Industrial location

Q.5 Which factor plays the most dominant role in the ideal location of an industry? Explain any three reasons in support of this factor.
Ans. The most dominant factor of industrial location is the least cost.
i. Cost of obtaining raw materials at site: Manufacturing activity tends to locate at the most appropriate place where all the raw materials of production are either available or can be arranged at lower cost.
ii. Cost of production at site: These are influenced by availability of labour, capital, power, etc. Thus industrial location is influenced by the costs of availability of these factors of production.
iii. Cost of distribution of production: The distance of industry from market influence the transportation costs. Transportation costs influence the cost of distribution of production.

Q.6 Explain the factors influencing the location of industry.
Ans. Industries maximize profits by reducing costs. Therefore industries are located where the costs are minimum. The factors influencing are:
  1. Access to Market:
Areas/regions having high purchasing power provide large market therefore industries are located in these regions.
  1. Access to Raw Material:
a. Raw material used by industries should be cheap and easy to transport. Industries based on cheap, bulky and weight-losing material (ores) are located close to the sources of raw material such as steel, sugar, and cement industries.
b. Industries using perishable raw material are located closer to the source of the raw material. Such as Agro-processing and dairy industries are located close to the sources of farm produce or milk supply respectively.
  1. Access to Labour Supply: Some types of manufacturing require skilled labour therefore industries are located near urban-educational centres where skilled labour is easily available.
  2. Access to Sources of Energy: Industries which use more power are located close to the source of the energy supply such as the aluminium industry.
  3. Access to Transportation and Communication Facilities:
Speedy and efficient transport facilities reduce the cost of transport. Therefore industries are attracted in regions having good transport facilities.
  1. Government Policy: Governments adopt ‘regional policies’ to promote ‘balanced’ economic development and hence set up industries in particular areas.
  2. Access to Agglomeration Economies: Many industries benefit from nearness to a leader-industry and other industries. These benefits are termed as agglomeration economies.

Q.7 What do you mean by agglomeration economies?
Ans. Industries are located near urban areas. Many industries tend to come together to make use of the advantages offered by the urban centres known as agglomeration economies.

Q.8 Why do industries tend to locate themselves near cities or urban centres?
Ans. Some industries tend to locate near urban centres because of:
i. Cities provide markets
ii. Cities provide services such as banking, insurance, transport, labour, consultants and financial advice, etc. to the industry.
iii. In the pre-Independence period, most manufacturing units were located in urban places from the point of view of overseas trade such as Mumbai, Kolkata, Chennai, etc.