BUSINESS

Factors responsible for location of Industries

Industrial locations are complex in nature. These are influenced by the availability of many factors. Some of them are: raw material, land, water, labor, capital, power, transport, and market.

Based on the value addition and tangibility broadly we can have three types of industries – primary industries,secondary industries and tertiary industries.

1. Primary industries are usually very simple industries involving processing of raw materials to give input goods for secondary industries.
Here value addition is usually minimal and they are
usually material oriented.Scale of operation may be small or may be very large.Examples are: coal mining and washing, oil-refining,flour milling, metal smelting, stone crushing, etc.

2. Secondary industries are very complex and diversified which took input from primary industries and add significant value to it in different processing stages.
The value additions are so significant that they may have a locational preference in favour of market.Secondary industries may again divided into heavy industries, light industries, footloose industries, etc.

3. Tertiary industries are not related to production process.They are basically trade and services providing industries.The scale of operation is so large that it is regarded as an industry.Examples are: banking industry, insurance industry, consultancy industry, etc.

Factors of industrial location

The factors affecting the location of industries are :-

1. the availability of raw material,
2. the availability of land,
3. the availability of water,
4. the availability of labour,
5. the availability and consistency of power supply,
6. the availability of capital,
7. the availability of transport network and market.

Sometimes, the government provides incentives like subsidised power, lower transport cost and other infrastructure so that industries may be located in backward areas.

It is rarely possible to find all these factors available at one place.Consequently, manufacturing activity tends to locate at the most appropriate place where all the factors of industrial location are either available or can be arranged at lower cost. In general, it should also be noted that both lower production cost and lower distribution cost are the two major factors while considering the location of an industry. Sometimes, the government provides incentives like subsidized power, lower transport cost, and other infrastructure so that industries may be located in backward areas.

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