Dr balraj Bishnoi: TRIBUTE TO FATHER OF THE NATION ....................

Dr balraj Bishnoi: TRIBUTE TO FATHER OF THE NATION ....................: KHADI AND VILLAGE INDUSTRIES: AN EVOLUTION Dr Balraj Vishnoi (author )           Beginning can be initiated by taking note of ...

Dr balraj Bishnoi: TRIBUTE TO FATHER OF NATION ........................

Dr balraj Bishnoi: TRIBUTE TO FATHER OF NATION ........................: KHADI AND VILLAGE INDUSTRIES: AN EVOLUTION  Dr Balraj Vishnoi  ( Author)   The Second Five Year Plan (1956-61), which ...

Dr balraj Bishnoi: TRIBUTE TO FATHER OF NATION ........................

Dr balraj Bishnoi: TRIBUTE TO FATHER OF NATION ........................: KHADI AND VILLAGE INDUSTRIES: AN EVOLUTION  Dr Balraj Vishnoi  ( Author)   The Second Five Year Plan (1956-61), which ...

TRIBUTE TO FATHER OF NATION ..............................Series 2

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

TRIBUTE TO FATHER OF THE NATION ..........................series 1

KHADI AND VILLAGE INDUSTRIES: AN EVOLUTION

Dr Balraj Vishnoi

(author )

          Beginning can be initiated by taking note of the phases through which the policy relating to khadi & Village industries has been developed over the years. For this purpose, the past may be divided into two periods : one upto 1947 and the other after 1947. While in the first period, the development of khadi and village industries was entirely a non-governmental effort under the inspired guidance of Gandhiji, the originator, in the second period the Govt. of India and the planning commission assumed the responsibility for fitting khadi & village industries within the overall framework of the five years plans.

1.1           Four phases may be distinguished in the first period. Originally, Gandhiji conceived khadi as the best instrument for giving concrete expression to the “Swedeshi” spirit and for making effective the boycott of foreign goods in general and foreign cloth in particular. Khadi was also expected to provide on opportunity to every man, woman and child for cultivating self-discipline and self-sacrifice as part of the non-cooperation movement.

1.2           For ensuring coordinated development of khadi throughout the country, Gandhiji set up in December, 1923, the All India Khadi Board with branches in all provinces. The organization was an integral part of the India National Congress and worked under its direction and supervision. This initial phase can be said to have begun in 1918 and ended in 1924.

1.4           The second phase opened in 1925 with the formation for an autonomous organization called “All India Spinners Association” (AISA) of Akhil Bharat Charkha Sangh. Although several congressmen continued to play an important role in the affairs of the sangh, it was organizationally independent of the congress. AISA did commendable work in regard to propagation, production and sale of khadi. However, Gandhiji continued to distinguish the increased volume and value of khadi produced or sold from the larger social objective of the khadi programme with emphasis on the latter.

1.5           In the thirties, Gandhiji turned his attention to other village industries and the result was the establishment in 1935 of another organization with the name, All India Village Industries Association (AIVIA). He wrote “Khadi is the central sun around which the other village industries revolve like so many planets. They have no independent existence nor khadi can exist without other village industries. They are absolutely inter-dependent”. Prime facie, the creation of a separate organization for village industries (AIVIA) may appear to be at variance with Gandhiji’s philosophy. But on a closer look, it would be clear that AISA and AIVIA were conceived for different purposes. AISA dealt with the revival of the extinct craft of spinning and took upon itself the whole process of promotion production, sales, technological development and welfare of the artisans. AIVIA concerned itself with resuscitation of some languishing industries through improvement in tools and training and philosophy of “Swadeshi”. The latter did not take upon itself the entire responsibility for production and sale. It organized State Level Association to provide support to craftsmen in varying ways. Even so, just before his death, Gandhiji saw the necessity of bringing together not only these two organizations but other organizations in-charge of constructive work. He proposed merging them in one organization called Akhil Bharat Sarva Seva Sangh.

1.5     There is evidence to show that Gandhiji was not entirely satisfied with the progress of the two organizations and the manner in which the programmes of Khadi & Village Industries were being developed, as they were ends in themselves. In the latter half of the forties, he felt an imperative need for an entirely new approach, according to which the programmes should be carried out as part and parcel of the wider programme of new-violent village uplift or village reconstruction. He named it as “Samagra Seva” and said that khadi could begin to have permanent effective only in the context of complete reorganization of the entire rural economy. He sincerely felt that otherwise all efforts would not only be inadequate but also largely futile. In his words, our main concern should be to lay the foundation for this work as deep as possible and not merely be satisfied with production of khadi and sale of khadi itself. He laid stress on village self-sufficiency, limitation of Government Assistance to education, technical research and technical guidance and reduction on dependence on raw materials from outside.

1.6           It must be added that the enthusiasm of Gandhiji for Khadi & Village Industries and the building up of programme of “Samagra Sewa” around them was not shared fully by all national leaders of importance. Even among those that conceded a role for khadi and village industries, some stressed the need for adopting better technology and a flexible attitude to the use of machines. It was in answer to these doubts and hesitancies that Gandhiji wrote in the “Harijan” dated June 20, 1946 as follows : Khadi (including village industries) is the only true economic proposition in terms of the millions of villagers until such time if ever, when a better system of supplying work and adequate wages for every able bodied person above the age of sixteen, male or female, is found for his field, collage or even factory in everyone of our villages so as to give the villagers the necessary comforts and amenities that well regulated left demands and is entitled to”. In this context, is worthwhile recalling two statements mode by Gandhiji on the use of machines.

(A)          “What I object to is the craje for machinery, not machinery as such. The craje is for what they call labour saving machinery. Man go on saving labour till thousand are without work and thrown on the open streets to die of starvation. I want to save time and labour, not for a fraction of mankind, but for all”.

(B)           “The supreme consideration is man. The machine should not tend to make atrophied the terms of man. For instance, I would make intelligent exceptions. Take case of the singer  sewing machine. It is one of the few useful things every invented, and there is a romance about the device itself. Singer saw his wife laboring over the tedious process of sewing and seaming with her own hands, and simply out of his love for her, he devised the sewing machine, in order to save her from unnecessary labour. He, however saved not only her labour but also this labour of everyone who could purchase a sewing machine”.

1.7           Perhaps, the first move to make khadi a governmental programme was made in 1946 by the Government of Madras which deputed a senior officer to obtain advise from Gandhiji and set up a department of khadi soon thereafter. This was followed by the central Governments recognition of the importance of rural cottage industries in the Industrial Policy Resolution of 1948. The Constituent Assembly also included development of cottage industries in rural areas among the Directive Principles of the constitution in Article 43. These ideas were elaborated in the first five year which began in 1951-52.

1.8           According to the First Five Year Plan, “village industries have a central place in the rural development programme”, and their development “should be as much a matter of state’s concern as the increase in agriculture production”. It recognized that the development of village industries called for “a great deal of local initiative and cooperation”. As they involved “Processing of local raw material for local markets with simple techniques. The plan envisaged the “Possibility of turning waste into wealth, for instance, production of gas from cow-dung and other refise of the village………………, production of bone manure…………soap making out of non-edible oils etc”. The plan added : “while organization in village industries requires drive 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 frame work within which they execute the programmes for individual village industries is set by policies followed by the Central Government. In the Central Governments, there is therefore need for an organization which will give close attention to the programmes of these industries and help the create favorable conditions for action by State Governments, constructive organizations and village cooperatives”. In accordance with this recommendation, the Government of India set up the All India Khadi Board in January, 1953. The main functions of the Board were to prepared and organize programmes of the development of Khadi and Village Industries, including training of personnel, manufacture and supply of equipment, supply of raw materials, marketing and research and study of the economic problems of different village Industries. However, the Board was expected to function as a clearing house of information and experience regarding these industries and to work in close cooperation with the State Governments and the Akhil Bharat Sewa Sangh which had earlier taken over the activities of AISA and AIVIA in 1948. It was soon found that the Board was suffering from several procedural handicaps, particularly the lack of timely financial arrangements. It was, therefore, decided in 1955 that the Board should be replaced by a statutory body. A bill was accordingly introduced in Parliament Proposing the establishment of a commission with “power executive as well as administrative”, for proper development of Khadi & Village Industries. It also provided “for the All India Khadi & Village Industries Board functioning as an advisory body which advise the commission generally in the discharge of there duties”. With the passing of the above bill and the promulgation of Act No. LXI of 1956, the Khadi and Village Industries commission come in to being in April, 1957. Besides Khadi, initially 10 village industries were named in the schedule. “Subsequently, 16 village industries” were added to the schedule, one in 1959, one in 1962, ten in 1965 and one each in 1978, 1979, 1980 and 1984, these bringing up the present total of 26 as follows :-

Beekeeping ; cottage match industry : Manufacture of Fire works and Agarbattis ; Cottage Pottery Industry ; Cottage Soap Industry (Now-edible oils and soap Industry) ; Flaying, curing and Tening of hides and skins and ancillary industries connected with the same and Cottage Leather Industry ; Ghani oil Industry ; Hand Made Paper ; Manufacture of can Gur and Khandsari Palmgur making and other palm products Industry and processing, packing and marketing of cereals, pulses, spices, condiments, Masalas etc……………….

              

1959		Manufacture and use of manure and methods gas from cowdung and other waste products (such as flesh of dead animals, night soil etc.) Biogas
1962		Lime stone, Lime shell and other lime products Industry
1965		Manufacture of shellac; Collection of forest plants and fruits for medicinal purposes, Fruits and vegetable processing, Preservation and canning, including Pickles ; Bamboo and cane work ; Black smithy ; Carpentry ; Fiber other than coir ; Manufacture of Household utensils in Aluminum ; Manufacture of Katha ; and manufacture of Gum Resins.
1978		Manufacture of Lok Vastra Cloth
1979		Poly Vastra
1980		Processing of Maize and Ragi
1984		Manufacture of Rubber Goods (dipped latex products)

               The commission and the Government of India persuaded the state governments to set up Khadi and Village Industries Boards, more or less, on the pattern of the commission, in order to receive grants and loans from the commission and there by assist the development of the scheduled Industries.  

1.9           Broadly speaking, the idea was to entrust the task of developing khadi and village industries to those who knew them best and to give them, for the purpose, sufficient powers, funds and as much autonomy as would be consistent with the concept of accountability of public funds. The last mentioned aspect was to be ensured through a Financial Advisor appointed in the office of the commission by the Govt. of India. According to Rule 12(5) of KVIC Rule 1957, the Financial Advisor shall have authority to advise the commission and the standing Finance Committee that a particular decision affecting the general financial policy of the Government should be referred to the Government for consideration. How the commission was constituted from time to time, how the persons nominated to the commission and the Financial Advisor perceived their respective roles and how the concept of autonomous institution was implemented in practice would be considered a little later. For the present, we may continue with the historical evolution of the policy relating to KVI.

1.10       During its short terms, the All India Khadi and Village Industries Board initiated in 1954 some experiments in integrated rural development on sarvodaya principles, in response to the call of the Prime Minister, Nehru. The were under the caption, Intensive Area Scheme. The scheme was continued by the commission till 1963-64. This must be viewed as an opportunity given to Gandhi’s to experiment “Samagra Seva” about which Gandhiji wrote during his last years. The idea of the Prime Minister was to try out a new approach through the Gandhians side by side with the Community Development approach. The intensive Area Scheme was “not intended to give ready-made programmes to the village community but…………..to guide it to formulate its own programmes in a comprehensive manner unfettered by any pre-conceived notions or limitations”. Each area was to consist of 20 to 30 villages, with a population of about 20,000. For implementing the scheme, a Kshetriya Samiti for the area and gram vikas mandal for every village were organized and the commission appointed an organizer, on assistant organizer and some staff technically trained in Village Industries. A though the scheme envisaged all round development, inducing agriculture and social services, the commission had no separate funds for these non-industrial purposes and had to depend on public contributions and the assistance from other government departments. However, the scheme had wide ranging objectives. There were four economic objectives : creation of employment at relatively low capital cost and raising levels of real income; a balanced and diversified occupational pattern; introduction of better and appropriate techniques; and local or regional self-sufficiency in essential consumption goods. Social objectives were also four facilities for education, health, recreation and social security; promotion of people’s participation, self-reliance, social cohesion and cooperation in gram parivar; creation of institutional frame work for village development and self-government and local leadership; and reduction of inequalities and Antyodaya. Under other objectives was listed, development of village industries in a balanced rural economy without much dependence on outside protection. A very ambitious list indeed. The programme had two stages-pre-intensive and intensive. 121 areas were brought under the scheme.