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Businesses can range from a small enterprise to a large business employing hundreds of workers across the globe. Depending on their size, organisations can be classified as small scale industries (e.g., micro and small enterprises) or large scale industries (e.g., public enterprises, multinational corporations). India is home to both small and large businesses – each playing their role in the socio-economic development of the country.
In this article, we will talk about large scale industries, examples of large scale industries, characteristics of modern large scale manufacturing businesses, and the advantages and disadvantages of large-scale industries.
What is a large scale industry?
Large scale industries and business enterprises can be defined as those that have massive infrastructure capabilities, employ a significant number of workers (usually 250 and more) and produce a large amount of output.
To further explain ‘what is a large-scale industry?’, you should also examine the fixed assets of a firm. These organisations have a fixed asset of at least ₹10 crore and more and as against small scale industries where the total investment in plant and machinery is much lesser.
Large scale industries are capital-intensive and have a major impact on the economy as they generate a substantial amount of revenue. They also have huge requirement of raw material for business and allied services. As such, large-scale businesses generate employment for many across urban and rural sectors. Therefore, the large -scale industries of India help in economic growth, foreign currency generation, and job creation for millions of Indians.
Types of large scale industries
Given below are the types of large-scale industries present in India:
- Paper industry
- Sugar industry
- Cement industry
- Jute industry
- Tea industry
- Food processing industry
- Engineering industry
- Automobile industry
- Information technology and electronics industry
Examples of large-scale industries in India
The term large-scale is generic in nature – certain types of large industries qualify the definition of large businesses. Given below are a few large-scale industries’ examples and the most popular companies from the large-scale industries of India:
- ONGC, Bharat Petroleum, Reliance Industries Limited
- Arvind Ltd., Raymond Ltd., Welspun India Ltd.
- Tata Motors, Ashok Leyland, Mahindra & Mahindra
- Tata Steel Ltd., JSW Steel Ltd., SAIL
- Life Insurance Corporation of India
- Sun Pharmaceutical Industries Ltd., Cipla
- Tata Consultancy Service, Infosys, Wipro Ltd.
- Ultratech Cement, Ambuja Cements, ACC Ltd.
- Mahindra Holidays & Resorts India Ltd.
- DLF Limited, Lodha Group, Godrej Properties
- Characteristics of large scale industries/enterprises
Characteristics of large scale industries/enterprises
While large scale industries can comprises of manufacturing, healthcare and pharmaceuticals, energy, IT and telecom and other business sectors, there are some common features or characteristics all large industries share. Listed below are the top features of large industries in India:
- Technologically advanced:
A large business uses modern technology and automation tools to run processes. They have access to funds and invest in tech-innovation to bring improvements and streamline functions. For instance, a large logistics company, might invest in modern technologies such as transportation management system, drones, RFID, warehouse automation and follow the latest logistics tech trends to stay up-to-date.
- Global footprint:
Large enterprises usually have their presence across global markets. Though corporate headquarters are located in one country, they usually have regional and national offices in different countries where they operate and even employ local workforce for the same.
- Structured organisation:
Due to the size of their workforce and market presence, large enterprises usually have well defined organizational charts. They are structured and categorized into different departments (e.g., finance, human resources, sales, marketing, operations, IT) and adhere by the legal compliances as prescribed.
- Wide audience base:
Large scale industries usually have a wider customer base and market coverage. Large businesses usually have a growth and expansion mindset always seeking opportunities to tap new customers and markets for revenue generation. They may even have production units in specific countries based on the market size. For example, automotive company Hyundai Motors (South Korea) have their manufacturing units in Tamil Nadu, India to build compact cars for emerging markets.
- Corporate management:
A large business is usually run by a Board of Directors, that is, executives appointed to run the organization and having a separate legal entity. These executives collectively run the corporation and can be replaced as per business requirements.
Now that we understand the meaning of a large industry, let us take a look at some examples of large-scale industries in India.
Advantages of large-scale industries
There are a number of advantages to large-scale industries. Some advantages are highlighted below:
- Economy of scale:
Larger industries employ a larger workforce and use the latest machines and technologies to automate processes. They can as such produce goods/products economically (i.e., achieve economies of scale) while upholding product quality.
- Professional skill enhancement:
Large scale industries are responsible for the development of a skilled workforce in the country as they train workers with different skill sets to use in their businesses.
- Economic development:
Large scale industries consume huge amount of raw materials and work with multiple raw material suppliers and distributors for procurement. They thereby support employment opportunities in the related sectors and even work with smaller businesses to enable their growth.
- Industrial development:
Large scale industries are a key player in the development of industries and helps in economic development of the country.
- Development of ancillary industries:
Large scale industries support the development of small-scale industries. Many times, to promote regional local micro businesses, large enterprises work with local small scale industries to produce/procure ancillary products. Therefore, small scale industries flourish on the growth of large-scale industries.
- Investment in R&D:
Large scale businesses have the capital to spend for research and development, which in turn helps in innovation.
- Employee benefits:
Large scale industries provide several lucrative perks and benefits to employees. Benefits like medical insurance, leave travel allowance, PF and ESI, gratuity, etc. help to improve employee quality of life. This is important from compliance point of view as well.
Disadvantages of large-scale industries
It goes without saying, but both small and large scale industries have their own set of pros and cons. Some of the problems of large-scale industries are given below:
One of the disadvantages of a large-scale industry is the size of business units. As individual businesses grow, it gets challenging to oversee and manage people and processes. Consequently, productivity decreases and inefficiency increases.
Large scale units churn out standardised goods and hence, fail to cater to the individual tastes of the consumers.
- No personal contacts:
Large scale businesses often fail to build personal rapport will organization wide teams. This often causes friction, misunderstanding, and disputes.
- Slow to adapt:
It is difficult for large units to adapt to changing circumstances rapidly. Since there the multiple compliance and procedures to follow, change is often slow which in turn might impact the overall business goals and outcome.
Large scale production is always a threat to small scale producers. Their monopoly often prevents small scale businesses to get market entry easily. Pricing wars are also common where large businesses can change product pricing to meet market needs without affecting overall business revenues.
- Excess production and wastage:
As demand cannot be assessed accurately in the large-scale production, it often leads to overproduction or underproduction. This is turn leads to wastage.
- Damage to environment:
Factories and manufacturing plants add to air pollution. Though there are government initiatives being undertaken to reduce environmental damage caused by industrial fumes, it is still a long way to go. For instance, in the steel sector, there is growing demand for steel recycling for less wastage and environmental damage.
- Decline of cottage and small-scale industries:
Large scale production takes a toll on the cottage industry as it can produce goods in large scale and sell at cheaper prices compared to hand made products.
Closing thoughts: Role of large vs small scale industries
To flourish, there is the need for the co-existence of small and large scale industries in India. Though in recent years there has been a surge in the growth of MSMEs in India, there has also been growth in several large-scale sectors especially steel, telecommunications, pharmaceuticals among others.
Some small-scale industries have become large scale industries with the growth of MSMEs in the country. Tea industry, cotton industry, etc., that once were small-scale industries have now become large-scale industries of India owing to increased participation by small businesses.
- Register your business as a MSME on the Udyam portal and leverage the benefits of MSME registration
- Register your business on Tata nexarc – a B2B platform for emerging businesses and MSMEs to accelerate growth
On Tata nexarc, we offer a wide range of solutions to enable your business’s growth. You can:
- Find efficient raw material (steel) procurement solutions
- Explore logistics at competitive prices with wide pincode coverage
- Avail business loans to meet your working capital and expansion goals
- Get relevant tenders from government sectors to match your business needs
Note: This blog has been edited on 12 April, 2023