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VILLAGE and SMALL INDUSTRIES AND FOOD PROCESSING INDUSTRIES Village and Small Industries Overview 6.1.1 Village and small industries sector consists of two broad sub-sectors, viz, modern small industries and traditional industries. The former covers small scale industries and powerlooms and the latter khadi, village industries, hand-looms, sericulture, handicrafts and coir industry. With effect from 2nd April, 1991. an industrial unit in which investment in fixed assets in plant and machinery does not exceed R.s.60 lakhs is regarded as a small scale undertaking. In the case of industrial units undertaking to export at least 30 per cent of the annual production by the end of the third year from the date of commencement of production, the ceiling of investment shall be Rs.75 lakhs. Further, in the case of ancillary industrial undertakings, the ceiling of investment in fixed assets has also been fixed at Rs.75 lakhs. This measure is expected to result in greater technological input and export thrust in the small scale sector. 6.1.2 A policy package for small, tiny and village industries has been announced in August, 1991 with the primary objective of imparting more vitality and growth impetus to this sector. The ceiling of investment in the case of "Tiny" enterprises has now been raised to Rs.5 lakhs, locational restrictions on setting of these enterprises have been removed and their scope has been enlarged to include all industry related service and business enterprises. Further, equity participation, not exceeding 24 per cent, by other industrial undertakings, including that by foreign collaborators in the small scale sector has been permitted with a view to encouraging modernisation and technological upgradation. Other salient features of this policy pertain to the setting up of a monitoring agency to ensure that the genuine credit needs of this sector are hilly met; review of all statutes, regulations and procedures and their modification to ensure that their operation does not militate against the interests of the small and village enterprises;encouraging industry associations to establish quality counselling and common testing facilities; sub-contracting exchanges and expansion of entrepreneurship development programme; further liberalisation of schemes of National Equity Fund and Single Window Loans, etc. Review 6.2.1 The progress of village and small industries sector during the Seventh Plan (1985-90) and Annual Plans (1990-91 and 1991-92) is indicated in Statements 6.1 and 6.2 respectively. 6.2.2 It will be observed from Statement 6.1 that the value of output in this sector increased, at constant prices, at a compound rate of 12.06 per cent between 1984-85 and 1989-90. However, the production of khadi, village industries, hand-loom cloth and coir yarn and coir products fell short of their respective target. Exports from this sector have increased, at current prices, at a compound rate of 26.57 per cent. In the case of employment coverage (full time and part time employment), while the rate of compound growth is 4.43 per cent, it is short of the Seventh Plan target. The growth rate achieved during the Seventh Plan is not likely to be maintained during 1990- 91 and 1991-92 on account of constraint of foreign exchange affecting the availability of imported raw materials, components and capital goods, credit squeeze, high rates of interest, recession in foreign markets, etc. Eighth Plan Approach and Strategy 6.3.1 The Eighth Plan aims at a growth rate of 5.6 per cent. The growth rates for the manufacturing sector and exports have been kept at 7.3 per cent and 13.6 per cent respectively. While no growth rate has been indicated for the village and small industries sector, it has to be higher than that of the manufacturing sector. * 6.3.2 In the new orientation to planning during the Eighth Plan, people's initiative and participation would be a key element in the process of development. Greater emphasis will be laid on private initiative in industrial development. The public sector will become very selective in the coverage of activities and in making investment. Small enterprises in the village and small industries sector are, more or less, based on private initiative and entrepreneurship. 6.3.3 One of the areas of priority of the Eighth Plan is generation of adequate employment to achieve near full employment level by the turn of this century. Several activities pertaining to [his sector like processing of agricultural produce in rural areas, sericulture and allied activities have been identified as critical goals in priority sectors. It is possible to dovetail programmes of khadi, village industries, hand-looms, sericulture and handicrafts to integrated local area development programmes for selected villages for poverty alleviation through increase in employment. It is also envisaged that entry into the services sector, which is expected to play a major role in generating employment during the Eighth Plan, and the ' informal' sector will be made free of innumerable rules, regulation and bureaucratic controls. Further, research and innovation in the tools and techniques of traditional occupations, including those of rural artisans, will be encouraged and their extensive adaptation will be induced. Physical Targets 6.3.4 Indicative targets in respect of production, employment coverage and exports for village and small industries for the Eighth Plan are given in Statement 6.3. 6.4.1 Major activities envisaged for the Eighth Plan are discussed in the subsequent paragraphs, sub-sector wise: Small Scale Industries 6.4.2 It will be observed from Statement 6.3 that the growth rates in respect of production, employment and exports relating to small scale industries envisaged for the Eighth Plan are lower than those achieved during the Seventh Plan. These rates have been worked out taking into consideration the prevailing difficult resource position. Quick estimate of Index of Industrial Production for April-September, 1991, vis-a-vis, the corresponding period of 1990 indicates negative growth rate of 1.9 per cent in manufacturing sector. Similarly, export performance, net of devaluation and inflation, for the above period has not been encouraging. 6.4.3 Credit continues to be crucial for the establishment and expansion of small industries. Advances from commercial banks to the small scale sector as on 23rd March, 1990, was Rs.15,543 crores as against Rs.6,766 crores at the end of June, 1985. This increased to Rs.17,151 crores as on 22nd March, 1991. In percentage terms, advances to the small scale sector were 15.7 per cent of the total bank advances in March, 1991. It would he necess-sary to increase the share of credit available to the SSI sector from commercial banks from the present 16-18 percent. It is needless to reiterate that timely and adequate availability of credit is of greater importance than concessional credit. This would call for strenthening of SIDBI and NABARD. With the establishment of SIDBI, certain new initiatives like sanction of composite loans under Single Window concept, concessional loans to State Corporations for infrastructure development and provision of factoring services have been introduced. 6.4.4 A development which is likely to increase the cost of credit to small scale industries is the deregulation of interest rates to be charged by banks on advances above Rs.2 lakhs. Its adverse effect would be felt by SSI units in general and tiny units in particular. Reserve Bank of India has appointed a Committee in December, 1991, to review the arrangements for meeting the working capital requirements of small scale industries and for the rehabilitation of sick small scale industries and to examine any other issues relating to small scale industries. The Committee will also look into the above issues with a view to ensuring that the interests of SSI sector are not adversely affected. 6.4.5 Entrepreneurs have limited access to quality raw materials. In the case of critical raw materials, new enterprises face problem in obtaining these in the absence of a proper and equitable policy of raw material distribution. After the decontrol of steel prices, drying up of canalising agencies (like MMTC, etc) and the devaluation of Rupee, the availability of raw materials, particularly to the small producer, has been severely affected. Industry associations will be encouraged to come forward and evolve a suitable distribution mechanism so that the interest of this sector is protected. 6.4.6 In order to upgrade technology, greater emphasis has to be laid on the establishment of tool rooms and provision of training facilities. State intervention in improving the quality may be confined to establishment of tool rooms and assistance in the establishment of testing facilities. The operation of testing facilities should be the responsibility of the industry. During the Eighth Plan, a bigger programme of development of appropriate technology and technology upgradation has to be initiated. 6.4.7 Technological obsoloscence is high in small industries. To improve marketability, there is need to induct better and appropriate technology. Need is felt for an agency which can take up the functions of collection, documentation and storing information on technology, conducting studies and preparing technology guidelines, assessing the need for establishment of tool rooms, testing centres, PDTCs etc., provision of technology inputs, import of samples from abroad, assimilation of technology, assisting entrepreneurs in obtaining suitable know how from indigenous sources, coordination with organisations engaged in technology development and its transfer. NSIC can handle these functions both for small industries as well as for others. 6.4.8 According to the All-India Census of Small Scale Industrial Units, with 1987-88 as the base year, registered working SSI units and closed units as^on 31.3.1988 were 5,82,368 and 3,01,390 respectively. It is indicative of extensive sickness in the small scale sector. Though sickness is reported in all market economies, locking of resources in the form of bank loans, materials, equipment and loss of employment are serious matters of concern. The Centrally Sponsored Scheme for revival of sick SSI units has not proved effective. The causes of sickness are many, like selection of un viable projects, inadequate availability of raw materials, power shortage, marketing problems, obsolete technology, inadequate working capital, inefficient management, etc. In order to prevent sickness at the incipient stage, it is necessary that SFCs and commercial banks should properly monitor the project. The quality of consultancy, particularly in technology has to be improved. Rehabilitation of sick units is very difficult and it requires not only proper diagnosis but also effective coordination among the various organisations involved. 6.4.9 In the State sector, a number of programmes of subsidies on investments in fixed assets, purchase ofdiesel generating sets, electricity duty, etc, are under implementation leading to unhealthy competition among the States and Union Territories to attract private investment. Further, concessions on purchase of land and exemption from the payment of sales tax for a specified period/investment limit are also provided to entrepreneurs. These schemes, generally, lead to flight of investment from less developed States to developed ones. It is imperative to evolve a uniform policy on the above issues based upon consensus among the State Governments in the interest of growth of industry on healthy and equitable basis. 6.4.10 The cumbersome procedures and a large number of returns that entrepreneurs have to furnish, distract them from production and marketing activities. It is, therefore, necessary to undertake a comprehensive review of laws and procedures and to simplify them so that entrepreneurs are able to concentrate on efficient running of their units. 6.4.11 Marketing is one of the intractable problems of the SSI sector. Marketing assistance through Small Industries Corporations, NSIC, etc, has so tar been able to cover only a very small fraction of turnover in this sector. The existing fiscal regime and the operation of labour laws are not conducive to vertical growth of SSI sector. There is need to modify them suitably. Industry associations will be encouraged to form marketing organisations which, besides marketing, will go into the quality aspect of products. 6.4.12 The Growth Centre approach has already been accepted as a suitable measure for industrial dispersal and is under implementation in large and medium industries sector. During the Eighth Plan, establishment of 70 Growth Centres has been envisaged. It is proposed to earmark a certain percentage of developed industrial area for small industries. There is also need to establish functional industrial estates ^t suitable locations in areas with substantial agricultural, vegetable and horticultural produce.Besides the growth centres, integrated infrastructure development centres for tiny units in rural and backward areas would be set up involving the Centre, State Governments and industry associations. 6.4.13 The experience of economic growth the world over indicates that greater employment generation takes place in the tertiary sector. Hence, there is need for emphasis on the promotion of industrial units catering to services and maintenance of equipment. In rural areas and small towns such facilities do not exist. A programme of suitable training and provision of tool kits needs to be taken up. Khadi and Village Industries 6.5.1 The production ofkhadi cloth in 1989-90, estimated at 107.47 million sq. metres, is less not only than the Seventh Plan target of 180 million sq. metres but also than the level of production of 127.82 million sq. metres achieved in 1984-85. Similarly, employment coverage of 14.12 lakh persons inkhadi sub-sector in 1989-90 is less than the target as well as the employment of 14.58 lakh persons in 1984-85. This trend in production persisted in 1990-91 and 1991-92. In the case of village industries, the value of output in 1989-90 was Rs. 1,101 crores at constant prices and Rs. 1,705 crores at current prices against the Seventh Plan target of Rs. 1,700 crores. However, the employment coverage in village industries in 1989-90 estimated at 32.14 lakh persons is marginally higher than the Seventh Plan target of 30 lakh persons. In 1990-91, there is a slight fall in employment coverage in village industries, vis-a-vis, the target. However, in 1991-92, the target of employment coverage of 35.40 lakh persons in village industries is expected to be achieved. 6.5.2 The decline in the growth of khadi sub-sector is attributable to several factors. Spinning on traditional charkhas in the northern belt could not be expanded due to low level of earnings and consequent decline in the number of traditional home spinners as well as preference of weavers for yarn produced by New Model Charkha (NMC). In some States adequate number of weavers are not willing to take up khadi weaving. The present structure as well as guidelines regarding lending to khadi institutions do not permit the Khadi and Village Industries Commission (KVIC) to advance loans to those institutions which have received over Rs.3 crores. These institutions have requisite infrastructure and expertise to increase the production ofkhadi, whereas new institutions which are eligible for funding take a lot of time to develop infrastructure and expertise. Further, as the production ofkhadi is bound by several restrictions such as certification, cost chart and its sale on no profit no loss basis, very few voluntary organisations come forward to take up this programme. It is, however, relevant to state in this context that the production of polyvastra which is a blend of polyester and cotton presently covered under village industries has been increasing during this period and in value terms it has increased from Rs.2.17 crores in 1984- 85 to Rs.16.61 crores in 1989-90. 6.5.3 There are other areas in KVIC programmes in which performance is not satisfactory. A large number of artisans' cooperatives engaged in village industries have continued to remain dormant. Though the productivity and earnings of artisans have improved, they are lower than those obtaining in the farm sector. The linkages between KVI programmes and general programmes of area development like IRDP, are inadequate. The gaps in performance are partly attributable to the fact that since its inception, KVIC has continued the policy of assisting institutions/private individuals registered with it directly and consequently the State Governments have not been according priority to its programmes. 6.5.4 The main objectives ofkhadi and village industries (KVI) programmes during the Eighth Plan would be to create additional employment opportunities in the non-farm sector and to ensure increased wages/earnings to rural workers. For this purpose, it would be necessary to reori-ent khadi programme and identify thrust areas among village industries keeping in view the growth potential and the consumer demand, provide escort services to artisans and adopt aggressive marketing approach. 6.5.5 The KVIC depends on institutional finance, besides budgetary support for the implementation of its programmes. But the flow'of funds to the KVI sector has not been commensurate with its requirements.Thus,the institutional finance flowing to the KVI sector under the interest subsidy scheme increased from Rs.40.94 crores in 1984-85 to Rs.120.61 crores in 1990-91.The KVIC issued interest subsidy eligibility certificates to State KVIBs and directly aided institutions for an amount of Rs.234.27 crores in 1990-91, but KVI received only Rs.120.61 crores of institutional finance during 1990-91. It is, therefore, essential to ensure adequate institutional finance for the stepped-up activities of KVIC. In this context, it is necessary to increase the active involvement of hanks in funding of KVI programmes and in this process to reduce their dependence on the budgetary support. It is also necessary to review the subsidies which are presently being provided for the development ofkhadi and village industries. The present policy of KVIC to advance loans for the development of village industries to the beneficiary organisations at 4% rate of interest also needs to be reviewed in view of the hike in the lending rates of commercial banks. 6.5.6 Artisans engaged in khadi and village industries face problem in obtaining assured and timely supply of raw materials of requisite quality as well as quantity at reasonable rates to enable them to produce quality goods at competitive cost on account of their weak resource base. Though KVIC has arrangements for supply of some raw materials, like cotton, raw wool, polyester fibre, silk cocoons, edible and non-edible oilseeds and splints and veneers, requisite support in regard to supply of essential chemicals and raw materials for the remaining village industries, including the expanded village industries, needs to be provided. 6.5.7 It has been noted that the utilisation of S and T funds by KVI sector has not picked up during the past seven years. There is urgent need to develop new types of tools, equipment and machines. They should be tested on pilot basis before being recommended for adoption on a wide scale. It is, therefore, imperative that technical problems of this sector should be recognised by national laboratories and they should help this sector in a big way to produce marketable products. R and D should pay attention not only to production process but also to quality finishing, packaging etc. For agro and food processing industries in rural areas, the activities ofCSIR and other research institutes functioning under its aegis, including CFTRI, should be reoriented and coordinated for development of appropriate technologies. 6.5.8 Due to their traditional character, the khadi products are unable to withstand the competition from the organised textile sector. It is, therefore, essential to adopt an aggressive marketing approach which takes into account the consumers' taste, price and other related factors for increasing production ofkhadi. This would necessitate diversification of markets as also the product mix; introduction of modem marketing techniques; better inventory control; and better management practices etc. The question of rebate on the sales of khadi has been examined in depth by the Committees headed by Shri M. Ramakrishnayya and Shri Abid Hussain. These Committees have favoured its continuance in the khadi sector. However, restructuring in respect of silk khadi needs to be considered hut any decision in this regard should cover both hand-loom and khadi sectors. In providing thrust to khadi sector, greater emphasis needs to be placed during the Eighth Plan on those activities which are economically viable without the support of subsidies. To achieve these objectives it would be necessary to popularise the New Model Charkha, diversify production of cloth so as to improve its blending with polyester, wool as well as silk and produce readymade garments irs accordance with the customer's taste and latest trends in fashion. 6.5.9 Though the network of sales outlets set up by KVIC and State KVIBs would appear to be adequate, it is not so and the cost of rendering marketing assistance to artisans is high. While product diversification, design and fashion development and fashion shows in major cities would assist marketing of khadi, marketability of products of village industries could be enhanced by improving quality and packaging. Greater stress on R and D, besides ensuring improvement in quality, would help increase productivity and thereby reduce cost. Apart from sale of KVI products through Bhavans, Bhan-dars, mobile vans, and three wheelers in big cities, their marketing on commission basis at district and taluka market besides weekly haats needs to be encouraged. 6.5.10 For generating employment opportunities in rural areas, it is necessary to expand the coverage of villages and identify the thrust areas among the village industries for development. It is imperative to widen the base of village industries and increase productivity and thereby ensure higher earnings to artisans which would sustain them in the activity. Though 96 village industries are presently within the purview of KVIC, it would be desirable initially to concentrate on about 15 industries in respect of which requisite infrastructure and expertise is available. It would also be necessary to provide training to artisans in respect of improved tools as well as implements and methods of production. It would be necessary to upgrade their skills to enable them to produce quality products which would find ready acceptance in the market. The greatest weakness in the expansion of village industries programme is in the area of providing training facilities. The KVIC's departmental training centres and those assisted by it and run by voluntary organisations numbering about 100 can take care of the training of only trainers. Hence, skill transfer at the grassroot level to the artisans is the real problem in view of diversity of industries and the large number of people who are required to be trained. For this purpose, efforts should be made to link it up with the Plus Two vocational education system, to reorganise the syllabus and the training programmes devised by the Education Department and to include KVI trades in the vocational curriculum wherever they are not already included. 6.5.11 For effective promotion and development ofkhadi and village industries, it is necessary to ensure full participation of the State Governments in the implementation of KVI programmes by providing adequate outlays in the State Plans. Coir Industry 6.6.1 Indian coir industry is an important cottage industry contributing significantly to the economy of the major coconut growing States and Union Territories, i.e., Kerala, Tamil Nadu, Andhra Pradesh, Karnataka, Maharash-tra, Goa, Orissa, Assam, Andaman and Nicobar, Lakshadweep, Pondicherry, etc. About 5.5 lakh persons get employment, mostly part time, in this industry. The exports from this industry are around Rs.70 crores. The coconut production in India is estimated at 9283 million numbers in 1989-90. Coconut husk is the basic raw material for coir products. Around 50 per cent of the available coir husk is used to produce coir products. Hence, there is scope for growth of coir industry. 6.6.2 During the Seventh Plan, while the production of white fibre' has remained stagnant, the production of brown fibre' has registered more than 55 per cent increase. The production of white fibre and brown fibre was 1,24,900 tonnes and 67,600 tonnes in 1989-90 against the respective level of 1,24,800 tonnes and 39,600 tonnes in 1984-85. During this period, the export of coir yam and other products has increased from Rs.26 crores to Rs.33.32 crores. The production of coir fibre in 1991-92 is anticipated to be 2.20 lakh tonnes against the target of 2.26 lakh tonnes. Exports are anticipated to be of the order of Rs.66.16 crores. 6.6.3 During the Seventh Plan period, encouragement was given for expansion of the home market through publicity and advertisement, product diversification, adoption of new technology, research and development, training for artisans, including women and social welfare measures for coir workers, most of whom are SC/ST and women. 6.6.4 The Eighth Plan programmes for coir industry aim at increased utilisation of coconut husk for production of coir fibre, growth of the domestic market, strengthening of research and development to find out new uses for coir fibre especially in the areas of geo-fibre, fire retar-dant, cement and gypsum polymer development, acquisition of new technology like PVC-tufted coir products, encouragement to cooperativisa-tion and pro vision of social welfare, civic amenities and medical facilities to the coir workers. Emphasis would be laid on mechanisation in a phased manner without affecting employment to make Indian coir products competitive in the export market. The production of brown coir fibre would be encouraged by providing seed capital assistance. Modernisation of coir units has been envisaged by providing incentives for installation of modern equipments to make coir industry more competitive in the export market. 6.6.5 Special training programmes have been formulated for women artisans. Improved modern treadle ratts would be provided to teamed women artisans to increase employment and earnings. Medical facilities, creche for children of coir workers, model coir villages for SC/ST coir workers and social welfare schemes would be implemented during the Eighth Plan period. 6.6.6 Emphasis has been laid on developing devices/equipment/ machinery through R and D to reduce drudgery and to improve productivity of coir workers. Development of improved variety of ratts and looms would help in improving the production of coir yarn spinning, coir mats, etc. In order to boost exports, the scheme of cooperative publicity programmes in the export markets which was started in the Seventh Plan would be continued. 6.6.7 The indicative target of production for coir fibre has been set at 2.77 lakh tonnes for the Eighth Plan. Export target is Rs. 100 crores. The schemes to be implemented during the Eighth Plan would aim at increasing the share of full-time employment in this sector from the present level. HandJoom Industry 6.7.1 The handloom industry provides the largest employment among the traditional industries, next only to agriculture. By the end of the Seventh Plan, the estimated employment coverage in this industry was 76 lakh persons. The performance of the handloom industry in terms of production of handloom cloth, employment and exports during the Seventh Plan fell short of the respective targets. However, the anticipated achievements in the handloom industry in 1990-91 and 1991-92 are expected to equal the target. 6.7.2 The Textile Policy of 1985 envisaged preservation of the distinct and unique role of this sector. However, the permisssion for installation of new loomage given to the organised mill sector and the decentralised powerloom sector, fibre freedom and liberal imports had posed strong competition to the handloom industry and acted as deterrents to its growth. 6.7.3 During the Seventh Plan, the focus of developmental programmes for handloom indus try was on cooperativisation, strengthening of Central and State level corporations, modernisation ofhandlooms, design development, training of weavers, assured minimum earnings through Janata Cloth scheme, etc. The inputs of technology, design and training were made available through Weavers' Service Centres (WSC) and Indian Institites of Handloom Technology (IIHT); the latter functioning at Salem, Varanasi and Guwahati. Primary and apex societies of handloom weavers were given share capital assistance, managerial subsidy, assistance for opening new sales outlets, design collection and development, participation in exhibitions and Expos, organising publicity, etc. The National Handloom Development Corporation (NHDC) further enlarged its activity of supply of hank yarn, dyes and chemicals. Hank yarn has been made available in yarn deficit States at mill gate prices to handloom weavers. The National Cooperative Development Corporation (NCDC) assisted handloom weavers' cooperatives to establish, modernise and expand yarn spinning mills to increase spindleage and availability of hank yarn to the weavers. 6.7.4 The Janata Cloth Scheme in the handloom sector was operational in 18 States and one Union Territory during the Seventh Plan.Production of Janata cloth increased from 397 million metres in 1985-86 to 548 million metres in 1989-90. Subsidy disbursement to all the States on Janata cloth was Rs.488 crores during the Seventh Plan. This scheme met partially its main objectives of providing consistent wages to weavers and making available cloth at reasonable prices to the weaker sections of society. However, the operation of this scheme has led to deskilling of weavers. 6.7.5 Inspite of implementation of developmental schemes,the economic condition of handloom weavers did not improve as envisaged. Cooperative coverage is limited to only 30 percent of the total weavers. Inadequate enforcement of, the challenging of the Handloom Act of 1985 in several High Courts and the stays granted to the powerloom operators by these Courts have rendered the Law ineffective and encroachment on handloom products still continues.The inherent weaknesses of the handloom industry like weak organisation, officialisation of handloom cooperatives, inadequate credit from financial institutions, inadequate marketing infrastructure etc. have made it more vulnerable to competition from the organised mills and the decentralised powerloom sector.Steep increase in cotton yarn prices, build up of unsold stock and delayed payments to primary societies by apex societies, etc. further deteriorated weavers' condition. 6.7.6 The Institute of Rural Management, Anand had carried out an evaluation of the development programmes of handlooms in 1989. Based on this study, a change in the delivery system was effected and a new approach for the developmental and promotional schemes was adopted from Annual Plan 1990-91. The approach of" project package' as indicated in the new Industrial Policy of August, 1991, has been adopted and it is proposed to do away with the limitation of routeing assistance only through cooperative/corporate organisations. 6.7.7 The programmes in the Eighth Plan for handloom industry seek to encourage employment generation, ensure reasonable wages for weavers, supply of hank yarn at reasonable prices, establish silk yarn bank, set up marketing infrastructure, help export development, etc. besides continuing the existing schemes for publicity and exhibitions, training and upgradation of technology through WSCs and IIHTs, research and development, enforcement of Hand-loom (Reservation of Products) Act, 1985 and welfare schemes. Production ofJanata cloth is proposed to be phased out. 6.7.8 To retain employment in the handloom sector State intervention would be desirable for placing the Handloom Reservation Act 1985 under the [X Schedule of the Constitution. The present list of reserved items would be revised. The revised list of reserved items would include selected products of handloom sector and only those items would be included which have higher design input, border and motif which are the strength and speciality of handloom sector. 6.7.9 During the Eighth Plan, the setting up of integrated handloom villages at places of concentration of weavers has been envisaged. These handloom villages would have worksheds and houses, pre and post loom facilities, depots for raw material, marketing infrastructure, banks, communication facilities and basic civic amenities for weavers. 6.7.10 With a view to providing marketing assistance, infrastructural facilities would be developed at the village, taluka, block and district levels besides metropolitan cities and important tourist places. 6.7.11 The apex societies along with NHDC would continue to be assisted to supply raw materials to the weavers throughout the country. Additional financial support would be required for their expanded activities to cover larger number of weavers. The apex societies would further augment assistance to the primary societies in the supply of raw materials and marketing. 6.7.12 To increase hank yarn availability to the handloom weavers, NCDC would provide financial support to weavers' cooperatives to in-stal new yam spinning mills to improve the availability of hank yarn. 6.7.13 The State Governments would be encouraged to establish IIHTs and WSCs for up-gradation of technology and increasing training and design inputs to the weavers. The workshed-cum-housing scheme would be taken up at enhanced level to provide more houses and worksheds to the weavers to improve their working condition and productivity. 6.7.14 The Indian handloom products have the potential to attract foreign buyers because of their natural fibre base, unique design, appearance and aesthetic appeal. Strict adherence to high quality standards from fabrics to made-ups and new design inputs to handloom sector would boost the exports. Funds would be provided to the apex societies and corporate organisations for export, arrangement of quality raw material for export orders, strict quality control and marketing expenses abroad, etc. 6.7.15 The Handloom Census (1987-88) data would be scientifically processed for planning for handloom sector. Information from the Census, 1991 about weavers would be integrated with the Handloom Census, 1987-88 data to provide a strong data base to the handloom industry. Powerlooms 6.8.1 The Textile Policy, 1985 provided an opportunity for regularising unauthorised pow-eriooms and installation of new powerlooms. This sector has grown rapidly during the Seventh Plan period from a level of 8.36 lakh power-looms ason 1.1.1985 to 11 lakh as on 31.3.1990. 6.8.2 During the Seventh Plan, production of powerloom cloth increased from 4,930 Alillion metres to 7,457 million metres. This is anticipated to rise further to 11,036 million metres by the end of 1991-92. Further, the employment in this sub-sector increased from 32.19 lakh persons to 45 lakh persons during the Seventh Plan. This is expected to go up to 53 lakh persons by the end of 1991-92. 6.8.3 To assist powerlooms in updating designs, training, testing facilities for yarn and fabrics and to give advice on technical matters, the Government has established 13 Powerloom Service Centres (PSCs) under the control of the Textile Commissioner. Encouragement ofpow-erioom cooperative societies and provision of assistance for share capital has helped cooperative sector in Maharashtra, Tamil Nadu, etc. 6.8.4 The State Governments of Maharashtra, Gujarat, Tamil Nadu and Assam have adopted certain measures for the welfare ofpowerloom weavers during the Seventh Plan. However, these measures were not commensurate with the growth of this sector. Powerloom workers did not get statutory wages and facilities like provident fund, medical facilities, social welfare benefits, safe working environment, education for their children and training, etc., due to the extra- legal status of powerlooms during the Sixth Plan period. The position in this regard did not improve during the Seventh Plan in spite of the legal status given to this sector by the Textile Policy of 1985. 6.8.5 The major problems in this sector relate to non-availability of yarn at stable prices, obsolete looms and outdated technology, inadequate pro-loom and post-loom facilities, inadequate financial assistance through financial institutions and dependence on middlemen for finance at high rates of interest. 6.8.6 In the Eighth Plan, efforts would be made to tackle the problems of weaver-owned powerlooms and powerloom cooperatives in the decentralised sector. There is need to extend working capital assistance to small powerloom weaver-owners by SFCs. 6.8.7 The Eighth Plan indicative target for cloth production in decentralised powerloom sector has been kept at 15,280 million metres, which implies a compound growth rate of 6.7 per cent. The employment target is set at the level of 75 lakh persons in 1996-97. Sericulture 6.9.1 Sericulture, an agro-industrial activity based mainly on land and water, is carried on in 52,000 villages on 3.32 lakh hectares of irrigated and rainfed land under mulberry plants and on forest land and village grazing reserves in the case of non-mulberry sericulture employing about 55 lakh persons in planting, seed preparation, silkworm rearing, reeling, weaving and other operations. Non-mulberry sericulture, namely, tasar culture, ericulture and muga culture, is mainly practised by the tribals. Mulberry silk, accounting for more than 90 per cent of the total silk produced in the country, is concentrated in the States of Karnataka, Andhra Pradesh, Tamil Nadu and West Bengal. India, with a production of 12,450 tonnes of mulberry silk in 1991-92, holds the second position in the world, next to China whose production of mulberry silk was 35,800 tonnes in 1987. However, most of Chinese silk is of bivoltine variety whereas ours is multi x bivoltine. About 70 per cent of our silk is used by handlooms. 6.9.2 The Seventh Plan target of production of raw silk was exceeded. However, tasar and muga silks did not fare well. In the case of bivoltine silk, the performance was disappointing. As against the target of 500 tonnes, the production was estimated at 150 tonnes. The export of silk made-ups and goods was encouraging. However, imports of silk doubled from about 1181 tonnes in 1984-85 to about 2,500 tonnes in 1989- 90. A National Sericulture Project costing Rs.555 crores with assistance from IBRD/IDA and Swiss Development Cooperation was taken up in 1989-90. Production of silk during 1990-91 was slightly above the target but in 1991-92 a shortfall in achievement of the target is anticipated. Exports in quantitative terms have also not increased. The National Sericulture Project under implementation by Central Silk Board in 12 States and by the State Governments in Karnataka, Andhra Pradesh, Tamil Nadu, West Bengal and Jammu and Kashmir made poor progress except in terms of coverage of land under mulberry, particularly in the the case of Andhra Pradesh. 6.9.3 During the Eighth Plan, the production of raw silk is envisaged to reach the level of 21,400 tonnes, including 2,000 tonnes of bivoltine variety. Whereas the productivity of mulberry silk in terms of kg/ha has risen from 32.09 in 1984-85 to 38.29 in 1989-90, the target set for the terminal year of the Eighth Plan is ambitious and would call for greater efforts in R and D. Sustained efforts are necessary to bridge the gap between productivity levels obtaining in India and those in countries like China and Japan. Production of bivoltine cocoons is essential for meeting the seed requirements, larger production of quality silk and lessening dependence on imports. 6.9.4 In Karnataka, a leading State in silk production, all the sericultural activities from plantation to weaving of fabrics have been promoted in an integrated manner. Similarly, in the States ofAndhra Pradesh, Tamil Nadu and West Bengal, though reeling is not as extensive as in Karnataka, all other sericultural activities are integrated. Further, raw silk is also used in the production of silk khadi and weaving of silk carpets. Thus, sericulture has linkages with the sub-sectors of khadi, handlooms and handicrafts. The programmes for the development of sericulture during the Eighth Plan, therefore, will be dovetailed to achieve both the vertical and horizontal integration. This would result in harmonisation of the various sub-sectors and generation of employment in khadi, handlooms and handicrafts. 6.9.5 Another aspect which has caused considerable concern in the recent past is the outbreak ofpebrine disease. In order to prevent its spread and contain it, emphasis will be laid on thorough moth examination and providing assistance to sericulturists and private graineurs. 6.9.6 So far, the emphasis has been on evolving improved varieties of food plants and silk worm races. However, reeling is an important activity. During the Eighth Plan, greater attention will be paid to improve reeling. Reelers will be trained and assisted in the establishment of cottage basins. Apart from the acquisition of skill in reeling, a reeler is handicapped on account of large requirement of working capital for the purchase of cocoons. There is provision of working capital loans through refinance from IDBI under NSP. Reeling under private sector would be promoted during the Eighth Plan. 6.9.7 There is hiatus in the availability of raw silk and weaving capacity in States like U.P., Bihar, Assam and Orissa. In these States, there is concentration of silk handlooms but production of mulberry silk is concentrated in Karnataka, Andhra Pradesh and Tamil Nadu. In order to remedy the regional imbalance and to improve the availability of raw silk to weavers, schemes for silk production would be taken up in new areas. 6.9.8 Finally, R and D activities have so far been directed towards mulberry sericulture. Since non-mulberry sericulture is practised by the tribals, there will be re-orientation of research activities so that production, employment and earnings of tribals engaged in these activities are improved and sustained. Handicrafts 6.10.1 Handicrafts are not only a part of the country's rich cultural heritage but they have also been a unifying factor in the national life. Handicrafts items, which blend utility with beauty, cater to the needs of the elite as well as other classes of the population. They also occupy an important position in the economy of the country both from the point of view of employment and export potential. The value of output in handicrafts sub-sector increased from Rs.3,500 crores in 1984-85 to Rs.7,067 crores (1984-85 prices) in 1989-90 and exports from Rs. 1,700 crores to Rs.6,400 crores during the same period. The production of handicrafts in 1991-92 is expected to reach a level of Rs. 13,260 crores. 6.10.2 The implementation of various schemes for promotion and development of handicrafts upto the end of the Seventh Plan has not been able to provide assistance to large sections of craftsmen in so far as production-related inputs are concerned and the marketing of their products is still left largely to the private trade. Consequently, they have not made any discernible impact on their earnings and standard of living. Its potential in terms of employment and exports remains unexploited. The country's share in the global market for the handicrafts (1.5%) is little more than the share of exports in general (0.5%) but it is insignificant compared to the enormous possibilities for growth. It is, therefore, necessary to reorient the schemed so that the basic needs of the artisans relating to raw material, credit and marketing are adequately met. In this context, the voluntary organisations can play an active and significant role. Further, the activities so far have been sponsored and implemented mainly by the Central Government and the role as well as involvement of State Governments have been inadequate. It is, therefore, imperative to remodel certain schemes in such a manner that would ensure the participation of these agencies also. 6.10.3 The main objectives of the Eighth Plan for the handicrafts sub-sector would be to enhance opportunities of employment and income from crafts as an economic activity and harness the export potential of crafts for increasing foreign exchange earnings of the country. 6.10.4 For promoting the growth of handicrafts, it is essential to service the production base of craftsmen. The services needed to support production include supply of raw material of requisite quality at reasonable prices, common facility, skill upgradation, design as well as technical guidance etc. and other related services. As handicrafts sector is decentralised and crafts are dispersed in the country, these services would be provided in a package in identified crafts pockets through the establishment of Crafts Development Centres (CDCs) by the States, cooperatives and voluntary organisations. It would be necessary to assess the impact of the 14 CDCs which have been set up recently before embarking on further expansion. 6.10.5 The importance of timely availability of raw materials in handicrafts cannot be over-emphasised. All materials have periodic spells of short supply. However, wool for carpets, silk for carpets, scrap metal and virgin metal for artmetalware, wood particularly sandalwood, seesum and teak, cane and shells are identified as critical to the sector. As the availability of the first three is dependent on import policy and the remaining two on forest policy, close liaison should be maintained with the concerned Ministries to make the forest policy and the import policy conducive to augmenting raw material supply for the handicraft sector. The Craft Development Centres should take up supply of raw material/processed raw material to the craftsmen according to their needs. 6.10.6 Though refinance to the handicrafts sub-sector is available from NABARD, the credit available to craftsmen and promotional organisations under these schemes is inadequate. It is, therefore, imperative that NABARD's response to the. credit requirements of handicrafts should be both adequate and positive. It should also extend refinance for providing the working capital for corporations and promotional organisations so that they could get cash credit facilities at concessional rate of interest. 6.10.7 Training is presently being imparted to artisans through 515 departmental ly run training centres, Master Craftsmen under the Apprenticeship Training Scheme and other organisations such as Corporations, voluntary agencies, etc. Out of 515 departmental training centres, 436 are tor carpet weaving, started in 1976 when the limited production base in carpet weaving could not cope with the heavy demand for Indian carpets in the international market. This activity should now he ciirlniled in the Central sector and carried on by the States and voluntary agencies. To begin with, instead of conducting basic and advanced training separately, each centre should conduct one course for basic and one course for advanced training with the ultimate objective of conducting only advanced training course because the aim of imparting training in handicrafts is to upgrade the skill of craftsmen rather than merely creating basic skills. During the Eighth Plan, the strategy would, therefore, he the promotion of other handicrafts like artmetal, wood carving, hand printed textiles, cane and hamhoo, hidriware, metal mirrors, hrassware, embroidery, imitation jewellery, L-u-qiierware, zari work, etc. Greater emphasis would lie placed on training through master craftsmen under the Apprenticeship Training Scheme as well as training tin niirli voluntary agencies. FITorts would also he made for the revival of languishing crafts so as to protect employment and earnings of craftsmen. Training schemes relating to departmentally-run training centres need to be evaluated by an independent agency with a view to taking decisions regarding effecting modifications or their continuation in future. 6.10.8 The existing Regional Design and Technical Development Centres (RDTCs) and 'i)->e-cialised craft Institutes such as Institute* of Hand-printed Textiles at Jaipur, Institute "of Carpet Technology at Bhadohi and Cane and Bamboo Development Institute at Agartala are unable to cater to the needs of handicrafts as they are too dispersed. Moreover, it is also necessary to attune the activities of these Centres to the marketing needs. It would, therefore, be necessary to ren"f"t their activities dii'-ine the Eighth Plan. A"wdingly, " RDTCs, instead of merely evolving their "'vn designs, would also solicit design orders from private trade and public sector organisations, establish linkages with the envisaged CDCs and collaborate with apex institutes such as NID, NIFT, etc. for design development, particularly in export-oriented crafts. Assistance would also be provided to other organisations like corporations, cooperatives and voluntary organisations to engage consulting designers. 6.10.9 As the impact of existing schemes on the marketing of handicrafts has not been significant on account of their implementation without any coordinated thrust and absence of innovative marketing, new marketing approaches would need to be adopted in the Eighth Plan so that the wages and income levels of artisans could be increased. As the rapidly expanding rural market offers great potential for consumer products including handicrafts, simple low-cost utility handicrafts should be evolved and their sale organised in local haats and market places. Though there is substantial demand for cane and bamboo products in various parts of the country and the raw material is available in abundance in the North Eastern Region, this potential is not being exploited fully on account of high transportation costs. To ensure cost effectiveness, it would be necessary to despatch processed raw materials to such centres where there is good demand for cane and bamboo products and artisans could assemble and produce the finished products there. Apart from organisation of traditional melas, fairs and exhibitions, selected market places in rural areas, towns and cities would be identified and craft complexes would be developed at pilgrimage, tourist centres and metropolitan cities for marketing of crafts. 6.10.10 Out of the estimated total exports of handicrafts valued at Rs.8100 crores in 1990-91, the share of gems and jewellery is 85 per cent. The value addition in gems and jewellery is about 30 per cent. In view of the potential of gems and jewellery industry to earn foreign exchange, it would be necessary to set up functional estates with facilities of trading, training, establishment of units and other infrastructure. Further, the industry would need easy availability of foreign exchange for import of raw materials, machinery, tools and equipments, training facilities, market information about the latest trends in fashion and designs preference in importing countries for sustained growth. 6.10.11 In view of envisaged thrust on sericulture, there would be significant increase in the domestic silk production during the Eighth Plan which should be utilised for the production of silk carpets for boosting their exports as there is good demand for them in overseas markets. While India's exports of handicrafts are mainly handmade, the large part of the global trade belongs to articles and items which cater to the common man's needs and tastes which have to be produced in bulk. Although made by hand, they need mechanical support in processing and finishing. As the export market for v cultural crafts' is limited, reliance will have to be placed on those crafts which cater to the common man's needs and tastes for boosting exports during the Eighth Plan. It would be necessary to ensure timely availability of both indigenous as well as imported raw materials and credit to boost exports. Further, mechanisation in certain areas which do not affect basic skill input but pertain mainly to processing and finishing should be encouraged. Both the designing and technical assistance should aim at adapting crafts to the utility based foreign market. Market research would also assist in the growth of exports and Export Promotion Councils should play an active role in the dissemination of requisite information to exporters. For encouraging the growth of exports, it would also he necessary to improve packaging and for this purpose the assistance as well as guidance of the Institute of Packaging should be solicited. 6.10.12 The absence of a comprehensive data base in handicrafts is a serious limitation in planning for and monitoring of the development in the sub-sector. Presently, the data base is mainly the Economic Census of 1977 and 1980 and figures maintained or extrapolated by the office of Development Commissioner (Handicrafts) on the basis of the aforesaid, census. These census did not delineate handicrafts as such and figures are compiled from 47 industry groups which correspond to handicrafts. Consequently, the data are neither realistic nor reveal the actual status of the industry. It is, therefore, essential to conduct a comprehensive survey of handicrafts in the country during the Eighth Plan. Wool Development 6-11 .i India has the fifth largest population of sheep in the world The sheep population is around 40 million and wool production was 43 million kgs. in 1989-90. However, productivity in wool production was 900 grammes per sheep which is quite low as compared to 5520 pins/sheep and 5320 gms/sheep in Australia and New Zealand respectively. 6.11.2 Sheep breeding and wool production are done mostly by tribals and the main problems faced by this sector are low productivity, poor quality of wool, non-existence of grading facilities, non-avaiiabiiity of good breeds, low level of education of the sheep breeder and migratory character etc. The wool industry also suffers from various problems like technological obso-lescence and the fact that most of the units are in small scaie and unorganised sector. Wool exports are negligible and there is vast scope to improve upon. 6.11.3 The Wool Development Board, set up in 1987, would promote the industry by way of assistance for wool marketing, establishment of wool testing and grading centres, industrial service centres, setting up of scouring and carbonising plants and collecting marketing intelligence. It will also implement other schemes like integrated sheep and wool development project, machine-shearing-cum-training centres, diversification of products and utilisation of coarse wool, etc. These development programmes will be supplemented by other schemes implemented in the handlooms and handicrafts sub-sector relating to promotion of exports of woollen carpets, Hill Area Wool Development Projects, Carpet Training Centres, encouragement to artisans, etc. Science and Technology 6.12.1 With a view to reducing technological obsolescence, improving competitiveness and raising the level of earnings of artisans and craftsmen engaged in this sector, several pro-I'nimmes are being implemented. Ten tool rooms and training centres and specialised institutes, three PPDCs, five PDTCs with five sub-centres, one service and training centre for electronics, four regional testing centres, 20 field testing stations, two footwear training centres, 27 SISIs, 31 branch institutes and 37 extension centres are providing technological assistance and other common facilities to the small scale sector. Besides, modernisation programmes are run for 20 industries on all-India basis and for 38 industry groups on State concentration basis. 6.12.2 The KVIC implements several projects, both departmental and institutional, for technology development, transfer of technology, substitution of alternate raw materials, product diversification, quality control, standardisation and testing of tools, equipment and new machinery. These projects would continue during the Eighth Plan. The R and D programmes for coir industry relate to improved methods in coir extraction, reducing drudgery of workers, spinning of coir yarn, weaving of coir matting on improved looms with higher productivity, development of new products of coir, such as geo-tex-tiles, coir polymer composites, coir gypsum composites, use of coir in improving soil stabilisation and erosion control, use of coir for cooling buildings by roof-surface-evaporation techniques, etc. For handloom weavers, assistance in design development, modernisation and cloth processing, etc, is being provided by the three IIHTs and 23 WSCs. Professional institutes are being engaged to carry out research and development and to study special problems of the handlooms sector. The Central Silk Board undertakes R and D activities relating to evolving of high yielding plant varieties, package of practices ofculivation of plants and silkworm rearing, control of pests, evolving of suitable silkworm races, etc. Under National Sericulture Project, breeding laboratories would be strengthened and additional laboratories for evolving region-specific improved silkworm races and disease-resistant races suited to different agro-climatic conditions of the country would be established. For craftsmen involved in different handicrafts, the programmes include strengthening the existing RDTCs and Craft Institutes like Institute of Hand Printed Textiles at Jaipur, Institute of Carpet Techn6l-ogy at Bhadohi and Cane Development Institute at Agartala. 6.12.3 During the Eighth Plan, two tool rooms with Danish assistance and three tool rooms with German assistance are proposed to be established. It is envisaged that NSIC will be entrusted with the responsibility of collection and dissemination of technology and other relevant information to SSI units. Besides strengthening the existing R and D infrastructure for other industries, it is envisaged to modernise SISI workshops. Food Processing Industries 6.13.1 The agricultural sector contributes 31.3 per cent to our gross domestic product. The annual production of fruit is estimated at about 28 million tonnes, next only to Brazil. Similarly, India ranks second in the world after China in vegetables with an annual production of 69 million tonnes. The cattle population in the country is estimated at 15.4 per cent of the world cattle population. Our milk production is the highest among the developing countries. However, hardly 1.5 percent of our food output and 0.5 percent to 1.0 percent of fruit and vegetables are processed. Post harvest losses of cereals and legumes are currently placed around 15 to 20 percent and those of perishable fruit and vegetables at 20 to 30 percent. The development of the food processing industries in the country has, therefore, assumed importance and urgency taking into account the prevailing favourable conditions and the vast potential for export of its products. 6.13.2 The food processing industries in India are broadly classified into (a) unorganised and cottage scale industries; and (b) organised processed food industries, with further division into the following sub-sectors:
Primary Food Processing 6.13.3 The production of principal raw materials for food processing industries in the initial and the terminal year of the Seventh Plan and in the last two years is shown in the S:;iiciT)ent 6.4. Exports from food processing induslii's in 1991-92 amounting to Rs. 2813 croies are indicated sub sectorwise in Statement (•' .5. in-dia's share in world exports of food .tern-; h.ss come down from 1.2 per cent in '978 t,' 0.44 per cent in 1988. The use of proces.'.cd tboij ;s becoming popular due to various so-.:io-ci.;o-nomic changes such as urbanisation, change in tastes, high cost of household labour, increase in the number of working women, improvement in the living standard of people in general etc. The demand for processed and fast foods by large urban population of the country is, therefore, likely to grow steadily in the near future. 6.13.4 Grain processing, which includes rice milling, flour milling and pulses processing, is the biggest component in the food sector constituting over 40 percent of the total value. This notwithstanding, even the present capacity for processing paddy is not fully utilised. There are substantial grain losses due to obsolete machinery. Installation of modern rice hullers and rice mills is therefore being encouraged by the Government. There are 306 solvent extraction units in the country at present for extracting rice bran oil. While flour milling is done in the organised sector through licensed flour mills, in the unorganised sector it is through country flour chakies. 6.13.5 The pulse milling is mostly in the unorganised sector. The disconcerting feature, however, is that about 10 to 15 per cent of the pulses are lost due to obsolete technology used in the process. 6.13.6 The annual production of fruit in India, which is about 28 million tonnes, is targetted to increase to 40 million tonnes by the end of the Eighth Plan. Similarly, the annual production of vegetables in India, which is about 69 million tonnes, is also targetted to increase to 94 million tonnes by the end of the Eighth Plan. The total installed capacity of fruit and vegetables processing industry, which is around 9 lakh tonnes, is grossly under-utilised at the level of 30 per cent. In India, hardly one percent of the annual production of fruit and vegetables is processed, while in Brazil and USA it is 70"per cent, in Phillipines 78 per cent, in Malaysia 83 per cent and in Thailand 30 per cent. High cost of packaging, non-availability of packaging machinery, non-availability of quality raw material at reasonable rates, lack of basic infrastructural facilities, etc., are some of the constraints faced by this sector. Dairy and Livestock Products 6.13.7 The annual milk production is around 56 million tonnes, of which 30 percent is being converted at present into milk products, ghee alone accounting for more than 85 per cent. While production of milk powder and infant milk increased from 22,000 tonnes in 1970 to 1,65,000 tonnes in 1989, it slid down to 1,55,000 tonnes in 1990. Production of mailed milk food and cheese was 39,000 tonnes and 2,000 tonnes respectively in 1990. The Government has recently de-licensed production of dairy products subject to locational parametres, with ice cream continuing to be reserved for the small scale sector. Development of the milk product industry further is, however, dependent on the availability of liquid milk in adequate quantity and increase in milk output per cattle . 6.13.8 With huge cattle population, India has the potential to be one of the top producers of meat and meat products but the position is none too happy. Cattle and buffalos, when they outlive their productive life, are slaughtered. Sheep are reared mostly for raising wool and not for producing meat. While a few modern slaughter houses have come up in big cities like Bombay, Aurangabad, Hyderabad, Durgapur and Panjim, most of the slaughter houses in the country, numbering around 3,600, are suffering from poor water supply, insufficiency of electricity, processing/storing facilities as also lack of adequate arrangements for moving carcasses. During the Fourth Plan, eight bacon '-nits were set up for manufacture of value-added pork products to ensure remunerative prices to pig rearers. The capacity remained by and large under-utilised. Nonetheless, buffalo meat constitutes the largest proportion of meat exports from India. There is good demand of buffalo meat in the Middle East countries but the export is inadequate due to lack of modern processing houses, prevalence of diseases like rinderpest and those of mouth in the animals. Unhygienic and filthy conditions in the slaughter houses also shy away prospective importers. The quality and quantity of nutrition provided to animals is very poor leading to low rate of growth. Apart from taking remedial measures, there is need to develop other meat sources like rabbit, etc. Loss of by-procuts like blood, offals, glands, bones, etc. also need to be avoided in the meat industry so as to afford additional profit to the meat producers. Fish and Fish Products 6.13.9 India has a coastline of 7,500 kms and an Exclusive Economic Zone (EEZ) extending to 2.02 million square metres with vast potential for marine fishery. There are 1.8 lakh country crafts ^non-mechanised), 23,000 mechanised fishing vessels and 179 deep sea fishing vessels operating in the Indian Exclusive Economic Zone. The annual production of maripe and inland fish and exports of marine products are indicated in Statement 6.6. Shrimp alone remains so far the major component of the marine exports from India. The export of marine products was approximately 20,000 tonnes during 1990-91 and the reasons for the abysmal level of exports in this sector can be traced to the inadequate fish processing capacity. There are at present 216 freezing plant with a freezing capacity of 2,200 tonnes per day and 25 canning units with a total capacity of 90 tonnes per day. On-board fish processing facilities are non-existent in the country. While Individual Quick Freezing Plants (IQFP) have recently been established, their capacity is inadequate as compared to that available in the advanced countries. As many as 5,000 cold storages, now available in the country, are also inadequate for handling the present volume of fish catches. In all, the deep sea fishing industry today stands on a very weak footing. Maritime Zone of India (Regulation of fishing by foreign vessels) Act, 1981 is implemented by the Coast Guards but they possess inadequate communication facilities. The Fishery Survey of India, Bombay is the nodal agency for conducting surveys and assessment of marine fisheries in the Indian waters. 6.13.10 To increase marine exports, there is need to use fish catches other than shrimps. New shrimp ground and non-shrimp resources also need to be identified by Fishery Survey of India since exploitation of the existing resources for shrimp catches have reached saturation level. Other aspects requiring greater attention are quality improvement, technology upgradation, value added products, development of infrastructure, improved methods of handling and preservation, etc. Consumer Goods Industry 6.13.11 The consumer industry for eatable food processing items has a very wide spectrum and it is concentrated largely in the organised sector including public sector units and large corporations in private sector. There an' more than 18,000 factories producing food products worth Rs.9,000 crores. There are large number of units in urorganised sector producing items like Pasta goods, traditional foods, Poha etc. This sector is also playing an important role. The Confederation of Indian Food and Trade Industry (CIFTI) is the apex body of food product manufacturing units while Agricultural and Processed Food Products Export Development Authority (APEDA) is promoting exports of a wide range of Indian agricultural products and processed foods Under the new industrial policy announced by the Government in July, 1991, licensing of food product industry has been dispensed with, except for non-potable alcohol, beer etc. Broad- banding has also been extended to all processed food items excluding the items reserved for the small-scale sector. 6.13.12 Two Central Public Sector Undertakings, namely, Modern Food Industries (India) Ltd. (MFIL) and North Eastern Regional Agricultural Marketing Corporation (NERAMAC) are engaged in the production and marketing of food products. MFIL is manufacturing bread, soft drinks, ready-to-serve food/drink, edible oil, wheat products, nutritional diet, etc. 6.13.13 The NERAMAC is, on the other hand, engaged in the marketing and processing of fruit and vegetables grown in the North Eastern States. The unit also markets citronella oil, ginger, mustard oil cake, aromatic products of tlie regions, etc. It has a pineapple juice processing plant at Nalkata in Tripura having a capacity of producing 48 tonnes of pineapple juice per annum. This unit is inclining losses since its inception. Unless a major revamp is effected, it may not become viable. Packaging Material for Food Industry 6.14.1 Several new trends, have now cmcigcd in new packaging materals like, tatrapacks, multi-layered aseptic cartions like tatrapacks, multi-layered aseptic cartions, flexible plastic pouches, thermofarm cups and tray packing,shrink film transport packing, etc. Container transport mode introduced by the Indian Railways has improved transportation facilities, much needed for the food processing industries. The increased shelf-life of the products of food processing industries have made these products popular and also, to some extent, prevented post-harvest losses in fruit and vegetables. 6.14.2 The high cost and inadequate availability of quality packaging materials, coupled with their irregular supply where these are available and high excise duties, have resulted in serious constraints in the development of packaging industry. The main thrust in 'R and D' has to be on development of cost-efficient sophisticated packaging and consumer packs to meet international standards. Food Processing Machinery 6.15.1 The requirements of food processing machinery are being met by chemical processing machinery manufacturers, specialised machinery manufacturers and small-scale units. Most of them do not have the necessary design and infrastructure for developing new products and cost efficient machinery and equipment. There is need to upgrade technology available with the Indian manufacturers by enlisting foreign collaborations where required, for design knowhow back-up. The Central Food Technology Research Institute, Mysore, would be actively involved in the research in food processing machinery. Encouragement to food processing industries would ipso facto increase demand of latest food processing machinery. Incentives and other facilities to Indian machinery manufacturer would, therefore, be required to enable them to enlist new foreign collaborations for food processing machinery as well as for high speed packaging machinery. Eighth Plan 6.16.1 Government has recently liberalised the foreign investment norms as also equity participation up to 51 per cent. With liberalisations and other incentives, substantial investment is expected in food processing industries sector which may create additional 2.5 lakh jobs by the end of the Eighth Plan. From the present level of Rs.2,813 crores, export is expected to reach Rs. 6,000 crores. Further promotion of food processing industries would require establishment of large private sector units in rural areas for production of processed food items. When these come into being, they will serve as nucleus plants for small- scale units to be set up around these plants. Some large industrial houses have made investment and provided extensive services which has resulted in higher production and exports of food products. 6.16.2 Development of the food processing industries also helps in conserving energy which otherwise gets used by the households for cooking of foods. The R and D should focus on processed foods using enzymes so as to save energy. Adoption of low-cost preservation techniques like sun-drying of fruit and vegetables, storing of fermented vegetables, extension of shelf-life of fruit and vegetables in cool chambers, storage of fruit pulp/juices by addition of simple preservatives, etc. also need to be taken up. 6.16.3 Facilities would be created in conformity with the latest EEC or USDA standards to promote export of meat and meat products. A National Livestock Products Development Council is proposed to be set up to formulate policy measures for promotion and development of modern processing facilities for pork, sheep, goat, rabbit, poultry and egg, buffalo meat, development of infrastructure for storage and transport of meat export, etc. A National Marine Fisheries Development Board is proposed to be established to look after the promotion of deep sea fishing industries. 6.16.4 It is proposed to acquire deep sea fishing vessels by offering differential interest rate subsidy and provision of loans through Shipping Credit and Investment Corporation of India to Indian entrepreneurs. During the Eighth Plan period, three freezing storages (at -40 to -20 degree Celsius) at major ports would be set up. Private sector entrepreneurs would be provided financial assistance for acquiring refrigerated vans. 6.16.5 Financial assistance is proposed to be given to food processing units for strengthening backward linkages between processors and growers and encouragement for contract farming. To encourage mushroom cultivators to set up spawn laboratories, compost-pasteurisation and other processing facilities along with supporting structures for mushroom growing, financial assistance would be given. To train rural artisans in food processing techniques, it is proposed to establish food processing and training centres in rural areas. These centres would provide functional education through 'hands on' experience to entrepreneurs. Diversification/modernisation/restructuring plans for MFIL and NERAMAC would be implemented so that these PSUs may become viable during the Eighth Plan period. Statement
6.1
* Revised Statement 6.2 Village And Small Industries - Targets and Achievements in 1990--91 and 1991-92
Statement 6.3 Village And Small Industries - Eighth Five Year Plan (1992-97) - Indicative Targets
Statement
6.4 Production of Principal Raw Materials For Food Processing Industries
Exports From Food Processing Industry
Statement 6.6 Production of Fish And Exports of Marine Products
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