explain the factors which effect the location of the industries
Answers
Generally, location of industries is influenced by economic considerations though certain non-economic considerations also might influence the location of some industries. Maximisation of profit which also implies cost minimization is the most important goal in their choice of particular places for the location of industries. There are several factors which pull the industry to a particular place. Some of the major factors influencing location are discussed below:
1. Availability of raw materials: In determining the location of an industry, nearness to sources of raw material is of vital importance. Nearness to the sources of raw materials would reduce the cost of production of the industry. For most of the major industries, the cost of raw materials form the bulk of the total cost. Therefore, most of the agro-based and forest-based industries are located in the vicinity of the sources of raw material supply.
2. Availability of Labour: Adequate supply of cheap and skilled labour is necessary for and industry. The attraction of an industry towards labour centres depends on the ratio of labour cost to the total cost of production which Weber calls ‘Labour cost of Index’. The availability of skilled workers in the interior parts of Bombay region was one of the factors responsible for the initial concentration of cotton textile industry in the region.
3. Proximity to Markets: Access to markets is an important factor which the entrepreneur must take into consideration. Industries producing perishable or bulky commodities which cannot be transported over long distance are generally located in close proximity to markets. Industries located near the markets could be able to reduce the costs of transport in distributing the finished product as in the case of bread and bakery, ice, tins, cans manufacturing, etc. Accessibility of markets is more important in the case of industries manufacturing consumer goods rather than producer goods.
4. Transport Facilities: Transport facilities, generally, influence the location of industry. The transportation with its three modes, i.e., water, road, and rail collectively plays an important role. So the junction points of water-ways, roadways and railways become humming centres of industrial activity. Further, the modes and rates of transport and transport policy of Government considerably affect the location of industrial units. The heavy concentration of cotton textile industry in Bombayhas been due to the cheap and excellent transportation network both in regard to raw materials and markets.
5. Power: Another factor influencing the location of an industry is the availability of cheap power. Water, wind, coal, gas, oil and electricity are the chief sources of power. Both water and wind power were widely sought at sources of power supply before the invention of steam engine. During the nineteenth century, nearness to coal-fields became the principal locating influence on the setting up of new industries, particularly, for heavy industries. With the introduction of other sources of power like electricity, gas, oil, etc. the power factor became more flexible leading to dispersal and decentralization of industries.
6. Site and Services: Existence of public utility services, cheapness of the value of the site, amenities attached to a particular site like level of ground, the nature of vegetation and location of allied activities influence the location of an industry to a certain extent. The government has classified some areas as backward areas where the entrepreneurs would be granted various incentives like subsidies, or provision of finance at concessional rate, or supply of power a cheaper rates and provision of education and training facilities. Some entrepreneurs induced by such incentives may come forward to locate their units in such areas.
7. Finance: Finance is required for the setting up of an industry, for its running, and also at the time of its expansion. The availability of capital at cheap rates of interests and in adequate amount is a dominating factor influencing industrial location. For instance, a review of locational history of Indian cotton textile industry indicates that concentration of the industry in and around Bombay in the early days was mainly due to the presence of rich and enterprising Parsi and Bhatia merchants, who supplied vast financial resources.
8. Natural and Climatic Considerations: Natural and climatic considerations include the level of ground, topography of a region, water facilities, drainage facilities, disposal of waste products, etc. These factors sometimes influence the location of industries. For instance, in the case of cotton textile industry, humid climate provides an added advantage since the frequency of yarn breakage is low. The humid climate ofBombay in India and Manchester in Britain offered great scope for the development of cotton textile industry in those centres.
These factors, specific to the Indian conditions, are discussed below:
1. Raw Material:
The earliest industries in India developed near the sources of raw material. For instance, the textile mills of Bombay had supply of cotton coming from Gujarat and Vidarbha and the jute mills of Hooghly region got the raw material from the delta region of the Ganga. The nature of raw material also has a bearing on the location.
For instance, those raw materials which get reduced in weight during manufacturing (i.e., which are perishable) influence the industry to be located near the source. This explains the particular location of sugar mills in Maharashtra and western Uttar Pradesh and of iron and steel industry in West Bengal-Bihar- Orissa belt.
2. Energy:
The iron and steel industry has been traditionally tied with the coal resources, as it uses coking coal for fuel. Similarly, the electro- metallurgical and electro-chemical industries, being power intensive, have been located where electricity is easily available.
This explains the location of aluminum producing units at Korba and Renukoot in Madhya Pradesh and of the fertiliser plant at Nangal in Punjab. However, since electricity can be easily transmitted, and petroleum can be transported, these industries can also be dispersed. It was only because of the transmissibility of electricity that industrial development could take place with hydel power in the coal deficient peninsular region.
3. Transport:
Transport is required for carrying raw materials to manufacturing units and finished products to the market. The earliest industries developed near the port towns of Kolkata, Mumbai and Chennai, since these ports were linked with rail and road to hinterland. This infrastructure for transport was further developed after independence.
4. Labour:
The availability of both unskilled and skilled, or technically qualified manpower, is an important factor in the location of industries.
Unskilled labour is easily available in urban locations due to large rural-urban migration. One characteristic feature of the labour factor is its mobility. The industrial belt around Mumbai attracts labour from all over the country. Some of the small scale industries traditionally associated with labour is glasswork (Ferozabad), brass-work (.Moradabad), utensils (Yamunanagar in Haryana), silk sarees (Varanasi), carpets (Mirzapur), etc.
5. Water:
Water is required to produce hydel power and in the process of manufacturing for cleaning, cooling, washing, etc. The industries which heavily depend on water, for one purpose or the other, include iron and steel (for cooling), textile (for bleaching and washing), paper and pulp, chemical, jute, food processing, leather and atomic power. Naturally, these units are located at places where water is easily available.
6. Market:
High demand and a satisfactory purchasing power give impetus to industrial development. Government policies facilitate expansion of the market and, thus, of the industry. Market may be local, national or international.
7. New Factors in a Changed Situation:
With scientific and technological advancement, the constraining geographical factors have not remained rigid. Labour has become more mobile, long distance transmission of energy is possible now and alternatives of various raw materials are available. Therefore, new factors have come into play which include skilled managerial services, availability of capital and financial resources and export potential of products.
The government policies seek to promote regional parity by locating the industry in backward regions. For instance, such objectives guided the government’s decision to locate an oil refinery in Mathura, a coach factory in Kapurthala, and a fertiliser plant in Jagdishpur, Uttar Pradesh.
Government policies also seek to check environmental degradation and to reduce congestion. Export potential of iron and steel products guided the location of new steel plants at Visakhapatnam and Salem. Visakhapatnam is a port, while Salem is well connected to the ports of Chennai and Kochi by rail and road.