Real planning consists i n the best utilisation of the whole

man-power of India and the distribution of the raw products of

India i n her numerous villages instead of sending them outside and ,

re-buying finished articles a t fabulous prices.

Harijan, 23.3.1.947, p .79.

CHAPTER - I

VILLAGE INDUSTRIES - A HISTORICAL REVIEW

1.1 Introduction

1.2 Definition of Village Industry

1.3 Evolution of Village Industries i n India

1.3.1 Pre-British Period

1.3.2 British Period

1.3.3 Post Independent Ferlod

1.4 Khadi and Village Industries in t h e Five Year Plans - An

Overall View.

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 CHAPTER I

VILLAGE I N D U S T R I E - A HISTORICAL REVIEW

1.1. Introduction

I n d i a is predominantly a country of v i l l a g e s . The majority

of her population reside in villages. Agriculture and allied

activities constitute their major occupation. However the

replacement of agriculture and craftsman production by the

superimposed colonial mode of production destroyed t h e occupational

structure of India. The destruction of agriculture a n d domestic

i n d u s t r i e s is t h e root c a u s e of t h e socio-economic c r i s i s confronting

t h e nation. The number of unemployed is i n c r e a s i n g every y e a r .

With a view to reduce t h e problem of unemployment, t o eradicate

poverty a n d t o improve t h e living s t a n d a r d of people, t h e p l a n n e r s

have implemented various strategies through Five Year Plans.

However these programmes do not solve t h e r e a l problem of I n d i a ,

i.e., m a s s poverty. Because t h e s t r a t e g i e s s o f a r implemented a r e

development oriented r a t h e r t h a n human centered, human welfare i s

of least concern. In this regard the development strategy as

visualised by t h e F a t h e r of the Eiation seems t o be t h e need of t h e

hour.

Mahatma Gandhi wrote , " t h e r e is no doubt i n my mind t h a t

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 in a country like ours, teeming with millions of unemployed,

something is needed to keep t h e i r h a n d s a n d feet engaged inorder

t h a t they may e a r n a n honest l i v i n g . It is f o r them t h a t k h a d i

a n d cottage i n d u s t r i e s a r e needed".' I n a county l i k e I n d i a where

c a p i t a l is s c a r c e a n d l a b o u r is a b u n d a n t , t h e strongest argument

along the l i n e s of employment c a n be p u t forward through village

industries. " I n view of t h e meagreness of c a p i t a l resources, there

is no possibility i n t h e short r u n , for creating much employment

through t h e factory i n d u s t r i e s . . .. Now consider t h e household or

2
cottage i n d u s t r i e s . They r e q u i r e very l i t t l e c a p i t a l " .

I n I n d i a , the cause- of v i l l a g e i n d u s t r i e s was initiated by

Mahatma Gandhi. To him v i l l a g e i n d u s t r y is a way of l i f e r a t h e r

:.Ian a means of l i f e . "The i d e a behind v i l l a g e i n d u s t r i e s scheme

is t h a t we should look t o t h e v i l l a g e s f o r t h e supply of our d a i l y

need^".^ He realised t h a t :

v i l l a g e economy cannot be complete without the

e s s e n t i a l v i l l a g e industries, such as hand-grinding,
hand-pounding, soap making, p a p e r making, match
making, tanning, oil pressing e t c . ..
Given t h e
demand, there is no doubt t h a t most of our wants
c a n be supplied from our v i l l a g e s . When we h a v e
become v i l l a g e minded, we w i l l not want imitations
of t h e West o r machine made products but we w i l l

1. E!.K. Gandhi. Harijan, 2.1.1937.

2. F . C . Mahalonobis, quoted by Gunnar Myrdal, Asian Drama.

Kalyani Publications, New Delhi, p .1290.

3. M . K . Gandhi, Harijan, 23.11.1937.

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 develop a t r u e n a t i o n a l t a s t e i n keeping with t h e
vision of a new India i n which pauperism,
s t a r v a t i o n a n d idleness w i l l be unknown .4
1.2. Definition of Village Industry

Zince t h e present s t u d y is on t h e problems a n d prospects of

village industries in Kerala, it is necessary to discuss the

conceptual definitions of the terms ' small scale industries ' ,

' cottage and village i n d u s t r i e s ' a n d ' t i n y s e c t o r ' .

"How is a s m a l l - ~ u s i n e s s defined? T h i s perfectly normal

question doesnot have a precise answer. It depends upon who

provides the definition". "Small firm cou?.i not be adequately

defined in terms of employment assets, turnover, output or any

other a r b i t r a r y single q u a n t i t y , nor would t h e same definition be

6
a p p r o p r i a t e throughout a n y economy".

\
I n I n d i a , i n d u s t r i e s i r e b r o a d l y c l a s s i f i e d i n t o four; l a r g e

scale, medium size, small s c a i e a n d t i n y and cottage i n d u s t r i e s .

"Industries having an investment of Rs.5 crores or more are

considered as l a r g e , those having a n investment of Rs.35 l a k h s t o

4. D .G. Tendulkar. Mahatma. Vol:VI, Publications Division, Delhi,

p.78.

5. Dan Steinhgff a John F. B a r g ~ e s , "Small Business Management

Fundamentais
y'30urth Edition. hlc Graw H i l l International
Students Editiun, p .8.

6 . Bolton 3.E , Small Firms Report of the Con~mittee of I n q u i r y on

Small Firms, London, Her Majesty's S t a t i o n a r y Office, 1978, p . 2 8 .

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 Rs. 5 crores a r e r e f e r r e d to a s medium sized. Those i n d u s t r i e s

h a v i n g a n investment upto Rs.35 l a k h s i n p l a n t and machinery a r e

termed as small scalev7 and "all industries with a capital

investment of Rs.2 l a k h s i n plant a n d machinery a n d located i n

r u r a l a r e a s a n d towns with a population of l e s s t h a n 50,000 a r e

included in tiny sector".' There is no well marked distinction

between tiny sector and village industries according to this

definition. Hence the definition given by Khadi and Village

I n d u s t r i e s Commission is accepted for t h e present s t u d y .

The Khadi a n d Village I n d u s t r i e s Commission defined v i l l a g e

i n d u s t r i e s a s "any i n d u s t r y located i n a r u r a l a r e a which produce

any goods or r e n d e r s a n y service with o r without t h e use of power

and i n which t h e fixed c a p i t a l investment i n p l a n t a n d machinery

a n d l a n d a n d building p e r head of a n a r t i s a n or worker does not

9
exceed 15,000 rupees".

1.3. Evolution of Village I n d u s t r i e s in I n d i a

From time immemorial, t h e v i l l a g e i n d u s t r i e s h a v e played a

predominant role in the development of Indian economy and its

7. Govt. of I n d i a . , "Seventh Five Year Plan 1905-90, Vol.11, Plann-

i n g Commission, New Delhi.

8. Directorate of I n d u s t r i e s a n d Commerce, Govt. of Kerala.

9. K V I C - brief information - 8 8 , Directorate of Publicity, Khadi

a n d Village I n d u s t r i e s Commission, Gramodaya, I r l a Road, Vile
P a r l e (W). Bombay, p.4.

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 civilisation. Here a h i s t o r i c a l a n a l y s i s of t h e evolution of v i l l a g e

i n d u s t r i e s i n I n d i a i s necessary t o h a v e a c l e a r understanding of

its place d u r i n g v a r i o u s periods. For v a l i d reasons t h e growth of

v i l l a g e i n d u s t r i e s over t h e y e a r s c a n be s t u d i e d under t h r e e heads,

namely Pre-British, British a n d Post I n d e p e n d a n t periods.

1.3.1 Pre-British Period

I n d i a h a d a glorious p a s t of v i l l a g e i n d u s t r i e s . Writings

of earlier visitors like Phahian contain detailed descriptions of

village a r t i s a n s i n India. According t o them I n d i a was one of t h e

chief manufacturing c e n t r e s of t h e world. The people of I n d i a h a d

produced a l l the goods needed for a good l i v i n g i n t h e v i l l a g e s .

Prof. R.C. Majumdar t e s t i f i e s t h i s i n h i s description of Indus-valley

civilisation :

Among t h e i n d u s t r i a l a r t s a n d c r a f t s , s p i n n i n g of
wool a n d cotton seems to h a v e been v e r y p o p u l a r
both among t h e poor a n d t h e r i c h , for t h e whorls
made of c h e a p a s well a s costly m a t e r i a l s h a v e
been found. That t h e dyeing of t h e f a b r i c s was
well known i s proved b y t h e a c t u a l f i n d of d y e r s '
vats. Fine wheel-made wares of v a r i o u s s h a p e s a n d
d e s i g n s show the high development of p o t t e r ' s
art . 10

The Aryans also gave importance to weaving and ofher

skilled production jobs:

10. R.C. Majumdar, Ancient India, Motilal B a n a r a s i Das, Delhi,

1977. p.24.

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 ... both men a n d women were engaged i n t h i s work
a s well a s i n the s u b s i d i a r y process of dyeing a n d
embroidery . Next came the carpenter
constructed houses a n d supplied household u t e n s i l s
who

and furniture. They also b u i l t c h a r i o t s , c a r t s .

boats a n d s h i p s . Many of them were s k i l l e d i n
wood c a r v i n g a n d produced a r t i s t i c cups. They
supplied v a r i o u s necessities of l i f e , from t h e fine
needles a n d r a z o r s to the s i c k l e s , plough s h a r e s ,
s p e a r s a n d swords. ..
The l e a t h e r workers tanned
l e a t h e r a n d made out of it a r t i c l e s s u c h as
11
bow-string a n d c a s k s f o r holding l i q u o r .

A l l these give i n s i g h t i n t o t h e self-sufficient, s e l f - r e l i a n t n a t u r e of

v i l l a g e s i n ancient I n d i a .

With the advent of trade and commerce, the skilled

a r t i s a n s of t h e ancient v i l l a g e s could produce more t h a n sufficient

to m e e t t h e i r l o c a l demands. I n other words, t h e human s k i l l could

produce a surplus over consumption, but his wants could not,

however be s a t i s f i e d within t h e household productions. Thus, t h e r e

arose t h e a r t i s a n production to meet t h e wants of others. With t h e

growth of a r t i s a n i n d u s t r y o r h a n d i c r a f t s , there a r o s e division of

labour between different trades and vocations. In India, such

division of l a b o u r took the form of caste system a n d all castes

In a v i l l a g e o r group of v i l l a g e s were bound together b y economic

ties:

Generally peasant castes are numerically

preponderant in villages and they need the
carpenter, blacksmith with leather-worker c a s t e s . ...

11. I b i d . , p.47.

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 Artisan c a s t e s produce goods which a r e wanted b y
everyone. The e s s e n t i a l a r t i s a n a n d s e r v i c i n g
castes a r e p a i d a n n u a l l y i n g r a i n at h a r v e s t
12
.
During Maurya period, the guild organisation was in a

flourishing condition. The principal industries were mining,

weaving, manufacture of l i q u o r a n d s h i p building. The art of t h e

carpenter a n d of t h e stone cutter was well developed, t h e l a t t e r is

best illustrated by Maurya sculpture. The other i n d u s t r i e s were

shoe-making, dyeing, pottery, fishing, manufacture of flour and

sugar and extraction of oil. The guild organisation of

i n d u s t r y made f u r t h e r progress i n Guptha period.

The t r a d i t i o n a l organisation of industry and trade i n the

form of guilds remained intact and continued to function during

Mughal period. "The s t a t e g a v e f u l l encouragement t o i n d u s t y a n d

r a n extensive workshops of its own. It was therefore possible t o

g i v e employment t o hundreds of weavers of s i l k a n d t o other people

i n connection with t h e production of a r t i c l e s needed at t h e court". 13

Among other p r i n c i p a l c r a f t s , mention could be made of making of

wooden bedsteads, chests, stools a n d boxes, leather goods,paper,

pottery a n d bricks:

12. Gazettier of I n d i a , Social Structure, Vol.IV, Publication Division

Government of I n d i a , 1969, pp.13-14.

13. K.A. Nilakantasastri, G. Srinivasasastri, History of South

I n d i a , Oxford University Press, Delhi, 1980, p .123.

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 A t t h i s period, I n d i a n looms h a d a p r a c t i c a l
monopoly of t h e home market for cloth a n d i n
addition h a d export markets. I n d i a supplied cotton
goods to t h e e a s t coast of Africa, Arabia, Egypt,
Burma, Malacca, t h e S t r a i t s a n d other Asiatic
markets. I n t h e course of t h e 17th c e n t u r y , t h e
European demand for cotton goods l e d to i n c r e a s e d
production a n d Madras Calicos became a l e a d i n g
14
item of t h e export t r a d e of t h e e a s t e r n coast.

Thus the skill and work of Indian artisans got approval and

appreciation i n v a r i o u s p a r t s of t h e world. But t h e importance of

guild system of I n d u s t r i e s declined d u r i n g t h e emergence of British

rule i n I n d i a .

1.3.2 British Period

The r u l e o f t h e British in India c a n be divided i n t o two

epoches; f i r s t t h e r u l e of t h e East I n d i a Company r a n g i n g from 1757

to 1857 a n d the r u l e of t h e British from 1857 to 1947. Before t h e

beginning of Industrial Revolution in England, the East India

Company concentrated on t h e export of I n d i a n manufactured goods.

textiles, spices etc. t o Europe where t h e s e a r t i c l e s were i n g r e a t

demand. After the I n d u s t r i a l Revolution t h e tremendous expansion

of productive capacity of manufacturers resulted in increased

demand of raw materials for British i n d u s t r y . This resulted i n the

flow of raw materials from I n d i a t o Europe a n d efforts were made

to commercialise a g r i c u l t u r e a n d i n d u s t r y . Thus:

14. I b i d . , p.538.

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 One of the most momentous consequences of the
establishment of British supremacy i n I n d i a was t h e
disruption of the centuries old union between
a g r i c u l t u r e and manufacturing i n d u s t r y , a s a result
of t h e progressive decline and destruction of t h e
Indian town handicrafts and village artisan
15
industries.

The l a r g e s c a l e production that grew a s a result of the

Industrial Revolution met a heavy reduction in costs. It also

created a g i g a n t i c i n d u s t r i a l organisation and consequently, the

machine-made goods began t o compete with t h e products of Indian

industries a n d h a n d i c r a f t s . It s t r i p e d the a r t i s a n s of t h e i r means

of livelihood. Under these circumstances the v i l l a g e a r t i s a n s who

lost their traditional occupations began to move to agricultural

sectors i n search of t h e i r livelihood which increased pressure of

population depending on l a n d .

In 1870's the Indian leaders began an intensive

investigation into t h e economic ills of t h e i r community:

A s a matter of f a c t , almost every I n d i a n publicists

of the day wrote a r t i c l e s o r books on the economic
situation i n I n d i a o r declaimed on the subject from
the public platforms o r i n t h e Council of Chambers
and p r a c t i c a l l y t h e whole field of I n d i a n political
l i t e r a t u r e of t h e period w a s concerned mainly with
16
economic , a f f a i r s .

15. D.R. Gadgil, The I n d u s t r i a l Evolution of I n d i a i n Recent Times,

1860-1939, Oxford University Press, Delhl, 1971.P.5

16. Bipin Chandra, The r i s e a n d Growth of Economic Nationalism i n

India. Peoples ' Publishing House. New Delhi , 1977, 88, pp .4-5.

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 Soon the subject of poverty began to dominate a l l discussions of

economic problems i n India and the Indian leaders began to attach

the highest importance to it. It was a t t h i s time that Gandhiji

entered into Indian politics and he realised the urgency of reviving

traditional handicrafts. the decline of which impoverished the

I n d i a n villages. From t h i s time the movement for the revival of

village industries started.

During the early years, ie., upto 1947, the revival of

village industries was entirely a non-governmental effort under the

guidance of Gandhiji. In a revealing passage he said "our

villages a r e on the verge of destruction owing to the disappearance

of village industries. They can be revivified only by the revival

of village industries". l7 Gandhiji was of the opinion that

"industrialisation on a mass scale w i l l necessarily lead to passive

or active exploitation of the villagers". He asserted the

importance of khadi and village industries i n a country like ours

teeming with millions of unemployed, and consequently with this

intention he started Khadi movement in 1918. In 1923 Gandhiji

formulated t h e A l l India Khadi Board. This organisation was an

integral p a r t of the Indian National Congress and worked under its

direction and supervision. The objective of this organisation was

to ensure co-ordinated development of khadi throughout the country.

17. M . K . Gandhi, Harijan, 25.3.1939.

18. M.K. Gandhi, Harijan, 29.8.1936 .

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 The second phase of Khadi Movement opened in 1925 with the

formation of a n autonomus organisation called All India Spinners

Association (AISA) of Akhil Bharat Charka Sangh. AISA did

commendable work with r e g a r d to t h e production, promotion, sales,

technological development and welfare of artisans. "Although

several Congressmen continued t o play an important role i n the

19
a f f a i r s of AISA, it w a s organisationally independent of Congress".

In the thirties Gandhiji turned his attention to other

village industries and established All India Village Industries

Association (AIVIA) in 1935. The main objective of All India ,

Village I n d u s t r i e s Association was t h e resucitation of l a n g u i s h i n g

i n d u s t r i e s through improvement i n tools a n d t r a i n i n g .

Gandhiji was not e n t i r e l y s a t i s f i e d with t h e progress of t h e

two organisations and the programmes implemented for the

development of khadi and village industries. So he merged them

together i n one organisation called Akhil B h a r a t S a r v a Seva Sangh

(ABSSS). He was of t h e opinion t h a t " k h a d i is t h e c e n t r a l sun

around which other village i n d u s t r i e s revolve l i k e planets. They

h a v e no independent existence, nor k h a d i c a n exist without other

village industries. They a r e absolutely interdependant". 20 In the

l a t t e r h a l f of the forties he r e a l i s e d a n imperative need for a new

19. S.K. J a j u , History of AISA, Sevagram, 1950, p.7.

20. M . K . Gandhi, Khadi - Why a n d How, Navajivan Publishing

House, Ahmedabad, 1955. p.223.

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 approach and thus incorporated the development programmes of

khadi and village industries a s a p a r t of the r u r a l reconstruction

programme. H e named it a s 'Samagra Seva' and advocated lchadi

for the economic uplift of Indian villages. Gandhiji wrote i n the

Harijan:

khadi (including village industries) i s the only

t r u e economic proposition i n terms of t h e millions of
villagers until. such time, i f ever, when a better
system of supplying work and adequate wages for
every ablebodied person above the age of sixteen,
male or female, i s found for h i s field, cottage or
even factory i n every one of our villages or
displaces the vFllages so a s to give the villagers
the necessarv comforts and amenities t h a t well
21
regulated l i f e demands and is entitled to.

1.3.3 Post Independent Period

The second period in the history of revival of village

industries s t a r t s with the participation of the Government i n Khadi

Movement. A s a p a r t of this "the Government of Madras deputed a

senior officer t o obtain advice from Gandhiji to setup a department

of khadi. This was followed by the Central Government's

recognition of the importance of rural cottage industries in

Industrial Policy Resolution of 1948". 22 The Constituent Assembly

also included development of cottage industries in rural areas

21. M.K. Gandhi, Harijan, 20.6.1940.

22. Report of Khadi and Village Industries Review Committee,

Ministry of Industries, Government of I n d i a , New Delhi, 1987,
p.3.

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 among the Directive Principles of the Constitution in Article 43.

Realising the role of village industries i n our national economy,

the planners give prime importance to the development of village

industries i n our national planning.

1.4. K h a d i a n d V i l l a g e Industries i n the Five Y e a r P l a n s - An

Overall V i e w

I n t h e first Five Year Plan, for giving close attention to

the programmes of village industries and to create favourable

conditions for action, the Government of India set up All India

Village Industries Board. I n the First Five Year Plan Draft, the ,

Planning Commission has stated:

while organisation i n village industries requires

d r i v e and direction from the Central and State
Governments, the primary responsibility for carrying
out programmes for village industries rests with the
state Governments, but in many aspects, the
framework within which they execute the programme
for individual village industries is set by policies
followed by the Central Government. In the
Central Government, there i s , therefore, need for a n
organisation which w i l l give close attention to t h e
programmes of these industries and help to create
favourable conditions for action by state
Governments, constructive organisations and village
--
LJ
co-operatives.

In accordance with the recommendations of the Planning Commission,

the Government of India set up the A l l India Khadi and Village

23. First Five Year Plan Draft, Planning Commission, New Delhi,
1953, p.316.

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 I n d u s t r i e s Board i n J a n u a r y 1953. The main functions of t h e Board

were t o p r e p a r e a n d organise t h e programmes for t h e development of

khadi and village industries: including training of personnel,

manufacture , supply of raw materials, marketing a n d r e s e a r c h

and study of economic problems of different v i l l a g e i n d u s t r i e s i n

t h e state.

The second Five Year Plan (1956-61) g a v e h i g h p r i o r i t y to

the development of heavy i n d u s t r y , b u t a l a r g e investment of p u b l i c

funds was utilised f o r t h e promotion of v i l l a g e i n d u s t r i e s . It was

observed t h a t t h e Khadi and Village I n d u s t r i e s Board was suffering

from s e v e r a l procedural handicaps including the lack of proper

f i n a n c i a l arrangements. It was, therefore, decided i n 1955 t h a t t h e

Board should, be replaced by a statutory body. A Bill was

accordingly introduced i n Parliament, proposing t h e establishment of a

Commission with 'power executive a s well as administrative' for

proper development of khadi and village industries. It also

provided:

for the A l l I n d i a Khadi a n d Village I n d u s t r i e s

Board functioning a s a n advisory body, which will
advise t h e Commission generally i n t h e d i s c h a r g e of
t h e i r duties. With t h e passing of t h i s Bill a n d t h e
Promulgation of Act No.LXI of 1956, t h e Khadi a n d
Village I n d u s t r i e s Commission came i n t o existence i n
?b
April 1957.

24. Report of Khadi and Village I n d u s t r i e s Review Committee. Op.

c i t . p.22.

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 Besides k h a d i , i n i t i a l l y ten v i l l a g e i n d u s t r i e s such a s Bee keeping,

Cottage match, F i b r e works, Agarbathis. Pottery, Non-edible o i l a n d

Soap, Flaying, Curing and Tanning of hides and skins and

Leather, Ghani O i l , Hand-Made p a p e r , Gur and Khandasari, Palmgur

making and other palm products, Processing and Marketing of

Cereals, Pulses, Spices, Masalas etc. were included i n t h e schedule.

Subsequently 16 other village industries were added to the

schedule. Consequently, t h e v i l l a g e i n d u s t r i e s sector was viewed

as a progressive and efficient decentralised sector, closely

i n t e g r a t e d with a g r i c u l t u r e .

In 1955 the Government of India appointed a committee

under t h e chairmanship of Karve t o examine the problems of v i l l a g e

industries in the country. The committee has recommended the

organisation of industrial co-operation for the implementation of

expanded programmes of village industries a n d t h e initiation of

s t e p s for f a c i l i t a t i n g t r a n s i t i o n to h i g h e r technology. Accordingly

attempts were made t o a s s i s t r u r a l a r t i s a n s for allocations under

r u r a l a r t s a n d c r a f t s i n t h e Community Development Block budgets

and to set up t h e training-cum production centres b y the Block

administrations. But tine Khadi Evaluation Committee appointed i n

1960 noticed t h a t t h e programmes did not come up to t h e expectation

due to inadequate training, lack of proper pre-processing,

non-standardisation of spinning equipment a n d inadequacy of t h e

o r g a n i s a t i o n a l structure. The committee a l s o found t h a t the activit-

i e s i n most a r e a s were confined to one o r two v i l l a g e s .

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 The Third Five Year Plan (1961-66) laid stress on

improvement of skills, supply of technical guidance, better

equipment a n d l i b e r a l i s e d credit, with a view t o reduce cost of

production and achieve h i g h productivity. It also suggested to

take necessary measures t o ensure subsidies and other financial

assistance so as t o motivate production u n i t s to achieve economic

viability even from t h e initial y e a r s .

The Fourth Five Year Plan (1969-74) drew s p e c i a l attention

to regional disparities i n the development of k h a d i and village

industries a n d to t h e need for s p e c i a l efforts i n backward a r e a s . ,

In 1971-72, Khadi a n d Village I n d u s t r i e s Commission approached the

State Governments requesting them to formulate schemes for

providing full-time employment to artisans in khadi and village

industries. However only t h e M a h a r a s h t r a State Khadi and Village

Industries Board took steps f o r its implementation and registered

294 block level multipurpose co-operatives. Under the scheme,

c a p i t a l expenditure was borne by Khadi and Village Industries

Commission and the working capital was secured from the

institutional financing agencies.

The Fifth Five Year P l a n (1974-79) highlighting t h e needs

of t r a d i t i o n a l a r t i s a n s who were getting displaced, suggested l a r g e r

employment of institutional finance for village industries in the

wake of the expansion of t h e b a n k i n g s t r u c t u r e a f t e r nationalisation.

Although great concern w a s expressed i n Fourth a n d Fifth p l a n s , a t

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 t h e r i s i n g unemployment i n r u r a l a r e a s a n d s p e c i a l programmes l i k e

Crash Schemes for Rural Employment (CSRE) a n d Drought Prone Area

Programme (DPAP) were introduced, t h e y remained confined to l a n d

based activities oriented to agriculture. Khadi and Village

Industries Commission with its charter for skill-based activities

oriented to artisans was, by and large, not drawn into these

special employment programmes.

The Sixth Five Year Plan (1980-85) laid down specific

t a r g e t s for v i l l a g e i n d u s t r i e s t o be developed under t h e I n d u s t r y ,

Service and Business (ISB) sector. But it was recorded ( i n Seventh

Plan proposal) t h a t t h e t a r g e t under t h e one p a r t of ISB sector

could not be achieved i n t h e Sixth P l a n due t o v a r i o u s reasons.

The Seventh Five Year Plan gave s t r e s s for t h e generation

of productive employment i n r u r a l a r e a s . The Khadi a n d Village

Industries Commission h a s s e t itself a n employment t a r g e t of 23.31

l a k h s i n k h a d i a n d 40.25 lakhs i n village industries during this

period. It w i l l be pertinent t o a n a l y s e t h e p r o g r e s s achieved by

the KVIC i n different p l a n periods For t h i s purpose some selected

indicators a r e presented i n Table-1 .l.

It is evident from the t a b l e t h a t while t h e r e were two s t a t e

Khadi and Village I n d u s t r i e s Boards, 242 registered i n s t i t u t i o n s and

60 co-operatives in 1955-56, their number increased to 28 State

Khadi and Village I n d u s t r i e s Boards. 1,300 registered institutions

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 Table - 1. I

Production, Sales and Employment of Khadi and Village

Industries i n India During Plan Periods

Sr. Subject 1955-56 19GO-61 l91;i66 19ih?-6:) 1973-7s

Nn.
-- ..~ . . -- .- -
I. Villages Covcrcd (Lnkl~s~ K.4 KA N.4 N.% X.\

11. ORGAERSAllONS
(i) State KVI h r d s (Sm.j 2 14 15 I5 20
(ii) Instihlrions (Nos.) 242 720 1,037 673 62I
(iii) Caopcmtivrs (Kos.) GO 1 1,765 19,371 20,0i9 23,i15
- --
Total 304 12,499 20,423 20,772 24,416

111. PRODUCnON (Rs. in C:rorcs) . .

(i) Khadi 5.54 14.23 26.80 23.%? 32.72
(ii) Villagc Industrirs 10.93 33.16 55.87 75.12 122.40
Total 16.47 47.39 82.67 93.50 155. I2

1V. SALES (Rs.in Crorcs)

(i) Khadi 4.37 14.07 19.67 20.74 45.95
(ii) Village Indtfstries 0.90 28.36 49.13 63.98 115.64
Total 5.27 42.43 69.40 84.72 161.59

V. EMPLOYhlENT (LaW,
A. aLIi
(i) Fun time 1.61 2.05 1. D l 1.32 1.07
(ii) Part time 5.96 15.08 17.14 12.01 7.77
Total 6.57 17.13 18.95 13.36 8.84

B. Vill y Industries
- (i) ,Full time 0.0s 0. i 3 0.81 0. i 9 1.32
(ii) Part time 2.99 6.08 7.96 6.93 i .96
Total 3.07 6.81 8.77 7.72 9.28

1 . TOTAL EMPLOYMENT (.4 +B;

(ij Full lime 0.69 2.78 2.62 2.11 . 2.39
(ii) Part time 3.95 21.16 25.10 18.97 15.73
Tot;tl 9.M 23.94 27.72 21 .@I 18.1:
,.
I . WAGESiEARNINGS (Rs. in Crorrj)
(i) Khzdi 3.35 8.54 16. I4 13.27 li.OS
(ii) Village Industrieh 3.64 6.55 10.74 i2.2~1 22.16
Toral 6.93 15.07 26.88 25.G7 39.24

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 Sr. Subject
xu.

I I. ORGANISATIONS
!ij State KVI Bo..rds (Xos.) 24 24 24 27 28
:ii) Institutions (Sos.) 694 739 851 1,127 1.300
.....
I C:ooperatives (So%) 27,07 1 27,842 28,941 31,000 32,000
. Tot.11 77,789 28.603 29.816 32.154 33.328 .

III. PRODUCTION (Rs. in Cmrrsj

(ij Khadi 64.89 76.54 92.03 157.62 300.00
(iij Village Indlrrtrirs 192.54 242.97 347.98 e07.06 1,700.00
Total 257.43 319.51 440.01 964.68 5000.0

IV. SALES (Rs.in C:rot.rs)

(i) Khadi 66.52 78.26 87.13 159.52 310.00
(ii) Village Indtstrics 190.29 242.01 338.97 880.45 1,785.00

V. m5'LOYMENT (Lnk11 Persons)

.I. KLpdi
(i) Full time 2.39 2.53 3.41 4.24 7.00
(ii) Part time 6.83 7.81 7.79 8.81 13.00
Total +
9.22 10.34 11.20 13.05 20:00

B. V i Idastries
(i) Full time 3.16 5.04 5.66 8.22 10.00
(ii) Part time' 11.78 9.92 10.47 16.60 20.00
Total 14.94 14.96 L6.13 . 24.84 30.00

\'I.TOTAL EMPLOYMENT (A iB;

(i) Full time 5.53 7.57 9.07 12.48 17.00
(ii! Part time 18.61 17.73 18.26 23.41 33.00

Source : Report of Khadi and Village Industries Review Committee,

1987. February, Government of India. pp .l3-14.

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 a n d over 37,000 co-operatives i n 1989-90. The production of k h a d i

a n d v i l l a g e i n d u s t r i e s was increased from 16.47 crores i n 1955-56 to

2,000 crores i n 1989-90. But t h e employment opportunities provided

by khadi and village industries varied year after year. The

Figure 1.1 shows t h a t though the employment i n village industries

increased year after year, that in the khadi sector reduced

rapidly:

The main reason for the sharp decline in

employment a f t e r 1965-66 w a s i n o r d i n a t e delay i n
the introduction of 6 a n d 12 s p i n d l e New Model
Charkha (NMC) i n place of old a n d 4 spindle
wooden Ambar Charkhas withdrawn e a r l i e r , thereby
creating a technology g a p , fall i n r e a l wages
r e s u l t i n a- i n a drop i n t h e . number of t r a d i t i o n a l
spinners. .
25

The 'above f a c t s r e v e a l the importance of k h a d i and v i l l a g e

i n d u s t r i e s i n improving t h e conditions of rural people. In this

context we c a n r e c a l l Gandhiji's statement:

I h a v e no doubt i n my mind t h a t we a d d to t h e
national wealth if we help the smallscale
industries. I h a v e no doubt also t h a t t r u e
swadeshi consists i n encouraging a n d reviving these
home i n d u s t r i e s . That alone can help the dumb
millions. It a l s o provides a n outlet for t h e
c r e a t i v e faculties a n d resourcefulness of t h e people.
It c a n also usefully employ hundreds of youths i n
t h e country who a r e i n need of employment. It may
h a r n e s s all the energy t h a t at present r u n s to
26
waste.

25. Ibid., p.10.

26. M . K . Gandhi. Cent Percent Swadeshi, Navajivan Publishing House,

Ahmedabad, 1958, p.5.

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 26

24

22 -

20 -
19 -

16 -

14 -
12
-
10

8 -
6
-
4 - V- Village Industries
2

F I G U R E - 1.1

E m p l o y m e n t in K h a d i and Village Industries

Source: Report of K h a d i a n d V i l l a g e I n d u s t r i e s Review Committee,

1987, F e b r u a r y , Government of India. p . l 4 ( a ) .
-

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 I n the present study, an attempt is made to analyse the

nature, status, scope and problems and prospects of village

industries with special reference to Kerala. Kerala h a s been the

traditional home of village industries for centuries i n t h e past.

However a t present the programme of village Industries was mainly

being carried out by K V I B .Board. There a r e 21 village industries

within the purview of the Board. The present work is based on the

programmes implemented by the Board i n the State.

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