WEEK 4|Analysing industry level data:

Question 1

What are the major industry classifications?

Answer 1

1. Labour
2. Raw Material
3. Ownership
   4.Source of Raw Material
4. Miscellaneous

Question 2

What are the types of Labour Industry?

Answer 2

1. Large Scale
2. Medium scale
3. Small Scale

Question 3

What are the types of Raw material industry?

Answer 3

1. Heavy
2. Light

Question 4

What are the types of ownership industry?

Answer 4

1. Private Sector
2. Public sector
3. Joint Sector
4. Co-operative sector
5. Multi-nationals

Question 5

What are the types of source of raw material?

Answer 5

1. Agro-based
2. Mineral based
3. Pastoral based
   4.Forest based

Question 6

What are the various Miscellaneous industry types?

Answer 6

1. Village
2. Cottage
3. Consumer
4. Ancillary
5. Basic
6. Basic
7. Captial Intensive
   8.Labour intensive

Question 7

What are large scale industry?

Answer 7

Industries which employ a large number of labourers in each unit are called large-scale industries. Cotton or jute textile industries are large scale industries

Question 8

What are medium scale industries

Answer 8

The industries which employ neither very large nor very small number
of labourers are put in the category of medium scale industries. Cycle
industry, radio and television industries are some examples of medium
scale industries

Question 9

What are small scale industries?

Answer 9

Industries which are owned and run by individuals and which employ a small number of labourers are called small scale industries.

Question 10

What are heavy industries?

Answer 10

Industries which use heavy and bulky raw-materials and produce products of the same
category are called heavy industries. Iron and steel industry presents a good example of
heavy industries

Question 11

What are light industries?

Answer 11

The light industries use light raw-materials and produce light finished products. Electric
fans, sewing machines are light industries.

Question 12

What are private Sector Vs. Public Sector Vs. Joint Sector Vs. Co-operative sector industries?

Answer 12

Private Sector Industries:
* Industries owned by individuals or firms such as Bajaj Auto or TISCO are called private
sector industries.
Public Sector Industries:
* Industries owned by the state and its agencies like Bharat Heavy Electricals Ltd., or Bhilai
Steel Plant or Durgapur Steel Plant are public sector industries.
Joint Sector Industries:
* Industries owned jointly by the private firms and the state or its agencies such as Gujarat
Alkalies Ltd., or Oil India Ltd. fall in the group of joint sector industries.
Co-operative Sector Industries:
* Industries owned and run co-operatively by a group of people who are generally
producers of raw materials of the given industry such as a sugar mill owned and run by
farmers are called co-operative sector industries

Question 13

What are Agro based industries?

Answer 13

Agro based industries are those industries which obtain raw-material from
agriculture. Cotton textile, jute textile, sugar and vegetable oil are
representative industries of agro-based group of industries

Question 14

What are mineral based industries?

Answer 14

The industries that receive raw materials primarily from minerals such as
iron and steel, aluminium and cement industries fall in this category.

Question 15

What are pastoral based industries?

Answer 15

These industries depend upon animals for their raw material. Hides, skins,
bones, horns, shoes, dairy, etc. are some of the pastoral-based industries.

Question 16

What are forest based industries?

Answer 16

Paper card-board, lac, rayon, resin, tanning of leather, leave- utensils,
basket industries are included in this type of industries.

Question 17

What are village industries?

Answer 17

Village industries are located in villages and primarily cater to the needs of
the rural people. They usually employ local machinery such as oil extraction,
grain grinding and agricultural implements

Question 18

What are cottage industries?

Answer 18

Industries which artisans set up in their own houses, work with wood, cane,
brass, stone, etc. are called cottage industries. Handloom, khadi and leather
work at the artisans house fall in this category

Question 19

What are consumer goods industries?

Answer 19

Consumer industries convert raw materials or primary products into
commodities directly used by the people. Textiles, bakeries, sugar, etc. are
some of the consumer goods industries.

Question 20

What are ancillary industries?

Answer 20

The industries which manufacture parts and components to be used by big
industries for manufacturing heavy articles like trucks, buses, railway
engines, tractors, etc. are called ancillary industries.

Question 21

What are basic industries?

Answer 21

Industries on which depend many other industries for their
manufacturing processes are called basic industries. Iron and steel
industry and power generating industry are included in this category

Question 22

What are capital intensive industries?

Answer 22

• Industries requiring huge investments are called capital-intensive
  industries. Iron and steel, cement and aluminium are outstanding
  examples of capital-intensive industries

Question 23

What are labour-intensive industries?

Answer 23

Industries which require huge labour force for running them are called
labour-intensive industries. In these industries, labour is more important
than capital. Shoe- making and bidi-manufacturing, etc. are included in
these industries

Question 24

what is Annual Survey of Industries (ASI)?

Answer 24

The Annual Survey of Industries (ASI) has been the principal source for most of the basic statistics of the Industrial Sector
The frame of factories, which the ASI uses for conducting the survey, is based on the list of factories maintained by the Chief Inspectors of Factories
(CIF).

Question 25

How are growth rates estimated?

Answer 25

• Estimates of the growth rates of industrial production based upon the Index of Industrial Production (IIP) are extensively used for policy-making at various levels in the Government and also for decision-making in the banking
  and Corporate Sectors.

The importance of IIP is further increased due to the fact that it is the only indicator generated every month and disseminated on a wide scale.

Question 26

What is Purchasing Managers’ Index (PMI)?

Answer 26

The Purchasing Managers’ Index (PMI) is an index of the prevailing
direction of economic trends in the manufacturing and service sectors.
* It consists of a diffusion index that summarizes whether market
conditions, as viewed by purchasing managers, are expanding, staying the
same, or contracting.
* The purpose of the PMI is to provide information about current and future business conditions to company decision makers, analysts, and investors.
* Investors can also use the PMI to their advantage because it is a leading indicator of economic conditions.
* The direction of the trend in the PMI tends to precede changes in the trend in major estimates of economic activity and output, such as the GDP, Industrial Production, and Employment.
* Paying attention to the value and movements in the PMI can yield
profitable foresight into developing trends in the overall economy

Question 27

What are 5 key indicators under PMI?

Answer 27

1. New orders
2. Inventory levels
3. Production
4. Supplier Deliveries
5. Employment Environment

Question 28

How to measure an industry’s concentration?

Answer 28

1. Concentration ratio
2. Herfindahl index

Question 29

What is concentration ratio?

Answer 29

The concentration measures an industry’s concentration by examining the share of output controlled by the largest four firms in that industry.
- this could be measured in terms of sales, value added, or other metric.
- Data published every 5 years by the Census Bureau of Economic Census in the US.

Question 30

What are the problems with concentration ratio?

Answer 30

• If four firms share all output, their concentration ratio is equal to 100% but they are not a monopoly.
• But if one firm is the sole producer, its concentration ratio is equal to 100% and it is a monopolist.

Question 31

How is Herfindahl index solves the problems with concentration ratio?

Answer 31

The herfindahl index is calculated in three steps:
1. Determine the percent of output produded by each of the largest four firms.
2. Square each of those shares
3. Add all the squared numbers.