, technical skills, lower cost of production, and availability of market in other countries lead to the establishment of such industries