TYBA-GEO-SEM-VI-PAPER-7-Economic-Geography-munotes

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DEFINITION : NATURE AND SCOPE OF
ECONOMIC GEOGRAPHY
Unit Structure :
1.1 Objectives
1.2 Introduction
1.3 Subject discussion
1.4 Definition
1.5 Nature and scope of economic geography
1.6 Relationship of economic geography with other branches of
social science
1.7 Concept and opration of economy
1.8 Resources: Concept, Classification and Importance in Economy
1.9 Summary
1.10 Check your Progress/Exercise
1.11 Answers to the self learning questions
1.12 Technical words and their meaning
1.13 Task
1.14 References for further study
1.1 OBJECTIVES
By the end of this unit you will be able to:
 Learn the Definition of economic geog raphy.
 Understand Nature and scope of economic geography.
 Discuss Relationship of economic geography with other
branches of social science.
 Learn Concept of economic region.
 Understand Importance of economic geography.

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Economic Geography
2 1.2 INTRODUCTION
In this chapter we are going to learn the definition of economic
geog raphy along with nature and scope of the same. The relationship of
economic geography with other branches of social
sciences will also be studied. Concept of economic region and importance
of econom ic geography will be studied in the latter part of this unit.
1.3 SUBJECT-DISCUS SION
From ancient times¸ Geography has been popularly known for its
curious nature. In the later period this subject started to study the actions
and reactions between man and the various factors on the surface of the
earth. In the recent past¸ Geography developed with its different
branches such as Physical Geography¸ Human Geography¸ Political
Geography¸ Economic Geography etc. Economic geography is equally an
important branch of geography that deals with the relations of physical
and economic conditions to the production and distribution of
commodities. Actually it is the study of man and h is economic
activities under varying sets of conditions. Geographers have different
opinions regarding the definition of the subject. Even though their
opinions meet at a common point of accord, where it means the study of
the spatial distribution of man’s economic activities in relation to
its environment, be it physical or non­physical. Economic geography
has a very broad scope.
1.4 DEFINITION OF ECONOMIC GEOGRAPHY
Economic Geography is the study of man and his economic activities
under varying sets of conditions. Geographers are of different opinion as
regards the definition of the subject. In fact, different geog raphe rs have
defined economic geography in a different way but their opinion
about the meaning is the same. So we can say, economic geography is
the study of the spatial distribution of mans economic activities in
relation to its environment be it physical or non­physical. According to
Hartshorn and Alexander “Economic geography is the study of the
spatial variation on the earth surface of activities related to producing,
exchang ing and consuming goods and services.
1.5 NATURE AND SCOPE
Economic Geography is the study of the location, distribution and spatial
organization of econom ic activities across the world. It is one of the
traditional disciplines of geog raphy. In the early
1910’s, economic geog raphy was mostly concerned with production,
exchange and consumption of goods by people in different areas of the
world. Most of the geographers have defined the nature and scope of
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Definition: Nature and Scope of Economic Geography
3 a. Where is the economic activity located?
b. What are the characteristics of the economic activity?
c. To what other phenomena are the economic activity related? To the
above studies two new questions has been added.
d. Why is the econom ic activity located where it is?
e. Would it not have been better located elsewhere, to better satisfy
certain economic and social criteria?
Later the content of study shows that economic geography has proved
its importance in various periods of its growth. If we go back to 18 82, the
German scholar Gotz has defined economic geog raphy as “A scientific
investigation of the nature of world areas in their direct influence of
goods.”George Chisholm, the father of modern economic geography,
thought that the p rimary use of economic geography is” to form some
realistic development of the future course of commercial development as
far as that is governed by geog raphical conditions.”In 1910, Ellsworth
Huntington considered that all sorts of material, resources, activities that
play in the work getting are the subject of economic geography. In simple
words we can say econom ic geography investigates the diversity in basic
resources of the different parts of the world. It studies differences in
economic development in different regions or countries of the
world. It studies about transportation and trade how they developed and
how are they affected by physical environment. According to E.B. Shaw
“Economic geography is concerned with the distribution of mans
productive activities over the surface of the earth”. Thus it is clear that
economic geography mainly deals with mans productive activities and
their relationship with environmental conditions.”Thus the scope of
economic geography is very vast. It is vast both in tempo ral and the
spatial terms. Economic geography does not only put emphasis on the
current situation but also tries to find out the scope going back into the
time. It studies about ancient, medieval, 19th century, 20th century,
recent and present studies. Economic geog raphy has enormous
spatial scope. It includes spatial locations from the ocean bed to the
mountain top. It also includes the economic activities and possibilities in
the outer space like the moon, the mars etc. It also includes economic
activities which are present in the horizontal direction like the lithosphere,
biosphere and hydrosphere. It includes the studies of the
continents. Thus we see economic geography has a global scope.
Economic geography has an applicability scope. In economic geog raphy
there is a scope for studying various theories which are included in the
subject. Econom ic geography has a scope of practical application as
well. Economic geography has enormous theoretical scope. It not only
involves the explanation of activities already present in the landscape but
also involves the selection of future location of a country.
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Economic Geography
4 1.6 RELATIONSHIP OF ECONOMIC GEOGRAPHY
WITH OTHER BRANCHES OF SOC IAL SCIENCES
Economic geography has a close connection with other branches of social
sciences. Infact it has a very close relation with economics. Economic
geography studies the problems in the regional distribution of
economics laws. It studies about the operations of economic laws. It also
examines about various types of resources which are found in different
regions. Economic geog raphy also studies the regional structure of the
economy as a whole. Thus economic geography and economics are
closely related. Economic geog raphy also has close ties with physical
geog raphy. Economic geography is interconne cted with historical
geog raphy, demog raphy as well as economic cartography. It also occupies
an important place in military geography. It has been argued that
Economic geography and economics meet at several points. This can be
well understood with the help of examples. Long distances and
difficult topography affect the ability to distribute goods. Similarly
factors like climate or economic activity present in the area affect the
kind of goods and services people want. The distribution of natural
resources also has a huge impact on the economy. Again we see the
economic development of a region determine where and how people
live. Again many locations discussed in Economic geography or many
economic activities about which we study in Econom ic geography have
references in history. Thus we can say Economic geography which is
an important branch of geography and which studies about agriculture,
industries, trade resources, transport and communication has very close
relationship with economics and other branches of geog raphy.
1.7 CONCE PT AND OPRATION OF ECONOMY
What Is an Economy ?
An economy is a complex system of interrelated production,
consumption, and exchange activities that ultimately determines how
resources are allocated among all the parti cipants. The production,
consumption, and distribution of goods and services combine t o fulfill the
needs of those living and operating within the economy.
An economy may represent a nation, a region, a single industry, or even a
family.
 An economy is a sy stem of inter ­related production and consumption
activities that ultimate ly determine the allocation of resources within a
group.
 The production and consumption of goods and services as a whole
fulfill the needs of those living and operating within it.
 Market­based economies, also called free market economies, are self ­
regulate d, allowing goods to be produced and distributed in response
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Definition: Nature and Scope of Economic Geography
5  Command ­based economies are regulated by a government body that
determines the goods which are p roduced, their quantities, and the
price paid for them.
 In the modern wor ld, few economies are purely market ­based or
command ­based.

1.8 RESOURCES: CONCEPT, CLASSIFICATION AND
IMPORTANCE IN ECONOMY

Mean ing Concept of Resourc e:
Etymologically, ‘r esource’ refers to two separate words —’re’ and
‘source’ —that indicate any thing or substance that may occur unhindered
many more times. The term ‘Resource’ had no special significance till the
early part of the twentiet h century.
Only in 1933, when the e minent professor of economics Erich W.
Zimmermann promulgated his famou s “Concept of Resource”, the idea
became so popular that numerous articles and papers started pouring in the
contemporary Economic Geographical literature. Urgent need was felt to
ident ify the new concept as a separate and important branch of study.
Prof. Zimmermann’s inimitable definition runs: “The word resource
does not refer to a thing or a substance but to a function which a thing or a
substanc e may perform or to an operation in wh ich it may take part,
namely, the function or operation of attaining a given end such as
satisfying a want. In other words, the word resource is an abstraction
reflecting human appraisal and relating to a func­tion or operation”. So,
resource satisfies ind ividual human wants or attains social objectives. It
also refers to the positive inte raction between man and nature. Man is, of
course, the most important and integral part of resource creation, as he is
situated in t he top of the hierarchy of resource con sumption. Only the
satisfaction of human beings converts anything or a substance into
resource. A thing or substance is not considered as resource when it fails to
give satisfaction to human beings. Proven reserves o f petroleum in the
midst of inaccessible terrain or in the abyss is not considered resource as
they fail to yield any satisfac tion to either society or individual.
Geo­thermal energy in this contemporary world is considered to be the
most useful resource, but, till recently, this heat ­flow was n ot considered
as resource —because man was absolutely ignorant about its uses.
CLASSI FICATION OF RESOURCES:
In general, resources are classified into tw o groups:
(a) Material resources, and
(b) Non -material resources. munotes.in

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Economic Geography
6 Material resources are tangible substa nces, e.g., petroleum, iron ore,
copper, water etc.
Non­material resources are intang ible substances like health condition,
culture, ethics, freedom , environmental harmony etc.
Material or tangible resources are direct, i.e., freely bestowed by nature.
Non­material or intangible resources are cultivated by human beings with
the help of inc reasing knowledge.
Material resources may, again, be sub -divided into two groups:
(i) Organic resources like forest, fish, livestock etc.
(ii) Inorganic resources like iro n ore, manganese , mica etc.
On the basis of durability, resources may be classified i nto two groups:
1. Fund or exhaustible resources that is, not everlasting, destroyed for ever
after use, e.g., coal, petroleum, uranium etc.
2. Flow or inexhaustible resou rces — supply of resource remains
unchanged even after renewed use, e.g., river water , sea ­wave,
sunshine, airflow etc.
Ownership is another parameter to classify resource .
On the basis of ownership resource may be divided into following groups:
(a) Intern ational or world resource:
Owned by global population, i.e., the total re­sources own ed by all
individuals and nations put together. The sum total of all material and non ­
material resources comes under this category.
(b) National resources:
The sum total of resources of the inhabi tants of the nation and resources of
the nation itself.
(c) Individual resources:
Both tangible resources, i.e., property, money, wealth, and intangible
resources, i.e., knowledge, wisdom, health etc. owned by any indi­vidual
is known as individual resou rces.
On the basis of the availability of resources, it can b e classified into two
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Definition: Nature and Scope of Economic Geography
7 (a) Ubiquitous,
(b) Localized.
Ubiquitous types of raw materials are found everywhere, e.g., sunshine,
air etc. while localize d raw materials are available only in some places,
e.g., petroleum, uranium, iron ore etc.


IMPORTANT OF RESOURCES IN ECONOMY :
(i) They satisfy hu man wants both individual and social,
(ii) They are a source or possibility of assist ance,
(iii) They are a means of development and support,
(iv) They are an expedient,
(v) They have capacity to take advantage of opp ortunities, and
(vi) O ne relies on the m for aid, support and supply.
In fact, “resources are those aspects of man’s environ ment which facilitates
the satisfaction of human wants and the attainment of social objectives”
(Encyclo­pedia of Social Sciences). A thing is a resource so far as it affe cts
man as a means of satisfying his wants. In other words, a thing becomes
resource by its function in relation to man, therefore, it is said that
resources do not exist, they become.
For example, a lump of coal is a resource not because of its shape, col or or
compo­sition or for its scarcity but because it functions for satisfying some
human wants. Thus, resource is something functional but at the same time
it must be beneficial to man.

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Economic Geography
8 1.9 SUMMARY
Economic geography is one of the subfields of geography and has a
variety of definitions. It studies the location, distribution and spatial
organization of economic activities across the world along with the
problems in the regional distribution of the economy. It also deals with
the integrated and comprehen sive analysis of the socio­economic and
natural conditions. It even deals with the resources of countries and
regions. Economic geography also studies the regional structure of the
economy as a whole.
Economic geography has a close connection with other branches of
social science especially with economics. Economic geog raphy and
economics are closely related because Economic geog raphy studies the
problems in the regional distribution of economics laws. Economic
geography is also very well tied up with physical geog raphy. Geography
determines the resource. The resource determines the economic
activity. Economics is also closely related to History. The activities of
a man in society of any era have a very close relation with the economic
matters. So to analyse any pe riod, a historian must possess at least a
rudimentary knowledge of the economics.
An economic region is an area in which particular types of commerce take
place based on administrative or geographical boun daries. These
bounda ries come in the form of state lines, international borders or
natural geographic landmarks.
1.10 CHE CK YOUR PROGRES S/ EXERCISE
1. True False
a. Economic Geography is the study of man and his economic
activities under varying sets of conditions.
b. Different geographers have defined economic geography in the same
way and so their opinion about the meaning is the same.
c. Economic geography is one of the traditional disciplines of
history.
d. There are 100 international Economic regions.
e. Economic geography has enormous spatial scope.
2. Fill in the blanks
a. The wheat belt of Kansas, the citrus growing area of South Texas
or the irrigated farmhou ses of California are all examples of
__________ regions.
b. The econom ic region identifies the ____________ activities and the
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Definition: Nature and Scope of Economic Geography
9 c. The main objective of Economic geography is to examine mans
Economic ____________ in terms of production and consumptions in
the light of his environment.
d. In 1882, the German scholar Gotz has defined economic
geography as “A ________________ investigation of the nature of
world areas in their direct influence of goods.”
e. Economic geography investigates the diversity in basic of
the different parts of _________ the world.
3. Multiple choice question
a. In the early 1910’s, economic geography was mostly concerned with
i. production, exchange and consumption of goods by people in
different areas of the world.
ii. only consumption of goods by people in different areas of the
world.
iii. production, and consumption of goods by people in Asia.
b. Economic geography involves the explanation of activities
already present in the landscape along with
i. involves the selection of the future location of an industry.
ii. involves the selection of future location of a country.
iii. involves the selection of future location of a linear settlement..
c. The distribution of natural resources also has a huge impact on the
i. economy.
ii. settlement.
iii. population growth.
d. In North America in the parts of Wyoming and Montana
i. wheat cultivation is a very important part of the economy.
ii. pisciculture is a very important part of the economy
iii. cattle ranching is a very important part of the economy
e. The concept of Economic region is very important tool
i. for orchard planning.
ii. for regional planning.
iii. for agricultural planning.
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Economic Geography
10 4. Answers the following Questions
1. Define Economic Geography.
2. State the nature and scope of Economic Geography.
3. What are the relationships of Economic Geography with other
branches of Social Sciences?
4. Write a short note on “Concept of Economic Region”.
5. What is the importance of Economic Geography?
1.11 ANSWERS TO THE SELF LEARNING QUESTIONS
1.a. true
1.b. false, different geographers have defined economic geography in a
different way but their opinion about the meaning is the same
1.c. false, geography
1.d. false, 10
1. e. true
2.a. Economic
2.b. econom ic, resources
2.c. achievement
2.d. scientific
2.e. resources
3. a i.
3.b.ii.
3.c.i.
3.d.iii.
3.e.ii.
1.12 TECH NICAL WORDS
1. Economic geography­is the study of the location, distribution and
spatial organization of economic activities across the world.
2. Location­ a particular place or position
3. Spatial­relating to space
4. Economic activities ­Actions that involve the production,
distribution and consumption of goods and services at all levels within
a society.
5. Production­The processes and methods used to transform raw
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Definition: Nature and Scope of Economic Geography
11 process to create an output that is suitable for use or has exchange
value.
6. Exchange­an act of giving one thing and receiving another in return
7. Consumption­the action of using up a resource
1.13 TASK
1. In a world map show the Economic region in North America.
2. In a map of India point out the Economic regions in India.
1.14 REFERENCES FOR FURTHER STUDY
 Clark, G., Gertler, M. and Feldman, M.(eds) (2003) The Oxford
Handbook of Economic Geography, Oxford: Oxford University Press
 Coe, N., Kelly, P., and Yeung, H. (2007) Economic Geography: A
Contemporary Introduction, London: John Wiley & Sons
 Economic Geography by Alexander J. W
 Economic Geography: A Contemporary Introduction by Coe N. M.,
Kelly P. F. and Yeung H. W
 Economic Geography by Willington D. E
 Guha, J.L. and Chatta raj, P.R. 1989: A New Approach to
Economic Geography: A Study of Resources, World Press, Kolkata
 Hartshorn, T.A. and Alexander, J.W. 1988: Economic
Geography, Prentice Hall, India, New Delhi.
 Isard, W. et al 1951: Location, Space and Economy,
Technology Press of MIT, and John Wiley, New York


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2
ECONOMIC ACTIVITIES
Unit Structure:
2.1 Objectives
2.2 Introduction
2.3 Subject discussion
2.4 Factors of location of economic activities:
a. Physical
b. Economic
c. Social and
d. Cultural
2.5 Sectors of economy
e. Primary
f. Se condary and
g. Tertiary
2.6 Agriculture and Lumbering: Types and Distribution
2.7 Fishing and Animal Husbandry: Types and Distribution
2.8 Summary
2.9 Check your Progress/Exercise
2.10 Answers to the self learning questions
2.11 Technical words and their meaning
2.12 Task
2.13 References for further study
2.1 OBJECTIVES
By the end of this unit you will be able to:
 Learn the Factors of location of economic activities: Physical,
Economic, Social and Cultural,
 Understand Sectors of economy: Primary, Secondary and
Tertiary.
 Discuss Major primary economic activities: significance and
world type.
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Economic Activities
13 2.2 INTRODUC TION
In the previous chapter we have learnt the definition, nature and scope of
Economic Geography We have discussed the relationship of Economic
Geography with other branches of social sciences, concept of economic
region and importance of economic geog raphy. In this chapter we will
learn the Factors of location of economic activities that is physical,
economic, social and cultural. We will also study the Sectors of
economy such as primary, seconda ry and tertiary. In the latter part of
this chapter we will discuss Major primary economic activities their
significance and world type.
2.3 SUBJECT-DISCUSS ION
Economic activities aim at the production and distribution of goods and
services with a view to make them available to consumer at all levels
within a society. A nation’s economy may be divided into various sectors
so that the p roportion of the population enga ged in the activity sector is
well understood. Fisher (1933) developed the classification of
economic a ctivities in three main sectors. He classifies the
economy into i) primary sector, consisting of agriculture, ii)
secondary sector, formed by industry and iii) the tertiary sector,
incorporating all other activities that did not fit in the first two sectors.
.After few years Clark (1940) used the t erm "services" to apply to all
activities of the tertiary sector, treating it as a complement to other
sectors. Many physical factors are involved in the location of
Economic activities such as, availability of raw materials, power
resources, water, labour, markets and the transport facilities. Somet imes
many social or cultural factors hold back economic activities. Down the
ages social and cultural values have affected economic activities
through attitude toward progress. Societies that value achievement, gain a
higher level of economic development faster than societies that discourage
personal and group achievements. The primary sector of the economy is
the sector of an economy making direct use of natural resources that
includes agriculture, forestry, fishing and mining. This sector is very
important in less-developed countries while it is less important in
industrial countries.
2.4 FACTORS OF LOCATION OF ECONOMIC
ACTIVITIES: PHYSICAL, EC ONOMIC, SOCIAL
AND CU LTURAL
2.4.1 Economic activities:
Economic activities are the activities that involve the production,
distribution and consumption of goods and services at all levels
within a society. There are many factors which influence the
location of economic activities.
1. Physical factors: munotes.in

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Economic Geography
14 Natural resources are the predominant factor that affects the economic
activity of a region. Among which, the land area and the quality of the
soil, forest wealth, good river system, minerals and oil-resources, good
climatic condition are most important. Hence for economic growth, the
existence of natural resources in abundan ce is essential.
2. Economic factors
Economic factors are outside influence on the marketplace. It may
include costs such as wages and availability of capital and market.
Banking and insurance are also important. To these we may add
interest rates, governmental activity, laws, policies, tax rates, and
unemployment. Although all of these factors occur outside the
economic activities but they heavily influence them.
3. Social and Cultural factors:
Social factors are things that affect lifestyle, such as religion, family or
wealth. These changes over time as communities have become more
multicultural, with different races and religions. Among the social and
cultural factors tradition of the population are important. Population
changes directly affect various economic activities because the structure
of the po pulation can change supply and demand of goods and services.
For example with the decline of birth rates demand decreases.
2.4.2 Different economic activities influenced by physical, economic,
social and cultural factor are as follows:
a) Pri mary economic activities are mostly dependent on the
environmental endowments. Agriculture is subjected to factors like soil
fertility, amount of rainfall; temperature etc. All forms of agriculture
are controlled largely by tem perature. Areas deficient in heat are
deficient in agriculture. Topography also affects agriculture. The
richness of soil is another important physical factor affecting agriculture.
In commercial type of farming transportation facilities play a significant
role. Agriculture also requires a supply of large amount of labour. Social
factors affect agriculture in a number of ways. The type of farming
practiced, be it shifting cultivation, subsistence farming, extensive
cultivation or mixed farming, etc., is always related to regional social
structure. Cultural factors can also affect the type of crops that are
grown. Mining can take place in such an area where mineral deposits
are found.
b) For secondary economic activities the main factors are labor
availability of energy, land, market, development of transportation etc.
Adequ ate supply of cheap and skilled labour is also necessary for location
of an industry. Access to markets is an important factor which the
entrepreneur must take into consideration while starting an industry.
Industries producing perishable or bulky commodities which cannot be
transported over long distance are gene rally located in close proximity to
markets. Transport facilities, also, influence the location of industry. The
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15 plays an important role. So the junction points of water- ways, roadways
and railways become the centres of industrial activity. Further, the
modes and rates of transport and transport policy of Government
considerably affect the location of industrial units. Another factor
influencing the location of an industry is the availability of cheap
power. Water, wind, coal, gas, oil and electricity are the chief
sources of power. Finance is required for the setting up of an industry,
for its running, and also at the time of its expansion. The availability of
capital at cheap rates of interests and in adequate amount is a dominating
factor influencing industrial location.
c) For tertiary economic activities transportation is very much required.
Among the physical factors relief of the land, soil and climate are
major determinants. Among the e conomic factors availability of capital
and market, banking and insurance are important. Among the social and
cultural factors the role of government, tradition of the popu lation are
important. Culture is in fact a very important non – economic factor.
Belief and behavior shapes the identity of a society. Cultural
personalities affect the location of the economic activities. Religion is
another non – economic factor. Class tradition and family are also
considered as non – economic factors which determine the location of
economic activities. The role of individual and political factor also plays
an important role.
2.5 SEC TORS OF ECONOMY: PRIMARY,
SEC ONDARY AND TERTIARY:
Economic activities are related to production, distribution, exchange and
consumption of goods and services. Economic activities are also known
as “Occupation”. Some of the economic geog raphers have classified
economic activities or occupations into 3 broad categories.
a. Business
b. Profession
c. Employment
Generally a country’s economy can be divided into 5 main sectors.
a. Primary sector
b. Secondary sector
c. Tertiary sector
d. Quaternary sector
e. Quinary sector
The primary sector of the e conomic extracts products from the earth.
Activities associated with primary sector are agriculture, mining, forestry;
grazing, hunting, gathering, fishing etc. In a developed country the
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Economic Geography
16 The secondary sector of the economic manufactures all finish goods.
Activities associated with the seconda ry sector include automobile
production, textile production, chemical industries, ship building industry
etc.
The tertiary sector of the economic is service industry. This sector
provides services to the general population and business activities
associated with th is sector include retail and whole sale activities,
transportation and d istribution, entertainments, restaurants, clerical
services, media, tourism, insurance, banking, health care etc. in the
developed countries a growing population of workers are in this sector.
Quaternary sector of the e conomic consist intellectual activities.
Activities associated with th is sector are governmen t, culture, library,
scientific research, education etc.
Quinary sector of the economic includes the highest level of decision
making in the society. Some consider this sector as the branch of
quaternary sector. This sector includes top executives, officials in the
government, university, media etc.
2.6 AGRICULTURE AND LUMBERING: TYPES AND
DISTRIBUTION
The primary sector of the economic activities is the sector which makes
direct use of the natural resource. The main primary activities are.
a. Agriculture
b. Forestry
c. Fishing
d. Mining
2.6.1 Agriculture
Agriculture is one of the most wide spread activity in the world.
However the character of agriculture is not uniform. Scholars
have classified different types of agriculture in the world in different
categories some of the major type of agriculture are:
a. Shifting Cultivation: In this system the land for cultivation is
obtained by clearing he forest with the help of slashing and burning
techniques and it is cultivated for a few years till the fertility
declines. Then the land is abandoned and a new land is cleared for
farming. This is a subsistence type of farming, which is done manually
without any use of technology and animal power. This type of
agriculture is common in Asia and especially in south -east Asia. This
type of agriculture gives more emphasis on grain crops. This type of
faming is now on a decline because its spoils nature.
b. Rudimentary sedentary agriculture: This is a substance type of
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17 Fallowing of land is adopted to maintain the soil fertility. This type of
agriculture is found in the tropical regions. Besides grain crops rubber
is also grown in the system.
c. Intensive subsistence farming: This type of agriculture is found in the
area of tropical regions having a high density of population and mostly
receiving a high amount of rainfall. Rice is the main crop. This type of
agriculture employs a large number of people. Asia and South East Asia
has this type of farming. Use of manual power is dominant.
d. Commercial plantations: This type of agriculture is very
important in terms of commercial value. The major products of this type
of agriculture are tea, coffee, rubber etc. This type of agriculture is
developed in Asia, Africa and Latin America. Actually the Eu ropeans
started this type of agriculture during the colonial period. This type of
agriculture requires a high amount of capital.
e. Mediterranean agriculture: This type of agriculture is found in the
Mediterranean region. Wheat, vine yard and citrus fruits are the major
crops here. Horticulture is the major activity of this region most of the
crops are grown in the winter with the help of winter rains.
f. Commercial grain farming: In this type of agriculture machines
are used. This is the major activity in the area of low rainfall and
low density of population. Monoculture of wheat is generally practiced
in the temperate grass lands of South Africa and Australia this the
main type of farming.
g. Life stock and grain farming: This type is commonly known as
mixed farming and it is mostly practiced in the humid area of the
middle latitude except in Asia. This is typically a Europe type of farming,
where crop farming and animal rearing is carried on togethe r. Great
Britain and New Zealand are the examples of area where this is
practiced.
h. Dairy farming: This type of farming has its origin in Europe. For the
development of this farming proximity to the market is very important.
Countries like Denmark and S weden has maximum development of this
type of farming.
i. Substance crops and stock farming: In this type crops are grown and
life stocks are kept but nothing is sold in the market. This type of
farming is common in middle latitudes with lower fertility of soil. In
Russia this type of farming is common.
In India we have 8 types of agriculture. India has a long agricultural
history and the second highest crop output in the world. The major types
of agriculture are:
a. Shifting agriculture: In India this type of agriculture is practiced
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18 b. Substance farming: This type of agriculture is seen all over
India. Here the farmers grow crops only for their family
members.
c. Intensive agriculture: In this type, attempt is made to
maximize the output of the land by using every possible effort.
d. Extensive agriculture: This is a modern type of farming where
machinery is used. This type of agriculture generally grows 1 crop
in a year.
e. Commercially agriculture: The total produce type of agriculture
is very high because the produce is exported to other countries for
profit eg. Wheat, cotton, sugarcane are grown in Gujarat, Punjab,
Haryana and M aharashtra as a commercial crop and they are
exported to other countries.
f. Plantation agriculture: Rubbe r, tea, coffee, coconut are grown as a
plantat ion crop in India. Plantation agriculture is mainly carried on
Kerala, Assam, Karnataka, and Maharashtra.
g. Dry la nd farming: This is practiced in arid and desert like
areas. It is practiced in North West and central India. Crops like jowar,
bajra are grown.
h. Wet land farming: Many areas in India are affected by heavy
monsoon rain and flooding. In this area rice, jute, sugarcane are grown.
2.6.2 Significance and Importance of Agriculture
For decades, agriculture has been associated with the production of
essential food crops. Agriculture plays a critical role in the entire life of
a given economy. Agriculture is the backbone of the economic system
of a given country. The main source livelihood of many people is
agriculture. Approximate ly 20 % of the people directly rely on agriculture
as a mean of living.
In addition to providing food and raw material, agriculture also
provides employment opportunities to very large percentage of the
population. Since agriculture employs many people it contributes
to economic development. As a result, the national income level as well
as people’s standard of living is improved. Infact, agriculture is the
main source of national income for most developing countries. A stable
agricultural sector ensures a nation of food security.
2.6.3 Forestry/ Lumbering :
Forestry is defined as a practice of creation, conservation and
scientific management of forest. The national forest policy of 1952 has
divided the forest land on the basis of its functions into 4 main types.
a. Protection forest
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19 c. Village forest
d. Tree land
The national commission of agriculture in 1926 has classified the forest
into 3 main types.
a. Protection forest
b. Production forest
c. Social forest
There are however 3 different type of forest.
a. Evergreen forest: This forest consists of trees that remain green
throughout the year. This type of forest is found in areas receiving more
than 200 cm of rainfall and having temp erature of 15º to 30º. They
occupy 2 % of the earth surface. These forest are very dense, the leaves
are very broad. In India ever green forest are found in the western
Ghats, in the states of Maharashtra, Kerala and Karnataka. In some
patches they are also found In Assam, Arunachal Pradesh,
Meghalaya, Nagaland, Tripura, west Bengal, Anda man Nicobar is lands.
b. Deciduous forest: this forest which sheds the leaves in the particular
time of the year is known as a deciduous forest.
Deciduous forests are found in different parts of the world including
North America, Europe, New Zealand, Australia and Asia. These forests
are adapted to with stand environmen tal chang es throughout the
year. The trees found in this forest vary from region to region but the
common trees of deciduous forest are walnut, chestnuts etc. Deciduous
forest generally grown in the area where there is sufficient rainfall to
suppo rt the tree growth. Generally in the winter season they lose their
leave and during the summer season they are green once again.
c. Coniferous forest: These forests are found in the northern hemisphere.
Some are found in the southern hemisphere also. The common trees are
spruce, hemlock, pines, firs the leaves of these trees are very small and
they are needle shaped. The trees are in a shape of a cone. The leaves are
waxy and this prevents water loss and the branches of the trees are very
soft and flexible. And they point down wards so that the snow can slide.
2.6.4 Significance And Importance of Forestry
Forest provides timber and this is the most economic significance
forests. Forest help in climate control, reducing pollution and it’s a
home of the wild animals. The forest has thick humus layer and has trees
which have long roots and they hold the water or preserve the water.
This is a very important aspect of forest. As mentioned, forest
provides shelter for the wild life. It also helps in tourism at present.
Deforestation especially in tropical rain forest has become a major
environmental concern. The management of the forest is known
as forestry. Forest management has changed considerably over the last
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20 foresters focus on the ecological, social and economic values of the forest
in consultation with local communities.
2.7 FISHING AND ANIMAL HUSBANDRY : TYPES AND
DISTRIBUTION :
Fishing is the activity of trying to catch fish. There are several
techniques to catch fish. Hand gathering, spearing, netting etc. This
activity is one of the a ncient practices which began during the Paleolithic
period. Now modern techniques have started. There is scope of further
developments also. There are different types of fishing.
a. Fisheries are harvested for th eir values eg. Commercial fishing,
recreational fishing etc. There can be salt water fishing or fresh water
fishing. There can be Marian fishing or inland water fishing.
b. Commercial fishing is the activity of catching fish and other sea food
for commercial profit. This type of fishing is practiced as an
a. industry and far into the ocean under adverse condition. Commercial
fisher man gene rally catches all types of fishes for which there is
demand in the world market. Technology is used in commercial
fishing. This type of activity has occupational risk.
b. Island fishery is mostly carried on in the rivers and lakes.
c. Islands fisheries are an important activity especially in Asia and South
East Asia. Here the fishes are caught in less quantity and mostly
support individual family or some sold in small unorganized
markets.
d. Fishing in India is a major industry in the costal state and it employs
about 14 million people. Fish production in India has increased more
than 10 folds since indep endence in 1942. India has 2,512 km of
marine cost line. India can be considered as one of the major
suppliers of fish in the world. Marine and fresh water catch fishing is
rapidly growing in India
1. Aqua culture is the farming of fish and other aquatic activities
organism. In Ind ia aqua culture is also practiced. Fishing industry
is an important part of the economic from the view point of providing
employment, nutrition and trade.
 Significance and Importance of Fishing
Fishing provides a large quantity of fishes which are used as a source of
food. Fishery by- products like fish oil have medicinal value. Fish waste,
after extraction of the oil is used as manure. Fishing industry provides a
large number of employments. The fishing industry has brought a
lot of income to the farmers in particular and the country in general.
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21  Mining
Mining is the extraction of the valuable minerals from the earth.
Mining of stones and metals has become a human activity since the pre
historic times. Modern mining processing has however changed
over time. Mining operations usually create a negative environmental
impact.
Mining techniques can be divided into 2 types.
a. Surface mining
b. Sub – surface / underground mining
Today surface mining is much more common and produces 85% of the
total minerals. Heavy machineries and large drills are often used in
mining. Environmental issues like erosion, formation of sink holes,
loss of bio – diversity, contamination of soil and ground water are
the common environmental effects. Large amount of wastes are produced
during mining. In India mining is a major economic activity. It provides
raw materials for industrial development.
Primary economic activities are very important in the development of
any economy of the world. The primary sector makes direct use of
the natural resources, agriculture forestry, fishing and mining. Primary
sector is generally a very large sector in the developing countries of the
world.
 Significance and Importance of Mining
Mining provides important minerals which are the source of raw
materials for industries. Mining brings employment, government
revenues, and oppo rtunities for economic growth and diversification
2.8 SUMMARY
After going through the chapter we have come to know that the activities
which are related to the production, consumption and exchange of things
are known as economic activities. Population and economic activities
are closely related hence economic activities may vary from person
to person. Some may be involved in farming, while others may be
involved in industry, business and so on. All these activities are the main
source of income of a country. Man is at the helm of all these activities.
The locations of economic activities primarily depend on some
physical, economic, social and cultural factors. For example mountains
are natural obstruction that blocks access of one area from another. So,
this physical feature may act as a hindrance to some economic activities.
On the other hand the e conomic factors are the factors used in producing
goods or providing services. Economic factors may be classified as
human resources that include labour and managem ent, and nonhuman
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22 technology. Social factors also play a vital role in economic
activities which have helped the social and economic development in a
society.
There are various sectors of Economic activities. Generally a country’s
economy can be divided into five main sectors such as, Primary sector,
Secondary sector, Tertiary sector, Quaternary sector, and Quinary
sector. Primary economic activities are mostly depe ndent on the
environmental endowments and include the production of raw material
and basic foods. Both subsistence and commercial agriculture is
associated with primary sector activities along with mining, farming
and fishing. Cultural factors can also affect the type of crops that are
grown as small holdings and inter gene ration conflicts concerning
succession of land hamper agricultural production. Farming may be of
different types; highly mechanized Commercial farming, or Sub sistence
type or Shifting Cultivation. The secondary sector of the economy
manufactures
finished goods and the tertiary sector provides services. Quaternary sector
of the e conomic activities consist intellectual activities where as Quinary
sector of the economic activities includes the highest level of decision
making in the society.
Forestry is the science, art and practice of understanding, managing and
using wisely the natural resources associated with, and derived from
forest lands. Even though there are a variety of forests, Evergreen
forest, deciduous forest and Coniferous forest are best known. The
activity of catching fish, either for food or as a sport is known as fishing.
This very old activity began during the Paleolithic period. Commercial
fishing, recreational fishing, Island fishery are different types of fishing
activities found around the world. The process of digging in mines to
obtain minerals is known as mining. There are a variety of mining
techniques like surface mining and sub – surface or underground mining.
Mining plays an important role in a state’s economy because industry
develops where mining is concentrated.
2.9 CHECK YOUR PROGRESS/ EXE RCISE
1. True False
a. For secondary economic activities the main factors are labor
availability of energy, land, market, developme nt of transportation
etc.
b. Adequate supply of cheap and skilled labour is not at all
necessary for location of an industry.
c. Quinary sector of the economic activity consist intellectual activities.
d. Commercial plantation is very important in terms of commercial
value.
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23 2. Fill in the blanks
a. Economic activitiesare the activi tiesthat involve the
_________distribution and __________of goods and service s at all
levels withina society.
b. The Richness of ________ is an is an important physical factor
affeting agriculture.
c. _____________ factors affect the type of farming practiced, be it
shifting cultivation, subsistence farming, extensive cultivation or
mixed farming.
d. The junction points of water-ways, __________ and railways
become the centres of industrial activity.
e. Economic activities are also known as “______ ____
3. Multiple choice question
a. In commercial type of farming
i. power resources play a significant role.
ii. market facilities play a significant role.
iii. transportation facilities play a significant role.
b. Industries producing perishable or bulky comm odities which cannot
be transported over long distance are gene rally located
i. in close proximity to raw materials.
ii. in close proximity to mining areas.
iii. in close proximity to markets.
c. The major products of Commercial plantations are
i. tea, coffee, rubber etc.
ii. Rice, wheat, pulses etc.
iii. Jute, cotton, rice etc.
d. The forest in which trees remain green throughout the year is
known as
i. Evergreen forest
ii. Deciduous forest
iii. Coniferous forest

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24 e. Aqua culture is the
i. farming of fish and other aquatic activities organism.
ii. is a process of growing fish and selling it or using its products
for domestic or commercial use.
iii. the production of silk and the rearing of silkworms for this purpose.
4. Answers the following Questions
1. What are the factors of location of economic activities?
2. What are the different sectors of economy? State the functions of
five main economic activities.
3. What do you unde rstand by agriculture?? Give an account of different
types of agriculture of the world.
4. What do you understand by Forestry? How did the national
commission of agriculture in 19 26 classify the forest? What are the
important types of forest present in India?
5. State the significance and importance of forestry.
6. Define fishing. What are the different types of fishing? State the
significance and importance of fishing.
7. Define Mining. What are the different mining techniques? State the
significance and importance of Mining..
2.10 ANSWERS TO THE SELF LEARNING
QUESTIONS.
1.a. true
1.b. false, is necessary for location of an industry.
1.c. false, Quaternary sector
1.d. true
1.e. true
2.a. production, consumption
2.b. soil
2.c. Social
2.d. roadways
2.e. Occupation
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25 3.b.iii.
3.c.i.
3.d.i.
3.e.i.
2.11 TECH NICAL WORDS
1. Aquaculture- it is a process of growing any aquatic animals and
selling them for commercial purposes.
2. Commercial farming - Cultivation is highly mechanised.
3. Shifting Cultivation - It is the oldest form of agriculture
4. Primary economic activity- it is direct use of natural resources that
includes agriculture, forestry, fishing and mining.
5. Secondary economic activity – it involves the transformation of
raw materials into goods
6. Tertiary economic activity-it involves the supplying of services to
consumers and businesses
7. Quaternary sector of the economy – it is a way to describe a
knowledge-based part of the economy
8. Quinary activities – services focused on creation, re- arrangement
and interpretation of new and existing ideas and evaluation of new
technologies.
9. Evergreen forest-It is a forest that consists mainly of evergreen trees
that retain green foliage all year round.
10. Deciduous forests -Forests where a majority of the trees lose their
foliage at the end of the typical growing season.
11. Coniferous forest- forests where vegetation is composed
primarily of cone-bearing need le-leaved or scale-leaved evergreen
trees
2.12 TASK
1. In a world map point out the areas where Tropical rain forests are
found.
2. In a map of India point out the areas where Evergreen forest are found.
3. In a chart compare three main types of economic activities.
4. In a chart compare the characteristics of subsistence and
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26 2.13 REFERENCES FOR FURTHER STUDY
 Clark, G., Gertler, M. and Feldman, M.(eds) (2003) The Oxford
Handbook of Economic Geography, Oxford: Oxford University Press
 Coe, N., Kelly, P., and Yeung, H. (2002) Economic Geography: A
Contemporary Introduction, London: John Wiley & Sons
 Economic Geography by A lexander J. W
 Economic Geography: A Contemporary Introduction by Coe N. M.,
Kelly P. F. and Yeung H. W
 Economic Geography by Willington D. E
 Guha, J.L. and Chatta raj, P.R. 1989: A New Approach to
Economic Geography: A Study of Resources, World Press, Kolkata
 Hartshorn, T.A. and Alexander, J.W. 1988: Economic
Geography, Prentice Hall, India, New Delhi.
 Isard, W. et al 1956: Location, Space and Economy,
Technology Press of MIT, and John Wiley, New York
 Oxford Dictionary
 Encyclopedia Britannica



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27 3
MINERALS AND INDUSTRIES
Unit Structure :
3.1 Objectives
3.2 Introduction
3.3 Subject discussion
3.4 Minerals: Importance, Characteristi cs and Distribution
3.5 Factors Affecting Industrial Locations
3.6 Weber’s Industrial Location Theory
3.7 Major Indust rial Regions of the World
3.8 Summary
3.9 Check your Progress/Exercise
3.10 Answers to the self-learning questions
3.11 Technical Words and Their meaning
3.12 Task
3.13 References for further study
3.1 OBJECTIVES
By the end of this unit you will be ab le to:
 Learn the Classification of Industries; Resources Based and Foot Lose
Industries
 Understand Weber’s Theory of Industrial Location
 Discuss Losch's Theory of Industrial Location
3.2 INTRODUCTION
In the first unit we have studied the definition, nature and scope of
Economic Geography along with its relationship other branches of social
sciences. In the second unit we learnt the Factors of location of economic
activities and the Sectors of economy such as primary, secondary and
tertiary. In the pr esent chapter we will study the Classification of
Industries; Resources Based and Foot Lose Industries. In the latter part of
this unit Weber and Losch's Theory of Industrial Location will be
discussed.

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28 3.3 SUBJECT -DISCUSSION
Industries are economic activi ties that process raw materials and
manufacture goods in factories. Industries play a vital role in the
development of a country’s economy. With the development of industry,
modernisation in the agricultural field has been possible. To increase
productivit y and modernise agriculture we need chemical fertilisers,
pesticide and tractors, pump sets respectively. These are all industrial
products and without all these, agricultural development and
modernisation is not possible. Industries had played a pivotal r ole in the
field of science and technology also. Urbanisation also follows
industrialization. In large scale industries where surplus is very high,
profits can be re -invested for expansion and development. So, industries
help in capital formation and promo tion of trade. Although our country
India is rich in natural resources but due to lack of capital and technology
much of these have not been tapped. Through industrial development
resources are properly utilised and transformed into industrial products.
This in turn has helped in the economical growth of our nation.
3.4 MINERALS: IMPORTANCE, CHARACTERISTICS
AND DISTRIBUTION
What are Minerals ?
The primary material foundation for socioeconomic growth is mineral
resources. According to statistics, mo re than 95% of the energy used by
humans, 80% of the raw materials used in industry, and 70% of the raw
materials used in agricultural production come from mineral resources.
Mineral resources are important to provide a nation wi th the foundation
for indus trial development. Fortunately, because of its diverse geological
structure, India is endowed with a great range of mineral resources. It has
more than a hundred minerals, of which about thirty are important from an
economic stan dpoint. Coal, iron ore, man ganese, bauxite, mica, and other
materials are a few examples. However, there are insufficient amounts of
petroleum and various nonferrous metallic minerals, particularly copper,
lead, zinc, tin, and graphite.

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29 Types of mineral resources:
Based on their chemical and physical characteristics, minerals can be
divided into two primary categories: metallic and non -metallic.
Minerals are basically categorized i n two ways:
Metallic Minerals:
Metallic minerals serve as a solid foundat ion for the growth of the
metallurgical industry. This group includes materials that generate metal,
such as iron ore and bauxite. Metallic minerals have an outward
appearance of met allic lustre or shine.
Ferrous and non -ferrous metallic minerals are subca tegories of metallic
minerals.
Ferrous: Ferrous minerals refer to all minerals that include iron.
Examples of ferrous minerals include chromites, iron ore, and manganese.
About thre e-fourths of the value of all metallic mineral production is made
up of fer rous minerals. These minerals offer a solid foundation for the
growth of the metallurgical industries, especially those producing iron,
steel, and alloys. In terms of ferrous minera l reserves and output, India is
in a good position.
Non-ferrous: Iron-free minerals are referred to as non -ferrous minerals.
Non-ferrous minerals include copper, bauxite, and others. Except for
bauxite, India has little access to non -ferrous metallic miner als.
Non-Metallic Minerals:
Non-metallic minerals lack extractable metals in their chemical makeup
and can either be of organic or inorganic origin. They are further divided
into two groups, namely mineral fuel and other non -metallic minerals,
based on the ir place of origin. India is blessed with several non -metallic
minerals, b ut only a small number of them are significant from an
economic standpoint. They are gypsum, phosphate, kyanite, sillimanite,
dolomite, limestone, and mica. Many different sectors, i ncluding those
that produce cement, fertilizer, refractories, and electric al items, employ
these minerals.
Fuel Minerals: Mineral fuels, such as coal and petroleum, are organic in
nature and generated from buried animal and plant life. They go by the
name of fossil fuels as well.
Other Nonmetallic Minerals: Other non -metallic mi nerals, like mica,
limestone, and graphite, are inorganic in nature.


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30 Characteristics of Minerals:
A mineral's fundamental qualities include the following:
 The mineral Crystal structure is clearly defined.
 They have a definite chemical composition.
 They ar e naturally occurring.
 They are formed by inorganic methods.
 They are solid in nature.
A rock must exhibit at least three of these qualities in order to be
considered a mineral.
Other properties of minerals include their irregular spatial distribution.
Mineral quality and quantity are inversely correlated, meaning that high -
quality minerals are rarer than low -quality minerals.
All minerals ev entually become depleted. Geologically speaking, minerals
take a very long period to produce, and they cannot be inst antly replaced
when needed.
Distribution of Minerals:
India has an uneven distribution of mineral resources. Mineral resource
occurrences are linked to specific categories of geological structure.
The majority of coal reserves are located in the Gondwana s ystem.
There are significant metallic mineral deposit s in the Dharwad and
Cuddapah systems, including copper, lead, zinc, etc.
The Damodar, Sone, Mahanadi, and Godavari valleys contain more than
97 percent of the world's coal deposits.
Petroleum reserves a re found offshore of Mumbai high in the Arabian Sea,
sedimentary basins of Assam, Gujarat. The Krishna -Godavari and Kaveri
basins contain new deposits.
Major non -metallic minerals found in the Vindhyan system include
gypsum, calcium, limestone, and dolomit e. In the ancient crystalline rocks
of the peninsular plateau region of India, the majority of metallic minerals
are found.
Major Mineral Regions of India:
Minerals may occasionally occur in isolated pockets here and there, but
they are often concentrated in three large areas throughout India.
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31 Area of the North Eastern Plateau:
It includes the plateaus of Chotanagpur, Orissa, and eastern Andhra.
Rich mineral reserves specifically used for metallurgy can be found in this
area.
Rich deposits of several minera ls, particularly those used in the
metallurgical indust ry, such as iron ore, manganese, mica, bauxite,
limestone, and dolomite, are found in this region.
Along the valleys of the rivers Damodar, Mahanadi, and Son, among
others, this area possesses abundant coal reserves.
Additionally, there are significant deposits of copper, uranium, thorium,
phosphate, etc. in this area.
Some important minerals:
Iron ore:
Iron ore resources are fairly numerous in India, and the ore is of very high
grade with an iron conte nt of more than 60%. Haematite, magnetite, and
limonite make up the three main forms of iron ore found in the nation. In
the country's north -eastern plateau region, the iron ore mines are located
near the coal deposits. The States of Odisha, Jharkhand, Chh attisgarh,
Karnataka, Goa, Telangana, Andhra Pradesh, and Tamil Nadu contain
over 95% of the world's iron ore deposit s.
types Iron ore Iron content
Hematite (red ore) 68%
Magnetite (black ore) 60%
Limonite (Yellow ore) 35% -50%

 The districts of Ananta pur, Khammam, Krishna, Kurnool, Cuddapah,
and Nellore are among those in Andhra Pradesh that have iron ore
reserves.
 Additionally, the states of Rajasthan, Maharashtra, and Tamil Nadu
contain some deposits. Particularly for export purposes, the mines at
Bailadila, Rajhara, and Kiruburu in Chhattisgarh and Odisha are being
developed.
 Although Goa's ore is of lower quality, it nevertheless makes an
impressive contribution to the nation's overall production. From
Mormugao Port, about all of Goa's iron producti on is shipped to Japan .
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32 Manganese:
 Odisha, Madhya Pradesh, Maharash tra, Karnataka, and Andhra
Pradesh are the key production regions. A belt extending from the
Maharashtra districts of Nagpur and Bhandara to the Madhya Pradesh
districts of Balaghat and Chh indwara has more than 78 percent of
India's total manganese ore dep osits.
 The largest producer of manganese in the nation is Madhya Pradesh
i.e; accounts for 33% of all production nationwide.
 Sundargarh, Rayagada, Bolangir, Keonjhar, Jajpur, Mayurbhanj,
Koraput, Kalahandi, and Bolangir are the significant mining regions.
 Another significant producer in the nation, Karnataka contributes 26%
of the overall output and has mines in Dharwad, Ballari, Belagavi,
North Canara, Chikkmagaluru, Shivamogga, Chitradurga , and
Tumkur.
 Manganese, which is mined in the districts of Nagpur, Bhandara, and
Ratnagiri, is another key mineral produced in Maharashtra.
Uses of Minerals:

 Both industrialized and developing nations make extensive use of
minerals.
 Sand, gravel, brick cl ay, and crushed rock aggregates are all
considered construction minerals. They are employed in the creation of
concrete, bricks, and pipes as well as in the construction of homes and
roadways.
 Non-metallic industrial minerals are util ized in a variety of i ndustrial
processes, such as the production of chemicals, glass, fertilizers, and
fillers for paper, plastics, and pharmaceuticals. Salt, clays, limestone,
silica sand, phosphate rock, talc, and mica are examples of industrial
mineral s.
3.5 FACTORS AFFECTING INDUSTRIAL
LOCATIONS
Generally, the location of industries is influenced by economic
considerations though certain non -economic considerations also might
influence the location of some industries. Maximization of profit which
also implies cost minimiza tion is t he most important goal in their choice of
particular places for the location of industries. Let us learn about various
factors affecting location of industries.

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33 There are several factors that pull the industry to a particular place.
Factors Affect ing Loca tion Of Industries are:
1. Availability of raw materials
2. Availability of Labour
3. Proximity to Markets
4. Transport Facilities
5. Power
6. Site and Services
7. Finance
8. Natural and Climatic Considerations
9. Personal Factors
10. Strategic Considerations
11. External Economies
12. Miscellaneous Factors

1. Availability of raw materials:
In determining the location of an industry, nearness to sources of raw
material is of vital importance. Nearness to the sources of raw
materials would reduce the cost of production of the industry. F or most
of the major industries, the cost of raw materials forms the bulk of the
total cost. Therefore, most of the agro -based and forest -based
indus tries are located in the vicinity of the sources of raw material
supply.

2. Availability of Labour:
Adequate supply of cheap and skilled labor is necessary for the
industry. The attraction of industry towards labor centers depends on
the ratio of labor co st to the total cost of production which Weber calls
Labour cost of Index. The availability of skilled worker s in the interior
parts of the Bombay region was one of the factors responsible for the
initial concentration of the cotton textile industry in the region.

3. Proximity to Markets:
Access to markets is one of the important factors affecting location of
industries that the entrepreneur must take into consideration. Industries
producing perishable or bulky commodities which cannot be
transported over long dista nces are generally located in close
proximity to markets. Industries located near the markets could b e able
to reduce the costs of transport in distributing the finished product as
in the case of bread and bakery, ice, tins, cans manufacturing, etc.
Acces sibility of markets is more important in the case of industries
manufacturing consumer goods rather th an producer goods.

4. Transport Facilities:
Transport facilities, generally, influence the location of industry.
Transportation with its three modes, i.e ., water, road, and rail
collectively play an important role. So the junction points of
waterways, roadw ays, and railways become humming centers of
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34 Further, the modes and rates of transport and transport policy of the
Government consi derably affect the location of industrial units. The heavy
concentration of the cotton textile industry in Bombay has been due to the
cheap and excellent transportation network both in regard to raw materials
and markets.

5. Power:
Another factor influenc ing the location of an industry is the availability
of cheap power. Water, wind, coal, gas, oil, and elect ricity are the chief
sources of power. Both water and wind power were widely sought as
sources of power supply before the invention of the steam engin e.
During the nineteenth century, nearness to coal fields became the
principal locating influence on the s etting up of new industries,
particularly, for heavy industries. With the introduction of other sources
of power like electricity, gas, oil, etc. the power factor became more
flexible leading to dispersal and decentralization of industries. Let us
dive fur ther and learn some more factors affecting the location of
industries.

6. Site and Services:
The existence of public utility services, the cheapness of the value of
the site, amenities attached to a particular site like the level of the
ground, the nature o f vegetation, and the location of allied activities
influence the location of an industry to a certain extent. The
government has classified some areas as backward areas where the
entrepreneurs would be granted various incentives like subsidies, or
provisio n of finance at a concessional rate, or supply of power at
cheaper rates, and provision of education and training facilities. Some
entrepreneurs induced by such incentives may come forward to locate
their units in such areas.

7. Finance:
Finance is required for the setting up of industry, for its running, and
also at the time of its expansion. The availability of capital at cheap
rates of interest and inadequate amounts is a dominating factor
influencing industrial location. For instance, a review of the loc ational
history of the Indian cotton textile industry indicates that the
concentration of the industry in and around Bombay in the early days
was mainly due to the presence of rich and enterprising Parsi and
Bhatia merchants, who supplied vast financial re sources.

8. Natural and Climatic Considerations:
Natural and climatic considerations include the level of the ground, the
topography of a reg ion, water facilities, drainage facilities, disposal of
waste products, etc. These factors sometimes influence the l ocation of
industries. For instance, in the case of the cotton textile industry, the
humid climate provides an added advantage since the fr equency of
yarn breakage is low. The humid climate of Bombay in India and
Manchester in Britain offered great scope f or the development of the
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35 9. Personal Factors:
In deciding the location of industrial units, som etimes an entrepreneur
may have personal preferences and prejudices against certain
localities. For instance, Mr. Ford started to manufacture motor cars in
Detroit simply because it was his hometown. In such cases, personal
factor dominates other considera tions. However, this kind of
domination is rare.

10. Strategic Considerations:
In modern times, strategic considerations are playing a vital role in
determining industrial location. During war -time, a safe location is
assuming special significance. This i s because in times of war the main
targets of air attacks would be armament and ammunition factories and
industries supply ing other commodities which are required for war.
The Russian experience during the Second World War provides an
interesting example.

11. External Economies:
External economies also exert considerable influence on the location
of industries. External economi es arise due to the growth of
specialized subsidiary activities when a particular industry is mainly
localized at a particular cente r with port and shipping facilities.
External economies could also be enjoyed when a large number of
industrial units in the same industry were located in close proximity to
one another.

12. Miscellaneous Factors:
Historical incidents also play a dominat ing role in determining the
location of industries in certain cases. The development of the cotton
textile industry in Lancashir e provides an interesting example of this.
Further, the size of an industrial unit would also have much influence
in choosing a location. This is because the size of industrial units
depends upon the radius of the circle within which they can profitably
distribute their goods and upon the density of the population living
within the circle.

3.6 THEORY OF INDUSTRIAL LOCATION – WEBER
Von Thünen was the first to make an effort to identify the factors that are
responsible for the locations of industries. Hi s ideas gave rise to the
subsequent work of German geographers such as William Lanyard and
Alfred Weber who has great contribution in the development of Least Cost
Theory.
3.6.1 Weber’s Theory of Industrial Location
Alfred Weber gave his theory in 1909 whi ch was published in the form of
an essay in German and subsequently translated in English in 1929. It was
only after 1929 that the modern thinking started.
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36 3.6.1.1 Salient Features of Weber’s Theory :

 The first and the most important feature of the Weber’s theory is its
division into two parts:
a. Pure theory and
b. Realistic theory .
 Other features of his theory are that it is based on the deductive method
and incorporates all those general factors which attract some areas or
regions and ultimately decide the basic location of the industries.
Through the process of cost analysis, Weber came to know that there were
certain costs in the total cost of production which are directly influenced
by geographical factors.
Geographical conditions vary from place to place and influence the cost of
production. But interest and depreciation are not influenced by
geographical factors.
3.6.1.2 According to Weber, factors affecting location of industries
may be broadly classified into two groups:
1. Regional factors or prim ary causes of regional distribution of industry.
2. Agglomerative and degglomerative factors or sec ondary causes
responsible for redistribution of industry.
1. Regional factors :
After examining the cost structures of different industries, Weber came to
the conclusion that the cost of production varies from region to region.
Therefore, the industry in general is localized at a place or in a region
where the cost of production was the minimum.
Again Weber opined that there are two general regional factors whic h
affect cost of production:
i. Transportation cost , and
ii. Labour costs .
In fact, these two are the basic factors influencing location of industries.

i. Transportation costs :
Transportation costs which play an important part in the location of an
industry are i nfluenced by the weight to be transported and the distance to
be covered.
Generally, industries have a tendency to localize at a place where material
and fuel are not difficult to obtain.
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37 Weber has also stated that the basic factors for location of an in dustry are
the nature or type of material used and the nature of their transformation
into products.
Weber has divided raw material into two categories :
a. Iniquities and
b. Specific local raw material.
The iniquities are generally available everywhere whereas the specific or
local raw material is found only in a certain area.
According to Weber, material may be of two types:
(i) Pure raw material and
(ii) Gross raw material .
(i) Pure raw material is one which does not lose its weight during
production process.
(ii) The gross raw material is that which loses considerable weight in the
transformation process in which the finished product is less in weight than
the weight of raw material used in its manufacture.
Examples of this type of material are sugar cane and iron ore.
Weber has given a material index to show the tendency of industries to
get located either at a place where raw materials are easily available or
where the markets are closer.

Fig 3.1
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38 The formula given by him is:
Material Index = Weight of Loca lized Gross Material/ Weight of
finished commodity
If the index number is greater than unity, industries will have a tendency
to localize at the place of raw materials; in case of its being less than unity,
they will get located near the places of consumpt ion or markets. In case of
unity, industries may get located at any of the places of raw material or
markets depending upon discretion of the entrepreneur and his
convenience.
ii. Labour costs also affect the location of industries.
If transportation costs ar e favourable but labour costs unfavourable, the
problem of location becomes difficult to have a readymade solution.
Industries may have tendency to get located at the place where labour
costs are low.
But labour and transportation costs should be low for an ideal situation.
Whether labour costs will have an upper hand in the location of an
industry will be decided by labour cost index
.This can be found by the following formula:
Labour Cost Index = Labour Cost / Weight of Product
If labour coefficient is h igher, the industry will get located at the place
where costs are low and if labour the coefficient is lower, transportation
costs may influence the decision.
2. Agglomerative and Degglomerative Factors :
Agglomerative factors make industries centralize at a particulars place.
Such factors may include banking and insurance facilities, external
economies and the like. The tendency of centralization is influenced by the
manufacturing index which indicates the proportion of manufacturing
costs in the total of p roduction. If the coefficient of manufacture is high
industries will have a tendency to centralize, if it is low, tendency of
decentralization may be visible.
Degglomerative factors are those which decentralize the location of
industries. Examples of such factors are: local taxes cost of land,
residence, labour costs and transportation costs. Such factors
decentralization because the cost of production stands reduced due to
decentralization of shift in location.
Weber has indicated two more possibilities
i. Split in Location .
According to Weber, when weight losing raw materials are used in
production and it is advantageous to carry out different activities at
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39 For example Paper industry, where pu lp is prepared at one place and paper
manufactured at another.
(ii) Location Coupling .
If wastes remaining after the main production are to be made saleable then
some subsidiary industry may take place. This is known as location
coupling.
Criticism of We ber’s Theory:
The most important criticism against Weber’s theory is that it is too
simple, unrealistic and imaginary.
The criticisms are as follows:
1. Inadequate Analysis of Transportation Costs :
Weber considers only two factors in transportation costs — the weight to
be transported and the distances to be covered. Weber has not given any
consideration to some other factors such as quality of goods, topography
etc., which also influence transportation costs. Also, Weber has taken
transportation cost on the basis of tone -mileage, and not on physical cost
basis.
2. Omission of Important Causes of Location:
Weber has included only transportation costs and labor costs among the
causes of location, centralization or decentralization of industry. Other
factors af fecting location, such as climate, credit facilities, cost of capital
etc., were not given any consideration.
3. Mathematical Expressions :
Weber has used index numbers and coefficient in his theory which has
made it complicated. In fact, the theory is base d on technical analysis and
has become mathematical in character. This has made it more difficult to
understand.
4. Categorization of Raw Materials :
Austin Robinson has regarded the division of raw materials made by
Weber as artificial and unnatural.
5. Historical Factors Ignored:
The non -economic factors like historical, social and political factors were
not considered by Weber
6. Consumption Centers:
Weber has taken consumption centers as stable whereas consumption
centers change and consumers and buyers are generally scattered all over.
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40 7. Overemphasis on Labour Costs:
Weber takes labour centers as fixed and the number of laborers on each
center as uncertain. This assumption is imaginary and does not appear
sound.
Conclusion : To conclude it can be said in spite of the criticism leveled
against Weber’s theory, it has its own place. The theory can be made more
3.7 Major Industrial Regions of the World
Industrial regions are areas where industries have concentrated due to
favourable geo -economic conditions. T hese are areas where the
manufacturing industry operates on a large scale and employs a large
proportion of the population. The spatial distribution of manufacturing
units demonstrates a clear trend of localization towards a few select areas;
these areas a re referred to as 'industrial regions.' The industries are not
established at random, but rather in order to ma ximise profit. Furthermore,
there are some methods that can assist entrepreneurs in determining their
locational requirements. This article will explain to you about Major
Industrial Regions of the World .
Major Industrial Regions of the World
The world's industrial regions are very unevenly distributed across the
globe.
Natura l and cultural factors are both involved in any explanation of the
global distribution of manufacturing regions, but the great differences in
the localization of any industrial region can be explained to a large extent
by resource availability.
Many indust rial centres have sprung up since the development of
machinery, where the re is an abundance of coal, coal and iron, or
extensive water power - the main sources of modern industry - and all
such towns are more or fewer business centres.
The world's five major industrial regions. The following are the industrial
regions:
 North Am erican Region
 European Region
 Other European Regions
 Asian Regions
 Other Asian Industrial Zones.

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41 North American Region
 The United States of America contributes roughly one -fifth of the
industrial output in this region. Canada is another significant produce r.
 Only 5% of these countries' land area contains one -third of their
population and nearly two -thirds of their manufact uring output.
 This manufacturing belt has risen to prominence as a result of a
combination of historical and environmental factors.
 Impor tant Location Factors
 The early settlement gave eastern cities an advantage in becoming the
country's dominant industri al centre.
 Access to Raw Materials - essential raw materials were available (by
waterway or natural resources).
 Transportation - The Great Lakes and major rivers played an early role
in determining waterway transportation.
 Access to fresh water and power - close proximity to large lakes
The Great Lakes region of North America
 It consists of the eight U.S. states of Illinois, Indiana, Michigan,
Minnesota, New York, Ohio, Pennsylvania, and Wisconsin, as well as
the Canadian province of Ontario.
 Navigable terrain , waterways, and ports fueled unprecedented regional
transportation infrastructure construction.
 With significant innovations in both pro duction processes and business
organisation, the region is a global leader in advanced manufacturing
and research and d evelopment.
New England region
 New England is a region in the northeastern United States that
includes the six states of Maine, New Hamps hire, Vermont,
Massachusetts, Rhode Island, and Connecticut.
 It has historically been a significant industrial manufact uring centre
and a supplier of natural resource products such as granite, lobster, and
codfish.
 The majority of exports are industrial pr oducts, such as specialised
machines and weaponry.
 Industrial and commercial machinery, such as computers and
electroni c and electrical equipment, account for roughly half of the
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42 West Coast region of Canada
 The Canadian West Coast - Weste rn Canada's dominant industries are
energy and agriculture, and this region, with only 10 million people, is
one of the world's largest net exporters of both energy and agricultural
commodities.
 Estimated breakdown: Oil (13% of global reserves; 4% of globa l
output) Uranium (8% of global reserves; 20% of global production),
Potash (60% of global reserves; 30% of global production), Wheat,
coarse grains, and oilseeds (21% of the global export market for
wheat; 10% for oilseeds).
Other Industrial regions in No rthern America
 The region of New York -Mid-Atlantic.
 The Midwestern Region
 Region of the North -East
 The region to the south.
 The Western Region
 The Pacific Region.
European Region
 The majority of countries in the European Union, particularly in
Western Euro pe, are highly industrialised.
 Some of the countries are world leaders in manufacturing. Germany,
the United Kingdom, Italy, France, and Spain are examples.
 The United Kingdom is one of the world's most industrialised
countries. In fact, modern industriali zation was largely born on British
soil.
 The industrial revolution began in Europe, and as a result, heavy
industries on a large scale developed in many parts of Europe.
 Despite i ndustrial development in many parts of the world, Europe
remains a major indu strial power.
 Industries in Europe are dispersed across many countries, and Europe's
manufacturing belt is not continuous.
United Kingdom
 The United Kingdom was the world's first highly industrialised
country. The coalfields are closely associated with the majority of its
industrial regions.
 The industry is currently declining due to cheaper and more efficient
production overseas, as well as old equipment and labour problems at
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43  Nonetheless, the UK's industrial structure is regarded as significant.
North East Coast
 The industrial region o f the northeast coast is also fairly close to a
coalfield, that of Durham and Northumberland.
 Coal mining and iron and steel production are two of the most
important industries.
 In recent years, its economic fortunes ha ve not differed significantly
from th ose of West Cumberland, despite the establishment of a greater
variety of steel processing industries as well as other industries such as
chemicals.
Lorraine region
 Lorraine is a region of France located in the northeas t corner of the
country, bordering Ge rmany, Belgium, and Luxembourg.
 This region of France is mostly agricultural, with the rivers Meuse and
Moselle flowing through it and rising on the forested slopes of the
Vosges.
 The region is well -known for its iron a nd steel industry, as well as its
crystal works.
Germany's Ruhr and Silesia
 The Ruhr valley is a city in North Rhine -Westphalia.
 It is the most densely populated region in Germany and is known
for its coal mining and steel industries.
Other Industrial re gions in Europe
Germany France Italy
 The Saar and
Middle Rhine
Industrial Region.  The Hamburg
Industrial Region.  Berlin Industrial
Region.
 Leipzig Industrial Region.  The
Northern
Industrial
Region.
 The
Lorraine
Industrial
Region.
 The Paris
Industrial
Regi on.  The Northern
Region
(Lombardy,
Piedmont,
Liguria, etc.).
 The Southern
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44
Other European Regions
 Several other industrial regions can be found in various European
countries.
 Swiss Plateau in Switzerland, Stockholm region in Sweden,
Rotter dam-Amsterdam region in Holland, and Brussels -Antwerp
industrial region in Belgium are all important.
 Separating one European industrial zone from another is a difficult
task. In reality, all of these areas are merely sub -regions of a much
larger European industrial zone.
The Moscow -Tula Industrial Region
 This is one of the Soviet Union's oldest industrial conurbations.
 Numerous industrial establishments can be found in Moscow, the
capital city, as well as other urban centres such as Tula, Gorky,
Ivanovo, a nd Yaroslav. During its early stages of development, Tula
iron ore and Moscow brown coal proved advantageous.
 However , the mineral resources declined later on. However, this
region's growth continues unabated.
 The Moscow -Tula region has the highest concent ration of industries.
 Iron-steel, heavy chemical, metallurgy, machine tools, refineries,
textile, electrical, automob iles, and so on are major industries. This
industrial agglomeration accounts for nearly a quarter of total national
industrial output.
The Southern Industrial Region
 The great Ukrainian region is the largest industrial area. This region
contributed the mos t iron steel and other metallurgical products.
 The famous Donetz coal and Krivoi Rog iron ore provided the
foundation for the region's over all economic and industrial growth.
 Aside from that, Nikopol manganese is widely used in iron limestone,
another raw material found in the region.
The Southern Industrial Region:
 The great Ukrainian region is the largest industrial area in the CIS.
This re gion contributed the most iron steel and other metallurgical
products.
 The famous Donetz coal and Krivoi Rog iron ore provided the
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45  Aside from that, Nikopol manganese is widely used in iron limestone,
another raw material found in the region.
The Ural Industrial Region
 The Ural industrial region owes much of its development to the
massive iron ore deposits of Magnitogorsk, Nizhny Tagil, and S erov.
Following the establishment of the Communis t regime, Rural
development was prioritised, and the 'UralKuznetsk Combine' was
built to expedite the region's indust rialization.
 This region has an excellent communication system, particularly
railroads. Several other industries emerged gradually.
 Among t hese are machine tools, agricultural machinery, chemicals,
and so on.
Other Industrial regions
 The Caucasus Industria l Region.
 The Volga Industrial Region.
 The Kuznetsk Industrial Region.
 The Central Asia Industrial Region.
Asian Regions
 No Asian country h ad a strong industrial base until recent times.
 However, with the rise of some countries in the industrial sector, such
as Japan, China, India, Korea, and Taiwan, this region is now posing a
serious threat to the traditionally developed nations.
 Indeed, wh en it comes to the world's future industrializat ion, Asia is
frequently regarded as the dark horse.
Japan's Yokohama region
 Yokohama is the capital city of Kanagawa Prefecture and the second -
most populous city in Japan after Tokyo.
 It is a significant comm ercial hub in the Greater Tokyo Area.
 The city's economy is strong, particularly in the shipping,
biotechnology, and semiconductor industries.
China's Manchurian region
 China's Manchurian region is a major industrial hub, with massive coal
mines, iron and steelworks, aluminium reduction plants, paper mi lls,
and factories producing heavy machinery, tractors, locomotives,
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46  The only extensively level area is the great Manchurian plain, which is
crosse d by the Liao and Songhua rivers.
 It has been a major manufacturing and agricultural centre in China
because it is fertile and densely populated.
The Calcutta Conurbation
 Broadly, a narrow strip running from Bansberia and Naihati in the
north to Budge Budg e and Uluberia in the south along the Hooghly
River may be taken as the demarcating line of India's oldest and
largest industrial region.
 This area has seen the developmen t of several suburban and satellite
townships. Notable among these are Howrah, Liluah , Bally, Uttarpara
etc
 Jute mills, cotton textiles, chemicals, drugs and pharmaceuticals,
engineering, machine tools, automobiles, tobacco, food processing,
leather, fabri cation, paper, match, and other industries are located in
this region.
Other Industri al regions in Asia
Japan  The OsakaKobe Region.
 The Chukyo Region.
 The North Kyushu Region
China  The Yangtze Valley Region.
 The North China Region.
 The South China Region.
India  The BombayPoona Megalopolis.
 The Ahmedabad Vadodara Region.
 The Southern In dustrial Region.
 The Damodar Valley Region.
Other Asian Industrial Zones
 Aside from these major industrial regions, Asia has a few isolated
and dispersed industrial centres.
 Seoul, Chongthu, Taejon, Taegu, Pohang, Ulsal, and Kwangju in
South Korea are not able, as are small islands such as Hong Kong
and Singapore.
 Karachi, Pakis tan, Kuala Lumpur, Malaysia, and Kuwait are
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47 Other Major Industrial Zones
Major Industrial
Zones Features
Magnitogorsk  Magnitogorsk is an industrial city in Chelyabinsk Oblast, Russia, situated on the eastern side of the Ural Mountains' extreme southern extent by the Ural River.
 It was named after Magnitnaya Mountain, a geological anomaly that was almost pure iron.
 The are a's large reserves of iron ore made it an ideal location for a steel plant.
 During WWII, the city played an important role because it supplied much of the steel for the Soviet war machine, and its strategic location near the Ural Mountains meant Magnitogorsk was safe from German Army capture.
Donbas of Ukraine
(Donets Basin)  The Ukrainian Donbas (Donets Basin) is a historical, economic, and cultural region in eastern Ukraine.
 Since the late nineteenth century, it has been a coal mining area that has become a heavily industrialised territory plagued by urban decay and industrial pollution.
 Donbas coal mines are among the most dangerous in the world due to enormous working depths (ranging from 300 to 1200 m) caused by natural depletion, as well as high levels of methane explosion, coal dust explosion, and rockburst dangers.
Kuzbass region  The Kuzbass region is located in southwestern Siberia, where the West Siberian Plain and the South Siberian Mountains meet.
 It is one of Russia's most important industrial regions, and it contains some of the world's largest coal deposits.
 The region's south is dominated by metallurgy and mining, as well as mechanical engineering and chemical production. munotes.in

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48
Appalachian region  The Appalachian region is a 205,000 -square -mile area that runs from southern New York to northern Mississippi along the spine of the Appa lachian Mountains.
 The Region's economy, which was once heavily reliant on mining, forestry, agriculture, chemical industries, and heavy industry, has recently become more diverse, and now includes a variety of manufacturing and service industries.
 Because Appalachia once produced two -thirds of the nation's coal, coal mining is the industry most commonly associated with the region.
Sao Paulo region  The Sao Paulo region is Brazil's largest city and is known as the "financial capital of Brazil," as it is home to the headquarters of many major corporations as well as the country's most renowned banks and financial institutions.
 Once known for its strong industrial character, Sao Paulo's economy has shifted to the tertiary sector, focusing on services and businesses for the country.
3.8 SUMMARY
After going through the chapter we have come to know that industry
produces goods within an economy. Utilization of huge volume of natural
resources has become possible wi th the development of various types of
industries. Industries can be classified on several bases such as Large
Scale Industry, Medium Scale Industries, and Small Scale Industries. On
the Basis of raw -material and finished goods industries are classified as
Heavy Industries, Light Industries. On the basis of ownership industries
may be classified as Private Sector Industries, Public Sector Industries,
Joint Sector Industries and Corporative Sector Industries. On the basis of
source of raw material industries are classified as Agro Based Industries
Mineral Based Industries, Pastoral Based Industries and Forest Based
Industries. There are many industries under Miscellaneous Industries too.
To illuminate the various fa ctors that influence the location of indust ries
geographers have taken numerous approaches. Alfred Weber formulated a
theory of industrial location in which an industry is located where the
transportation costs of raw materials and final product is a minim um.
Weber’s theory has two parts; Pure theo ry and Realistic theory. According
to Weber Regional factors or Agglomerative and degglomerative factors
affect the location of an industry. Even being criticized, Weber’s theory
has its own place.
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49 August Losch ba sed his theory on the modification of the W alter
Christaller's central place theory. His model postulated that there is one
superior centre where all goods are produced.
3.9 CHECK YOUR PROGRESS/ EXERCISE

1. True False
a. Industry is an economic activity concer ned with the processing of raw
materials an d manufacture of goods in factories.
b. Agro Based Industries depend upon animals for their raw materials.
c. Industries which require huge labour force for running them are called
labour intensive industries.
d. Petro ch emicals are an example of agro based indust ries.
e. Agglomerative factors make industries centralize at a particulars place.
2. Fill in the blanks
a. The first and the most important feature of the Weber’s theory is its
division into two parts: Pure theory and ___ _______ __________.
b. Through the process of_ _________ ________, Weber came to know
that there were certain costs in the total cost of production which are
directly influenced by geographical factors.
c. Industries which employ a large number of laborers in eac h unit are
called ______ _________industrie s.
d. Industries owned by state and private firms are known as _________
_______ industries.
e. ________ Based Industries are those industries which obtain raw
materials from agriculture.
3. Multiple choice question
a. Indust ries which are owned and run by individuals and which employ
small number of laborers are called
i. small scale industries.
ii. Large scale industries
iii. Foot lose industries

b. Industries that are owned by state is a
i. private sector industry.
ii. publi c sector industry.
iii. joint sector indust ry.

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50 c. Paper cardboard, lac, rayon, resin, basket industries are included in
i. Forest Based Industries.
ii. Agro Based Industries.
iii. Mineral Based Industries.

d. Village industries are located in villages and primarily cater to the
needs of
i. urban people.
ii. old people.
iii. rural people.

e. Industries may have tendency to get located at the place where
i. labour costs are low.
ii. labour costs are high.
iii. transportation costs are high

4. Answers the fo llowing Questions
1. Define industry. Classify industry on the basis of Strength of Labour,
Ownership, Source of Raw Material and Raw Material and Finished
Goods.
2. Write a short note on Miscellaneous Industries.
3. Compare between Resources Based Industries and F oot Loose
Industries.
4. Explain the Theory of Industrial Location by Alfred Weber.
5. Explain the Theory of Industrial Location by Losch.
6. Criticise Weber’s theory of industrial location.
3.10 ANSWERS TO THE SELF LEARNING
QUESTIONS .
1.a. true
1.b. false, Pastora l
1.c.true
1.d. false, Resources based indu stries
1.e. true
2.a. Realistic theory.
2.b. cost analysis
2.c. large scale
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51 2.e. Agro
3.a.i.
3.b.ii.
3.c.i.
3.d.iii.
3.e.i.
3.11 TECHNICAL WORDS:

1. Primary sector –it is the sector of an economy th at makes direct use of
natural resources
2. Secondary sector - it is the sector of an economy where industries
produce a finished, usable product
3. Industry -a particular form or branch of economic or commercial
activity concerned with the processing of raw mat erials and
manufacture of goods in factorie s
4. Large scale industries : industries with huge infrastructure man power
and heavy capital
5. Medium scale industries - industries that are in -between large scale
and small scale industries
6. Small scale industries - it is an industry created on a small budget an d
produces its goods using small machines, less power and labour
7. Light industry - industry that is usually less capital -intensive than
heavy industry and uses light raw materials and produce light
finished produc ts.
8. Heavy industry - industry that is more consumer -oriented than
business -oriented and use heavy and bulky raw materials
3.12 TASK

1. In a chart show the classification of industries.
2. In a chart show the salient features of Weber’s Theory.
3.13 REFERENCES FOR FURTHER STUDY

 Clark, G., Gertler, M. a nd Feldman, M.(eds) (2003) The Oxford
Handbook of Economic Geography, Oxford: Oxford University Press
 Coe, N., Kelly, P., and Yeung, H. (2007) Economic Geography: A
Contemporary Introduction, London: John Wiley & Sons
 Economic Geography by Alexander J. W munotes.in

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52  Economic Geography: A Contemporary Introduction by Coe N. M.,
Kelly P. F. and Yeung H. W
 Economic Geography by Willington D. E
 Guha, J.L. and Chattaraj, P.R. 1939: A New Approach to Economic
Geography: A Study of R esources, World Press, Kolkata
 Hartshorn, T .A. and Alexander, J.W. 1933: Economic Geography,
Prentice Hall, India, New Delhi.
 Isard, W. et al 1956: Location, Space and Economy, Technology Press
of MIT, and John Wiley, New York
 Oxford Dictionary
 Encyclopedi a Britannica



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53 4

MODES OF TRANSPORT AND
INTERNATIONAL TRADE
Unit Structure
4.1 Objectives
4.2 Introduction
4.3 Subject discussion
4.4 Transportation: Importance and influencing factors
4.5 Major Transport Patterns in the World
4.6 Patterns of International Trade: Compos ition and Direction
4.7 Major International Trade Organisations: WTO, OPEC, SAARC, G - 20 and BRICS
4.8 Summary
4.9 Check your Progress/Exercise
4.10 Answers to the s elf learning questions
4.11 Technical words and their meaning
4.12 Task
4.13 References for further study
4.1 OBJECTIVES

By the end of this unit you will be able to:
 Learn the Modes of transport and transport cost
 Understand bases of spatial interaction
 Discuss recent trend in international trade
 Understand major trading organizatio ns and trading blocs such as
WTO, OPEC, ASEAN, SAARC, EFTA, LAFTA, EU, G20, and
BRICS
4.2 INTRODUCTION

In the first unit the definition, nature and scope of Economic Geogra phy
along with its relationship other branches of social sciences have been
studied. In the second unit we learnt the Factors of location of economic
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54 tertiary. In third chapter the Classi fication of Industries; Resources Based
and Foot Lose Industries and Weber and L osch's Theory of Industrial
Location have been discussed. Now in this unit Modes of transport and
transport cost, bases of spatial interaction, Recent trend in international
trade and Major trading organizations and trading blocs such as WTO,
OPEC, ASEAN, SAARC, EFTA, LAFTA, EU, G20, and BRICS will be
studied.

4.3 SUBJECT -DISCUSSION
Transportation and Communication is a tertiary economic activity. One of
the primary factors tha t play an important role in a region’s economic
growth is the presence of an eff icient transportation system. With the
advancement of human society, the need of transportation and
communication has increased. A well developed transportation system
provides adequate access to those regions where vast natural resources of
the country ar e present. Moreover for the economic development of a
country means of transports are essential because they connect the distant
part of the country as well as helps in increas e in the demand for goods.
Transport increases mobility of labour and capital. I t is observed that
transportation is highly developed in the advanced countries.
International trade has given rise to a world economy. It is the exchange of
commodities, produ cts, services and capital between people and
companies in different countries. I nternational trade has existed for long
but increased hugely in the past few hundred years having major impact
on international economy. This type of trade encourages greater
competition as well as more competitive pricing in the market.
International tra de was 26 percent of the global economy in 2016.
4.4 TRANSPORTATION: IMPORTANCE AND
INFLUENCING FACTORS
Transportation: Importance
 Transport support trade and industry in carry ing raw m aterial to the
place of production and distribution of finished products for
consumption.
 Transport means to make goods available to consumers. Transport
makes possible movement of goods from one place to another with
great ease and speed.
 Trade means exch ange of goods and services. In trade there is
movement of goods from surplus areas to scarcity areas.
 The movement of goods is possible only because of transport. In other
words, without the help of transport development of trade is not
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55  Thus, tra nsport plays an important role in economic development and
globalisation of trade.
 Transportation: influencing factors :
1. Fuel costs
The cost of maritime and land transport is, of course, related to the price of
fuel.
As fuel prices fall, co ntainer ships and cargo trucks become cheaper to
operate and the price of transport goes down. Savings (or losses) are
passed on to consumers – either indirectly or through a fuel cost
component built into a carrier’s pricing model.
And of course, if fuel prices increase, carriers will pass the additional
expense on to merchants.
2. The labor market for commercial drivers
Increasing wages and comp etition among carriers for truck drivers can
have an upward impact on transportation costs.
As older drivers ret ire, carriers may struggle to find operators for their
vehicles.
Recruiting new drivers is difficult; the job can be tough and typically
requi res a different class of driver licence (courses to certify new
commercial drivers can take weeks or even months t o complete).
Moreover, many logistics companies struggle to compete with ‘in -house’
truck driving positions that tend to pay better and may o ffer less stress.
3. Demand for freight
Pricing depends on the volume of product being shipped by operators just
as much as it depends on the actual, underlying costs.
If capacity is limited, operators may be inclined to sell limited space at a
premium.
On the other hand, if business is slow, a carrier may be talked into offering
a more competitive rate, at least in th e short term.
4. Customer loyalty
Merchants who can offer a carrier regular, consistent business are well
placed to receive a preferentia l rate, especially if demand across the
industry is low.
5. Vehicle capacity
Some trucking companies operate an older, smaller fleet.
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56 While these trucks are entirely adequate, newer trucks are designed to
maximize storage space, allowing a truck to split space even further.
6. Government regulation
Regulation may directly impact the freight industry and its bottom line; f or
example, gov ernments often set maximum driving hours for commercial
operators.
Other government regulation may also impact freight costs; for example,
New Zealand’s Emissions Trading Scheme has been estimated to increase
freight costs by several dollars for every tho usand kilometers travelled.
7. Geopolitical events
International maritime shipping has become fraught with the dangers of
pirates and rogue governments.
The World Bank estimates that the losses from global piracy amounted to
approximately USD $18 billion in 2014, pushing up the price of everyday
freight as carriers were forced to change shipping routes and pay higher
insurance premiums.
8. Your reputation as a merchant
The price quoted by a carrier will, at least in part, reflect the carrier’s
expectation s as to the packing of pallets and the time to load. If you have a
reputation for loading quickly, you may be charged a slightly smaller rate
to compensate.
4.5 MAJOR TRANSPORT PATTERNS IN THE WORLD
Transportation is a distinguishable part of an y society. The term Transport
is derived from the Latin trans ("across") and portare ("to carry").
Transportation is the movement o f people and goods from one place to
another. One of the key factors that play a pivotal role in a region’s
economic growth i s the presence of a reliable and efficient transportation
system. This is mainly due to the fact that a well -developed transportati on
system provides adequate access to the resources of a society and
transports resources from one particular society to othe r. These resources
can range from material things like efficient operation of manufacturing,
retail, labour, market to knowledge an d skills like movement of doctors
and technicians to the places where there is a need of them. The modes of
transport are cla ssified on the basis of the way, the vehicle, the motive
power used and terminals.
The modes of transport can be broadly divided in to three categories:
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57 4.5.1 Land Transport:
Land transport refers to activiti es of physical movement of goods and
passengers on land.
This movement takes place on road, rail, rope or pipe. So land transport
may further be divided into
 Road transport,
 Rail transport,
 Ropeway transport,
 Pipeline transport.
 Tramways
Road Transpor t has been the principle form of competition for the
railway. Its main features are as follows:
 It offers flexibility, choice of ro utes and delivery at the door.
 Roads are the means that connect one place to another on the surface
of the land. We have seen roads in our village, in towns and cities. Not
all of them look alike. Some of them are made of sand and some may
be of chips and cement or coal tar. We find different vehicles plying
on roads like bullock carts, cycles, motorcycles, cars, truck, buses, e tc.
All of these constitute different means of road transport.
Advantages of Road transport
Road transport has the following advan tages
 It is a relatively cheaper mode of transport as compared to other
modes.
 Perishable goods can be transported at a faste r speed by road carriers
over a short distance.
 It is a flexible mode of transport as loading and unloading is possible
at any dest ination.
 It provides door -to-door service.
 It helps people to travel and carry goods from one place to another, in
places wh ich are not connected by other means of transport like hilly
areas.
Limitations of Road transport
Road transport has the following limitations:
 Due to limited carrying capacity road transport is not economical for
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58  Transportation of heavy goods or goods in bulk by road involves high
cost.
 It is affected by adverse weather conditions. Floods, rain, landslide,
etc., sometimes create obstructions to road transport.
Rail transport
Transportation of goods and passengers on r ail lines through trains is
called rail transport. It occupies an important place in land transport
system of our country.
Charact eristics of Rail transport :
 It is the most dependable mode of transport to carry goods and
passengers over a long distance.
 Besides long distance, local transport of passengers is also provided by
local trains or metro -rail in some metropolitan cities.
 Rail transport is available throughout the country except some hilly or
mountainous regions.
Advantages of Rail transport:
Rail transport has the following advantages
 It is a convenient mode of transport for travelling long distances.
 It is relatively fast er than road transport.
 It is suitable for carrying heavy goods in large quantities over long
distances.
 Its operation is les s affected by adverse weathers conditions like rain,
floods, fog, etc.
Limitations of Railway transport :
Railway transport has the following limitations:
 It is relatively expensive for carrying goods and passengers over short
distances.
 It is not available in remote parts of the country.
 It provides service according to fixed time schedule and is not flexible
for loading or unloading of goods at any place.
 It involves heavy losses of life as well as goods in case of accident.
Pipelines Transport
In modern times, pipelines are used for various purposes. Water supply to
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59 Petroleum and natural gas are also transported from one place to another
through pipelines. This is the most convenien t as well as economical mode
of transport for petroleum as well as natural gas in comparison to road and
rail transport, provided t he volume to be transported is large. But the cost
of installation and maintenance requires large capital investment.
Ropeway Transport
Ropeway refers to a mode of transport, which connects two places on the
hills, or across a valley or river. In the hilly areas, trolleys move on wheels
connected to a rope and are used for carrying passengers or goods,
especially building materi als, food, etc.
Tramways
Tramway is suitable in large cities. It is one of the cheapest, longest,
quickest and safest modes of Lan d Transport. Nevertheless due to certain
limitations such as very slow movement, huge investment, inflexibility
etc. it is lo sing its importance. Hence gradually it is replaced by other
means of Land Transport.
4.5.2 Water Transport
Water transport refers to movement of goods and passengers on
waterways by using various means like boats, steamers, launches, ships,
etc. With the help of these means goods and passengers are carried to
different places, both within as well as outside the country.
Different Me ans Water Transport:
 Inland transport
 Ocean transport
Inland water transport
Inland water transport use boats, launches, bar ges, streamers, etc., to carry
goods and passengers on river and canal routes. These routes are called
inland waterways.
Ocean t ransport
Ocean transport refers to movement of goods and passengers with the help
of ships through sea or ocean waterways.
Advantages of Water Transport
Water Transport has the following advantages
 It is a relatively economical mode of transport for bulky and heavy
goods.
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60  The cost of maintaining and constru cting routes is very low as most of
them are naturally made.
 It promotes international trade.
Limitations of Water Transport
Water transport has the following limitations
 The depth and navigability of rivers and canals vary and thus, affect
operations of d ifferent transport vessels.
 It is a slow moving mode of transport and therefore not suitable for
transport of perishable goods.
 It is adversely affected by weather conditions.
 Sea transport requires large investment on ships and their maintenance.
4.5.3 Air transport
This is the fastest mode of transport.
Importance of Air Transport
 It carries goods and passengers through airways by u sing different
aircrafts like passenger aircraft, cargo aircraft, helicopters, etc.
 Besides passengers it generally carries goods that are less bulky or of
high value.
 In hilly and mountainous areas where other mode of transport is not
accessible, air tr ansport is an important as well as convenient mode.
 It is mostly used for transporting goods and passengers during natural
calamities like earthquake and floods, etc. During war, air transport
plays an important role in carrying soldiers as well as suppli es to the
required areas.
Advantages of Air transport
It has the following advantages
 It is the fastest mode of transport.
 It is very useful in transporting goods and passengers to the area,
which are not accessible by any other means.
 It is the most co nvenient mode of transport during natural calamities.
 It provides vital support to the national security and defense.

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61 Limitat ions of Air Transport
It has the following limitations
 It is relatively more expensive mode of transport.
 It is not suitable for tr ansporting heavy and bulky goods.
 It is affected by adverse weather conditions.
 It is not suitable for short distance travel.
 In case of accidents, it results in heavy losses of goods, property and
life.
4.6 PATTERNS OF INTERNATIONAL TRADE :
COMPOSITION AND DIRECTION
International trade is the exchange of capital, goods, and services across
international borders. In int ernational trade imports are purchases and
exports are sales to foreign countries.
Foreign trade has become very important to the econ omy of any country in
the recent years. Export and import of goods and services have grown
rapidly in the recent years. Th is growth has benefited the standard of
living in several ways. With the growth of international trade the
employment has increased. E xport of goods and services has generated
more income. The GDP has also increased. In fact, whenever the export
exceeds im ports it creates a positive impact on the economy.
International trade is constantly changing. With the change in technology,
culture, politics and society, the shape of international trade has to change.
Now the countries have good relationship with each other and this is also
one of the factors of changing international trade. India, China, Brazil has
become the emerging markets and ha ve impacted the international trade in
many ways.
In the recent years manufacture products accounted for 60% to 70% of the
total goods exported. Oil is another product which forms an important
commodity in international trade. However, the share of food an d
agricultural raw material has decreased. Computer, communication and
other services dominate the service export in the r ecent times. Transport
services have also lost its importance in the international trade.
In the present days the multinational Corpo rations are influencing the
international trade. Now especially in Indian context the export of finished
goods are higher than the export of raw materials.

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62 4.7 MAJOR TRADING ORGANIZATIONS AND
TRADING BLOCS

1. WTO
The World Trade Organization (WTO) is the onl y global international
organization dealing with the rules of trade between nations. The goal is to
help producers of good s and services, exporters, and importers conduct
their business.
The WTO was born out of negotiations, and everything the WTO does is
the result of negotiations. The bulk of the WTO’s current work comes
from the 1986 –94 negotiations called the Uruguay Rou nd and earlier
negotiations under the General Agreement on Tariffs and Trade (GATT).
The WTO is currently the host to new negotiations , under the ‘Doha
Development Agenda’ launched in 2001.
Where countries have faced trade barriers and wanted them lowered, the
negotiations have helped to open markets for trade. But the WTO is not
just about opening markets, and in some circumstances its rules support
maintaining trade barriers — for example, to protect consumers or prevent
the spread of disease.
At its hear t are the WTO agreements, negotiated and signed by the bulk of
the world’s trading nations. These documents provide the legal ground
rules for international commerce. They are essentially contracts, binding
governments to keep their trade policies within a greed limits. Although
negotiated and signed by governments, the goal is to help producers of
goods and services, exporters, and impor ters conduct their business, while
allowing governments to meet social and environmental objectives.
The system’s overridi ng purpose is to help trade flow as freely as possible
— so long as there are no undesirable side effects — because this is
important for economic development and well -being. That partly means
removing obstacles. It also means ensuring that individuals, co mpanies
and governments know what the trade rules are around the world, and
giving them the confidence that there will be no sudden ch anges of policy.
In other words, the rules have to be ‘transparent’ and predictable.
Trade relations often involve conflic ting interests. Agreements, including
those painstakingly negotiated in the WTO system, often need
interpreting. The most harmonious w ay to settle these differences is
through some neutral procedure based on an agreed legal foundation. That
is the purpose behind the dispute settlement process written into the WTO
agreements.
2. OPEC
Organization of the Petroleum Exporting Countries is an
intergovernmental organization of 13 petroleum -exporting nations,
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63 Arabia, Venezuela), and headquartered since 1965 in Vienna, Austria. The
13 countries account for 40% of global oil product ion and 73% of the
world's "proven" oil reserves, making OPEC a major influence on global
oil prices.
OPEC's stated missio n is "to coordinate and unify the petroleum policies
of its member countries and ensure the stabilization of oil markets, in
order to secure an efficient, economic and regular supply of petroleum to
consumers, a steady income to producers, and a fair retur n on capital for
those investing in the petroleum industry."
OPEC’s stated mission is to coordinate and unify the petroleum policies o f
its member countries and ensure the stabilization of oil markets in order to
secure an efficient economic and regular su pply of petroleum to
consumers, a steady income to producer and a fair return on capital for
those investing in petroleum industry. Th e organization is also a
significant provider of information about the international oil marker. As
of January 2017, OPEC’ s members are Algeria and Angola, Ecuador,
Gabon, Irina, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, UAE and
Venezuela. OPEC de cision has come to play a prominent role in the global
oil market and international relation.
3. ASEAN
The Association of So utheast Asian Nations, or ASEAN, was established
on 8 August 1967 in Bangkok, Thailand, with the signing of the ASEAN
Declaration (Ban gkok Declaration) by the Founding Fathers of ASEAN,
namely Indonesia, Malaysia, Philippines, Singapore and Thailand.
The a ims and purposes of ASEAN are:
1. To accelerate the economic growth, social progress and cultural
development in the region through jo int endeavours in the spirit of
equality and partnership in order to strengthen the foundation for a
prosperous and peacef ul community of Southeast Asian Nations;
2. To promote regional peace and stability through abiding respect for
justice and the rule o f law in the relationship among countries of the
region and adherence to the principles of the United Nations Charter;
3. To promote active collaboration and mutual assistance on matters of
common interest in the economic, social, cultural, technical, scie ntific
and administrative fields;
4. To provide assistance to each other in the form of training and research
facilities i n the educational, professional, technical and administrative
spheres;
5. To collaborate more effectively for the greater utilisation of their
agriculture and industries, the expansion of their trade, including the
study of the problems of international co mmodity trade, the
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64 6. To promote Southeast Asian studies; and
7. To maintain close and beneficial cooperation with existing
internat ional and regional organisations with similar aims and
purposes, and explore all avenues for even closer cooperation among
themselves.
ASEAN Member States have adopted the following fundamental
principles, as mentioned in the Treaty of Amity and Cooperatio n in
Southeast Asia (TAC) of 1976:
1. Mutual respect for the independence, sovereignty, equality, territorial
integrity, and national identity of all nations;
2. The right of every State to lead its national existence free from
external interference, subve rsion or coercion;
3. Non-interference in the internal affairs of one another;
4. Settlement of differences or disputes by peaceful ma nner;
5. Renunciation of the threat or use of force; and
6. Effective cooperation among themselves.
The ASEAN Vision 2020, adopted by the ASEAN Leaders on the 30th
Anniversary of ASEAN, agreed on a shared vision of ASEAN as a concert
of Southeast Asian nat ions, outward looking, living in peace, stability and
prosperity, bonded together in partnership in dynamic development an d in
a community of caring societies.
At the 12th ASEAN Summit in January 2007, the Leaders affirmed their
strong commitment to accele rate the establishment of an ASEAN
Community by 2015 and signed the Cebu Declaration on the Acceleration
of the Establishm ent of an ASEAN Community by 2015.
The ASEAN Community is comprised of three pillars, namely the
ASEAN Political -Security Community, A SEAN Economic Community
and ASEAN Socio -Cultural Community. Each pillar has its own
Blueprint, and, together with the Init iative for ASEAN Integration (IAI)
Strategic Framework and IAI Work Plan Phase II (2009 -2015), they form
the Roadmap for an ASEAN Comm unity 2009 -2015.
4. SAARC
The South Asian Association for Regional Cooperation (SAARC) is the
regional intergovernmental orga nization and geopolitical union of nations
in South Asia. Its member states include Afghanistan, Bangladesh,
Bhutan, India, Nepal, the Maldives, Pakistan and Sri Lanka. SAARC
comprises 3% of the world's area, 21% of the world's population and 3.8%
(US$ 2.9 trillion) of the global economy, as of 2015.
SAARC was founded in Dhaka on 8th December, 1985. Its secretariat is
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65 economic and regional integration. It launched the South Asian Free Trade
Area in 2006. SAARC maintains permanent diplomatic relations at the
United Nations as an observer and has developed links with multil ateral
entities, including the European Union.
The idea of co -operation in South Asia was discussed in at least three
conferences: the Asian Relations Conference held in New Delhi on April
1947; the Baguio Conference in the Philippines on May 1950; and the
Colombo Powers Conference held in Sri Lanka in April 1954.
In the ending years of the 1970s, the seven inner South Asian nations that
included Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri
Lanka agreed upon the creation of a trade bloc an d to provide a platform
for the people of South Asia to work together in a spirit of friendship,
trust, and understanding. President Zia Ur Rahman later addressed official
letters to the leaders of the countries of the South Asia, presenting his
vision for the future of the region and the compelling arguments for
region. During his visit to India in December 1977, Rahman disc ussed the
issue of regional cooperation with the Indian Prime Minister, Morarji
Desai. In 1977, King Birendra of Nepal gave a call for close regional
cooperation among South Asian countries in sharing river waters.
In 1983, the international conference hel d by Indian Minister of External
Affairs P.V. Narasimha Rao in New Delhi, the foreign ministers of the
inner seven countries adopted t he Declaration on South Asian Association
Regional Cooperation (SAARC) and formally launched the Integrated
Programme of A ction (IPA) initially in five agreed areas of cooperation
namely, Agriculture; Rural Development; Telecommunications;
Meteorology; and Health and Population Activities.
Officially, the union was established in Dhaka with Kathmandu being
union's secretaria t-general. The first SAARC summit was held in Dhaka
on 7 –8 December 1985 and hosted by the President of Bangladesh
Hussain Ershad. The declaration signed by King of Bhutan Jigme Singye
Wangchuk, President of Pakistan Zia -ul-Haq, Prime Minister of India
Rajiv Gandhi, King of Nepal Birendra Shah, President of Sri Lanka JR
Jayewardene, and President of Maldives Maumoon Gayoom.
5. EFTA
Europea n Free Trade Association (EFTA) is the inter government
organization set up for the promotion of free trade and economic
integration to the benefit of its four members states.
EFTA was founded on 4th January 1960 on the premises of free trade as a
means o f achieving growth and prosperity amongst its member’s states as
well as promoting closer economic corporation between the western
European countries. EFTA was founded by the following seven countries;
Austria, Denmark, Norway, Portugal, Sweden, Switzerlan d and the UK.
The immediate aim of the association was to provide a frame work for the
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66 6. LAFTA
Latin America Free Trade Association (LAFTA) was created in 1960 by
Argentina, Brazil, Chile, Mexico, Pe ru and Uruguay. The LAFTA comes
into effect in January 2nd 1962. LAFTA had a population of 220 million
and produced about $ 90 billion of goods and services.
LAFTA has brought many constructive results; it also brought problems to
individual nations as wel l as to Latin America as a whole. The goal of
LAFTA is the creation of a free trade zone in Latin America to achieve
these goals -
1. The council of foreign ministers
2. A conference of all participating countries
3. A permanent council
LAFTA agreement ha s important limitations. It only refers to goods, not
to services, and it does not include a coordination of policies. L AFTA
brought new positive changes to Latin America.
7. EU
European Union (EU) is the political and economic union of 28 member
states th at are located primarily in Europe. EU has developed an internal
single market through a system of law that applies in all member states.
EU policies aim to ensure the free movement of people, goods and
services and capital within the internal market, ena ct legislation injustices
and home affairs and maintain common policies on trade, agriculture,
fisheries and regional deve lopment.
EU operates through a hybrid system of supranational and inter -
governmental decision making. EU traces its origin from the Eu ropean
coal and steel community (ECSE) and the European Economic
Community (EEC) covering 7.3% of world population. The EU has also
developed a role in internal relations and defense.
8. G20
The G20 (G – 20 or group of 20) is an international forum for the
governments and central banks governors from 20 major economics. It
was founded in 1999 with the aim of studying reveling a nd promoting
high level discussion of policy issues pertaining to the promotion of
international financial stability. It seeks to addr ess issues that go beyond
the responsibility of anyone organization. The G20 heads of government
or heads of state have pe riodically confront of summits since their initial
meeting in 2008, and the group also hosts separate meetings of finance
ministers an d central bank governors.
The members include 19 individual countries – Argentina, Australia,
Brazil, Canada, China, Fran ce, Germany, India, Indonesia, Italy, Japan
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67 Kingdom and United States – along with the European Union (EU). EU is
represented by the European commission and by the European Central
Bank. Collectively the G20 economics account for around 85% of the
gross world product (GWP), 80% of world trade (or, if excluding EU int er
trade, 75%), and two – third of the world population.
With the G20 growing in stature after its summit in 2008, its le aders
announced on 25th September 2009 that the group would replace the G8
as the main economic council of wealthy nations. Since its inception, the
G20s membership policies have been criticized by numerous intellectual,
and its summits have been a focus f or major protest by anti globalists
nationalist and others.
The heads of the G20 nations meet semi – annually. Since November 2011
Cannes summit, all G20 summits have been held annually.
9. BRICS
BRICS is the acronym for an association of 5 major emerging n ational
economies: Brazil, Russia, India, China and South Africa. Originally the
1st four were grouped as “BRICS” (or the BRICS), befo re the induction of
South Africa in 2010. The BRICS members are all leading developing or
newly industrialized countries, but they are distinguished by their large,
sometimes fast growing economies and significant influence on regional
affairs; all five ar e G20 members. Since 2009, the BRICS nations have
met annually at formal summits. China will host the 9th BRICS summits
in Xiamen in September 2017.
The term does not include countries such as South Korea, Mexico and
turkey for which other acronyms and gro up association were later created.
As of 2015, the five BRICS countries represent over 3.6 billion people, or
half of the world population ; all 5 members are in the top 25 of the world
by population, and 4 are in the top 10. The five nations have a combin ed
nominal – GDP of USS16.6 trillion, equivalent to approximately 22% of
the gross world product, combined GDP (PPP) of ar ound US $ 37 trillion
and an estimated US $ 4 trillion in combine foreign reserves. Over all the
BRICS are forecasted to expand 4.6% i n 2016, from the estimated growth
of 3.9% in 2015. The World Bank expects BRICS to growth to pick up to
5.3% in 2017.
The BRICS have received both praises and criticism from numerous
commentators. Bilateral relations among BRICS nations have mainly been
conducted on the basis of non interference, qualities and mutual benefits.
4.8 SUMMARY
After going through this unit we ha ve learnt that transportation is the
means of conveyance or travel from one place to another. Human urge for
mobility has paved the wa y for Society's progress since history began. The
history of this mobility or transport is the history of civilization. In remote
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68 different modes of transport. Since ancient civiliz ations the history of
Road Transport started. Gradually it gained its popularity. There were
three main types of transpor tation that increased during the Industrial
Revolution: waterways, roads, and Railways. So with the industrial
revolution Railway beca me the pioneer of modern mechanical transport.
Railway had the monopoly as the Land Transport unless and until Motor
Trans port was introduced. Nature has gifted us Waterways. It is the
cheapest and oldest form of transport. It is suitable for heavy goods a nd
bulk cargoes. It being natural does not require a huge amount of money in
its maintenance. Movement on water is done b y using various means like
boats, steamers, launches, ships, etc. Rivers are the water highways given
by nature. It was highly develo ped in the pre -railway days. Air transport
is the fastest mode of transport. The first flight in the air was made in 1903
for twelve seconds. After the First World War (1914 -1918) it was used
successfully as a means of transport.
However transports have q uite a few limitations too. Due to limited
carrying capacity road transport is not economical for long distance
transporta tion of goods and transportation of heavy goods or goods in bulk
by road involves high cost. In case of Railway transport it is relati vely
expensive for carrying goods and passengers over short distances and it is
not available in remote parts of the count ry. Regarding water transport it
may be said that as the depth and navigability of rivers and canals vary the
operations of different transport vessels also varies accordingly. Air
transport is relatively a more expensive mode of transport and is not
suita ble for transporting heavy and bulky goods.
WE have learnt about the concept of spatial interaction also. It was first
used by French geographer Edward Ullman. According to him there are
three bases for spatial interaction such as Complementarity,
Transfer ability and Intervening opportunity.
International trade, the economic transactions that are made between
countries, has become very i mportant to the economy of any country in
the recent years. The rapid growth in export and import of goods and
services in the recent years has benefited the standard of living in several
ways. Actually whenever the export exceeds imports it creates a posi tive
impact on the economy.
4.9 CHECK YOUR PROGRESS/ EXERCISE

1. True False
a. Land transport refers to activities of physica l movement of goods and
passengers on land.
b. Road transport provides door -to-door service.
c. Rail transport is available throughout the c ountry even in the
mountainous regions.
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69 e. Sea transport requires large inve stment on ships and their maintenance.
f. Whenever the export exceeds imports it creates a positive impact on
the economy.
g. In Indian cont ext the export of finished goods are lesser than the
export of raw materials.
h. The OPEC or the Organization of the Petroleu m Exporting Countries
is the only global international organization dealing with the rules of
trade between nations.
i. BRICS is the acro nym for an association of 5 major emerging national
economies such as, Belgium, Russia, Indonesia, China and South
Africa.
j. OPEC decision has come to play a prominent role in the global oil
market and international relation.

2. Fill in the blanks
a. ___________ _ refers to a mode of transport, which connects two
places on the hills, or across a valley or river.
b. During _____________ , air transport plays an important role in
carrying soldiers as well as supplies to the required areas.
c. __________transport is affecte d by adverse weather conditions.
d. About ________% of the global oil consumption is for transport
activities.
e. Spatial intera ction refers to the __________ of commuters,
intercontinental migrants, movements of raw materials and so on.
f. __________________ refer s to the cost of overcoming distance.
g. ___________’s stated mission is to coordinate and unify the petroleum
policies of it s member countries and ensure the stabilization of oil
markets
h. The aims of the Association of Southeast Asian Nations, or ASEAN is
to promote __________ _________ studies
i. _____________ -was founded in Dhaka on 8th December, 1985.
j. European Union (EU) is the political and economic union of ________
member states that are located primarily in Europe




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70 3. Multiple choice question
a. Latin America Fr ee Trade Association(LAFTA) was created in 1960
by
i. South Africa, Brazil, China, Mexico, Poland and Uruguay
ii. Iran, Iraq, Ku wait, Saudi Arabia, Venezuela
iii. Argentina, Brazil, Chile, Mexico, Peru and Uruguay

b. One of the main features of Road Transport is
i. it offers flexibility, choice of routes and delivery at the door.
ii. it is available throughout the country except some hilly or
mountainous regions.
iii. it is used for water supply to residential and commercial areas.
c. The mode of transport which connects two places on the hills, or
across a valley or river is called
i. Railway
ii. Ropeway
iii. Road transport
d. Water transport refers to movement o f goods and passengers on
waterways by using
i. various means like bus, taxi, car, truck, cycle.
ii. various means like passenger aircraft, c argo aircraft, and helicopters.
iii. various means like boats, steamers, launches, ships.
e. EU policies aim to ensure
i. the free m ovement of people, goods and services and capital within
the internal market, enact legislation injustices and home affairs and
mainta ins common policies on trade, agriculture, fisheries and
regional development.
ii. no free movement of people, goods and servi ces and capital within
the internal market, and maintains various policies on trade,
agriculture, fisheries and regional development.
iii. assistance to people in the form of training and research facilities in
the educational, professional, technical and admin istrative spheres

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71 4. Answers the following Questions
1. What are the various modes of transportation?
2. Write short notes on
a) Land transportat ion
b) Inland water transportation
c) SAARC
d) EFTA
e) WTO
f) OPEC
g) ASEAN
3. What are the disadvantages of air transportation?
4. What are the advantages of land transportation?
5. What are the merits of waterways?
6. Compare the merits of land and air transportation system.
7. What d o you understand by Bases of Spatial Interaction? State the
three bases for spatial interaction.
8. Define International Trad e. What are the recent trends in International
Trade?
4.10 ANSWERS TO THE SELF LEARNING
QUESTIONS .

1.a. true
1.b.true
1.c. false, exc ept some hilly or mountainous regions
1.d. false, fastest
1.e.true
1.f. true
1.g. false, in Indian context the export of f inished goods is higher than the
export of raw materials.
1.h. false, World Trade Organization (WTO)
1.i. false, Brazil, Russia, India , China and South Africa. munotes.in

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72 1.j. true
2.a. Ropeway
2.b. war
2.c. Air transport
2.d. 60%
2.e. movement
2.f. Transferability
2.g. OPEC
2.h. Southeast Asian
2.i. SAARC
2.j. 28
3.a.iii.
3.b.i.
3.c. ii.
3.d. iii
3.e.i.
4.11 TECHNICAL WORDS:

1. Trade - is the activ ity of buying and selling goods
2. International – between or involving different countries
3. Transferability - the quality of being transferable or exchangeable
4.12 TASK

1. In a map of India show the important rail routes.
2. Compare the advantages of land trans portation against water
transportation in tabular form.
3. State the different modes of transportation in land, water and air in
tabular form.
4.13 REFERENCES FOR FURTHER STUDY

 Clark, G., Gertler, M. and Feldman, M.(eds) (2003) The Oxford
Handbook of Economi c Geography, Oxford: Oxford University Press munotes.in

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73  Coe, N., Kelly, P., and Yeung, H. (2007) Economic Geography: A
Contemporary I ntroduction, London: John Wiley & Sons
 Economic Geography by Alexander J. W
 Economic Geography: A Contemporary Introduction by Coe N. M.,
Kelly P. F. and Yeung H.
 Nimbalkar, Chaudhari: Commercial Geography, Himalaya Publishing
House. New Delhi.
 Economic Ge ography –Wheeler, J.O.
 Arunachalam, B: Economic and Commercial Geography, A.R. Sheth
and Co. Mumbai.
 Economic Geography by Willington D. E
 Guha, J.L. and Chattaraj, P.R. 1989: A New Approach to Economic
Geography: A Study of Resources, World Press, Kolkata
 Hartshorn, T.A. and Alexander, J.W. 1988: Economic Geography,
Prentice Hall, India, New Delhi.
 Isard, W. et al 1956: Location, Space and Economy, Technology Press
of MIT, and John Wiley, New York
 Oxford Dictionary
 Encyclopedia Britannica


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74 5

ECONOMIC DEVELOPMENT OF INDIA
Unit Structure
5.1 Objectives
5.2 Introduction
5.3 Subject discussion
5.4 Levels of Economic Development in India
5.5 Globalization and Indian Economy - its Impact on the Environment
5.6 Concept of SEZ and Related Issues in India
5.7 Summary
5.8 Check your Progress/Exercise
5.9 Answers to the self learning questions
5.10 Technical words and their meaning
5.11 Task
5.12 References for further study

5.1 OBJECTIVES
By the end of this unit you will be abl e to:

 Understand the Economic Development of India
 Discuss Regional Disparities in India
 Learn Globalization and Indian Economy - its Impact on Environment
 Understand Concept of SEZ and Related Issues in India
5.2 INTRODUCTION
In the previous four units Economic Geography ha s been learnt in details.
The definition, nature and scope of Economic Geography, its relationship
with other branches of social sciences along with the Factors of location of
economic activities and the Sectors of economy such as prim ary,
secondary and te rtiary have been studied in the first and second units. In
third unit the Classification of Industries; Resources Based and Foot Lose
Industries and Weber and Losch's Theory of Industrial Location have been
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75 interaction, Recent trend in international trade and Major trading
organizations and trading blocs such as WTO, OPEC, ASEAN, etc. were
the topics of the previous unit. In the present unit we are going to study the
Economic Development of India as well as Regional Disparities in India.
In the latter part of this unit Globalization and Indian Economy - it’s
Impact on Environment and Concept of SEZ and Related Issues in India
will be discussed.
5.3 SUBJECT -DISCUSSION
India is one of the most populous countries in the world with a population
more than 1.2 billion. Economic development of a country with such a
huge population depends on both economic and non -economic factors.
Agriculture, services and manufacturing industrie s play a vital role i n the
development of the Indian economy.
Economic development includes the advancement of economic growth as
well as the reduction of inequality and eradication of poverty, increase in
employment opportunities and welfare of the masses , etc. It also aims a t
encompassing human developments. Amartya Sen opines economic
development in terms of ‘entitlement’ and ‘capability’. Entitlement refers
to the set of alternative commodity bundles that one can command through
the totality of rights a nd obligations that h e or she faces.
India is facing acute problem in regional disparities. Per capita income, the
proportion of population living below the poverty line, the percentage of
urban population of total population, percentage of working popula tion
engaged in agric ulture, the percentage of workers engaged in industries,
infra -structural development etc. are the factors that indicate such
imbalances.
A Special Economic Zone (SEZ) is a geographical region that refers to a
totally commercial area specially established to promote foreign trade. It
has economic laws more liberal than a country's typical economic laws. In
the late 1990s the then Union Commerce Minister Murasoli Maran visited
the high tech SEZs in China. He was highly impressed by thei r
contribution to the rapid growth of GDP of the country. Hence he thought
about taking measures to do the same in India.
5.4 LEVELS OF ECONOMIC DEVELOPMENT IN
INDIA
The Indian economy is the third largest economy of the world. The history
of Indian economic develop ment can be divided into 3 phases.
1. Pre colonial
2. Colonial
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76 1. Pre-colonial : The economy of India started since Indus Valley
Civilization. From Indus valley civilization to 1700 AD can be called pre
colonial era. During this phase Indian econo my was not very well
developed.
2. Colonial : The arrival of East India Company in India caused a huge
strain to the Indian economy. The Britishers would buy raw material from
India at a cheaper rate and again sold the finished good at a higher rate.
3. Post colonial : When India got independence from British rule in 1947
the process of rebuilding the economy started. During the post -colonial era
the 5 years plan were integrated national economy programs. The 1st five
years plan (1951 -1956) was formulated ri ght after i ndependence and it
focused on the development of the primary sector. The 2nd five year plan
(1956 - 1961) aimed for rapid industrialization. The 3rd five year plan
(1961 -1966) stressed on agricultural development and especially on the
production of wheat. During this time many primary schools were started
in the rural areas. The 4th five year (1969 -1974) focused on nationalization
of banks and green revolution in India to bring an advancement in
agricultural. The 5th five year plan in (1974 - 1978) stressed on
employment, poverty and justices. The 6th five years plan (1980 - 1985)
made a beginning of economy liberalization. The 7th five years plan (1985
- 1990) stressed on economy productivity. The 8th five years plan (1992 -
1997) stressed on inv estment on gross domestic product. The 9th five years
plan (1997 - 2002) stressed on development on unexploited potential of
the country. The 10th five years plan (2002 - 2007) specially aimed to
reduce poverty. The 11th five years plan (2007 - 2012) mainl y stressed on
inductive growth and improvement through education skill development it
also aimed for gender equality and environmental sustainability. The 12th
five years plan (2012 - 2017) is specially aimed to improve the growth
rate.
At present India i s the 9th largest economy in terms of GDP. In the year
2000 the percent of growth rate was 5.6 and in 2014 it increased to 6.9.
India consumes the 2nd largest amount of oil in Asia Pacific Region after
China. India is ranked 133rd on the “Ease of doing bus iness Index ” in
205.Corruption in many forms is a problem which is affecting the
economy of India. Indian labour force is growing by 2.5% a year, but the
employment is growing only at 2.3% a year. Environmental degradation,
lack of clean and safe water is the problem s which are affecting the
economy of India.
Thus we can say that through time, India has witnessed development in all
sectors of economy. Agriculture and related sectors employ 60% of the
total work force. The Industrial sector contributes 1/4thin the GDP and
provides employment to about 1/5th of the total work force. The service
industry has shown a very fast growth in India. It is perhaps the faster
growing sector in Indian economy. Education, health services and
infrastructure is also showing a positive growth. On top of that there is
sound governance. Thus, the economy of India is in the path of
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77 REGIONAL DISPARITIES IN INDIA
India is facing the problem of acute regional imbalances and the indicators
of such imbalances are reflected by the factors like per capita income, the
proportion of population living below the poverty line, the percentage of
urban population of total population, percentage of working population
engaged in agriculture, the percentage of workers eng aged in industries,
infra -structural development etc.
A region may be known as economically backward as it is indicated by the
symptoms like excessive pressure of population on land, too much
dependence on agriculture, high incidence of rural em ployment an d high
degree of under -employment, low productivity in agriculture and cottage
industry, under urbanisation, absence of basic infra -structural facilities etc.
In India, some important socio -economic indicators are very prominent to
reflect the r egional imb alances between various regions or states of the
country.
1. State per Capital Income as an Indicator of Regional Imbalance:
The most important indicator of regional imbalance and disparity among
the different states of India is the difference i n per capit a state income
figures. In 2000 -01, the national average per capita income in India was
Rs. 10,254. The states whose per capita income figures were higher than
this national average include Punjab, Goa, Haryana, Maharashtra, Gujarat,
Karnataka, Tamil Nadu and Kerala.
Moreover, the range of regional disparity in India has been widening
continuously is reflected from the differences between per capita income
of Bihar at the bottom and that of Punjab at the top.
2. Inter -State Disparities in Agricu ltural and Industrial Development:
Another important indicator of regional disparities is the differences in the
levels of agricultural and industrial development between different states
of the country. In India, states like Punjab, Haryana - and part of U ttar
Prades h had recorded a high rate of agricultural productivity due to its
high proportion of irrigated areas and higher level of fertilizer use.
Due to the adoption of HYVP or New Agricultural Strategy the combined
share of Punjab and Haryana in total production of food grains of the
country increased from 7.5 per cent in 1964 -65 to 16.8 per cent in 1992 -93
and more particularly the share in wheat production was as high as 34.3
per cent in 1992 - 93 although these two states accounted for only 4.3 per
cent of the t otal population of the country.
3. Population below Poverty Line:
Percentage of population living below the poverty line in different states is
another important indicator of regional imbalance or disparities. The
percentage of population living below the poverty line for the whole
country was 26 per cent in 1999 -2000 and there were 12 states whose munotes.in

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78 percentage of population living below the poverty line have exceeded this
all-India average.
Bihar, Orissa, Madhya Pradesh and Uttar Pradesh are the f our states which
have the highest percentage of population below the poverty line as well
as they have the lowest per capita income in the country.
The main reasons behind this low percentage of poverty in Punjab and
Haryana are their strong production bas e and bette r distribution of income.
4. Spatial Distribution of industries:
Another important indicator of regional imbalance is the uneven pattern of
distribution of industries. Since independence, states like Karnataka,
Andhra Pradesh, Kerala, Gujarat, Punjab and Haryana have achieved
considerable development in its industrial sector. But West Bengal could
not keep pace in its industrial growth as much as other industrially
developed states. In this way disparities in industrial growth between
different states have been reduced to some extent.
One more thing that is to be noticed is that as the country as a whole has
achieved industrial development at a fair rate since independence but the
spatial distribution of such industrial development between differ ent states
remained almost uneven.
5. Degree of Urbanization:
Disparities in the degree of urbanization are another important indicator of
regional imbalance. In respect of urbanization, the percentage of urban
population to total population is an importan t indicator . The all -India
average of such percentage of urban population stands at 26 per cent in
1991.The states which are maintaining higher percentage of urban
population than the national average include Maharashtra, Tamil Nadu and
Gujarat and then fo llowed by K arnataka, Punjab, Andhra Pradesh and
West Bengal. Whereas, the states which are having a lower degree of
urbanization include Himachal Pradesh, Assam, Bihar, Orissa, Arunachal
Pradesh etc.
6. Per Capita Consumption of Electricity:
Per capita con sumption of electricity is also another important indicator of
regional disparities. States like Punjab, Gujarat, Haryana, Maharashtra
etc., having higher degree of industrialization and mechanization of
agriculture, have recorded a higher per capita consu mption of e lectricity
than the economically backward states like Assam, Bihar, Orissa, Madhya
Pradesh and Uttar Pradesh.
7. Employment Pattern:
Employment pattern of workers is also an important indicator of regional
disparities. States attaining higher d egree of in dustrialization are
maintaining higher proportion of industrial workers to total population.
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79 Nadu and West Bengal are still maintaining a higher proportion of
agricultural l abourers to total workers as the industrial sector of these
states have failed to enlarge the scope of employment sufficiently to
engage more and more rural workers.
8. Intra -State Imbalance:
Intra -state imbalance is another important indicator of regional imbalance
existing within each particular state. There is a growing tendency among
most of the advanced states to concentrate its developmental activities
towards relatively more developed, urban and metropolitan areas of the
states while allocating its i ndustrial a nd infra -structural projects.
As for example, in West Bengal, about 70 per cent of its new industrial
concentration was located in the Hugli district. Similarly, about 86 per
cent of registered factories in Maharashtra were mostly concentrated i n a
few urb an areas, leaving the other potential areas untouched.
5.5 GLOBALIZATION AND INDIAN ECONOMY - ITS
IMPACT ON ENVIRONMENT
Globalization is the tendency of investment funds and business to move
beyond domestic and national markets to other markets around the globe,
thereby increasing the inter connection of the world. Globalization has had
the effect of markedly increasing international trade and cultural
exchange.
Globalization has had far – reaching effect on our life style. It has led to
faster access to t echnology, improved communication and innovation.
Apart from playing an important role in bringing people of different
culture together, it has ushered a new era in the economy prosperity and
has opened up vast channels of development. However, globalizati on has
also created some areas of concern, and prominent among these is the
impact that it has had on the environment. Globalization has featured
extensively in the debates on environmentalism, and green activities have
highlighted its far – reaching effec ts. Activist have pointed out that
globalization has led to an increase in the consumption of products, which
has impacted the ecological cycle. Increased consumption leads to n
increase in the production of goods, which in turn puts stress on t he
environm ent. Globalization has also led to an increase in the transportation
of raw materials and food from one place to another. Earlier, people used
to consume locally – grown food, but with globalization people consume
products that have been develop ing foreign countries; the amount of fuel
that is consumed in transportation of these products has led to an increase
in the pollution levels. Transportation has also put a strain on the non –
renewable sources of energy, such as gasoline. The gases that a re emitted
from the aircraft have led to the depletion of the ozone layer. Apart from
increasing the green house effect, the industrial waste that is generated as
a result of production has been dumped in oceans. This has killed many
under water organism a nd has depo sited many harmful chemicals in the
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80 one of the leaking container of British petroleum in 2010 is just one of the
examples of the threat globalization poses to the environment .
5.6 CONC EPT OF SEZ AND RELATED ISSUES IN
INDIA
A special economy zone (SEZ ) is an area in which business and trade
laws are different from rest of the country. SEZs are located within a
country's national borders, and their aims include: increased trade ,
increased investment, job creation and effective administration. To
encourage businesses to set up in the zone, financial policies are
introduced. These policies typically regard investing, taxation, trading,
quotas, customs and labour regulations. Addit ionally, co mpanies may be
offered tax holidays, where upon establishing in a zone they are granted a
period of lower taxation.
The creation of special economy zones by the host country may be
motivated by the desire to attract foreign direct investment (FDI). The
benefits a company gains by being in a special economy zone may mean it
can produce and trade goods at a lower price. In some countries the zones
have been criticized for being little more than labour camps, with workers
denied fundamental labour r ights.
The Special Economy Zone (SEZ) policy in India first came into inception
on April 1, 2000. The prime objective was to enhance foreign investment
and provide an internationally competitive and hassle free environment for
exports.
At present India ha s eight fun ctional SEZs located at Santa Cruz
(Maharashtra), Cochin (Kerala), Kandla and Surat (Gujarat), Chennai
(Tamil Nadu), Visakhapatnam (Andhra Pradesh), Falta (West Bengal)
and Noida (Uttar Pradesh). Further an SEZ in Indore (Madhya Pradesh) is
now ready for operation.
In addition, 18 approvals have been given for setting up of SEZ’s on the
basis of proposals received from the state governments. State governments
will have a very important role to play in the establishment of SEZ’s.
5.6.1 Advantag es of SEZ i n India
Worldwide SEZ’s have played a vital role in the promotion of exports,
employment generation as well as overall development of an economy.
Some of the advantages of SEZ are -
1. Attracting Foreign Investments: Free trade and foreign direct
investments have been powerful channels for transmission of technology
from the industrially developed advanced countries to the developing
nations. The process has benefited the both parent companies and the
developing countries.
2. Providing Employment Oppo rtunities : One of the important
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81 opportunities in developing countries. In order to increase the job creating
effect, SEZ’s are often established in areas were a big number of workers
are available. SEZ’s in India play an important role in creating
employment opportunity.
3. Promoting Exports : Generally success of SEZ’s policy is just by its
ability to enhance foreign investment and promote export.
4. Technology Gradation and Technology Transfer : Most of
economy and social progress of the past few countries has been due to
technology. Most technological improvements in developing countries to a
large extent are dependent on the diffusion of technology from advanced
countries. SEZ attract export o riented FDI and promotes other forms
collaboration between local firms and MNC’s.
5.6.2 Disadvantages on SEZ
Following the SEZ act of 2005 and SEZ rules of 2006, the department of
commerce has approved the setting up of a large number of SEZ’s in
differe nt parts of the country. This has generated debates on a number of
issues and they can be broadly clubbed under five heads which are as
follows:
1. Loss of Government Revenue : The SEZ act. 2005 offers various
fiscal and non – fiscal insensitive and faciliti es for attr acting investments
into the SEZ’s.
2. Degeneration of Agriculture and Associated Livelihood Issues :
Currently the most widely discussed issue is the land acquisition for SEZ
mostly from farmers. It has been argued that due to the implementation of
the SEZ po licy in different parts of the country, a large amount of
agricultural land will be put to use for industrial purpose and that will have
several implications on the livelihood of farmers and food securities.
3. Uneven Regional Development : One of the importa nt objectives of
planning of India is to secure a balanced growth of the different regions of
the country and thereby reduce regional disparities in development. It is
essential for the success of democratic planning that the benefits of
economi c developme nt should reach all the regions of the country.
4. Misuse of Land of Real Estate : It has been argued by many cities
that in India on the name of industrialization and economic development,
the land acquisition act is now being used to take away la nds from po or
farmers to give these to mega rich private companies for their real estate
business.
5. Discrimination against Existing Industries : There is a criticism
that due to fiscal incentives enjoyed by units in as SEZ, the industries
outside SEZ feel t hey are dis criminated by the Government.
The state of Maharashtra has been in the forefront in attracting foreign
direct investments for accelerating the pace of economy growth. The SEZ
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82 enhanci ng productive and the ease of doing business in Maharashtra.
According to government of India guidelines SEZ’s can be developed in
the public, private or joint sectors, or by the state government. They are
expected to promote the establishment o f large, se lf – contained areas
supported by world – class infrastructure oriented towards export
production. Exploiting the full potential of the concept of SEZ’s would
bring large dividends to Maharashtra in terms of economy and industrial
development an d the gener ation of new employment opportunities.
5.7 ENVIRONMENT AND ECONOMIC
DEVELOPMENT AND RELATED ISSUES
The issue of economic growth and the environment essentially concerns
the kinds of pressures that economic growth, at the national and
internat ional level, places on the environment over time. The relationship
between ecology and the economy has become increasingly significant as
humans gradually understand the impact that economic decisions have on
the sustainability and quality of the planet.
Economic growth is commonly defined as increases in total output from
new resources or better use of existing resources; it is measured by
increased real incomes per capita. All economic growth involves
transforming the natural world, and it can effect env ironmental quality in
one of three ways. Environmental quality can increase with growth.
Increased incomes, for example, provide the resources for public services
such as sanitation and rural electricity. With these services widely
available, individuals n eed to worry less about day -to-day survival and can
devote more resources to conservation . Second, environmental quality
can initially worsen but then improve as the growth rate rises. In the cases
of air pollution , water pollution , and deforestation an d encroachment
there is little incentive for any individual to invest in maintaining the
quality of the environment. These problems can only improve when
countries deliberately introduce long -range policies to ensure that
additional resources are devoted t o dealing with them. Third,
environmental quality can decrease when the rate of growth increases. In
the cases of emissions generated by the disposal of municipal solid waste ,
for example, abatement is relatively expensive and the costs associated
with th e emissions and wastes are not perceived as high because they are
often borne by someone else.
The World Bank estimated that, under present productivity trends and
given projected population increases, the output of developing countries
would be about fiv e times higher by the year 2030 than it is today. The
output of industrial countries would rise more slowly, but it would still
triple over the same period. If environmental pollution were to rise at the
same pace, severe environmental hardships would occu r. Tens of millions
of people would become sick or die from environmental causes, and the
planet would be significantly and irreparably harmed.
Yet economic growth and sound environmental management are not
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83 Economic growth will be undermined without adequate environmental
safeguards, and environmental protection will fail without economic
growth.
The earth's natural resources place limits on economic growth. These
limits vary with the e xtent of resource substitution, technical progress, and
structural changes. For example, in the late 1960s many feared that the
world's supply of useful metals would run out. Yet, today, there is a glut of
useful metals and prices have fallen dramatically. The demand for other
natural resources such as water, however, often exceeds supply. In arid
regions such as the Middle East and in non -arid regions such as northern
China, aquifers have been depleted and rivers so extensively drained that
not only irriga tion and agriculture are threatened but the local ecosystems.
Some resources such as water, forests, and clean air are under attack,
while others such as metals, minerals, and energy are not threatened. This
is because the scarcity of metals and similar resour ces is reflected in
market prices. Here, the forces of res ource substitution, technical progress,
and structural change have a strong influence. But resources such as water
are characterized by open access, and there are therefore no incentives to
conserve . Many believe that effective policies designed to sustain the
environment are most necessary because society must be made to take
account of the value of natural resources and governments must create
incentives to protect the environment. Economic and pol itical institutions
have failed to provide these necessary incentives for four separate yet
interrelated reasons:
1) short time horizons;
2) failures in property rights;
3) concentration of economic and political power; and
4) immeasurability and insti tutional uncertainty.
Although economists and environmentalis ts disagree on the definition of
sustainability, the essence of the idea is that current decisions should not
impair the prospects for maintaining or improving future living standards.
The econom ic systems of the world should be managed so that societies
live off the dividends of the natural resources, always maintaining and
improving the asset base.
Other issues :
Pollution
Deforestation
Loss of biodiversity
Climate change
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84 5.8 SUMMARY:
After going through this unit we have learnt that the two century long
British regime had negative impacts on Indian economy. During colonial
period the agricultural sector had low productivit y and surplus of labour.
Lack of modernisat ion in the industrial sector and a bad shaped trade etc.
put India into economic challenges at the time of independence. In the
modern era it is observed that each and every state of India differs in terms
of thei r productive potential and the type of indu stry they can support. The
potential of the states drives the diversified competency of the nation. On
the other hand regional specialization provides the impetus for growth of
the nation.
Globalization describes a process by which regional economies, soc ieties,
and cultures have become integrated through a global network of
communication, transportation, and trade. It has made the major
environmental damages more prominent, even though it’s only indirectly
respon sible. However, 97 percent of climate scien tists agree that humans
have changed Earth's atmosphere in dramatic ways over the past two
centuries, resulting in global warming. Apart from increasing the green
house effect, the industrial waste and many harmfu l chemicals that has
been dumped in oceans has killed many under water organism. Some
national, regional and international policies have reduced the negative
effects of globalization on the environment.
SEZ is a geographical region that has economic laws m ore liberal than a
country’s typical econom ic laws. Moreover it is a trade capacity
development tool. It aims at promoting rapid economic growth and uses
tax and business incentives to attract foreign investment and technology.
SEZ’s are important for the third world countries like India because th ey
have been in the race for rapid economic growth. The SEZ’s could
drastically improve the economic activity in the country; make the
country’s export competitive and globally noticeable. The Special
Economy Zone (SEZ) policy in India first came into ince ption on April 1,
2000. At present India has eight functional SEZs located at Santa Cruz
(Maharashtra), Cochin (Kerala), Kandla and Surat (Gujarat), Chennai
(Tamil Nadu), Visakhapatnam (Andhra Pradesh), Falta (Wes t Bengal) and
Noida (Uttar Pradesh). Furthe r an SEZ in Indore (Madhya Pradesh) is now
ready for operation. There are several advantages and disadvantages of
SEZ in India. However to be economically viable SEZ’s should be
approved over a large land area at least greater than 1000 acres so that
rapid economic growth, profitable and self sustainable development
happens in that particular area. The prevalence of Relaxed Tax norms,
Labour laws will attract foreign investment and major industries to setup
industr ies in the SEZ’s making it profitable.


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85 5.9 CHECK YOUR PROGRESS/ EXERCISE

1. True False
a. One of the important indicators of regional disparities is the
differences in the levels of agricultural and industrial development
between different states of the countr y.
b. The percentage of population living belo w the poverty line for the
whole country was 36per cent in 1999 -2000
c. SEZs are located outside a country's national borders.
d. At present India has eight functional SEZs located at Santa Cruz
(Maharashtra), Cochin (K erala), Kandla and Surat (Gujarat), Chennai
(Tamil Nadu), Visakhapatnam (Andhra Pradesh), Falta (West Bengal)
and Noida (Uttar Pradesh).
e. An SEZ in Siliguri (West Bengal)is now ready for operation.
2. Fill in the blanks
a. At present India is the ____________ largest economy in terms of
GDP.
b. The 1st f ive years plan (1951 -1956) was formulated right after
independence and it focused on the development of the ________
sector.
c. The most important indicator of regional imbalance and disparity
among the different sta tes of India is the difference in _______
________ state income figures.
d. _____________ has led to faster access to technology, improved
communication and innovation.
e. ____________ has put a strain on the non –renewable sources of
energy, such as gasoline.
3. Multiple choice question
a. The 4th five year (1 969-1974)
i. focused on nationalization of banks and green revolution in India to
bring an advancement in agricultural.
ii. stressed on employment, poverty and justices.
iii. is specially aimed to improve the growth rate.


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86 b. A region may be known as economically backwa rd as it is indicated
by the symptoms like
i. excessive pressure of air on land, too much dependence on fertiliser,
high incidence of urban employment and high degree of
employment, high productivity in agriculture and cottage industry
etc.
ii. excessive pressur e of population on sea routes, too much dependence
on interstate travelling, high degree of under -employment, low
productivity in iron steel and cotton industry etc.
iii. excessive pressure of population on land, too m uch dependence on
agriculture, high inciden ce of rural employment and high degree of
under -employment, low productivity in agriculture and cottage
industry, under urbanisation, absence of basic infra -structural
facilities etc.
c. Pre colonial era can be calle d
i. from Indus valley civilization to 1700 A D.
ii. from Indus valley civilization till today.
iii. from 1500 A.D. to 1700 AD.

d. The Industrial sector in India contributes
i. 1/5th in the GDP and provides employment to about 1/4th of the total
work force.
ii. 1/3thin the GD P and provides employment to about 1/6th of the total
work force.
iii. 1/4thin the GDP and provides employment to about 1/5th of the total
work force.
e. The main reasons behind low percentage of poverty in Punjab and
Haryana
i. are their strong industrial base and better distribution of finished
products.
ii. are their strong production base and better distribution of income.
iii. are their weak production base and weaker distribution of income.
4. Answers the following Questions
1. Write a short note on the history of Indian eco nomic development.
2. What is Regional Dispari ties in India? State the important socio -
economic indicators that reflect the regional imbalances between
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Economic Developme nt of
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87 3. What is SEZ? What are the advantages of SEZ in India?
4. Make a comp arative study between the advantages and di sadvantages
of SEZ in India.
5. What happened to the Indian economy with the arrival of East India
Company?
5.10 ANSWERS TO THE SELF LEARNING
QUESTIONS .
1.a. true
1.b.false, 26
1.c.. false, SEZs are located within a country's national borders
1.d.true
1.e. fa lse, Indore (Madhya Pradesh)
2.a. 9th
2.b. primary
2.c. per capita
2.d. Globalization
2.e. Transportation
3.a.i.
3.b.iii.
3.c .i.
3.d.iii.
3.e.ii.
5.11 TECHNICAL WORDS:

1. Per Capita Income - Total national income ( GDP) divided by total
population.
2. Globaliza tion- the process by which businesses start operating on an
international scale
3. Transportation - the process of being transported
4. SEZ - special economic zone (SEZ) is an area where business and
trade laws are differ ent from rest of the country.
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88 5.12 TASK

1. In a map of India locate the eight functional SEZs.
2. In a chart make a comparative study of the advantages and
disadvantages of the SEZs by using bullets .
5.13 REFERENCES FOR FURTHER STUDY

 Clark, G., Gertler, M. and Feldman, M.(eds) (2003) The Oxford
Handbook of Economic Geography, Oxford: Oxford University Press
 Coe, N., Kelly, P., and Yeung, H. (2007) Economic Geography: A
Contemporary Introduction, Lon don: John Wiley & Sons
 Economic Geography b y Alexander J. W
 Economic Geography: A Contemporary Introduction by Coe N. M.,
Kelly P. F. and Yeung H.
 Nimbalkar, Chaudhari: Commercial Geography, Himalaya Publishing
House. New Delhi.
 Economic Geography –Wheeler , J.O.
 Arunachalam, B: Economic and Commerc ial Geography, A.R. Sheth
and Co. Mumbai.
 Economic Geography by Willington D. E
 Guha, J.L. and Chattaraj, P.R. 1989: A New Approach to Economic
Geography: A Study of Resources, World Press, Kolkata
 Hartshorn, T.A. and Alexander, J.W. 1988: Economic Geograp hy,
Prentice Hall, India, New Delhi.
 Isard, W. et al 1956: Location, Space and Economy, Technology Press
of MIT, and John Wiley, New York
 Oxford Dictionary
 Encyclopedia Britannica

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QUESTION PAPER PATTERN

Time: 3hours Marks;100 N.B. 1.All questions are compulsory and carry equal marks.
2. Use of Map Stencils is permitted.
3. Draw sketches and diagrams wherever necessary.
Q.1 Long answer question on Unit -I 20Marks
OR
Long answer question on unit –I for 20 Marks or
Two short answer questions each 10 Marks 20Marks

Q.2 Long answer question on Unit-II 20Marks
OR
Long answer question on unit –II for 20 Marks or
Two short answer questions each 10 Marks 20Marks

Q.3 Long answer question on Unit -III 20Marks
OR
Long answer question on unit –III for 20 Marks
or
Two short answer questions each 10 Marks 20Marks

Q.4 Long answer question on Unit -IV 20Marks
OR
Long answer question on unit –IV for 20 Marks
or
Two short answer questions each 10 Marks 20Marks

Q.5 Long answer question on Unit -V 20Marks
OR
Long answer question on unit –V for 20 Marks
or
Two short answer questions each 10 Marks 20Marks
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