RURAL PRODUCTION AND LIVELIHOOD SYSTEMS RURAL INDUSTRIES WHERE

RURAL PRODUCTION AND LIVELIHOOD SYSTEMS RURAL INDUSTRIES WHERE ARE WE?

What is Rural Industry? Rural Industries mean any Industry located in rural area of township, which produces any goods or senders, any services with or without the use of power and in which the fixed capital investment per head of an artisan or worker does not exceed fifty thousand rupees in plant and machinery, land building. Rural Industries are also known as Village Industries.

HISTORY OF RURAL INDUSTRIALIZATION The muslins, the textile handicrafts including chintzes of Lucknow, dhotis and dupattas of Ahmedebad. Silk bordered cloth of Nagpur and Murshidabad, shawls from Kashmir, Amritsar and Ludhiana were very famous and were exported to different parts of the world. Well known for artistic industries like marble work, stone carving, jewellery, brass, copper and bell metal wares wood carvings etc. Spices like pepper, cinnamon, opium indigo etc which were exported to different parts of the world.

Major export destinations v. Middle east v. China v. Rome v. England

Major rural industries • Mineral Based Industries Pottery, Lime, Stone Carving. • Khadi – Sericulture, Handloom, Powerloom, Jute Processing, Wool Knitting • Coir • Forest Based Industry – Medicinal Plants Industry, Bee Keeping Industry (Honey), Minor Forest Based Industry.

• Agro Based/Allied and Food Processing Industry – Pulses & Cereals Processing Industry, Gur & Khandsari Industry, Palmgur Industry, Fruit & Vegetable Processing Industry, Village, Oil Industry, Poultry, Fisheries, Livestock, Dairy. • Polymer & Chemical Based Industry – Leather Industry, Non Edible Oils and Soaps Industry, Cottage Match Industry, Plastic Industry.

• Hand Made Paper & Fibre Industry – Hand Made Paper Industry, Fibre Industry. • Rural Engineering & Bio-Technology Industry – Non Conventional Energy, Carpentry & Black smithy, Electronics

Growth of rural industries 1 st FIVE YEAR PLAN (1951 -56) 0. 4 Billion rupees were allocated for rural and cottage industries. Additional impetus on agriculture. National income rose 18%, per capita income 11% and per capita consumption 9% during the plan period. 2 nd FIVE YEAR PLAN (1956 -61) 1. 9 Billion rupees were allocated in this plan. Additional thrust is given to industry Unfavorable monsoons in 197 -58 and 1959 -60 lead to moderate success.

3 rd FIVE YEAR PLAN (1961 -66) 2. 4 Billion rupees were allocated. The plan targeted a 30% increase in agricultural production and 70% in industry. Additional impetus was laid on integrated development of village and khadi industries. These targets are marred by the Chinese war in 1962 and the Pakistan war in 1965. 4 th FIVE YEAR PLAN (1969 -74) The allocation was 2. 4 Billion rupees once again. In this plan Ashok Mehta committee was set up to critically review the functioning of the Khadi and village industries. Industrial growth was only 3. 9% against the targeted 8% pa.

5 th FIVE YEAR PLAN (1974 -79) The allocation was 5. 9 billion crores Arresting the displacement of traditional artisans from existing crafts. Targets relating to agriculture were met. 6 th FIVE YEAR PLAN (1980 -85) 19. 5 Billion rupees were allocated. IRDP extended to 5011 blocks in the country. National Rural Employment Project) was also started Industry achieved 6% growth rate against 5. 3%.

7 th FIVE YEAR PLAN (1985 -90) Industrial growth also accelerated during this plan period to 8. 7% pa. 32. 5 billion rupees were allocated. Jawahar Rozgar Yojana was introduced to give a fillip to the rural industry. 8 th FIVE YEAR PLAN (1992 -97) 63. 3 billion rupees were allocated. This plan targeted an annual growth of 5. 6% in GDP and 7. 5% pa in industry. This plan achieved success in attaining the targets.

9 th FIVE YEAR PLAN (1997 -02) An outlay of Rs. 2000 crores was provided. Additional thrust to improve the agricultural income and to improve the living conditions of small, medium and marginal farmers and landless labourers. Goals were attained to a large extent. 10 th FIVE YEAR PLAN (2002 -07) The allocation of funds for the rural development programmes has been enhanced to Rs. 76, 774 crores were allocated in this plan. The path breaking, ‘National Rural Employment Guarantee Act’ 2005 (NREGA) was passed guaranteeing 100 days of employment in a financial year to a rural households. Sampoorna Grameen Rozgar Yojana’ (SGRY) and ‘Swarnjayanti Gram Swarozgar Yojana’ (SGSY) were also launched to give fillip to the rural industries. Finally, additional thrust on cost cutting and technical up gradation of the rural artisans were given due importance.

CURRENT STATUS PRODUCTION (Rs. In Crores) Year Khadi Village Industries Total 2000 -2001 431. 57 6491. 69 6923. 26 2001 -2002 411. 00 7140. 52 7551. 52 2002 -2003 443. 07 8126. 30 8569. 37 2003 -2004 453. 50 9228. 27 9681. 77 2004 -2005 461. 54 10458. 89 10920. 43 Source: Website of Khadi & Village Industries Commission

CURRENT STATUS SALES (Rs. In Crores) Year Khadi Village Industries Total 2000 -2001 570. 55 7384. 55 7955. 10 2001 -2002 518. 25 8383. 49 8901. 74 2002 -2003 577. 63 9615. 71 10193. 34 2003 -2004 587. 04 10988. 17 11575. 21 2004 -2005 617. 84 12487. 35 13105. 19

CURRENT STATUS EMPLOYMENT (In Lakh Persons) Year Khadi Village Industries Total 2000 -2001 9. 56 50. 51 60. 07 2001 -2002 8. 48 54. 16 62. 64 2002 -2003 8. 58 57. 87 66. 45 2003 -2004 8. 61 62. 58 71. 19 2004 -2005 8. 64 68. 14 76. 78

ROLE OF GOVERNMENT AGENCIES • Ministry of Agro & Rural Industries (ARI) was set up in September, 2001 with the objective of integrating efforts for the development of agro and rural industries and creating more employment opportunities in the rural areas based on the local raw materials, skills and technology. • The Ministry is the nodal agency for coordination and development of village and khadi industries and tiny and micro enterprises in both urban and rural areas as well as for the implementation of the Prime Minister’s Rozgar Yojana (PMRY)

• The various policies, programmes/ schemes related to agro and rural industries are implemented by the Ministry, through the Khadi and Village Industries Commission (KVIC) and the Coir Board. • In May 1994 the KVIC launched Rural Employment Generation Programme (REGP) with effect from 1 st April, 1995 for generation of two million jobs under the KVI sector in the rural areas of the country. The broad objectives of the REGP are • 1. To generate employment in rural area. • 2. To develop entrepreneurial skill among the rural unemployed youth. • 3. To achieve the goal of rural industrialization. • 4. To facilitate participation of Financial Institutions for higher Credit to rural industries

Following are the achievements of REGP upto December 2005 Details Upto 2003 -04 2004 -05 2005 -06 upto Dec'05 No. of Projects Sanctioned 186252 23453 12893 Margin Money Utilised (Rs. in Crores) 1079. 47 295. 87 164. 93 Employment Generated (Persons in lakhs) 22. 75 5. 30 2. 89

• Central Sector Scheme titled the “Scheme of Fund for Regeneration of Traditional Industries (SFURTI)” has been drawn up and approved at a total cost of Rs. 97. 25 crores on 3. 10. 2005. • NABARD has identified financing, development and promotion of RNFS as one of its thrust areas. NABARD has evolved several refinance and promotional schemes over the years and has been making constant efforts to liberalise, broad base and refine/ rationalise the schemes in response to the field level needs.

• The Rural Industries Programme (RIP) of the Small Industries Development Bank of India (SIDBI) provides a cohesive and integrated package of basic inputs like information, motivation, training and credit, backed by appropriate technology and market linkages for the purpose of enterprise promotion

ROLE OF NONGOVERNMENTAL AGENCIES • Providing assistance at the grassroots level for assimilation of technological extensions in rural areas • To create awareness, build skills, introduce technology and develop capacities for maintenance and sustainability • Governmental programmes are given shape by these organisations

PROBLEMS Some of the reasons for the underdevelopment of rural industry are: • Lack of good infrastructure. Due to this there is inability to supply the required quality of raw material in time. • Inability to provide loans both short term and long term • No procurement policy from the artisans and no uniform pricing either • No system of feedback information • No identification of potential demand

PROBLEMS • • • No efforts to undertake training Mismanagement Political and bureaucratic interference Excessive manpower Low productivity Low incentive for performance Technological obsolesce Lower level worker and managerial skill. No efforts towards product development, packaging and designing

STRATEGIES FOR GROWTH • • • Provision of credit Skill up gradation Organisation Identification of products Procurement Marketing

STRATEGIES FOR GROWTH • • • Creating Local awareness Selling points Encouragement to exports Sales services Deepening of local consumption Developing network of small sales department

POTENTIAL & FUTURE PROSPECTS • Strong Institutional Basis for Rural industrial sector • Ongoing decentralization process • Availability of huge manpower • Largely untapped markets • Traditional Village Industries 1969 -70 Rs. 2, 183 crores 2000 -01 Rs. 25, 553 crores • Proper implementation of Govt. schemes.

CONCLUSION This sector is ideally suited to build on the strengths of our traditional skills and knowledge, by infusion of technologies, capital and innovative marketing practices. The diversity in production systems and demand structures will ensure long term coexistence of many layers of demand for consumer products / technologies / processes The bane of the sector has been the inadequacies in capital, technology and marketing. But this can be rectified by the process of liberalization coupled with Government support.

THANK YOU Presented By: B. V. Shiva Kumar (13) Nivedita Nayak (31)