About The Sector
The handloom sector is one of the largest employers in India, providing
employment to about 65 lakh persons. The sector represents the continuity
of the age-old Indian heritage of hand weaving and reflects the socio-cultural
tradition of the weaving communities. The Government of India has been
following a policy of promoting and encouraging the handloom sector through
a number of policies and programmes. Most of the schematic interventions
of the Government of India in the Ninth and Tenth Plan period have been
through the state agencies and cooperatives in the handloom sector. However
in the face of growing competitiveness as well as opportunities emerging
in the post liberalization environment, the logic of economic liberalization
for handlooms will sooner or later, involve elimination of subsidies for
handlooms. The issue has therefore, to be seen in the context of productivity,
employment generation, protection and promotion of traditional skills and
the need to provide a safety net to the poor in a Country where any economic
programme must some how have target in this direction.
This sector is highly decentralised and dispersed and handloom weavers
can be found in over 400 clusters in the country. In view of the high employment
in the sector and cost disadvantages faced by handlooms compared to the
Mill and Power loom sectors and due to the manual nature of production, the
Govt. of India had been following a policy of protection of the Handloom sector
since long. This policy consists of subsidy for production of yarn supply,
marketing rebate on sales, and exemption from excise duty on hank yarn
which has recently been discontinued.
What the handloom sector should look far then is not continuation of financial
subsidies, but institutional support for modernization of production,
steady and regular supply of inputs like yarn, dyes and chemicals at reasonable
prices, training in design and innovative patterns of weaving. There
is also a need to empower weavers to chart out a sustainable path for growth
and diversification in line with emerging market trend. The handloom
sector has an edge over the power loom and mill sector in its ability to
commercially produce the goods in small volumes, openness to innovation, quick
to switch over to new designs, adoptability to suppliers requirements and
creation of exquisite designs. It has also the comparative advantage in terms
of availability of skill base across the country, abundance of local raw
materials and labour intensity. Yet this sector has not been able to fully
harness its potential.
During the VIII and IX Plan, the Central Government has been extending
financial assistance to the states on the basis of centrally sponsored
schemes and intended benefits have gone to the beneficiaries as determined
by the State Governments. There has been no focused approach in growth
and development of Handloom sector as resources were generally spread very
thinly. The working group for the X Five Year Plan had proposed a slight shift
in the development paradigm--focus on cluster development.
In the Textile Policy of 2000, to make the Handloom industry capable of
surviving in a globally competitive world, emphasis was given on encouraging
and assisting excellence in craftsmanship in order to carve out a niche
on exclusivity of design and product and for this purpose, on the provision
of skill upgradation, technological improvement, product development and
marketing. After the removal of restrictions on imports as per the W.T.O.
obligations, the Handloom sector have seen erosion of fiscal protection by
removal of the excise exemption in favour of handloom sector and putting it
at par with the Powerloom and Mill sectors since the excise duty on yarn was
abolished for all sectors.
The Hon'ble Finance Minister in his budget speech of 2005-06 has stated
that:
"I think it is necessary to lend further help to the handloom sector.
The Government proposes to adopt the cluster development approach for the
production and marketing of handloom products. The Ministry of Textiles will
take up 20 clusters in the first phase at a cost of Rs.40 crore, and the amount
will be provided during the course of the year".
Looking at the aforesaid situation, it has been felt that the cluster approach
for the development of handloom sector where all the needs of the cluster
are met would be an ideal solution to the travails of this sector. In fact
this initiative of the government was also highlighted in the award ceremony
of Handloom Export Promotion Council (HEPC) held at National Institute of
Fashion Technology (NIFT, Gandhinagar) on 20th May 2005 by honourable Union
Minister of Textiles, Shri Shankasinh Vaghela.
The objective of Integrated Handloom Cluster Development Scheme (IHCDS)
being introduced in the year 2005-06 is five fold:
• To provide for development of handloom clusters in an inclusive and
holistic manner to build their capacity to meet the challenges of the market
and global competition in a sustainable and self reliant manner;
• To facilitate collectivization of handloom weavers and service providers
to take up input procurement, production, marketing and other support activities;
• To provide for common infrastructure and services in a viable format
in the cluster;
• To provide an environment of empowered and participative decision
making among weavers;
• To encourage convergence of schematic assistance and support services
from various schemes and programmes of various government and other agencies
in the cluster to optimize resource utilization for betterment of the livelihood
and quality of life of handloom weavers.
Advantages of following cluster approach:
Across the country, cluster development assistance has displayed a strong
appeal for Governments and institutions alike, as a result of its several
attractive features, such as:
• High impact and cost-effectives due to the multiplier effects of
reaching out to large number of interrelated enterprises working in close
proximity.
• Stimulation of broader local economic development in a given area,
including a stronger basis for local private-public partnerships.
• Interaction with related support institutions (e.g. banks, technology
providers) and, in the process, better articulation of support needs, including
the gradual creation of more vibrant Business Development Services (BDS)
markets.
• Enhanced scope for long term sustainability as a self-governance
framework emerges that does not require much external support to operate.
While the focus on the clusters could provide a mechanism to achieve the
maximum coverage of handloom weavers in an efficient and effective manner,
the more important dimension of approach could be the fine tuning of strategies
tailor made to fit the skill sets as well as the strengths and weakness
of the weavers in the cluster. For example, some weavers may be working
on coarse cotton, fiber while others on the finer varieties. Elsewhere
they may have strength in tie& Dye, whereas other may have strength in
weaving pattern. Additionally some may have better exposure to the urban
markets, whereas other may primarily be catering to the rural markets. In
order to improve the overall performance of the cluster and to enable it to
achieve collective efficiency, the edifice of the cluster should be built
on its needs, the flexibility and viability it has to diversify the production,
the group it focuses on and should be beneficiary led and managed.
Contraints Of The Sector
Despite the unrestricted scope and opportunities, the dispersed and unorganized
nature of handloom industry has been facing constraints on its sustenance
such as:
• Traditional production technique
• Low level of technology and skills
• Lack of modernization
• Quality up gradation - Research and development
• Lack of adequate, even and timely supply of inputs
• Lack of product and design innovation
• Non-availability of adequate and timely credit facilities
• Lack of skill up gradation of weavers in designing, dyeing, printing
and processing;
• Inadequate organizational marketing and technical support
StakeHolders
In the context of handloom cluster the following actors play a major part:
• Weaving units, Finishing Units
• Dyeing and printing units
• Garment producers
• Merchant buyers
• Traders
• Exporters
• Producers of specialized inputs such as yarn, buttons, etc.
• Government and private financial and R&D institutions etc.
• BDS providers and Associations, e.g. Weavers' Club etc.
Entrepreneurship Development Institute of India (EDI), a national resource
institution in the task of entrepreneurship teaching, research, establishing
replicable models of development and policy advocacy in association with
Ministry of Textile has undertaken specific diagnostic cum scoping study
of select five clusters in different parts of the country viz; Sonepur
(Orissa), Banaras (UP), Bijoy Nagar (Assam), Kuringipadi (TN) & Madhavaram (AP) under the
banner of International Centre for Cluster Competitiveness & Growth (IC3G).
The centre inaugurated by honourable chief Minister of Gujarat, Shri Narendra
Modi on 18th January 2005, derives its genesis from the cluster development
initiatives at hand with the Office of Development Commissioner, Small Scale
Industries, Ministry of Small Scale Industries, Government of India. The centre
has been active in imparting training, providing hand holding and mentoring
support, direct implementation of cluster development programmes along with
putting up relevant inter cluster interface like websites, news letter etc;
so as to reap in dynamism of growth and knowledge management.
• Traditional production technique
• Low level of technology and skills
• Lack of modernization
• Quality up gradation - Research and development
• Lack of adequate, even and timely supply of inputs
• Lack of product and design innovation
• Non-availability of adequate and timely credit facilities
• Lack of skill up gradation of weavers in designing, dyeing, printing
and processing;
• Inadequate organizational marketing and technical support
Outcome Based Interventions
The five studies have highlighted the need and importance of an urgent
intervention so as to improve upon the socio-economic condition of weavers,
improve design development skills, marketability so as to derive the needed
competitive advantage in the present economic environment. The interventions
will revolve around the following set of actions:
• Recognize the role of social capital - At the weavers' level;
• Trust-building initiatives;
• Vision building with Cluster stakeholders;
• Networking with special attention to consortia;
• Job Quality Improvement & upgrading worker's productivity;
• Association / consortium building and Strengthening;
• Accessing Business Development Services (BDS);
• Implementation of Cluster Action Plan (With an eye on Exit Strategy);
• Establishing principles of monitoring and evaluation, with special
emphasis on the benefit sharing within the cluster.
Approach
The above activities will involve following approaches in an integrated
manner:
1. Capacity Building Approach.
2. Market Development Approach
3. Technological
4. Institutional Development
Expected Outcome
1. Generate awareness about CDP among the cluster actors, Enhanced Skills
of the weavers / Traders / Cluster Actors, Improved working conditions
for weavers (Will lead to Increased Productivity per weaver)
2. Increase in Product range, Consumer orientation & Awareness levels
increased as regards the quality, Increase in the number of niche products
in order to make inroads in export market.(Will lead to Product Diversification,
Increased Volume of sales/ Product Range/ Number of persons engaged in Handloom
Activities/ Job work - Number of working days)
3. Increase in productivity / Loom, Improvement in dying practice.(Cost
Reduction & Increased Productivity per weaver)
4. Optimized operative expenses/ Cost of Production, Improved social security
for weavers, Networking between the traders/ manufacturers/ Exporters(Credit
Disbursed / actualized by the groups)
The integrated approach above all will adopt holistic development of the
languishing trade and ultimately the weavers.