In this essay we will discuss about the Indian cottage industries (since independence). After reading this essay you will learn about:- 1. Factors Responsible for Persistence of Indian Cottage Industries 2. Steps for the Revival and Growth of Cottage Industries 3. Industrial Estate and Cottage Industries 4. Progress of Cottage Industries under the Plans.

List of Essays on the Indian Cottage Industries, Since Independence

Essay Contents:

  1. Essay on the Factors Responsible for Persistence of Indian Cottage Industries
  2. Essay on the Steps for Revival and Growth of Cottage Industries
  3. Essay on Industrial Estate and Cottage Industries
  4. Essay on the Progress of Cottage Industries under the Plans

Essay # 1. Factors Responsible for Persistence of Indian Cottage Industries:

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Despite the operation of so many adverse factors, many of India’s cottage Industries did not altogether disappear. several factors were responsible for their persistence.

1. Persistence:

Firstly, a number of articles like artistic products or luxury goods did not lend themselves to standardised production on a large scale.

Secondly, the prevalence of wide-spread poverty in the rural areas did not permit any change either in the standard or the pattern of living. Village artisans, therefore, had a longer lease of life than the urban crafts demand for whose products declined due to change in the habits and fashions of the upper class of society.

Thirdly, delay in the development of transport facilities in the interior of the country greatly protected the village industry from the competition of machine-made goods.

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Fourthly, some of the village industries like carpentry or Iron smithy survived because the demand for the repair of small agricultural implements had to be locally met.

Fifthly, in certain industries, the artisan adapted himself to the changed circumstances. He produced articles which were in demand and also adjusted his workmanship to modern requirements. As the Indian Industrial Commission points out, the weaver took to mill yarn, the dyer to synthetic dyes, the brass and copper smith to sheet metal and the wavers began to use the fly-shuttle.

Sixthly, cottage industries ensured better working conditions to the workers. Seventhly, the independence movement, with its emphasis on khadi, greatly softened the attitude of the Indian public towards the products of the Indian handicrafts. Lastly, the force of family tradition and absence of an alternative source of livelihood, compelled many a worker to cling to his family trade. This helped many industries to survive.

2. Revival Since Independence:

Another factor was that the government’s policy towards cottage and small industries since independence underwent a welcome change, It was recognised that these industries have a significant contribution to make in the context of the two-fold problem of expanding employment and increasing the supply of consumer goods.

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It was clear that country, having a large volume of unemployment and under employment, must develop labour-intensive forms of production.

It was also clear that, in order to keep the prices under control, some part atleast of the unsatisfied consumer demand must be met by increased production from the cottage and small-scale sector since paucity of capital resources restricted invest­ment in large consumer good industries.

In addition, these industries could also ensure a more equitable distribution of income and a more balanced development of the country. It was, however, realised that small- scale production suffers from technological deficiencies and, therefore, has only a limited competitive strength.

The Industrial Policy Resolution of 1956, recognising this position, stated that “the aim of State Policy will be to ensure that the decentralised sector acquires sufficient vitality to be self-supporting and that its development is integrated with that of the large scale industry. The State will, therefore, concentrate on measures designed to improve the competitive strength of the small-scale producer.”

Essay # 2. Steps for the Revival and Growth of Cottage Industries:

Ac­cordingly, the Five Year Plans assigned a high priority to these industries while a number of steps were initiated for their revival and growth. These are discussed below.

a. All India Boards:

A major step taken was the establishment of several All-India Boards to advise and assist in the formulation of programmes of development for the Hand- loom industry, Khadi and Village industries, small scale industry, Handicrafts, sericulture and coir.

The Khadi and Village Industries Board not only prepared programmes for the industries with which it was concerned, but also had them implemented through registered institutions and cooperative societies.

In the case of other industries, responsibility for the implementation of programmes mostly rested with the state governments. A notable development during the second plan was the establishment of a statutory khadi and village industries com­mission with more extensive statutory powers than those enjoyed by the Khadi and Village Industries Board.

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Further, in almost all states, statutory state Khadi and Village Industries Boards were created under legislation sponsored by state Governments. Steps were also taken to strengthen the state departments of in­dustries. Thus, a three-tier organisation was developed — The Ministry of Com­merce and Industry at the Centre, All India Boards, State Departments of Industries and State Boards.

b. Financial Assistance:

Efforts were made during the plans to provide adequate credit facilities to cottage and small industries. Towards this end, the rules and regulations governing the administration of State Aid to Industries Acts were liberalised. A more important step was the establishment of twelve state Finance Corporations with the avowed object of providing medium and long term financial assistance to small industries.

The State Bank of India also launched a pilot scheme for enlarging and coordinating credit facilities available to small-scale industries at selected centres. Under the Credit Guarantee Scheme, launched by the Reserve Bank of India in 1960, the Bank guaranteed loans advanced to small and village industries.

The Bank also continued to provide credit facilities to the central financial agencies for meeting the working capital requirements of the handloom weavers’ cooperative societies. In the field of handicrafts, assistance had to be given to individual artisans and entrepreneurs because a sufficient number of artisans organisations had not developed at the field level.

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In handloom and coir, assistance was channeled mostly through cooperative societies; on Khadi and village industries, mostly through institutions registered with the Khadi and Village Industries Commission.

c. Technical Assistance:

The development of cottage and small-scale industries had been hampered by their low level of technology. Provision of technical services was, therefore, an important step to stimulate their growth. The Khadi and Village Industries Commission set up a technological institute for village industries and also estab­lished central and regional institutions for the training of workers.

A programme for the production and distribution of Amber charkhas on a large-scale was undertaken. A scheme was also introduced to assist handlooms weavers’ coopera­tives to change over to power-looms.

The All India Handicrafts Board set up four Regional Design Centres which were in addition to production-cum-training centres for specific crafts like ivory and conch shell products, bidri, decorative pottery, toys, bamboo articles, paper-Mache products etc.

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In order to provide technical services, advice and assistance to small Industries, Regional Small Industries Service Institutes were set up. The common facility workshops also provided technical assistance in undertaking difficult production operations on behalf of small firm’s at a cost.

d. Marketing Assistance:

An important step towards providing marketing assistance to these industries was taken when the government, having accepted the recommendations of the Store-Purchase Committee, began to place large orders with them. As a result, the value of government purchases increased from Rs. 66 lakhs in 1952-53 to Rs. 37.4 crores in 1963-64.

Besides, over 100 emporia and sales depots were opened for the sale of handlooms, handicrafts, and the products of the Village Industries.

The establishment of the National Small Industries Corporation, whose function is “to organise production for meeting government orders, to assist the manufacture of parts and components by small units so as to fit it with the production of the corresponding large units and to arrange the supply of machines on hire- purchase terms,” was of great help in pushing up the sale of the products of small industries.

In 1963-64 alone, the value of machinery thus supplied was Rs. 6.5 crores and the number of machines was 3,060.

e. Protection against Competition:

Apart from these programmes of assistance, steps were also taken to protect these industries against the competition of large- scale industries.

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For this purpose, certain steps such as the reservation of spheres of production, non-expansion of capacity in large-scale industry, imposition of a cess or excise duty on the products of large-scale industries were undertaken for the assistance and promotion of a number of small industries.

For example, the production of certain varieties of cloth was reserved for the handloom industry and an excise duty was levied on the production on large mills so as to build up a fund for assisting handloom and khadi industries.

Similarly, all applications for substantial expansion of existing large units or for the establishment of new large units in leather foot wear and tanning industries were examined in the light of their possible effects on the cottage and small units.

In the match industry, a new category of D-Class factories was introduced and the rebate of excise duty in respect of these factories was enhanced. In certain other industries including agricultural implements, furniture making, sports good’s slates and pencils, bidi, writing inks, chalks, crayons and candles, it was decided to reserve further expansion of production for small units only.

These measures notwithstanding, “the operation of the industrial licensing system was not effective in preventing competition from the large-scale industries and in providing the required degree of initial protection.”

Essay # 3. Industrial Estate and Cottage Industries:

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Industrial estate were established with a view to providing, on a rental basis, good accomodation and other basic facilities such as electricity, water, gas, steam, railway-slidings, watch and ward to groups of small enterpreneurs who would have otherwise found it sificult to secure these facilities at a reasonable price.

By 31 March 1965, 235industrial estates had been completed out of which only 154 were really functioning. their estimated annual production was Rs.41 Crores. it may be added that the industrial estate established in the urban areas showed greater success since they attracted enterpreneurs much more easily.

On the other hand, the estates situated in semi-urban and rural areas did not posses enough pull and consequently were haltingly utillised.

Essay # 4. Progress of Cottage Industries under the Plans:

Despite their importance, the cottage and small scale industries were not assigned a high priority in the First Plan. This may be seen from the fact that the total outlay on these industries during the First Plan amounted to a meagre Rs. 43 crores.

However, as a result of programmes undertaken and the institutions established, these industries were assured of an important place in Indian Planning and their key role in diversifying the rural economy and expanding employment opportunities was duly emphasised.

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Therefore, the programme to be carried out in the Second plan was considerably larger than in the First. Programmes for the Second plan and problems connected therewith were reviewed by the village and small industries committee, commonly known as the Karve Committee.

The committee thought that the progressive expansion and modernisation of rural industry could be brought about by the establishment of small industrial units in villages and small towns located all over the country, thus leading to a “Pyramid of industry broad-based on a progressive rural economy,” In the initial stages of expansion, the committee recommended.

(a) Ceiling on the growth of large-scale consumer goods industries;

(b) Reservation of spheres of production for small units;

(c) Creation of price differentials in favour of small-scale village industry. The Karve Committee’s recommendations were misunderstood as an attempt “to bloster up inefficiency”. In reality, it was an extension of the ‘Infant industry’ argument to cottage industries vis-a-vis machine-made goods.

The essence of the scheme was to prevent elimination of existing cottage and small units so as to provide them with an opportunity to improve their efficiency. During the Second plan, total public expenditure on small scale and village industries amounted to Rs. 180 crores.

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The main objectives of the Third plan programmes for these industries were:

(a) To promote the productivity of the worker and reduce production costs by placing greater emphasis on improvement of skills, supply of technical advice, better equipment and credit ;

(b) To promote the growth of industries in rural areas and small towns;

(c) To promote the development of small scale industries as ancillaries to large scale industries and

(d) To organise artisans and craftsmen on cooperative lines.

A sum of Rs. 264 crores was allocated for the achievement of these aims. In actual practice, only an estimated Rs. 240.76 crores were actually spent. Under the encouragement and protection provided by the government, the village and small industries registered substantial improvement.

The number of small-scale units, registered with the State Industries Directorates, rose from 36,000 units at the beginning of 1962 to 75,000 units at the end of March, 1965.

Among the cottage industries, the most impressive advance was made by the Handloom industry whose production increased from 742 million yards in 1950-51 to 3060 million yards in 1965. It provided employment to million weavers and the value of its exports stood at Rs. 12.6 crores.

The value of the total gross output of handicrafts was estimated at Rs. 317 crores in 1966 and their exports stood at Rs. 26 crores in 1964-65. Exports of coir fibre and products stood at Rs. 11.10 crores in 1965-66.

To sum up, in the post-independence period, small-scale and cottage industries emerged from “the alleys of metropolitan slums” as progressive force behind the country’s development. However, for their survival and future growth, they needed re-equipment and adaptation to better techniques.