Industrial Clusters in Tamil Nadu Online Test 10th Social Science Lesson 19 Questions in English

Generally, “any human activity which is engaged in the conversion of raw materials into readily usable materials is called an industry”.

The share of agriculture in an economy's income and employment decreases with development. First, demand for food remains constant with regard to income. Therefore, as an economy grows and incomes increase, consumers tend to spend a lesser share of their income on products from the agricultural sector.

Food products are taken over longer distances, processed and branded. This also requires that food products have to be preserved. As a result, the prices that farmers get tend to be much less compared to the prices at which consumers buy.

By using modern methods of production, industries contribute to better productivity and hence lower cost of production of all goods produced. It therefore helps people to buy goods at a cheaper rate and help create demand for more products.

Through such expansion of production, industrialisation helps to absorb the labour force coming out of agriculture. Employment generation is therefore an important objective of industrialisation.

Expanding incomes lead to more demand for goods and services

If an economy is not able to produce enough to meet such demand, it has to rely on imports and therefore spend a lot of foreign exchange. If the economy does not earn enough from exporting, it will be difficult to meet the growing demand.

Based on the users Industries can be classified into three types. They are consumer Goods sector, basic goods industries and capital good sector.

If the output is consumed by another producer, it is called a capital goods sector.

Industries can be classified into four types based on following factor 1. Types of Input used 2. Ownership 3. Type of Inputs Used 4. Size

The small sector is believed to generate more employment than the large-scale sector, which is likely to use more advanced and automated technologies and therefore may not generate enough employment.

when small firms specialising in one sector are geographically concentrated in specific locations, and linked to one another through production and learning, they tend to be equally if not more efficient than large scale enterprises. Such agglomerations of small firms are called industrial clusters.

The advantages of industrial clusters or districts was first observed by the famous economist Alfred Marshall.

While the notion of an ‘industrial district’ was developed by Marshall, it was only after the success of small firms in Italy in the 1980s that it became popular.

The advantages of industrial clusters or districts was first observed by the famous economist Alfred Marshall in the 1920s when he tried to understand the working of clusters of small firms in the metal-working and textile regions in England.

The following are the chief characteristics of a successful cluster. • geographical proximity of small and medium enterprises (SMEs) • sectoral specialisation • close inter-firm collaboration • multi-skilled workforce

Apart from the Chennai region, industrial growth has been concentrated in several Small-town clusters, throughout the state, with the western region being more dominant.

Colonial policies also contributed to the decline of the handloom weaving industry due to competition from machine made imports from England. But some industries also developed during the colonial period and provided the basis for subsequent industrialisation in the state.

The introduction of cotton cultivation in western and southern Tamil Nadu by the colonial government led to the emergence of a large-scale textile sector in these parts, which involved ginning, pressing, spinning and weaving operations.

Increase in trade during this period led to industrial development around two of the most active ports in the region, Chennai and Tuticorin.

Match factories too emerged during the colonial period in the Sivakasi region, which later on became a major centre for fireworks production and printing.

Another major development in the western region is the introduction of electricity from hydro-electric power in the 1930s. Availability of electricity allowed for use of oil engines for drawing ground water.

Hydro-electric power led to both expansion of agriculture as well as increase in demand for oil engines. In turn, it led to emergence of workshops for servicing engines and also for addressing the demand for spare parts.

Soon after independence, several large enterprises were set up by both the central and state governments in different segments such as the Integral Coach Factory in Chennai to make railway coaches.

The Bharat Heavy Electricals Limited (BHEL) in Tiruchirapalli (Trichy) manufacture to boilers and turbines. BHEL in turn led to the emergence of an industrial cluster of several small firms catering to its input requirements.

Heavy Vehicles Factory was set up to manufacture tanks in Avadi on the outskirts of Chennai. Standard Motors too started manufacturing cars in Chennai.

Ashok Motors (later Ashok Leyland) and Standard Motors together helped form an automobile cluster in the Chennai region.

The Avadi industrial estate was established in the 1950s to support the small and medium companies supplying to the large firms in the region.

The Salem Steel Plant was set up in 1973 to produce stainless steel. The government played a major role in all these processes. More hydro-electric power projects in the state were also initiated to increase the spread of electrification.

First, because of trade liberalisation measures, exports of textiles, home furnishings and leather products began to grow rapidly.

Chennai region also emerged as a hub for electronics industry with MNCs such as Nokia, Foxconn, Samsung and Flextronics opening plants on the city's outskirts. A significant share of these investments has come up in special economic zones in the districts bordering Chennai.

Automobile sector relies heavily on component makers, entry of MNCs not only brought along other MNC component suppliers but also opened up new market opportunities for domestic component producers.

Tamil Nadu at present has the largest number of factories among all states in India and also has the largest share of workforce employed in manufacturing. Importantly, it is more labour intensive compared to other industrially advanced states like Maharashtra and Gujarat.

There are 27 clusters in 13 districts in Tamil Nadu. Unlike other states, the industries are spread across all regions of the state with many of them being export oriented as well.

Unlike in North India where entrepreneurs and business groups are drawn mostly from merchant communities, in Tamil Nadu, the entrepreneurs come from a dispersed social background, with a relatively small size of capital.

Chennai is nicknamed as "The Detroit of Asia" because of its large auto industry base. Chennai is home to large number of auto assembly and component making firms.

Hosur is another auto cluster with firms like TVS and Ashok Leyland having their factories there. Coimbatore region is also developing into an auto component cluster.

The Namakkal-Tiruchengode belt in western Tamil Nadu is known for its truck body building industry. About 150 of the 250 units in this sector are located in this cluster including 12 large-sized body building houses.

Tamil Nadu is home to the largest textiles sector in the country. Because of the development of cotton textile industry since the colonial period, Coimbatore often referred as the "Manchester of South India".

Tirupur is famous for clustering of a large number of firms producing cotton knitwear. It accounts for nearly 80% of the country's cotton knitwear exports and generates employment in the range of over three lakh people since the late 1980s.

Apart from body building, Karur is a major centre of exports of home furnishings like table cloth, curtains, bed covers and towels. Bhavani and Kumrapalayam are again major centres of production of carpets.

Tamil Nadu accounts for 60 per cent of leather tanning capacity in India and 38 per cent of all leather footwear, garments and components.

Hundreds of leather and tannery facilities are located around Vellore and its nearby towns, such as Ranipet, Ambur and Vaniyambadi. The Vellore district is the top exporter of finished leather goods in the country.

The Vellore district is the top exporter of finished leather goods in the country. Chennai also has a large number of leather product making units involved in exports. There is another clustering of leather processing in Dindigul and Erode.

Apart from such modern clusters, there are also traditional artisanal clusters such as Madurai and Kanchipuram that are famous for cotton and silk handloom sarees. Even these clusters have witnessed a degree of modernisation with use of power-looms in several units.

Sivakasi region, once famous for its match industry has now become a major centre for printing and fireworks in the country.

Sivakasi region is believed to contribute to 90% of India’s fireworks production, 80% of safety matches and 60% of offset printing solutions.

All these industries have their origin in the colonial period and at present offer employment to a large number of workers.

The Policy Factors that Helped the Industrialisation Process divided into three aspects. They are 1. Education 2. Infrastructure 3. Industrial promotion

Industries require skilled human resources. Apart from a lot of attention to primary education to promote literacy and basic arithmetic skills, the state is known for its vast supply of technical human resources.

SIPCOT (State Industries Promotion Corporation of Tamil Nadu) was formed in the year 1971 to promote industrial growth in the state by setting up industrial estates.

TANSIDCO (Tamil Nadu Small Industries Development Corporation) is a state-agency of the state of Tamil Nadu established in the year 1970 to promote small-scale industries in the state. It gives subsidies and provide technical assistance for new firms in the small-scale sector.

SIPCOT (State Industries Promotion Corporation of Tamil Nadu) was formed in the year 1971 to promote industrial growth in the state by setting up industrial estates.

MEPZ is a Special Economic Zone in Chennai. It is one of the seven export processing zones in the country set up the central government.

Madras Export Processing Zone (MEPZ) was established in 1984 to promote foreign direct investment, enhance foreign exchange earnings and create greater employment opportunities in the region.

TIDCL

TIIC is intended to provide low-cost financial support for both setting up new units and also for expansion of existing units. Though it is meant to meet the requirements of all types of firms, 90% of support goes to micro, small and medium enterprises.

TANSI (Tamil Nadu Small Industries Corporation Ltd.) was formed in 1965 to take over the small scale-units that were set up and run by the Department of Industries and Commerce.

Hosur SEZ – Auto Engineering, Electronics, Defence and Aerospace.

TIIC (Tamil Nadu Industrial Investment Corporation Ltd.) was established in the year 1949.

TANSI (Tamil Nadu Small Industries Corporation Ltd.) is supposed to be the first industrial corporation operating in the domain for small enterprises.

A policy was introduced on in April 2000 for the settling up of special Economic Zones in the country with a view to a hassle-free environment for exports.

The policy is also envisaged the some of the existing Export Processing Zones, would be converted in to Special Economic Zones.

The services sector has emerged as a much bigger employer over the last three decades. Tamil Nadu has become a hub for some important and dynamic service sectors such as software services, healthcare and education services.

Software services is, however, largely confined to Chennai. Only in the last ten years, a few software firms have moved to Coimbatore.

Start-up India Scheme was Launched on 16-Jan-2016. Start-up India Scheme is an initiative of the Indian government, the primary objective of which is the promotion of start-ups, generation of employment and wealth creation

Employment generation potential has declined because of use of frontier technologies because of the need to compete globally. Quality of employment also has suffered in recent years as most workers are employed only temporarily.

Stand-up India Scheme is to facilitate bank loans between `10 lakh and `1 crore to at least one Scheduled Caste (SC) or Scheduled Tribe (ST) borrower and one-woman borrower per bank branch for setting up a greenfield enterprise.

Entrepreneur is an innovator of new ideas and business processes. He possesses management skills, strong team building abilities and essential leadership qualities to manage a business.

They contribute towards the development of society by reducing concentration of income and wealth.

Stand-up India Scheme was Launched on 5-April-2016.

Entrepreneurs provide large-scale employment to artisans, technically qualified persons and professionals and work in an environment of changing technology and try to maximise profits by innovations. They enable the people to avail better quality goods at lower prices, which results in the improvement of their standard of living.