What do you mean by Industry ? what is industry

 What is industry ? 

Production of goods and services in different volumes and quantities by using skills, resources and appropriate technology is called industry. The development of industry. The development of industries help in the economic development of the country. IT also helps in the development of agriculture and trade. Many of the countries have made significant progress in the industrial sector by utilizing means and resources of the country, In absence of industries in the country, we have to import the essential goods from abroad which causes the currency go out of this country. The country has to bear the loss of billions of rupees. If the industries are established in the country, the required goods and services can be easily available in the country. The country can be self reliant in the industrial goods. If the industries are established with the intention of exporting goods to foreign countries, the country can earn foreign currency as well. It can largely contribute in the national economy. The industries contribute about fifty percent to eighty five percent in the developed countries but in Nepal, it contributes only ten percent in the national income. 

Basic requirements of an industry

1. Raw materials 
2. Capital 
3. Skilled manpower 
4. Laborers 
5. Appropriate technologies and machines 
6. Means of transportation and communication 
7. Proper market facility 
8. Storage facility 

Types of industries 

On the basis of investment, the industries are classified into two types. 

• Cottage and small industries 
• Medium and Large industries 

Cottage and Small Industries 

A small-scale industry is defined as the industry which can be run in less capital by using locally available materials with the help of family members at own home. In cottage industries, the creation of products and services is home-based, rather than factory-based. According to Industrial Enterprises Act 2049, the industries with a fixed asset of up to an amount Rs. 30000000 is called small industries. The fixed asset is termed as land, building, machine, furniture, etc. Cottage and small industries have been contributing in the Nepalese economy since ancient time.

 

Importance of Cottage and Small Industries 

There is a great importance of cottage and small industries in the development of a country. It utilizes the local means and resources and helps to increase the national income. The importance of cottage and small industries are as follows: 

a. Conservation of Nepalese art and culture: Generally, the cottage and small industries produce handicrafts and curio materials which may help in the conservation of art and culture of the country. Thus, it is necessary to develop cottage and small industries. 

b. Creation of employment: It may be useful to reduce the problem of unemployment in the country. It further reduces the over dependency on agriculture and helps to mobilize manpower in the productive work. 

c. Decrease in regional disparity: It is difficult to establish large industries in Nepal because of geographical remoteness and lack of physical infrastructure. So, it would be better to develop cottage industries with the the utilization of local skills and technologies. It may help to decrease regional disparity as well. 

d. Earning of foreign currency: Tourist love to see and buy Nepalese handicrafts. The country can earn foreign currency from the sale of such products. The foreign currency is required while importing machines and other requirement. 

e. Reduction in the trade deficit: Nepal is bearing a great loss in foreign trade. The essential goods have to be imported from other countries. If the cottage and small industries are developed, it could fulfill the domestic need and help to reduce the trade deficit of the country. 

f. Use of indigenous skills and technologies: It helps in the utilization of local skills and technologies. the occupation of making earthen pots, Dhaka clothes, iron tools, artistic items, etc. can be developed as industries. 

g. Utilization of local raw materials: The raw materials from consumptions like straw, wheat stalk, stone, mud, wood, leather, bamboo, etc can be utilized in the cottage and small industries. From such raw materials, useful items can be made for our daily use. 

Problems of Cottage and Small Industries 

• Frequent Change in the industrial policy 
• Incapability to compete with large industries 
• Lack of appropriate market 
• Lack of capital for investment 
• Mass poverty 
• Shortage of skilled laborers 
• Traditional technology 

Solutions of Cottage and small Industries 

• Formulating and implementing stable industrial policy and creating suitable environment 
• Bringing cottage and small industries conservation policy and policy of tax exemption. Producing the items which are not produced in large industries. 
• Producing quality product, advertisement, searching local and international markets, encouraging for the use of domestic product, etc. 
• Encouraging for saving, provision of soft loan and subsidies. 
• Launching the programs and policies for poverty alleviation. 
• Providing contemporary education and training to the laborers. 
• Using modern machines and technologies. 

Possibilities of Cottage and Small Industries 

• There is enough availability of local resources and means in Nepal. 
• Nepalese people have been involving in field of cottage and small industries since ancient time. 
• There are lots of local technologies and skills which can be useful in the cottage and small industries. 
• The local people are skillful and efficient in arts and crafts. 
• The amount of remittance is increasing which can be utilized in it. 
• The returnees from foreign employment are searching appropriate opportunities to utilize their skills and knowledge. 
• It can be run with little amount of investment, local skills and technology. 

Medium and Large Industries 

The industries run with more investment, skilled manpower and suing modern machineries and producing quality product in large quantity are called medium and large industries. According to the Industrial enterprises Act 2049 (amended in 2054) the industries with a fixed asset of more than one hundred million rupees are named as large industries. Sugar mill, cement factory, beverage industry, iron industry, leather factory, jute industry, leather factory, jute industry, paper industry, cigarette industry, cloth industry, tea industry, brick industry, soap industry, zinc industry, etc are the examples of medium and large industries established in Nepal. The development of such industries increases the economic activities in the country. 

Importance of medium and large industries

There is an important role of medium and large industries to improve the economic growth of the country. It creates the employment opportunities and make the country self reliant in the necessary goods and services. The importance of medium and large industries can be mentioned as follows:

a. Base of the economic development: The development of medium and large industries to develop the primary industries like iron, cement, electricity, machineries, etc. and set the base of the economic development in the country. 

b. Creation of employment  opportunity: About 1500 to 2000 youths are leaving Nepal every day in search of job in foreign countries. It is because of the lack of employment. If medium and large industries are established in the country, they can get job in their own country and the problem of unemployment can be solved.  According to the statistics established by Department of Industry, 112 large industries and 99 medium industries are established in 2069/70 BS.

c. Growth in national income : The development of industrialization enhances the economic activities extensively. It increase the employment and per-capita income of the country. As a result, there is improvement in the national income.

d. Improvement in the living standard: The development of medium and large industries increases the employment opportunity which helps to improve the income of people. With the improvement in the income, people can fulfill their requirements and improve their living standard. 

e. Less import and more export: Industrial development plays important role to lessen the loss in foreign trade of Nepal.  The required goods and services are available in the country. Foreign currency can also be earned by exporting the surplus industrial product.

f. Support in the development of agriculture: The medium and large industries produce the essential elements for the modernization and commercialization of agriculture like agricultural tools, chemical fertilizers, pesticides, improved seeds, etc. The industrial development reduces the over pressure on agriculture by shifting the manpower to industries which ultimately increase the production.

Problems of medium and large industries

problems

• Frequent change in industrial policy and impractical tax policy
• Inaccessible transportation and communication.
• Lack of enough capital for machineries, raw materials, laborers, building, storages, etc.
• Lack of entrepreneur and laborer.
• Lack of primary industries.
• Lack of raw materials
• Political chaos
• problems of energy
• problem of market
• Strike, protest, closure, etc. 

Solutions

• Formulating and implementing concrete industrial policy and tax policy
• Developing transportation and communication rapidly
• Encouraging for saving, provision of soft loan and subsidies, encouraging foreign and internal capital investment, encouraging entrepreneurs with accessible loan, etc. 
• Producing skilled entrepreneur and laborers, developing technical education and providing trainings,
• Developing industries related to processing, iron, cement, steel,  tin, etc.
• Increasing the production of cash and food crops, utilizing natural resources, managing the imported raw materials properly
• Maintaining political stability
• Increasing the production of hydroelectricity, using other alternatives of energy like petroleum, coal, solar and wind
• Increasing purchasing power of people, searching domestic and international markets,  improving the quality in goods and services.
• Ensuring industrial protection, maintaining good relation between entrepreneurs and laborers.

Possibilities of medium and large industries in Nepal

1. Raw materials can be obtained from forest and agricultural products.
2. Utilization of mineral resources available in the country can help in the development of such industries.
3. Natural beauty, swift flowing rivers and possibility of adventurous activities can support in the development of tourism industries.
4. Increasing remittance and growing interest of people for investment also can help in the development of industries. 
5. Changing trend of vocational and technical education, motive of entrepreneurship in people and encouraging policy of government for foreign investment can also support to the development of industries.