KHADI AND VILLAGE INDUSTRIES: AN EVOLUTION
Dr Balraj Vishnoi
( Author)
The Second Five Year Plan
(1956-61), which gave a high priority to the development of heavy industry and
large investment of public funds in this Sector, found a new justification for
Village Industries. It was propounded that the rising demand for consumer goods
could be met by additional production generated by village and small industries
which required relatively less capital investment and that they could thus help
reduce the inflationary pressures recurring from high investment on heavy
industries. The village and small industries sector was viewed as a progressive
and efficient decentralized sector, closely integrated with agriculture on the
one hand and the large industry on the other. As a result, common production
programs and regulatory devices such as reservations, controls, allocation of
raw materials and purchase policies were advocated. The Karvc Committee
(October 1955) which was appointed to examine the problems of the VSI sector
recommended the organization of industrial cooperatives for implementation of
the expanded programme of village Industries and the initiation of steps to
facilitating transition to higher technology. This was in accordance with the
prevailing preference for the co-operative method in the field on rural
development. Some of these new ideas were incorporated in the industrial policy
resolution of 1956. The Resolution highlighted the potential of village and
small industries as the method of ensuring a more equitable distribution of
national income, as they are capable of creating immediate and permanent
employment on a large scale at relatively small capital cost : Attempts were
also made to assists rural artisans from allocations under rural arts and
crafts in the Community Development Block budgets and through the
training-cum-production centres set up by the Block administrations. In some
places, the state Khadi and Village Industries Boards were invited to start
village industries programmes. KVIC itself took commendable initiative to
organize carcass disposal and bone digester centres, non-edible oil units, plan
products, carpentry and block smithy units, beekeeping etc. and to promote
research in improved tools and equipment. It was against this background that
Ambar Charkha was introduced in 1956-57 with noted hope. But as the Khadi
Evaluation Committee (1960) noted, the programme did not come up to
expectations for various reasons, such as “inadequate training, lack of proper
pre-processing, non-standardization of spinning equipment and inadequacy of the
organizational structure”. The Ambar Charkha had to be remodeled and converted
into in all-metal six spindled unit. It came to be known as New Model Charkha
(NMC). Its introduction also come to be restricted to carefully selected areas.
This on important lesson was learnt by the khadi and village industries
commission about the complexities in the transfer of technology on a large
scale.
The Evaluation Committee headed by Dr.
V.K.R.V. Rao of the institute of economic growth, Delhi took up the survey of
Intensive Area in 1962. It found that out of 121 Areas, 48 were abandoned due to
unsatisfactory working. The committee also found that the activities in most
areas were confined to one or two villages, that the scheme suffered for lack
of resources, particularly for non-industrial activities outside the
jurisdiction of KVIC, that delays in sanction and release of funds by KVIC
affected the progress of the programme and the commission’s attitude to
technological changes and use of power should have been more pragmatic in the
interest of higher productivity. Later in 1966, the Estimates Committee of the Parliament drew
attention to the unimpressive results of the scheme and advised the Government
to evolve an ‘overall and well coordinated plan of rural industrialization’. It
added that in view of the “ideological reservations and inhibions” the KVIC is
not a suitable organization for implementing the programme of a rural
industrialization, covering all rural industries and all rural areas.
We may also take note of
another experiment in intensive work undertaken by KVIC. On the recommendation
of a combined meeting held in June, 1959 Khadi Gramodhyog Samiti of the Sarva
Seva Sangh, the Khadi and Village Industries Boards and the representatives of
Khadi & V.I. Industries Board, the commission decided to intensify its
activities in the Gramdan Villages. In a number of states assistance was
provided under the scheme. Foundations of integrated Development Programme,
which was initiated in April, 1961, were laid by the Intensive Area Scheme and
to a certain extent, by the “Gram Dan” Village Scheme. The objective of the
programme was to develop compact areas with a population of about 5,000 each
into well-knit units of agro-industrial economy where, in addition to Khadi and
Village Industrial, other programmes of rural development such as sanitation,
housing, health services education etc… were also to be developed. It was
intended to stimulate in the local population initiative and desire for the
development of village community as a whole in preference to the programmes of
different sectors of the economy in an isolated manner.
However, in the light of the
observation of the Estimates Committee of Lok Sabh (1961-62) that the Intensive
Area Scheme was outside the scope of the Commission as well as the
unsatisfactory results in its implementation, KVIC decided to discontinue the
Intensive Area Scheme 1963-64. It could not also pursue the Integrated
Development Programme on the lines Visualized in April, 1961. However a limited
(Ltd) programme was launched in 1966-67, with the objective, inter-alia, of
developing new organizations or encouraging existing local institutions for
promoting KVI activities as a part of helping the process of integrate
development of selected areas. In other words, the new approach of the IDP
envisaged building up of institutional infrastructure in areas where KVI
activities are relatively weak or absent. At present this programme sometimes
referred to as Gram Ekai is implemented in 14 states by 57 institutions and
agencies. The pattern of assistance provides sanction of financial assistance
up to Rs. 40,000 grant per IDP lalock to an institution for a period of seven
years, on a tapering basis.
The policies and approaches
laid down in the first and second Five Year Plans were by and large, continued
in the subsequent plans with some change in emphasis on one aspect or the
other. For example, Third Five Year Plan (1961-66) laid stress on improvement
of skills, supply of technical guidance, better equipment and liberalized
credit, with a view to reducing production costs and achieve higher
productivity. It also suggested that a view should be taken on the role of
subsidies and other financial props, so as to motivate production units to
achieve viability as soon as possible. The Fourth Five Year Plan (1969-74) drew
special attention to regional disparities in the development of Khadi and
Village Industries and the need for special efforts in backward areas. The
Fifth Five Year Plan (1974-78) spoke of the needs of traditional artisans who
were getting displaced and suggested larger development of institutional finance
for village industries in the wake of the expansion of the banking structure
after Nationalization. KVIC continued to operate within the four corners of its
state only a few more were added to the list of village Industries as noted
earlier. The feedble exercises initiated in the second Five Year Plan to
integrate Khadi and Village Industries with the larger programme of rural
development came to an abrupt end with the abandonment of the community
Development Programme and the dismantling of the block machinery in most of the
states. Although great concern was expressed in the Fourth Five Year Plans at
the rising unemployment in rural areas and special programme like crash scheme
for Rural Employment (C&RE) and Drought Prone Area programme (DPAP) were
introduced, they remained confined to land-based activities oriented to
artisans was by and large, not drawn into these special employment programmes.
Here, Mention may be made of
the initiative taken by the commission to
interest the state governments in The Artisans Employment Guarantee scheme
popularly known as balutedars block Level Multi-Purpose Cooperation Scheme. The
main object of this scheme was to cover as large a number of artisans as
possible with the help of the available field agencies and to arrest their
displacement from the existing crafts. The scheme was to ensure adequate
earnings on the our hand and provision of fuller employment on the other.
In 1971-72, KVIC approached
State Governments requesting them to formulate detailed schemes for providing
fuller employment to artisans in Khadi and Village Industries. However, only
the Maharashtra State Khadi KVI Board took steps for its implementation and
registered 294 block level multi-purpose co-operatives, under the scheme,
Capital expenditure was born by KVIC and the working capital was secured from
the institutional (cooperative) financing agencies. The Reserve Bank of India
agreed to provide refinancing facilities under section 17(2) (bb) of the RBI
Act. KVIC also provided loan assistance to the artisan members of Block Level
Multi-purpose Cooperatives towards their share capital contributions. The State
Government agreed to meet the establishment cost of the multipurpose
Co-operative Societies they also contributed to the share capital. KVIC extended
interest subsidy scheme to the borrowings of Block Level Multipurpose
Co-operative The
scheme was launched in Maharashtra in 1972-73. In 1985-86 the scheme was
implemented by 295 block level multipurpose cooperatives with a membership of
1.82 lakhs and paid up share capital of Rs. 5.62 crore. It availed of
institutional credit of Rs. 12.20 Crores. The number of artisan assisted under
the scheme was 1.26 Lakhs and the production was valued at Rs. 59.48 Crores.
The Progress of the scheme and the lessons to be drawn there from will be
critically reviewed in a later chapter.
During the second half the
Fifth Plan, the Planning Commission began to show a marked preference to the
beneficiary oriented approach and self employment in the anti poverty programmes.
The trend of thinking got a boost during the Janta period (1977-79) when some
State Government revived the evocative term “Antyodaya” which was coined by
Gandhiji himself. When one is called upon to identify the poorest of the poor
and to help him attain viable self-employment through the acquisition of assets
like tools and equipment and through training, one is compelled to choose a
simple craft or a village industries, if the selected person has the
inclination to be an artisan. Accordingly, the Sixth Five Years Plan (1980-85)
laid down specific targets for Village Industries to be developed under the
Industry, services and Business ( I & B) Sector of Integrated Rural
Development Programme (IRDP) out of the 600 families selected in each block, at
least 50 were thus required to be assisted to take up Village Industries. And
as every such Industry needs for successful operation on a continuing basis,
specif backward and forward linkages, attempts came to be made to involve the
KVIC and the State Khadi and Village Industries Boards and the District
Industries Centres Concerned. The District Level Officer of the State KVIB has
been included in the DIC as Manager-in-charge of Village Industries in some
states. But a great deal has still to be done to make these links strong,
useful and effective. The seventh Five Year Plan document has recorded that the
target under the 1 part of I&B sector could not be achieved in the Sixth
Plan for various reasons. Now that the Seventh Plan (1985-90) has never the less
reaffirmed broadly the approach under IRDP, according to bring about the
organizational and other improvements that will help in achieving the objects.
Some other developments have
also contributed to an increased flow of funds for Village Industries through
channels outside the control of the KVIC. They are the Tribal Sule – Plan, a
concept introduced in the Fourth Five Year Plan, the special component plan for
schedule castes which come into vogue in the Fifth Plan and the special women’s
programme which resulted from the recognition that something special should be
done for the economics betterment of women in general and rural women in
particular. In all these cases, KVIC and the State KVIBs are often required to
provide the necessary support, although no proper organizational arrangements
have been evolved by the concerned agencies for ensuring the necessary degree
of coordination. As a result, coordination has been left to the initiative of
the local officers. This has worked well in some areas while in some others, it
has not.
It is interesting to note that
as flow of funds through other channels for setting up Village Industries has
been increasing, the allocations to the KVIC have been declining in terms of
percentage of the total public sector outlay.
to be continue.................3
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