Nothing for the Handloom Industry

Advocacy, Economics, Employment/ Livelihood, Policy

Nothing for the Handloom Industry



(April, 2007 Update)

Every year at Budget time the handloom industry waits to see if its importance in providing productive, low-investment employment in rural areas will be rewarded by the government of the day. Every year it is deeply disappointed that its potential is not recognized through policy measures and budgetary allocations. In 2005 there was a flurry of activity in the PMO and the Planning Commission, a Steering Committee was formed in the Planning Commission and was asked to give recommendations for policy on handlooms for the 11th Plan period. I was part of that Committee and this is a summary of the recommendations we drafted:

  • The policy for the handloom sector should recognize that the sector has tremendous potential for generating productiverural employment, and therefore as a critical sector for expanding rural employment it is entitled to substantial State support. A critical drawback in policy formulation has been that information regarding the industry is out-of-date or non existent; proper data needs to be collected and disseminated, on the basis of which a vision document for the industry should be prepared. The processes of information collection and policy formulation to be inclusive, with consultations at the level of primary producers, co-operative management, assistant directors of State Handloom departments, and higher level State officials.
  • Upto now interventions have taken a fragmented view of the industry, addressing issues piecemeal. Instead, theproduction-market process should be seen as a whole, and existing institutions such as Weavers’ Service Centres should be strengthened to play critical roles in developing production-market linkages. Management training specific to the industry to be provided through dedicated institutions, and large-scale promotion and publicity at different levels to be taken up.
  • In recognition of the size of productive employment generated by the industry, the budgetary allocation to be raisedto at least Rs 800 crores this fiscal. Delivery mechanisms to include NABARD and others such as DRDAs. Concessional credit on adequate scale to be made available. Co-ops & SHGs developed into viable production units.
  • Institutions for long-term technology research on the lines of the chain of laboratories supported by Government forother textile sectors to be set up.
  • Interventions to address both, business aspects as well as State’s social responsibility, and policy to recognize theseparate nature of these interventions.
  • Enforcement of existing legislation on reservation and hank-yarn, Government to be responsible for guaranteed accessand price support for raw materials, particularly yarn.
After the recommendations were drawn up and submitted to the PMO nothing further was heard. Unlike the draft Education Policy which some years ago was offered for public discussion and comment, no draft handloom policy has been circulated. Though there have been stringent criticisms from the field and from academics on the working of the Cluster Development scheme, and repeated requests that other existing schemes be evaluated and modified where necessary, the Finance Minister’s Budget speech this year states that ‘an additional 100-150 clusters will be taken up in 2007-08’ and ‘the 12 schemes which are now implemented will be grouped into 5 schemes in the Eleventh Plan period’. In other words, there is nothing new, all is as before, and there is total disregard of dissatisfaction at the grassroots. Though the Steering Committee had in 2005 itself recommended a budgetary allocation of Rs 800 crores, the allocation in 2007 is only Rs 321 crores, and even this meagre allocation is spent according to the pre-ordained schemes of the Office of the Commissioner, Handlooms in Delhi, rather than on making handlooms sustainable.
This cannot be the way to move towards inclusive growth. To achieve inclusive growth, to address the shocking figures of child malnutrition in rural areas, we need large-scale and fast-paced expansion of economic activity that can provide large scale viable livelihoods producing marketable goods without disturbing the social fabric; without accelerating the migration from rural to urban areas. There is a finite quantity of financial resources that can be invested in this process. So we need to build on the resources that exist, such as the features of the handloom industry: existing or easily acquired skills, inexpensive infrastructure and low capital costs, and support these resources with developmental funding.

Even at its present low ebb the industry employs 6.5 million families in weaving alone, besides an equal number in warping, sizing, dyeing and tool-making. It produces a vast array of textiles of unique character and individuality, with tremendous marketability in both domestic and foreign markets. It is an area of expertise where everything that is needed for production is available within the country, so the export realization is 100%, unlike many mechanized industries that depend heavily on imported equipment or raw material.

The handloom industry needs the support that all industries expect from the Government, of high-quality research and training institutions and infrastructure. It needs specific marketing, systems development, product placement and market exploration during its growth and take-off phase. With a modicum of support where it counts, the industry can easily double and triple in size in both output and employment.

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