Wednesday, 6 May 2015

Role of village and cottage industries in rural development

The handicrafts, small scale and medium scale industries manufacturing play a dominant role in programmes for rural development. The promotion of these industries leads to an improvement in social and economic conditions; and an overall balance of rural and urban industrial activities, which in turn, retards migration of labour from rural to urban areas. Socioeconomic improvement in the rural set up is crucial which need improvement in the allied sectoral activities. There is need to have backward and forward linkages of agriculture with industry which is a necessary and sufficient condition for attaining rapid and sustainable growth of primary sector. Encouragement of indigenous entrepreneurship by way of a relatively large participation of individuals in the management and operation of small establishments, thereby improving productivity through personal efforts to raise operational funds and the effective use of such capital to provide marketable finished products are most crucial for making headway in this direction. Since the manufacturing establishments at craftsmanship level are of traditional types, the identification of these traditional skills and the injection of capital, modern machinery equipment, and improved technical training and marketing activities can improve the overall preferences of these units and thus pave the way for greater industrial development in the rural areas. increase of employment and eradication of poverty by creating more units in the handicrafts and small scale sections will be the sure outcome. Infrastructure facilities and capital outlay are relatively smaller in these sections, compared with large establishments. A rational approach would be to encourage the growth of industries in rural areas with a planned dispersal and decentralization programme. Dispersal would improve rural working conditions through the extension of roads, housing electricity, water supply and other amenities of modern industrial life. Diversification of products and establishment of new product lines are another elements which are to be looked into. As there is greater flexibility in the locational and operational requirements of handicrafts and small scale industries, they are more suitable for bringing diversification in both Agriculture and Industries or adding new product lines which need special attention. Import substitution and an increase in subcontracting by such industries means that off-arm activities can be created with less investment and increased production. This type of ancillary development provides overall industrial stability. Further, greater utilization of rural resources and capital formation proves as means of giving impetus of this sectoral activities. Greater utilization of resources is possible only by the creation of more rural handicrafts and small scale industries make full use of all available resources with minimum wastage, resulting in greater saving and capital formation. There already exist great potential for mobilisation of local resources which need dispassionate strategy to be evolved. The fact is that despite the need for rural industrial development certain limitations on the expansion of handicrafts and small scale industries in rural areas exists. As emphasised in the monographs on Appropriate Industrial Technology by UNIDO, the lack of timely credit facilities, difficulty in acquiring machinery and raw materials; lack of appropriate products design, shortage of suitable factory premises and location, lack of technological and managerial know-how, trained manpower; marketing facilities and quality standards. in-adequacy of each constraint creates special difficulties for small enterprise. An integrated development programme providing technological and institutional facilities is needed to form a system of links at the rural industrial level. The problem of sickness of small scale industries specially relating agro-industries need special strategy to be evolved to come over the tense situation. According to the latest estimates small scale units are reported to be in bad shape. The number of sick industries is increasing year after year and the malady if not checked might erode the roots and industrialisation which is a vital component of the economy of the country. A number of reason could be attributed for the sickness of small scale industries in the country and prominent among them are:- a) Management deficiency; b) Inadequate and timely availability of finance; c) Out-dated technology; and d) Marketing problem. e) Inadequate availability of inputs


COTTAGE INDUSTRIES AND THEIR IMPORTANCE
Cottage industries occupy an important place in the economy of India. India is a predominantly agricultural country. About eighty per cent of our country’s population depends on agriculture. In India agriculture can be termed the largest and the most important industry. Agriculture is a seasonal industry which does not provide any work to the agriculturists for about three to four months in a year. The women and the old are without any useful employment almost throughout the year. Cottage industries can provide them some gainful employment and add to their income. They can increase the total production in the country as well.
This is the age of machines. Mechanisation is the order of the day all over the world. But in’an underdeveloped and agricul­tural country like India, the importance of cottage industries cannot be over-emphasised. Even Mahatma Gandhi strongly recommended the development and expansion of cottage industries in India. He said, “I can have no consideration for machinery which is meant to enrich the few at the expense of many.” According to him, “Mechanisation is good when the hands are too few for the work intended to be accomplished. It is an evil when there are more hands than required for work as is the case in India • The problem is how to utilise the idle hours of teeming million inhabitants of our villages which are equal to the working days of six months in a year.”
Cottage industries are of special importance because they can be carried on with the help of the members of the family. They do not require large premises, huge machines and great investment. They are labour intensive. The greatest advantage of such industries is that even the women and the old in the family can usefully utilise their leisure. They not only increase the income of the family but also reduce unemployment and thus raise the standard of living of the members of the family. In olden times, India had fairly deve­loped cottage industries. The commodities produced in these industries were famous for their beauty, art and delicacy. Every village in India was a centre of these industries. But during the British rule these industries received no protection, what to talk of encouragement, and so they were ousted by large industries. After the attainment of independence our national government has paid sufficient attention to the development of these industries.
The problem of unemployment has assumed dangerous pro-tion in India. Eminent economists have expressed the view that present problem of unemployment can be solved by cottage iustries alone and not by large scale industries. India’s Five Year ins have, therefore, laid stress on the development of these indus-and the government of India have constituted more than half-Jozen boards to help their development. Cottage industries have I great potential to solve the problem of unemployment and also to blip in the equitable distribution of wealth. There is no denying the fact that big industries increase the level of production but a Riejor part of the profit goes into the pockets of big industrialists, Wiulting in wide disparity in the distribution of wealth of the nation. The cottage industries prevent the evils of concentration Of industries. Big industries can be located only in certain parts of the country where the necessary infrastructure already exists, whereas Cottage industries can be carried on in every village. Big industries, tend to create regional imbalance : on the other hand cottage Industries reduce regional imbalance in the field of economic acti­vities.
Cottage industries in India are faced with a number of diffi­culties. Our village artisans are mostly illiterate and poor. They have been employing traditional methods and techniques of produc­tion. But of late they have taken to new and improved methods as a result of expansion of education and awareness among them. Government is also helping them by extending training facilities. Shortage of raw materials and difficulty in marketing the finished goods at reasonable prices, are other two great obstacles in the development of cottage industries This results in hardships and exploitation of the artisans. The raw material becomes costlier in remote villages and absence of marketing organisation results in disincentive to greater production. These apart, lack of improved equipment, shortage of power supply, ignorance of new designs are other handicaps suffered by the artisans of these industries. And lastly, lack of finances poses a great problem to those engaged in these industries.
Concerted efforts are being made by our government for the development and expansion of these industries and some improve­ment has been recorded in the matter. The schemes of rural electrification are being implemented to make power available to these industries. Cooperative marketing societies are being orga­nised to help these industries in procurement of raw materials and sale of their product at a reasonable price. New roads constructed in the rural areas have provided transport facilities to them. Government are exploring foreign markets for the goods produced by these industries. Arrangements for credit facilities on nominal interest have been made for them. In the purchase of government supplies, priority is given to these industries. The government is, thus, making serious efforts to encourage and develop them.
The Union ‘Government has set up Khadi and Village Indus-tries Commission to help these industries. Village industries include processing of cereals and pulses, oil, gur and khandsari, palm gur, non-edible oils and soap, bee keeping, handmade paper, village pottery, carpentry, and black-smithy. These industries depend on local raw materials and mainly cater to the requirements of the local population. The Khadi and Village Industries Commission, which is responsible for the development of these industries, provides financial assistance to the registered institutional cooperative societies, State Khadi and Village Industries Board and other village industries which come under its purview. The strategy of economic development evolved by the Planning Commission recognises the need for cottage industries. An important role has been assigned to khadi and cottage industries. In fact it can be said that economic development in our country cannot reach a take-off stage until the vicious circle of poverty is broken by creating avenues of employ­ment for 80 per cent of our population in the rural sector, whose only hope is cottage industry.
In the Industrial Policy Statement made in Parliament in December 1977, it was made clear that Government would introduce legislative measure to ensure adequate recognition to cottage indus­tries, which are capable of providing employment to a large number of persons in the rural sector. As a result of this shift in the attitude of the government every district will be provided with an agency to look after the needs of cottage industries in the district. This district agency would arrange for machinery, raw material, credit facilities, marketing, research and expansion of these indus­tries. The policy statement hoped that the financial institutions would reserve a portion of their total advances for the cottage industries. The government departments and public undertakings have been instructed to make their purchases from these industries on a priority basis. Government would take effective measures for development and greater use of small and simple equipment and machinery suitable for those employed in cottage industries with a view to increasing their productivity and profitability.
During the first three Five Year Plans a sum of Rs. 458.76 crores was spent by government for the development of village and small scale industries. The Fifth Plan outlay for the development of this sector was Rs. 535.03 crores. The Sixth Plan provides an outlay of Rs. 935.00 crores for cottage and small scale industries. It is estimated that khadi and village industries, and small scale indus- ‘ tries would be producing goods worth Rs. 2561 crores and Rs. 2670 crores during 1982-88 they are likely to give employment to 74.48 lakh and 57.68 lakh persons respectively.
Having fixed the objectives of removal of poverty and un­employment, the economic growth of the rural areas is one of the most important measures for achieving it. Development of cottage industries is vital for the real transformation of our countryside.