[ Vol1-Index ] - [ Vol2-Index ]

(including Village, Small, Cottage, Agro and Food Processing Industries)

Sugar

5.220 India has been the largest producer of sugar for quite some time. A fluctuating trend of sugar production was witnessed in the first three years of the Eighth Plan with an all-time high of 16.4 million tonnes during 1995-96 and a very low of 9.8 million tonnes in 1993-94. The Eighth Plan target was 15.5 million tonnes. As against this, production in 1996-97 is expected to be around 12.8-13.0 million tonnes. The decline in production was due to decrease in the area under cane cultivation and lower yield in the first two years of the Plan. About two million tonnes of sugar were imported in 1993-94.

5.221 The sugar industry until recently continued to function under a regulatory system where licence had to be obtained for establishing new capacity or expanding the existing installed capacity. The industry has been delicensed in September 1998. The dual price control system is, however, still in operation, under which 40 per cent of the output is pre-empted for distribution through Public Distribution System (PDS) at an ex-factory price which is fixed for each of the 20 zones of the country. The factories are free to sell the balance 60 per cent at market price.

5.222 The Statutory Minimum Price (SMP) for sugarcane is fixed by the Government of India on a basic recovery of 8.5 per cent sucrose content and is used as the basis for determinig the levy price of sugar. However, the price to be paid for sugarcane by the industry is the State Advised Price (SAP) fixed by the State Governments which is much higher than the SMP. This is clearly anomalous and needs to be rectified at the earliest.

5.223 For increasing the productivity of sugar industry, Government of India launched a Technology Mission Programme in 1994. Under this programme, encouragement is being given to modernisation/expansion of sugar mills, improvement in cane recovery, etc., to boost production. Financial assistance for this is being made available from the Sugar Development Fund.

5.224 The Government of India allowed export of sugar during the years 1995-96 and 1996-97 to bring down the surplus stock of sugar. Sugar mills are now permitted to pack sugar in 50 kg. packs for export purposes and also in small consumer packs for local sale.

5.225 Incentives are being provided for setting up sugar units of minimum economic size. As a part of restructuring of sugar industry, the price and distribution controls of molasses were abolished with effect from 1993. In order to bring about greater efficiency in this sector, the Government of India has allowed sugar mills to set up downstream facilities.

5.226 The demand for sugar during the terminal year of the Ninth Plan (2001-2002) is anticipated to be around 19.5 million tonnes. With the decontrol of sugar industry, it is expected that the domestic sugar industry will not only meet this demand but will also produce surplus for exports.

5.227 The activities of Sugar Technology Mission (STM) for technological innovations would need to be continued. For effective human resource development, National Sugar Institute needs to be converted into an autonomous body.

Leather and Leather Goods

5.228 The leather industry has been identified as one of the thrust areas of exports. Footwear sector has been identified as an area of extreme focus. The export performance of the leather sector has improved considerably during the Eighth Plan period. The value of exports went up from Rs.3,076 crore during 1991-92 to Rs.5,861 crore during 1995-96 exceeding the Eighth Plan target of Rs.5,463 crore. However, during 1996-97, the exports were marginally down to Rs.5,798 crore. During the Eighth Plan period, the leather industry registered an annual growth rate ranging between 20-25 per cent.

5.229 A number of policy initiatives were taken by the Government during the Eighth Plan period, interalia, facilitating import of raw materials, consumables, components and machinery for increasing production of the leather and leather goods sector. These included rationalisation of import tariffs, delicensing, allowing joint ventures, free imports at concessional duty, etc. Manufacture of finished leather from semi-finished leather was delicensed in April 1993. Tanned or dressed fur skins and chamois leather have also been removed from the list of items requiring compulsory licensing with effect from July, 1997. Domestic manufacture of components for the shoe industry was encouraged by promoting joint ventures and duty rationalisation on inputs required for manufacture of such components. Almost all the machinery items required for leather industry have been put under OGL and allowed to be imported at concessional rate of duty. Units in the Export Processing Zones have been allowed duty free import of inputs.

5.230 The Government of India also initiated two important programmes in the Eighth Plan for achieving a rapid growth of the leather industry. These are UNDP assisted National Leather Development Programme (NLDP) and National Leather Technology Mission (NLTM) for sustainable development of the leather industry. Both these programmes are aimed at ensuring an integrated and balanced development and modernisation of the leather industry.

5.231 The leather industry is reserved for the small scale sector, which along with the cottage sector accounts for over 75 per cent of the total leather goods production. Units in the organised sector can enter this area only with a minimum export obligation of 75 per cent of their production. Units in the small scale and unregistered cottage sectors are encouraged to export leather footwear and leather products. This policy is designed to meet the twin objectives of safeguarding the interests of the small scale and cottage sectors and of increased exports.

5.232 One of the problems in the leather sector has been inadequate supply of raw materials i.e. raw hides and skins. The availability of raw hides and skins is influenced by the population of animals, growth rate of different animal types, recovery of carcasses, the production and marketing chains for raw hides and skins and management practices used in the country.

5.233 According to a survey by the Central Leather Research Institute (CLRI) considerable fallen carcasses are not recovered and this contributes to a significant loss of raw hides and skins. Model centres have now been established for recovery of fallen carcasses in various parts of the country. The NLTM has launched an initiative to commission 25 demonstration centres for recovery and for training the flayers and primary producers of raw hides and skins, leading to quality improvement. Several steps are being taken to augment the potential of raw hides and skins. These include (a) tapping the full available potential, (b) exploring new potential from the existing sources of animals, (c) generating new indigenous resources with techno-economic benefits and (d) supplementing resource needs through imports.

5.234 A major objective of the Ninth Plan would be modernisation of leather processing industry as well as artisan sector in footwear and leather goods segments. This would include (a) cost- reduction through higher productivity, (b) putting in place cleaner production systems, and (c) focussing on global market leadership in selected vital sectors through improvement of quality and consistency of products.

5.235 Tanning industry in India is facing a major crisis due to non-compliance with the national pollution control standards. A comprehensive technological package with both process changes and common effluent treatment needs to be developed with assistance from National Laboratories and other Government agencies.

5.236 The export target for the leather and leather products sector has been placed at US $ 3,218 miillion and US $ 4,515 million respectively by the end of the Ninth Plan.

Textile Sector

5.237 Textile industry is one of the largest and the most important sectors in the economy in terms of output, employment generation and foreign exchange earnings. It is presently contributing 20 per cent to the national industrial production and 35 per cent to the total national export earnings. It has also made a significant contribution to employment generation by providing over 25 million jobs. The production of spun yarn has grown at an average annual growth rate of a little over 5.06 per cent over 17 years since 1980-81. The dominant share in spun yarn is that of cotton yarn constituting about 81 per cent of the total spun yarn production. The production of cotton and non-cotton yarn has grown at the rate of 4.48 per cent and of blended yarn at 8.47 per cent compound annually during the last 15 years. Although the output of blended yarn and 100 per cent non-cotton yarn has been growing, their shares have remained more or less the same, because over 70 per cent of the spindles are suitable for production of 100 per cent cotton and viscose yarn and the balance can use man-made fibres.

5.238 The domestic production of man made fibres and filament yarn has nearly tripled since 1985. This was primarily due to cuts in fiscal levies and tariff on man-made fibre intermediaries as per 1985 Textile Policy. This led to a spurt in the domestic demand for these fibres. The most notable growth was that of Polyester Filament Yarn (PFY), the production of which rose very sharply as compared to viscose and nylon filament yarn at 27.06 per cent during 1981-97. This has led to the expansion of powerloom sector - as PFY is largely used in this sector. As against this, the production of viscose filament yarn grew at an average annual compound growth rate of 2.06 per cent and nylon filament yarn at 3.85 per cent during the same period. The spindlage capacity has been increased from 28.09 million in 1992-93 to 33.53 million by the end of March 1998. The per capita domestic availability of cloth in the country has risen to about 30.78 sq. mtrs. in 1997-98 from a little over 24.50 sq. mtrs. in 1992-93.

5.239 The production of cloth grew at 6.54 per cent during the period from 1980-81 to 1996-97. This was accompanied by a distinct shift in market share from the large-scale organised mill sector to the small-scale unorganised powerloom sector. The share of mill output declined to 5.71 per cent and that of powerloom rose from 38.5 per cent to 72.5 per cent. This is also reflected in the average annual compound growth rate in production recorded during the period 1980-81 to 1996-97 among the major sub-sectors of the textile industry. While the production of mill sector recorded a negative growth rate of 5.11 per cent, production of handlooom sector grew at an average compound growth rate of 5.62 per cent and of powerloom sector at 10.83 per cent during the period 1980-97. Some of the factors which led to negative performance of the mill sector were structural transition coupled with lower productivity of labour, obsolescence of technology, increase in cost of inputs and working capital shortage besides competition from the powerloom sector because of its greater cost advantage.

5.240 The growth of textile exports from a modest figure of Rs.1336 crore at the beginning of 1981 to Rs.35,478 crore during 1996-97 (all textiles including readymade garments) was impressive. The share of man-made fibre textiles, which was almost negligible during 1981-82, now accounts for about 9.07 per cent in the total textile exports; it recorded an annual compound growth rate of 34.57 per cent during the period from 1981-82 to 1996-97 followed by 28.24 per cent for cotton textile fabrics, made-ups including yarn and sewing thread and 13.68 for woollen textiles.

5.241 The thrust areas for the textile sector during the Eighth Plan included greater emphasis on production of value-added, diversified and quality goods for exports and increased capacity utilisation with sophisticated designs, product mix with the use of latest technologies.

5.242 During the Eighth Plan period, the organised mill sector concentrated increasingly on exports with the bulk of the indigenous demand being met by the powerloom sector. The handloom èsector produced high-value products for domestic as well as export markets.

5.243 The physical targets of yarn and cloth production set for the terminal year of the Eighth Plan (1996-97) were achieved and even surpassed in some cases. However, the export performance has been far short of the targets.

5.244 As a part of the world trade reforms, the Multi Fibre Arrangement (MFA) would cease to be in force after 2005. The Indian textile industry would get unrestricted access to the world market but would also face competition in the international market as well as in the domestic market from foreign exporters. It is, therefore, imperative to take urgent steps to bridge the technological gap.

5.245 While the spinning sector has performed well, the weaving and processing sectors have not, because of lack of modernisation. Due to this, the exporters have been generally exporting only grey fabrics. There is a considerable scope for increased processing resulting in higher value addition and better export earnings.

5.246 Upgradation of these sectors needs special attention and large doses of investment. The modernisation of textile sector would be a major thrust area in the Ninth Plan. For this purpose, it is proposed to create a Textile Modernisation Fund.

5.247 The ginning and processing units in the small-scale sector also suffer from obsolete technology, resulting in poor quality and wastage. It is imperative to provide adequate credit for modernisation of these units.

5.248 The targets for spun and filament yarn and cloth production for the terminal year of the Ninth Plan (2001-2002) are placed at 3755 million kgs, 997 million kgs and 44000 sq. mts. respectively.

5.249 The jute sector would continue to play an important role during the Ninth Plan period. A new organisation - National Centre for Jute Diversifiction - has emerged to provide forward and backward linkages between the existing and emerging entrepreneurs. A number of mills have R and D Centres and are diversifying their products. Exports are showing a steady upward trend.

5.250 A major area of thrust during the Ninth Plan would be to consolidate the achievements of the UNDP-assisted National Jute Development Programme and to carry on the follow-up activities. The Plan will have the twin objectives of consolidation of what has been achieved so far and moving into newer pastures. The thrust in the traditional sector would be on producing lighter material, modernisation of machines and processes, cost reduction and increased diversification and exports. Newer pastures are enthusing new entrepreneurs, NGOs, Women's Groups etc. in taking up jute related activities leading to increased and diversified production, sustainable human resource development, etc.

Paper Industry

5.251 There are more than 380 paper mills in the country with installed capacity of 43.5 lakh tonnes. The industry is providing direct employment to about 2 lakh people and indirect employment to 10 lakh persons. The Eighth Plan had projected the installed capacity of paper and paper board at 35 lakh tonnes and production at 29 lakh tonnes. While the installed capacity has exceeded the target, the production at 28 lakh tonnes was marginally lower than the target.

5.252 As a part of the liberalisation process, the paper industry has been delicensed subject to locational conditions. In order to help the industry improve its production and financial viability, policy measures such as free import of raw materials, broad banding of different varieties of paper and paper board, excise concessions for use of non-conventional raw materials, etc., were taken up during the Eighth Plan period.

5.253 The paper industry is one of the few sectors where the outcome of the global linkages has surfaced in the post-liberalisation era. With the scaling down of import duties to 20 per cent and the volatile international prices, the paper industry has been exposed to severe competition. The issues of scale of operations, cost competitiveness, quality upgradation have, therefore, assumed greater significance for the future of the paper industry.

5.254 The paper industry is dependent upon raw materials from forest sources. Wood is the main raw material used by the industry. Paper and pulp industry world-over has recognised strategic importance of wood as a fibrous raw material and countries with captive plantations of fast growing species would have a competitive edge over others because of cost-effective and high quality raw materials secured through these plantations. Assured raw materials facility and standardisation of manufacturing process would result in higher recoveries and better quality product.

5.255 One of the serious constraints which have been faced in augmenting the supply of forest-based raw materials is the restrictions imposed on captive industrial plantations under the national forest policy which rules out the provision of even degraded forest lands to the paper industry for industrial plantations. An appropriate policy on industrial plantations needs to be worked out to enable the industry not only to meet its raw material requirements but also help in increasing the green cover of the country through captive plantations on degraded and waste lands.

5.256 The problems facing the large paper mills are technological obsolescence and outdated processes and machinery. The small paper mills are beset with problems of obsolete equipment and inefficient chemical recovery systems which lead to high cost of production and pollution problems. More than 70-80 per cent of the paper used in India is of low quality unlike international markets where paper quality is much superior.

5.257 Presently, major imports of paper products include ivory card, art board, single coated paper, etc. The competitiveness of the paper industry in terms of cost and quality would depend upon modernisation, technological upgradation and economies of scale in production. The production of value-added products will also improve the viability of paper mills.

5.258 The paper industry is classified on the basis of installed capacity, raw materials consumed and the products manufactured. The proportion of non-wood raw material based paper has increased over the years. At present, about 61 per cent of the total production of paper is based on non-wood raw materials and the balance 39 per cent is based on wood. Most of the small and medium sized paper mills are based on non-conventional materials, namely, waste paper and agro residues. Bagasse, a byproduct of sugar industry, has found successful application in the manufacture of paper. The Government is offering incentives to the units using such non-conventional materials. In view of the constraints in the availability of forest-based raw materials, the future capacities would have to be based on alternate sources, related to recycleable, renewable and non-conventional raw materials.

5.259 The mechanism of waste paper collection from indigenous sources needs improvement in respect of grading/sorting. A stress on improving R and D efforts would be required to improve input/output norms, improve quality and reduce energy costs. Timely support is also needed by the paper industry by way of rationalisation of duty structure for imported paper vis-a-vis indigenous cost of production on account of volatile international prices and dumping.

5.260 The Hindustan Paper Corporation Ltd. (HPC) has five units, namely, Nagaon and Cachar Paper Mills in Assam and three subsidiaries, namely, Hindustan Newsprint Ltd. (HNL), in Kerala, Mandya National Paper Mills Ltd. (MNPM) in Karnataka and Nagaland Paper and Pulp Co. (NPPC).

5.261 Except HNL, the performance of other units has been below expectations. In the case of NPPC, the production has been suspended from October 1992 due to erratic power supply from the grid coupled with disturbed working conditions. The revival of NPPC is under consideration. At MNPM, the production has been suspended since April, 1993, due to shortage of working capital and uneconomical operations. For MNPM, the only alternative appears to be privatisation.

5.262 The Eighth Plan provision for HPC was Rs.360 crore, including budgetary support of Rs.9.0 crore. The capacity utilisation was low and the company suffered cash losses on account of its sick units, namely, MNPM and NPPC. However, the capacity utilisation improved in the later part of the Eighth Plan period. The operating profits of the company also improved. The company has drawn up a plan for installation of certain balancing equipment to maximise capacity utilisation.

5.263 Paper is an essential consumer item and is of vital importance for educational, scientific, industrial and commercial sectors of the economy. With greater emphasis on increasing literacy level, the demand for paper would continue to grow. With the growth-oriented economy, the overall demand for paper and paper board is expected to be around 42 lakh tonnes by the end of the Ninth Plan.

Newsprint

5.264 There are at present 35 mills with an annual installed capacity of 7.63 lakh tonnes of newsprint. The production of newsprint in 1996-97 was 3.00 lakh tonnes. The capacity utilisation has been low, primarily because of competition from cheap imports. The timely rationalisation of duty structure is important to this sector as in the case of paper and paper board to maintain cost competitiveness and to avoid any dumping.

5.265 Besides the obsolete plant and machinery, the main problem being faced by the industry is inadequate availability and high prices of raw materials. The industry needs to be allowed captive plantations, at least on degraded forest and waste lands, to have an assured source of raw materials. Usage of alternative sources of raw materials also needs to be encouraged to improve the level of production. Among the alternative sources of raw material, bagasse has been found to be a promising alternative. A leading Indian paper unit M/s Tamil Nadu Newsprint Ltd. has successfully employed bagasse-based technology for manufacture of newsprint. Another alternative source is waste paper, known as recycled fibre. Deinking technology has also a crucial role to play in future newsprint production. There exists a good scope for setting up newsprint capacity based on this technology. The demand for newsprint by the end of the Ninth Plan is estimated to be around 7.5 lakh tonnes.

5.266 The performance of NEPA was adversely affected on profitability and production fronts due to power shortages, accumulation of stocks, inadequate availability of inputs due to financial constraints, depressed market scenario, etc. NEPA was referred to Disinvestment Commission which has recommended the company for strategic sale.

5.267 Hindustan Newsprint Ltd. (HNL) in Kerala is a subsidiary of Hindustan Paper Corporation (HPC) with a capacity of 1 lakh tonne per annum. The performance of HNL has been quite satisfactory. The company has been consistently earning cash/operting profit during the Eighth Plan period.

Atomic Energy

5.268 The activities of the Department of Atomic Energy under Industry and Minerals sector pertain to the requirement of heavy water, nuclear fuel, instruments and controls, spent fuel recovery and waste disposal for nuclear power reactors.

5.269 The Uranium Corporation of India Ltd. (UCIL) completed its project of uranium Mining and Mill at Narwapahar, Bihar. The Nuclear Fuel Complex (NFC) took up five new projects for implementation in the Eighth Plan for meeting fuel requirement of the new nuclear power reactors.

5.270 Three of the NFC's projects namely, New Zircaloy Fabrication Plant, New Uranium Oxide Plant and New Fuel Assembly Plant are at advanced stages of completion. The two remaining projects namely Zirconium Sponge Plant and Titanium Sponge Plant are yet to start. However, due to the scaling down of the nuclear power target, the delay has not caused any problem in meeting the fuel demand of the existing reactors.

5.271 The Department of Atomic Energy has taken up the development of fast breeder reactors which enable utilising Thorium as fuel for power reactors. Simultaneously, it is proposed to set up high flux research reactors to develop new fuel designs in order to economise on the use of nuclear fuels. For augmenting uranium capacity, UCIL will develop a new uranium mine at Domiasat in Meghalaya in the Ninth Plan.

5.272 No new heavy water plant will be set up in the Ninth Plan. A new spent fuel re-processing plant, in addition to revamping of the old plant at Trombay, will be taken up in the Ninth Plan.

5.273 The Indian Rare Earths (IRE) will take up joint ventures for beach sand processing in Andhra Pradesh and Tamil Nadu in the Ninth Plan.

VILLAGE and SMALL INDUSTRIES

5.274 The Village and Small Industries (VSI) sector comprises modern and traditional segments of industry. The modern segment includes small-scale industries (SSI) and powerlooms, which use modern technology in the manufacturing process. The traditional segment consists of handlooms, sericulture, khadi and village industries (KVI), coir industries, handicrafts and wool development (unorganised sector). Because of immense potential of creating new jobs at low cost, the VSI sector has been accorded high priority.

5.275 The physical performance of the VSI sector - production, employment and exports- is given in Statement-5.6.

Small-Scale Industries (SSI)

5.276 The major problems faced by the SSI sector are (i) inadequate flow of credit, (ii) use of obsolete technology, machinery and equipment, (iii) poor quality standards, and (iv) inadequate infrastructural facilities. The Government has taken a number of steps to mitigate the impact of these problems. For increasing the flow of credit, the Government has started setting up specialised branches of banks exclusively meant for providing credit to SSIs, simplification of procedures, sensitising bank managers and reorienting them towards the working and the needs of the SSI sector, conducting sample surveys, etc. The SIDBI has already set up a Technology Development and Modernisation Fund with a corpus of Rs.200 crore. The Government has also set up Technology Trust Funds with contributions from State Governments and industry associations for transfer and acquisition of the latest technologies.

5.277 Under the scheme of Integrated Infrastructure Development Centres (IIDCs), infrastructure facilities are being developed in backward, rural areas. Fifty such IIDCs were to be set up during the Eighth Plan period, out of which 22 have been approved. This scheme would be continued during the Ninth Plan period with enhanced incentives and financial assistance for hilly areas and N.E. States. Technology upgradation, transfer and acquisition of appropriate technology would be encouraged through enhanced flow of credit from financial institutions (FIs) and encouragement would also be given for adoption of higher quality parameters and quality consciousness amongst the SSI units.

5.278 The sector also has the problem of non-conforming to quality standards which are vital for standardisation and continuous order flow for components, sub-assemblies and spares from large and medium sectors. To help the SSI sector, the Government has taken a number of policy initiatives like allowing 24 per cent equity participation to large and medium-scale units in SSI units, simplification of registration procedures, simplification of environmental laws applicable to SSI units, allowing filing of Memorandum of Information for all categories of industries, except 17 categories of polluting industries, simplification of labour laws in respect of small-scale units, etc.

5.279 Financial assistance upto Rs.75,000 per SSI unit is being provided to acquire ISO 9000 or an equivalent quality certification.

5.280 To provide technological support and training to small scale units, Tool Rooms with German, Danish and Italian assistance and expertise are being set up at Indore, Ahmedabad, Bhubaneshwar, Jamshedpur and Aurangabad. Construction work for these Tool Rooms has been completed. Machine tools have been installed at Indore.

5.281 A Process-cum-Product Development Centre (PPDC) for essential oils has been set up at Kannauj (U.P.), with UNDP assistance and contributions from the Central and U.P. Governments, to provide necessary inputs for modernisation and upgradation of technology of essential oils and perfumery industry. Steps have been initiated to overcome the problems being faced by the small scale units engaged in exporting leather products by providing critical inputs used in the leather industry. Modernisation of the existing Central Footwear Training Centres (CFTCs) at Madras and Agra has been completed. The CFTCs at Calcutta and Mumbai provide technical manpower to the leather industry.

5.282 The credit provided to the SSI sector by the financial institutions is considered credit to `priority sector'. By March, 1997, the total credit provided by public sector banks stood at Rs.31,542 crore. The cumulative disbursement by the State Financial Corporations amounted to Rs.12,704 crore upto March, 1996.

5.283 The Small Industries Development Bank of India (SIDBI) is providing credit to the small-scale sector directly and through refinance to the nationalised banks and Bill Rediscounting Scheme. Under the direct assistance scheme, SIDBI provides credit for (i) equipment purchase, (ii) industrial infrastructure development, (iii) marketing, (iv) ancillary development, (v) resources support to factoring companies, (vi) assistance to leasing companies, (vii) direct project loans and (viii) direct discounting of bills (equipment and components).

National Small Industries Corporation (NSIC)

5.284 The NSIC was set up in 1955 to assist small-scale entrepreneurs and artisans. The Corporation is serving this sector through hire-purchase and leasing of machinery and equipment, procurement and supply of indigenous and imported raw materials, technology transfer, Government stores purchase programme, prototype development, training, upgradation of managerial skills, etc. It helps SSI units in technology upgradation by setting up common facilities and provides training at Prototype Development and Training Centres (PDTCs) and their sub-centres. It also provides marketing assistance, etc.

5.285 The Corporation is periodically publishing a Directory of Units enlisted under the programme. Under the Single Window Scheme of NSIC the small-scale units registered with the Corporation are getting advantage of preferential purchase policy over large and medium units. The NSIC also helps SSI units by discounting of bills drawn on public sector units. Besides, the Corporation provides assistance to small industries for export of products.

5.286 The NSIC provides technological inputs and training to SSI units through five Prototype Development and Training Centres (PDTCs) set up at New Delhi, Rajkot, Howrah, Chennai and Hyderabad. These Centres provide common facilities in areas like testing, machining, casting, electroplating, etc. Sub-centres of PDTCs have been set up for different trades at Aligarh (U.P.), Dindigul (Tamil Nadu), Khammam (Andhra Pradesh) and Rajpura (Punjab). A Demonstration- cum- Training Centre at Guwahati is conducting technical training as well as enterprise building programme for the North Eastern States.

5.287 The Corporation has developed improved tool kits for rural artisans, which are being distributed under the Rural Development Programme. The Corporation offers concessional terms in respect of earnest money, rate of interest and administrative charges for units in backward areas. Units, especially those promoted by SC/ST entrepreneurs, technocrats, physically handicapped persons, ex-defence personnel and women entrepreneurs are also offered these concessions. The NSIC has introduced liberal terms for units taking up modernisation / expansion, technological upgradation and for tools and dies. The Corporation has taken up equipment leasing activity which would help the SSI units in modernisation, expansion and diversification. The scheme provides 100 per cent finance, single window service for indigenous as well as imported machines and tax rebate on full year rental.

5.288 For the Ninth Plan, the Corporation has envisaged an increase in its turnover from the estimated Rs.664.03 crore in 1996-97 to Rs.1,560 crore in the terminal year of the Ninth Plan. It would continue all the programmes and schemes in the Ninth Plan with focus on tiny and rural industries. With the proposed increase in the investment ceiling for plant and machinery for SSI units upto Rs.300 lakh, more units would be falling under the SSI sector. The NSIC would have to focus on advanced technology, higher quality parameters and modernisation of SSI units.

Khadi and Village Industries

5.289 The Khadi and Village Industries (KVI) sector is not only providing employment to people in rural and semi-urban areas at low investment per job, but also utilises local skill and resources and provides part-time as well as fulltime work to rural artisans, women and minorities.

5.290 The production of khadi cloth increased from 105 million square metres (m.sqm) in 1995-96 to 125 m.sqm in 1996-97. The target of khadi cloth production has been kept at 230 m.sqm in the terminal year of the Ninth Plan.

5.291 The production of village industries increased from Rs.3,504 crore in 1995-96 to Rs.4,120 crore in 1996-97. The target of production for village industries for the terminal year of the Ninth Plan has been kept at Rs.7,260 crore. The employment in KVI sector increased from 57 lakh persons in 1995-96 to 58 lakh persons in 1996-97. During the Ninth Plan, about 23 lakh more persons are proposed to be provided employment.

5.292 There is a need to bring profit making culture in the manufacture of khadi cloth. There is also an urgent need for reducing its dependence upon rebate and interest subsidy. The Khadi and Village Industries Commission (KVIC) and State Khadi and Village Industries Boards (SKVIBs) would have to become more professional to promote large-scale employment in the village industries sub-sector. During the Ninth Plan, the KVIC has envisaged more emphasis being placed on the creation of additional employment in village industries which has the potential of generating additional employment at low investment, utilisation of local raw materials and skills and to fulfil the demands of local population. The spread of village industries would also ensure increase in income levels and quality of life of rural workers, artisans and craftsmen. Therefore, the thrust area will be promotion of village industries under KVIC during the Ninth Plan.

Coir Industry

5.293 The coir industry is one of the traditional cottage industries in India and is primarily located in the Southern States, namely, Kerala, Tamil Nadu, Karnataka and Andhra Pradesh. The coir industry utilises agro wastes of coconut plantations and is labour-intensive. The development of coir industry has all along been in areas where there is concentration of coconut cultivation and availability of coconut husks.

5.294 The coir industry employs more than five lakh persons and is manufacturing finished products such as mats, mattings, carpets, rags etc. In 1996-97, production of coir fibre was 2,76,000 tonnes and the export of coir products is estimated at Rs.212.58 crore. In the terminal year of the Ninth Plan the export of coir products is targetted at Rs. 400 crore.

5.295 The Coir Board was set up as an autonomous statutory body under the provisions of Coir Industry Act, 1953. The Board is vested with the responsibilities of promoting growth and development of the coir industry, promotion of exports and increasing consumption of coir and coir products within the country. The Coir Board implements a number of developmental programmes for the coir sector which include schemes for domestic market development, provision of assistance for participation in exhibitions abroad, production of publicity material on coir products, giving coir industry awards, strengthening of national level training institutes etc. Further, the Board is implementing welfare schemes for the coir workers under the Model Coir Village Programme. A major scheme which is being implemented in the coir sector is the scheme of cooperativisation under which not only financial assistance is given for modernisation but margin money is also provided to various cooperatives. The scheme of cooperativisation is intended to assist the formation of viable cooperatives and also to revitalise the potentially viable but dormant societies. The National Coir Training and Design Centre, Kalavoor and the Central Institute of Coir Technology, Bangalore are engaged in scientific research and technology development in white fibre and brown fibre sectors, respectively. The activities of the two research institutions include steps to improve the process of fibre extraction, development of spinning ratts, improvement of softening/ bleaching/ dyeing/shade manufacturing, etc.

5.296 The Government has initiated a scheme of Mahila Coir Yojana under which financial assistance is made available to women artisans to the extent of 75 per cent of the cost of motorised ratts subject to a maximum of Rs.7,500. The other major programmes are cooperativisation, welfare measures for coir workers and rebate on sale of coir yarn.

5.297 The main problems being faced by the coir industry are low wage earnings due to use of obsolete machinery and equipment, drudgery, non-availability of medical, educational and other facilities of social welfare. The coir industry is also facing stiff competition in the export market from countries like Sri Lanka and there is an urgent need to modernise the industry. Schemes/programmes for modernisation, diversification, development of new products with rubber/ plastic base, alternative uses of coir pith such as for fertilizer and increasing value addition by using new dyes and colour combinations, modernisation of looms, etc, would be implemented by the Coir Board during the Ninth Plan period. New employment-oriented schemes like Mahila Coir Yojana would be implemented with additional impetus. Emphasis would be laid upon conversion of part-time jobs to full- time jobs and improving the wage earnings of artisans and quality of their life. Welfare schemes would be implemented to help the artisans in areas like health care, thrift loans, group insurance, etc. Financial/fiscal incentives will be provided to exporters/manufacturers/artisans to increase exports. Emphasis would be laid upon new designs, intensive publicity in export markets, market feedback, etc.

Handlooms

5.298 The handloom sector is providing employment to about 124 lakh persons which is next to agriculture in term of employment intensity. This sector is facing problems like (i) obsolete technology and traditional production techniques, (ii) dependence on rebate, (iii) high price of hank yarn, (iv) inadequate availability of inputs like standard dyes and chemicals in small packs, new designs, training for upgradation of skills, etc, and (v) inadequate market intelligence and feedback. The handloom sector has inherent disadvantages like (i) unorganised structure and its dispersal throughout the country, (ii) weak financial base of the weavers, (iii) bureaucratisation/ politicisation of cooperatives, etc. Inspite of these handicaps, it has the potential to be transformed into a self-reliant and export- oriented sector.

5.299 The production of handloom cloth in 1996-97 was 7,235 million square metres (msqm). For the terminal year of the Ninth Plan, production of 8,800 m.sqm. has been envisaged.

5.300 The handloom sector provided employment to 124 lakh persons during 1996-97. By the end of the Ninth Plan, the employment in handlooms is expected to reach about 173 lakh persons.

5.301 The exports of cotton handloom textiles amounted to Rs.1,621.81 crore in 1996-97. For the terminal year of the Ninth Plan a target of Rs.3,170 crore has been kept.

5.302 The developmental schemes/programmes are focussing mostly upon weavers under the cooperative fold. To increase the number of weavers under the cooperative fold and to encourage production of market-oriented items, a scheme of setting up 3,000 Handloom Development Centres (HDCs) and 500 Quality Dyeing Units (QDUs) with an investment of Rs.831 crore was taken up in 1993-94. The Government had approved setting up of 1,588 HDCs and 313 QDUs upto 31.3.1997 and released a sum of Rs.80.91 crore to various State Governments and UT Administrations under this scheme. Based upon the feedback about the problems faced in its implementation and suggestions from the State Governments, suitable corrective measures have been incorporated in the scheme. Setting up of remaining HDCs/ QDUs is proposed to be completed during the Ninth Plan.

5.303 A High Power Committee (HPC) was set up to look into the problems and to suggest measures for the growth of handlooms during the Ninth Plan period. The HPC submitted its report in December, 1996. Most of the recommendations of this committee have been accepted by the Government and the schemes/programmes in the Ninth Plan are being formulated on the basis of these recommendations.

5.304 The handloom sector uses bulk of its yarn requirements in the form of hanks along with some quantity of reeled yarn. To ensure a regular supply of hank yarn to handloom weavers at reasonable prices a scheme for supplying hank yarn at mill gate prices through National Handloom Development Corporation (NHDC) is being implemented. Under the hank yarn obligation scheme it is mandatory for yarn producers to supply upto 50 per cent of their yarn production upto 40 counts in the form of hank yarn. This ensures hank yarn supply to the handloom weavers. The National Cooperative Development Corporation (NCDC) is providing financial/loan assistance for setting up new/expansion/ modernisation of weavers' cooperative spinning mills.

5.305 The scheme for supply of hank yarn at mill gate prices through National Handloom Development Corporation (NHDC) was under implementation during 1996-97, and the NHDC utilised a subsidy of Rs.1.17 crore in 1996-97 for supply of 46.91 lakh kgs yarn.

5.306 The Janata Cloth Scheme was introduced in 1976 to provide sustained minimum wages to handloom weavers and also to provide cheap cloth to the weaker sections of the society. The scheme is being gradually phased out and the weavers engaged in the manufacture of Janata Cloth are provided training and encouraged to manufacture high-value-added items to provide them gainful employment.

5.307 The Association of Corporations and Apex Societies of Handloom (ACASH) was registered in 1984 under the Societies Registration Act. The ACASH is coordinating and promoting marketing in the handloom sector. It is the nodal agency for supply of handloom goods to the Central Government Departments / Agencies. During 1996-97, orders worth Rs.19.84 crore were executed by ACASH.

5.308 In order to provide welfare measures and better working conditions to handloom weavers, a package of group insurance scheme, health scheme, thrift fund scheme and workshed-cum- housing scheme is being implemented in the handloom sector. These schemes would be continued during the Ninth Plan and suitably modified keeping in view the recommendations of the HPC. The guidelines of workshed-cum-housing scheme and insurance scheme for weavers have been modified and the rates of Central assistance have been stepped up.

5.309 The Handlooms (Reservation of Articles for Production) Act 1985 stipulates the articles reserved for production in the handloom sector, which helps the handloom weavers face the stiff competition from the powerloom sector. This scheme is also proposed to be continued in the Ninth Plan.

5.310 A census of handlooms was carried out in 1988. Many changes have taken place since then and keeping these in view a nationwide census of handlooms has been carried out in 1996. The data collected are being scrutinised by the National Council of Applied Economic Research (NCAER) and the Ministry of Textiles. The final figures of the census are expected to be released shortly.

5.311 During the Ninth Plan period a greater stress would be laid on production of marketable items, reduction in dependence upon rebate, enhanced inputs like dyes and chemicals in small packages, skill upgradation, designs and product, etc., and welfare package to improve the quality of life, and development of the weavers. The Workshed-cum-Housing scheme, with higher targets, would be implemented during the Ninth Plan to provide better work places and safe environment, resulting in increasing productivity and earnings of weavers.

5.312 The Project Package Scheme, being implemented since 1992- 93, is one of the major schemes to provide the requisite support to weavers in an integrated and coordinated manner. Altogether, 717 projects were sanctioned and Central grant to the tune of Rs.60.60 crore was released to assist 1.67 lakh weavers during the Eighth Plan. Similarly, as against a target of 120 villages, 101 villages were covered under the Integrated Handloom Development Scheme (IHVD) to benefit 20,534 households during the Eighth Plan. For this, a sum of Rs.2.40 crore was released as Central grant. Under the scheme of Margin Money for Destitute weavers, 1.14 lakh destitute weavers were covered during the Eighth Plan. All the three Schemes, namely, the Project Package Scheme, IHVD and Margin Money for Destitute Weavers Scheme have been marged into Modified Project Package Scheme and has come into force w.e.f April, 1997.

Powerlooms

5.313 The powerloom sector has emerged as the largest cloth manufacturing sector in the textile industry. Powerlooms have not only succeeded in providing employment to a large number of people/weavers but also achieved higher exports of readymade garments. With the coming into effect of the World Trade Organisation (WTO) regime and gradual phasing out of Multi Fibre Arrangement (MFA), it has become imperative to develop new designs, to adopt more efficient and modern production techniques and machinery for weaving and processing to increase value addition and cater to the needs of the upper segment of export market.

5.314 The setting up of the Powerloom Development Institute, CAD/CAM facilities, more number of Powerloom Weavers' Service Centres (PWSCs) and Modernisation and Technology Development Fund are some of the measures which would be implemented in the Ninth Plan. Adequate credit flow from financial institutions would have to be ensured for the modernisation of the powerloom sector. Stricter implementation of labour laws and other statutory provisions is also being emphasised upon with the State Governments.

5.315 The Government of India appointed National Council of Applied Economic Research (NCAER) to conduct a joint census of handlooms and powerlooms at the national level and the results of this census are expected to be published shortly. There are 13 Powerloom Service Centres (PSCs) functioning under the Office of the Textile Commissioner and 29 Powerloom Service Centres under the Textile Research Associations. During the Eighth Plan period, 20 new PSCs were to be set up, out of which 10 were sanctioned up to March, 1997.

5.316 In order to give a thrust to the development of the powerloom sector and to promote exports of powerloom fabrics, the Government has set up a separate export promotion council called the Powerloom Development and Export Promotion Council (PDEXCIL).

5.317 The Government of India introduced a Group Insurance Scheme for powerloom workers in association with the Life Insurance Corporation of India during 1992-93. All powerloom workers between the ages of 18 and 60 years, who had worked during the year are eligible for insurance under this scheme. Recently, this scheme has been reviewed to make it more effective. The scheme envisages annual premium to be shared equally by the Central Government, State Government and the powerloom worker For an insurance coverage of Rs 10,000, an annual premium of Rs.120 is charged. The funds contributed by the Government are channelised through the State Governments on reimbursement basis.

5.318 The Government had allocated five per cent of the export quota of fabrics and made-ups to the quota countries covered by the Multi Fibre Arrangement for the powerloom manufacturers in 1992. There are seven computer-aided design centres functioning under various Textile Research Associations. During 1994-95, three computer-aided design centres were sanctioned by the Government. The aim of such centres is to upgrade the quality and designs of the cloth produced by the decentralised powerloom sector so as to enable the powerloom sector compete in the international markets.

Handicrafts

5.319 In the context of generating employment in rural non-farm sector, a major thrust during the Eighth Plan was to provide marketing opportunities to craftpersons. This necessitated more efforts in organising exhibitions and melas in all the States. Besides, efforts were made to provide permanent market structures at strategic places. As a measure of export promotion, greater attention has been and is being paid to those crafts which are relatively less known and have export potential. In order to achieve this, a number of schemes pertaining to training, design development, market promotion, exhibitions and publicity, export promotion are being undertaken.

5.320 The training centres for craftsmen were mostly being operated departmentally but during the last three years, this scheme was given a new dimension by expanding it to non- governmental organisations and cooperative societies. Several studies have shown that 70 to 80 per cent of the trainees get gainful employment after completing the training. This scheme would be continued in the Ninth Plan.

5.321 Four Regional Design and Technical Development Centres undertake the development of new designs and upgradation of tools and equipment. An Institute of Carpet Technology is being set up at Bhadohi (UP). There are two Common Facility Service Centres at Farrukhabad and Ahmedabad in regard to Hand-Block Prining. The Metal Handicrafts Service Centre at Moradabad has been catering to hi-tech requirements of exporters. Two UNDP projects are also underway to develop jute and wood-based handicrafts.

5.322 The major thrust in recent years has been on promoting grassroot organisations with the intention of organising production on the lines of market demand. In addition, financial assistance is provided to cooperatives and voluntary organisations for opening and expanding emporia to market handicrafts. The Craft Development Centres established in identified pockets, provide extension services in respect of design guidance, supply of raw materials, common facility services and marketing network.

5.323 A complete census of the handicrafts sector by the National Council of Applied Economic Research is underway in all the States. With UNDP assistance, the Government of India has approved a project "Export Promotion of Wood-Based Handicrafts" with the objective of increasing the exports of wood-based handicrafts on a sustainable basis.

5.324 For the promotion of jute-based handicrafts, the UNDP has approved two schemes viz. Design and Market Development and Beneficiary Oriented Programme for implementation during the Eighth Plan period.

5.325 A number of schemes have been identified under the Tribal Sub-Plan and the Special Component Plan for SCs and STs. Special employment schemes for women have been initiated to provide employment, exclusively to women.

5.326 In the handicrafts sub-sector, there is a vast potential to achieve higher exports. The exporters/artisans need to be provided with feedback regarding export markets, utility aspects, quality standards and new trends. The proposed schemes in this sector would be suitably modified and would be made market- oriented to help the artisans/ cooperatives/NGOs and Self-Help Groups (SHGs) to produce handicraft items with a blend of traditional and ethnic designs and utility concept. Stress would be on development through a cluster approach.

5.327 There is an urgent need to help the artisans by providing quality raw materials, new designs, improved techniques for manufacture of articles, marketing support as well as welfare and socio-economic benefits, to improve their wage earnings and quality of life.

5.328 During the Ninth Plan, emphasis is being laid on marketing, skill upgradation, modernisation, welfare and preservation of craft heritage. A number of new schemes viz. training of trainers, common facility centres, computerised design development, market workshops, design and development through reputed institutes, craft colleges like NIFT, NID, etc., pension to artisans and development of improved tools and kits, dissemination are proposed to be implemented during the Ninth Plan.

Sericulture

5.329 India is the second largest producer of silk in the world after China. It has the unique distinction of producing all the four varieties of silk: mulberry, eri, tasar and muga. Mulberry accounts for 92.5 per cent, eri 5.3 per cent, tasar 1.7 per cent and muga 0.5 per cent of the total raw silk production in the country.

5.330 Sericulture is an important labour-intensive and agro-based cottage industry providing employment to about 60 lakh persons. Mulberry sericulture is being practised in traditional States like Jammu and Kashmir, Karnataka, Andhra Pradesh, Orissa, Tamil Nadu and West Bengal. Tasar sericulture provides livelihood for the tribal population of Andhra Pradesh, Bihar, Madhya Pradesh, Maharashtra and Orissa. Eri and muga sericulture is practised in all the seven North-Eastern States.

5.331 The production of raw silk is estimated at 14,000 tonnes (t) in 1996-97. The target for the terminal year of the Ninth Plan has been fixed at 20,540 t. The employment in sericulture sector was estimated at 60 lakh in 1996-97 and the target for the terminal year of the Ninth Plan is 74 lakh persons.

5.332 The exports of silk were worth Rs.880.44 crore in 1996-97. The target for terminal year of the Ninth Plan is Rs.1520 crore.

5.333 The Central Silk Board (CSB), a statutory organisation responsible for implementing the developmental schemes in sericulture, supplements the efforts of the States by providing necessary support for research and development and extension and training through its countrywide network of institutions, units and extension centres. The CSB has set up six full-fledged research and training institutes at Mysore (Karnataka), Berhampore (West Bengal) and Pampore (J and K) dealing with mulberry, Ranchi (Bihar) for tasar and Jorhat (Assam) for muga and Mendipathar (Meghalaya) for eri silk. For carrying out R and D in post-cocoon technology, a research institute has been set up at Bangalore.

5.334 The National Silkworm Seed Project (NSSP) is implemented by the CSB and provides basic mulberry silkworm seeds to the rearers. Under this programme, 27 basic seed farms have been established to produce the basic stock and meet the seed requirements of other multiplication farms/State Department Farms. As many as 35 Silkworm Seed Production Centres (SSPCs) have been set up in different States to produce Disease Free Layings (DFLs) for sale to the silkworm rearers. These centres have provided 2.53 crore DFLs during 1996-97.

5.335 The CSB is installing cold storage plants to meet the demand for bivoltine layings in all the seasons. The CSB has established 318 Chawkie Rearing Centres under the Research Extension Centres and SSPCs to arrange supply of healthy young silkworms to the sericulturists. The CSB has also established Basic Seed Multiplication Centres for supply of DFLs of Tasar, muga and eri. With the assistance of Japan International Cooperation Agency (JICA), a Bivoltine Sericulture Technology Development Project is being implemented for evolving suitable mulberry bivoltine silkworm races. JICA has made available the services of experts and trained 20 Indian scientists under the counterpart training programme.

5.336 The Central Silk Research Technological Institute, Bangalore, has developed an indigenous multi-end silk reeling machine with higher productivity for producing quality silk from bivoltine and multi x bivoltine hybrid cocoons. Efforts are being made to make this machine popular among private reelers by providing subsidy.

5.337 A scheme for establishing decentralised peripatetic sericulture centres for farmers has been formulated by the CSB and farmers/rearers are being provided training in improved sericulture practices. With financial participation of the CSB and the Department of Rural Development (Ministry of Rural Areas and Employment), 13 Sericulture Training Schools for farmers have been set up in various States. These provide advice, technical guidance and knowledge about sericulture to the farmers of non- traditional sericulture States.

5.338 Under the National Sericulture Project (NSP), the main thrust was towards strengthening infrastructural facilities in the five traditional States and twelve pilot States to provide long term support for development of sericulture. This project ended on 31st December, 1996. The infrastructural facilities created under NSP are being supplemented in the Ninth Plan to boost production of raw silk, particularly bivoltine variety, with higher productivity.

5.339 The Indian Silk Export Promotion Council provides services for promotion of exports of natural silk goods. It also acts as the registering authority for silk exporters. It produces and disseminates information to its members with respect to market developments in the world, modifications in trade policies and future market trends. The Council is providing sample catalogues containing sample swatches of the full range of silk products available in India. This information helps the potential buyers, textile import agents and Indian missions abroad. The CSB is implementing test sampling scheme for exports of silk items to ensure adherence to the contracted quality parameters of export orders.

5.340 During the Ninth Plan period, the sericulture sub-sector would be made more vibrant by focussing upon (i) bringing in new more productive and stable silkworm races, (ii) improved silkworm rearing practices, (iii) improvments in reeling by promoting installation of modern technology based machines, (iv) encouragement to plantations for tasar, eri and muga silk, (v) utilisation of infrastructure and organisations created under NSP, (vi) increasing the area under mulberry plantation, (vii) enhancing value addition by improving designs, colour combinations, finishing methods, etc., (viii) increase in exports by diversifying into dress materials and made-ups and (ix) encouragement to bivoltine silk.

Wool Development

5.341 The Central Wool Development Board (CWDB) set up in 1987, with headquarters at Jodhpur in Rajasthan, is looking after the unorganised wool sector. The Board has been implementing schemes like Integrated Sheep and Wool Development Project, Weaving and Designing Training Centre, Carpet Weaving Training Centre, Training Scheme for Woollen Products, Industrial Service Centres, Wool Testing Centres, Wool Scouring Plants, setting up of Machine Shearing-cum- Training Projects, etc.

5.342 The woollen industry in India is small in size and widely scattered. It is an industry where the organised sector, the decentralised sector and the rural sector run complementary to each other towards meeting the requirements of different sections of the domestic market as well as exports. The industry has the potential to generate employment in far flung areas, including hilly regions in the North and desert tracks of the West. It has a wide spectrum of units from the modern sophisticated fully composite mills in the organised sector to handloom and hand- knotted carpet manufacturing units at the village level.

5.343 The woollen industry in India is primarily located in the States of Punjab, Haryana, Rajasthan, Uttar Pradesh, Maharashtra and Gujarat. Forty per cent of the wool units are located in Punjab, 27 per cent in Haryana and 10 per cent in Rajasthan, while the rest of the States account for the remaining 23 per cent of the units. There are about 658 woollen units in the organised sector. Besides, there are a large number of small- scale hosiery units, knotted carpet making units, powerlooms and handlooms in the decentralised handloom and khadi sector. The total number of persons employed in the woollen industry is estimated at around 12 lakh.

5.344 The organised sector consists of composite mills, combing units, worsted and non-worsted spinning units and the machine- made carpet manufacturing units. The decentralised sector includes hosiery and knitting units, powerlooms, handmade knotted carpet units, handlooms and independent dyeing houses. One of the major problems is non-availability of the raw materials required by the industry. The country does not produce enough fine wool and against the total requirement of approximately 30 million kgs. of apparel grade wool, indigenous production is around 4 to 5 million kgs. The balance requirement is met through imports, mainly from Australia.

5.345 The wool produced in India is of medium and coarse varieties which is ideally suited for making carpets, blankets etc. Presently, the total production is estimated at 43.2 million kgs., of which 70 per cent is good carpet grade wool.

5.346 Apart from importing fine wool for worsted mills, medium range wool in large quantity is being imported from New Zealand and many other countries to meet the domestic demand.

5.347 During the Eighth Plan, the programmes/schemes implemented by the CWDB included setting up three more Industrial Service Centres at Pithoragarh and Pashulok in Uttar Pradesh and at Guru Nanakdev University, Amritsar, sanctioning one Wool Testing Centre to Himachal Pradesh State Wool Federation by providing an assistance of Rs.7.1 lakh, assisting 23 weavers at the Weaving and Designing Centre at Jaisalmer and setting up 15 new Carpet Weaving Training Centres.

5.348 The CWDB had also taken up an Integrated Angora Rabbit Development Project in 1994-95. Under this project, many units have been sanctioned which are being implemented in Himachal Pradesh and Uttar Pradesh. The CWDB also publishes a quarterly news magazine "Wool Ways" to disseminate information on important aspects of wool and woollens and also sheep rearing. Further, the Board is preparing video cassettes on important aspects of sheep rearing, wool production and benefits accruing from the schemes of the Board with the help of Gujarat Sheep and Wool Development Corporation Ltd. (GUSHEEL). To expose Indian woollen products to new markets and to ensure a better price for the products made in remote areas, the Board has taken up a scheme called "Wool Expo". The first two Wool Expos were successfully organised by the Board in 1995-96 at New Delhi and Jodhpur.

5.349 In order to give a thrust to the woollen sector, the Government set up the Wool Research Association (WRA) as a cooperative research organisation in 1963. It is functioning under the administrative control of the Ministry of Textiles. The WRA is giving consultancy to CWDB to set up Woollen Industry Service Centres at Bikaner, Jaisalmer, Ahmedabad, Mumbai, Amritsar and Mehboobnagar in Andhra Pradesh. A Computer Aided Design Centre for carpet sector is being established in the cooperative sector at Jaipur with the help of CWDB and WRA. Despite the efforts put in by the Central Wool Development Board and other related organisations such as WRA, the wool sector continues to be in the periphery where the wool growers still live in abject poverty and hardship. One of the biggest problems impeding the growth of the sector is lack of adequate grazing grounds. Besides, there is also a lack of pre-loom and post-loom processing facilities. One of the weakest links in the wool sector is the lack of proper wool grading system, as a result of which, the small producers are being exploited by the middlemen who do not offer prices commensurate with the wool grade. There are also other problems like high import duty on machinery, differential rates of import duty as applied to apparel grade wool and synthetic rags, lack of in-house training facilities, etc.

5.350 During the Ninth Plan period, the Board has proposed to extend its schemes to more areas and improve wool productivity per sheep in coordination with State Governments and Department of Animal Husbandry and Ministry of Agriculture. Special attention would need to be paid to improving the quality and area of grazing pastures.

FOOD PROCESSING INDUSTRY

5.351 India has a tremendous potential for development of food processing industry considering the fact that it has emerged as the largest producer of milk, the second largest producer of fruits and vegetables, the largest producer of spices, groundnut and rape seed and the fourth largest producer of wheat. India also has one of the largest livestock population, apart from a long coastline of 7500 Kms which makes it the seventh largest producer of fish. Thus, India is amongst the top-ranking nations in terms of total production of various raw materials required for development of the food processing industry. Despite all these advantages, India is nowhere in the world map in terms of processing when compared with other countries like Brazil, Phillipines, Thailand and Malaysia which are processing 70 percent, 78 percent, 30 percent and 83 percent respectively, of their total horticultural produce. The corresponding figure for India is only about one percent. This low level of processing, incidentally, is not due to lack of installed capacity. There is surplus capacity available - of which only about 35 percent utilised because of various reasons ranging from narrow product base to technological obsolescence, high cost and unsuitable quality of raw materials etc. Besides, about 25 to 30 percent of the produce is lost by way of post-harvest losses due to poor handling, storage and transportation facilities.

5.352 The Government, being well aware of the prospects for development of food processing sector, has taken various initiatives for its promotion. These include setting up of a separate Ministry for Food Processing and promotional bodies such as Marine Products Export Development Authority (MPEDA), Agricultural and Processed Food Products Export Development Authority (APEDA) and National Horticulture Board (NHB). The other major initiatives taken by the Government have been enumerated earlier in the Chapter.

5.353 Some new measures have been taken in 1997-98 e.g. dereservation of certain items including ice-creams and biscuits, repeal of the Cold Storage Order of 1968, etc. The proposed raising of investment limit for the small-scale industry is also expected to promote investments in this sector, especially in terms of upgradation of technology.

5.354 The policies pursued by the Government in the past have paid rich dividends. Today, the food processing industry contributes about 18 per cent to the industrial Gross Domestic Product (GDP) and employs around 1.5 million persons. The food processing industry, however, is primarily functioning in the informal and unorganised sector. This sector has attracted a lot of foreign investment and till June, 1997, 4,098 Industrial Entrepreneur Memoranda (IEM) envisaging an investment of Rs.47,146 crore had been received.

5.355 It may, however, be mentioned that this growth is nowhere near the potential India has and the factors adversely affecting the growth of this industry include aspects such as primitive technology, inadequate infrastructure, poor quality of raw materials including non-availability in bulk, low productivity of various horticulture crops, poor quality of packaging, inadequate working capital, lack of grading facilities and standards.

Primary Food Processing

5.356 The primary food processing sector includes roller flour milling, rice processing, cereal-based products, maize processing, pulse processing and pasta products. The roller flour milling industry is 100 years old and today, there are about 800 mills with a capacity of 18 million tonnes in this category. The capacity utilisation, however, is not satisfactory, being only about 40 percent. The major problems being faced by this sector are obsolete equipment, high power consumption, high power rates, excessive levies by local and State Governments at various stages of procurement of wheat, selective credit control and low yields.

5.357 The production of paddy in the country is expected to reach 130 million tonnes by 2000 AD. The processing of paddy is carried out in a variety of mills. While some of the mills are modern, others are traditional shellers or huller-cum-shellers. The Government has taken a few steps, both legislative and promotional, for modernisation of the rice milling industry. Today, good quality machines are available within the country and, in fact, the Bureau of Indian Standards (BIS) has formulated standards on rubber roll dehuskers, cleaners, polishers etc. Separately, the Government has also been implementing the Huller Subsidy Scheme in various States to promote modernisation of the small huller units. At present, there are about 34,000 modern rice mills processing approximately 65 per cent of the paddy production.

5.358 The pace of modernisation of rice mills has not been as fast as expected. There is still considerable scope in the field of modernisation and the State Governments need to actively participate in order to check unauthorised growth of huller mills in the country. The rice milling industry suffers from several constraints such as obsolete machines, low yields, non-recovery of by-products, losses due to poor warehousing and packaging, inefficient use of energy, lack of skilled and trained manpower, lack of R and D etc. Since the rice milling industry is dereserved it will invite state-of- the-art technology into this area and will help improve the quality of rice available to food processing industry.

5.359 The bakery sector is the largest among the processed foods industry. Out of bakery products, bread and biscuits account for 82 per cent of the total production. There are about 75,000 bakery units in the small and cottage sectors whose production accounts for more than 60 per cent of the total output The current annual turnover of this sector is valued at more than Rs.15,000 crore By 2002 AD, the output of biscuits will reach 44 lakh tonnes while that of bread will be 20 lakh tonnes. The current figures are 10 lakh tonnes and 14 lakh tonnes respectively. The annual per capita consumption of bread in India is only 1.4 kgs which is well below the average of 25 kgs in most of the industrialised nations. Inspite of the vast potential of this sub-sector, the manufacture of bread and biscuits in India has missed out the benefits of the modern technology and also on economies of scale during the last many years. With the recent dereservation of biscuit industry, it is expected that the industry will be able to exploit economies of scale and also bring about the necessary modernisation. The bakery units need different grades of wheat with varying protein content and gluten strength which are not presently available in the country. The Indian Council of Agricultural Research (ICAR) will have to provide the necessary inputs to grow apporpriate varieties of wheat in India.

5.360 The increase in pulses production in India has been rather slow and has not been able to keep pace with the growth in population. The per capita availability of pulses today is in fact lower than what it was in 1950-51. More than 75 per cent of the pulses produced in the country are converted into dals in about 10,000 mills of varying capacity all over the country. Originating in the household sector, the pulse processing sector has developed now as an organised industry. There are a number of difficulties faced by the traditional pulse milling industries, e.g. low yields of pulse crops, labour-intensive techniques, inadequate pre-milling treatment, processing time extending to several days or weeks, etc. Dal milling industry has been dereserved recently, which will promote induction of modern technology into this area.

5.361 Vermicelli, noodles, macaroni and spaghetti, better known as pasta products, are becoming increasingly popular. Pasta products have gained popularity in the recent past, primarily in the urban areas and particularly in metropolitan cities. The growth in demand is consequent to the rising trend of urbanisation due to industrial growth which necessitates a person's absence from home for considerable duration. The installed capacity of pasta products in the country is estimated at 34,000 tonnes per year per shift of eight hours. It is estimated that a total of 178 units exist in the small-scale sector producing pasta products. The demand for pasta products is expected to rise phenomenally in future though there will be problems in the growth of this sector due to lack of pasta machinery manufacturers and adequate packaging materials. Appropriate steps would need to be taken to promote manufacture of pasta machinery.

Horticulture

5.362 The total cropped area in the country is about 180.36 million hectares out of which horticulture accounts for about 6.7 per cent. India is the second largest producer of fruits and vegetables in the world, after China. The estimated production of fruits and vegetables in the country was expected to reach about 110 million tonnes by the end of the Eighth Plan. Unfortunately, the post-harvest losses are intolerably high and estimated to be about 25 to 30 percent of the output. India has not been able to exploit its large output as far as processing is concerned as only about one percent of its total horticultural produce is being processed. Ironically, India is not able to utilise its existing installed capacity which stands at about 17.5 lakh tonnes.

5.363 The marketing practices are not conducive to the growers who realise only 30 to 40 per cent of the price ultimately paid by the consumers. The balance amount is being shared by intermediaries at various stages. Apart from the inhibiting factors mentioned above, other major constraints faced by this sub-sector include high cost of packaging, non-availability of packaging machinery, non-availability of quality raw materials, lack of basic infrastructural facilities, complexity of land and food laws, inadequate linkages between farmers and processors, inadequate induction of technology, etc.

Dairy Industry

5.364 India has become the largest milk producing country in the world. India's output of liquid milk reached 69 million tonnes in 1996, surpassing that of USA. Milk production was almost stagnant from independence till about 1970 with an annual growth rate of only one per cent. Thereafter, there has been an improvement and during the Eighth Plan, it has registered an annual growth rate of 4.5 per cent.

5.365 The milk production target of 70 million tonnes at the end of the Eighth Plan is likely to have been achieved with per capita availability of 204 gms. per day against the recommended nutritional requirement of 220 gms per day. The Indian dairy industry has an installed processing capacity of 20 million litres per day with an estimated investment of Rs.12,000 crore. About 60% of the installed processing capacity is in the cooperative sector. Along with the increase in milk production, there has been a simultaneous increase in the production of milk powder including baby food, malted food products, condensed milk, etc. As a result of liberalised industrial policy announced by the Government in 1991, import of technology and machinery has become easier. This has resulted in the industry taking up manufacture of new products like edible casein, pharmaceutical grade lactose and whey protein concentrate and other high value products which are export oriented.

5.366 The dairy industry, however, faces several constraints as the industry has traditionally been subjected to licensing and other restrictions. The Government policy in this regard has been to give preference to the establishment of milk processing plants selling liquid milk. This policy was guided by an overall shortage of milk and the national milk production falling short of nutritional requirement in the earlier years of planning era. Consequently, the processing plants manufacturing products have received a lower priority. Appropriate policy measures would need to be worked out to give a fillip to this sector.

5.367 The PFA standards for the quality of milk and milk products, which were formulated in the early 1950's, have become outdated. They are also not in conformity with international standards. The problem becomes more acute since there are very few testing laboratories and testing kits for rapid quality testing at the grassroots level are not available. It is imperative to closely examine the Prevention of Food Adulteration Act and carry out appropriate modifications at an early date.

5.368 Packaging of milk and milk products is another grey area, which needs attention. Dairy products, incidentally, are not included in the mandate of the Indian Institute of Packaging and only limited work could be done in the area of development of packaging at the National Dairy Research Institute, Karnal. The industry also faces an acute shortage of cold storage facility for dairy products in major consumption centres. The milk products industry also faces the problem of levy of sales tax at multi points adding to the cost of the final product. The system needs rationalisation to give a boost to this industry.

Fisheries

5.369 Fish production in the country has increased from 7.8 lakh tonnes in 1951 to 47.89 lakh tonnes in 1994-95. The average annual growth rate in fish production during the last decade has been around 5.6 per cent. While the growth rate in the marine product sector has been about 5 per cent, the inland fishery sector has grown slightly faster at 6.7 per cent annually. Exports from the seafood sector have done well and crossed the one billion US$ mark during 1994-95 when 3,07,300 metric tonnes of marine products were exported, valued at Rs.3,375.27 crore. Fish production is estimated to reach about 63.67 lakh tonnes by the turn of the century. Out of this, about 33.12 lakh tonnes will be contributed by the marine sector and the remaining 35.55 lakh tonnes will originate from the inland sector. At this level, the per capita availability of fish will be 11 kg. per annum as against the present per capita availability of 9 kg. per annum.

5.370 The current annual marine fish production is around 26.92 lakh tonnes against a potential of 39 lakh tonnes. The exploitation of resources in the coastal zone i.e. upto a depth of 50 metres has been rather heavy whereas resources beyond 50 metres are still under-exploited. The contribution of deep-sea fishing to the total marine production has been less than 2 per cent. The Government of India, therefore, had introduced the New Deep-Sea Fishing Policy in 1991 to give a thrust to deep-sea fishing in the country. The policy on deep-sea fishing, however, came under severe criticism from the traditional fishermen who complained of large-scale poaching and ecological disturbances perpetrated by the deep-sea fishing vessels. On the recommendations of the Murari Committee, which was set up to study these aspects, the Government has decided to discontinue giving licences for deep-sea fishing.

5.371 India has a tremendous potential for the development of fish processing and there were 367 units in 1996 having a total capacity of 6,496.0 tonnes per day. About 45 per cent of these units are modern. The capacity utilisation of fish processing units, however, is very low. At present, hardly 20 per cent of the total fish production is being processed. This sector, as in the case of other food processing sectors, faces an acute shortage of infrastructure in the form of cold chains. The industry is also not equipped with basic facilities which are required for hygienic processing and this is going to seriously affect India's exports to the Western countries as most of them have formulated stringent standards of hygiene and quality control. This calls for urgent remedial action.

Meat and Poultry Sector

5.372 India has the largest livestock population in the world. However, the quality of the livestock remains poor. The present production of meat is about 3.7 million tonnes while production of high-value-added processed meat products is only about 50,000 tonnes. The per capita consumption of livestock products in India is considerably lower than in other countries, e.g., the per capita poultry meat consumption in India is only about 12 per cent of that in China. The annual per capita consumption of eggs in India is 29, and in rural areas, it is even lower. It is also far below the recommendations of the National Institute of Nutrition which stipulates 180 eggs and 9 kgs. of all kinds of meat per annum.

5.373 There are about 3,600 slaughter houses in the country which are being managed by Municipal Corporations and other local bodies. There are also 121 small meat processing units manufacturing high-value-added products like ham, bacon, sausages, etc. Though the demand for meat and meat products is expected to increase due to the rise in per capita income, the meat industry has several constraints which impede its growth. The industry is using extremely primitive techniques and hygiene leaves much to be desired. There are only a few modernised abattoirs and lack of good hygienic production is affecting exports adversely. Meat exports from India primarily consist of buffalo meat followed by mutton. Export of poultry meat, eggs or processed meat is insignificant. However, export of egg products in the form of powder or frozen products has started. Other factors impeding the growth of the meat industry are lack of infrastructure like cold chain, inadequate availability of feed, poor transportation facilities, absence of an inspection and quality control system, etc. These need to be attended to during the Ninth Plan period.

Packaging

5.374 The packaging industry in India is still at the infant stage though, as consumer awareness and standard of living improves gradually, the need for packaged commodities is increasing. Most of the raw material requirements of the packaging industry are met by indigenous production, with the exception of tin plates and plastics. Though the supply of various packaging media has been increasing over the years, the demand-supply gap has been widening. During 1995-96 the quantum of packaging material produced/consumed is placed at 6 million tonnes, valued at aproximately Rs.10,000 crore.

5.375 The consumption pattern of some of the primary packaging media in India is in sharp contrast to the world situation. While in the developed countries, the usage of plastics is proportionately more vis-a-vis paper and paper boards, the situation in India is exactly the reverse. The consumption of packaging media in India is much lower than in the developed countries. This is evident from the fact that the per capita consumption of paper and board in India is only 1.3 kg. as against 310 kgs. in USA and for plastics, it is only 0.7 kg. in India as against 50 kgs. to 90 kgs. in the developed countries. The growth rate of consumption and demand for packaging in India is envisaged to be of the order of 12 per cent per annum and by 2000 AD, the total requirement of all packaging will increase to about 9.33 million tonnes from the present level of about 6 million tonnes, implying an increase of 55 per cent.

5.376 Testing, quality control and other laboratory facilities are available at the Indian Institute of Packaging and its Regional Centres and also at the Packaging Division of the Central Food and Technology Research Institute (CFTRI). These facilities, however, not only need to be enhanced but also need to be made more exhaustive to cover all packaging media and products packaging. The Bureau of Indian Standards (BIS) has separately developed technical specifications for packaging vanaspati, oils and ghee. The packaging requirements relating to edible oils and a host of other processed foods and fruits like mangoes, tomato pulp, and mushrooms, etc. have still to be developed/specified. These require adequate attention during the Ninth Plan period.

5.377 Based on the experiences of the Eighth Plan and keeping in mind the recommendations made by the Working Group on Food Processing Industries, specific policy measures have to be prescribed for each of the sub-sectors. In the case of primary food processing sector, due emphasis will have to be given to aspects such as strengthening training and extension work, improving backward linkages for maize/coarse grains, improving efficiency of pulse milling industry, making energy audits compulsory for improving efficiency of existing units, bringing about modernisation in the roller flour milling and rice milling industry.

5.378 For horticulture-based sector, a relook needs to be taken at some of the existing laws, apart from effecting improvements to enhance infrastructural facilities. Amongst the laws to be reviewed, amendment of the Seed Policy would be one of the vital areas in order to induct suitable strains. Other important areas would be amendment of the Pesticides Act to ban the use of BHC, etc. and amendment of Food Laws to allow irradiation. Other policy support required by this sub-sector would include continuance of the exemption of excise duties for all food and vegetable products, reduction of sales tax on food and vegetable products levied by the States, providing fiscal incentives by way of direct tax incentives for post-harvest infrastructure including cold chains, providing tax holidays in backward areas, setting up quality control laboratories, etc.

5.379 As regards the dairy sector, the focus in the previous Plans has been on the processing of liquid milk. A conscious attempt needs to be made in the Ninth Plan to promote the development of indigenous milk products. The country produces a wide variety of sweets based on milk but the export potential of these sweets has not been tapped.

5.380 Other areas which would need attention during the Ninth Plan are creation of cold storages, promotion of research and development in product development and technology upgradation, quality assurance, packaging, consumer awareness, etc.

5.381 The development of meat and poultry processing sector needs to be directed towards achieving the goal of hygienic production and processing of meat and meat products, bringing about technological improvements and improving transport and storage facilities for efficient operation. At present, there are only a handful of modernised abattoirs and all efforts of the Government in the past to modernise other abattoirs/slaughter houses have not been successful. A fresh initiative in this respect during the Ninth Plan would be required. The Government has encouraged the growth of meat processing units by offering financial incentives and through this, some joint sector projects have been successfully set up. Development of marketing infrastructure for meat and poultry products, however, was not taken up in the earlier Plans. Only a few schemes of transport and storage were taken up and that too, in the public sector. The Government will have to induce sufficient investments into this area in order to catalyse the growth of meat processing sector. Separately, investments will also have to be ensured for the establishment of quality control laboratories. A special emphasis has to be laid on the North Eastern States where meat and poultry processing, especially pork, is an important activity which is being done in unhygienic circumstances due to non-availability of necessary infrastructure.

5.382 The main objectives of the development of the fishery sector during the Ninth Plan will be to create infrastructure for storage and transportation of fish in order to reduce wastage, to sufficiently strengthen the fish processing sector for greater value addition by adopting improved hygienic standards, better quality control measures, product diversification, induction of modern technology, improving packaging standards, etc. The aim would be to ensure remunerative prices to fisher folk and better wages for the labour. One important element to be added in the Ninth Plan is strengthening of traditional technologies such as fish drying and utilisation of low-value fish to make value-added products. Separately, adequate emphasis will also be laid on promotion of fishery cooperatives to develop the export and domestic market for fishery products. Continued support will have to be given to the Coast Guards for monitoring and surveillance of the Exclusive Economic Zone (EEZ). For improving the survey work, the Fishery Survey of India (FSI) needs to be duly strengthened by replacing its obsolete fleet of ships.

5.383 The packaging industry in India, by and large, being in the small-scale sector, suffers from inadequate research and development facilities. The industry needs to be encouraged in order to enable it to grow to international standards. Besides, pilot projects may be set up in selected institutions to cater to the needs of the packaging industry. The Government should promote product package-wise studies. Export package specifications should be drawn up in detail and wherever necessary, as a code of practice. The facilities available within the country in some of the institutions have to be enhanced since their equipment has become obsolete. The BIS may be encouraged to develop further specifications in consultation with the industry. Due emphasis has to be given to develop low-cost paper and pulp from natural fibre agro-wastes for packaging applications, as there is already a scarcity of raw material for paper. Appropriate legislative measures will be useful to discourage the use of second grade packaging materials like tin plates or recycled plastics.

5.384 The food processing industry faces the problem of finance, both working capital and also long-term finance. It is interesting to note that the food processing industry, while contributing to about 19 per cent of the industrial GDP, has access to only about 5.2 per cent of the total investments made in the industrial sector. This sector is also not in a position to generate large internal resources and has to depend only upon external sources of finance. Given the fact that a sum of Rs.28,250 crore would be the investment required during the Ninth Plan, as estimated by the Working Group, it is imperative that the financial institutions adopt a more positive and pragmatic approach towards this industry. In this regard, it is felt that the field officers in the banks/financial institutions should be imparted necessary training since the parameters involved in this sector are very different from those of the manufacturing industry as a whole. The Government may even examine the possibility of creating a specialised bank for food processing industry with the equity subscribed by the different financial institutions.

5.385 Finally, there is the question of availability of trained manpower for this industry, keeping in mind that it is expected to grow at a faster rate during the Ninth Plan period than in the last few years. There are very limited institutions within the country which are providing training in the field of food processing and the number of people being trained every year is grossly inadequate. Necessary funding has to be forthcoming for this area to ensure that the growth of this industry does not get hampered by non-availability of technical manpower.

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