10.2 VILLAGE AND SMALL INDUSTRIES

Transcription

1 10.2 Village and Small Industries 599 Introduction 10.2 VILLAGE AND SMALL INDUSTRIES Small-scale and cottage industries play a very vital role in the country's economy despite the phenomenal growth in the large-scale sector. In fact, the small-scale sector is playing a vital role in the growth of national economies the world over and is considered to be the engine of growth in most countries. The small-scale industries are labour - intensive and provide employment to nearly 1.86 crores persons in the country. The emphasis on Village and Small-Scale Industries (SSIs) has always been an integral part of the Indian Industrial strategy, more so after the Second Five Year Plan. It was envisaged that Village and Small-Scale Industries would play an important role as producer of consumer goods and absorber of surplus labour thereby addressing to the problems of poverty and unemployment. Other advantages of small industries are that they ensure a more equitable distribution of national income, enhance balanced regional industrial development, act as a nursery for entrepreneurship and facilitate mobilization of local resources and skills which might otherwise remain unutilized. Consequently, the Government of India had been encouraging and supporting the promotion of Small-Scale Industries through deliberate policies such as protection from large-scale industries, capital subsidies, differential tax treatment, reservation etc. The Government continues to provide protection to the small scale sector, inter-alia, through the policy of reserving items for exclusive manufacture in the small-scale sector. Industrial undertakings other than the small-scale industrial undertakings engaged in the manufacture of items reserved for exclusive manufacture in the small-scale sector are required to obtain an industrial licence and undertake an export obligation of 50 per cent of the annual production. However, the condition of licensing is not applicable to such industrial undertakings operating under 100 per cent Export Oriented Undertakings Scheme, the Export Processing Zone and the Special Economic Zone Schemes. The reservation policy was introduced in 1967 an attempt to protect SMEs from competition from corporations and 44 goods were specified to be exclusively manufactured by SMEs (Large Corporations were allowed to enter this sector on condition that 50% of their produce would be exported). As a result, SMEs dominated readymade garments, leather goods, autocomponents, electrical appliances and the hand tool industries. Over the years, the number of items reserved for SMEs increased and it stood at over 800 in However, the Abid Hussain Committee set up by the Government of India which submitted its report in January 1997 observed that the reservation policy was inconsistent with the current trade reforms which allow free import of a large majority of the goods and most of the remaining can be imported under the special Import Licence. The number of reserved items has, therefore, been coming down. Industrial undertakings with investment in plant and machinery up to Re. 1 crore qualify for the status as small-scale or ancillary industrial

2 Village and Small Industries undertaking with effect from 24 December The investment limit for tiny units is Rs. 25 lakh. The Small-Scale Industry sector has emerged as a dynamic and vibrant sector of the Indian economy in recent years, displaying phenomenal growth in the field of production, employment and dispersed development in general and exports in particular. There are nearly 34 lakhs Small-Scale Industries in the county accounting for about 40% of the gross value of output in the manufacturing sector and about 34% of the total exports of the country. It provides employment to nearly 186 lakhs persons, which is second only to agriculture. Position as in No. of Small-Scale Industries Units Rs lakhs Production at current prices Rs. 6,45,496 crores Employment 186 lakh persons Exports Rs. 59,978 crores The Small-Scale sector contributes amply to other socio-economic aspects such as reduction in income inequalities, product diversification, dispersed development of small industries and linkage with other sectors of the economy. Tamil Nadu Small Scale Industries Profile The small scale industries, which are defined in terms of value of productive machinery, made an early start in Tamil Nadu with the Government stepping in to create major industrial estates at Guindy and Ambattur in Chennai. In 1973, Tamil Nadu had the largest number of SSIs in the country with 18,500 registered units and it has maintained this leadership, by and large. When the Second All India Census of SSIs was carried out in , it was still the leader in terms of units and employment, though not in the growth rate. According to SIDBI (2000), in its Report on small-scale industries sector during to , the Tamil Nadu SSI sector continued to grow fast. The average annual rate of growth (compound) of number of units was 12.8 per cent and of employment 10.9 per cent. As an important sector of the economy as a whole, Small Scale Industries sector accounts for 95 per cent of industrial units, 40 per cent of output in manufacturing sector, 35 per cent of exports and employment to 30 lakhs persons in the State. There are nearly 4.20 lakhs registered SSI Units and total investment nearly Rs. 12,500 crores. The contribution of Small Scale Industries to employment generation is next only to Agricultural and allied sectors. The SSI sector has been considered as a powerful instrument for realizing the twin objectives: `Accelerated Industrial Growth' and creating additional `Productive Employment Potential', in rural and backward areas.

3 10.2 Village and Small Industries 601 No.of registered SSI Units Employment Total investment Production Predominant Industries Small Industries - State Profile 4.20 lakhs 30 lakhs Rs crores Rs crores - Textile, Food Products, - Non-Electrical machineries, tools and parts, - Cotton Textile - Paper and Printing. Major Exports Major issues - Readymade Garments - Leather & leather goods - Gem and Jewellery, Cashew Kernal - Food products, Marine products. - Need for modernisation and technological upgrdation, - Strengthening the system of information dissemination, - Need for availability of working capital - Need for infrastructure building The Government departments/ agencies concerned with Small Industries comprise the Small Industries Department at the Secretariat, the Directorate of Industries and Commerce, the Tamil Nadu Small Industries Development Corporation (SIDCO) with 73 Small Industrial Estates, the Tamil Nadu Small Industries Corporation (TANSI) with 26 production units, the Entrepreneur Development Institute and INCOSERVE, SAGOSERVE, TAICO Bank and Industrial Co-operatives. The Village and Small Industries Sector comprises of five Sub-Sectors viz., 1) Small Scale Industries (under the control of the Director of Industries and Commerce), 2) Handlooms and Textiles, 3) Khadi and Village Industries, 4) Handicrafts Development and 5) Sericulture. Ninth Plan Outlay - As against an outlay of Rs. 600 crores for Village and Small Industries in the Ninth Plan, the expenditure has been Rs crores. The departmentwise activities and performance during the Ninth Plan and the programs for Tenth Plan are outlined below:

4 Village and Small Industries I. Small Scale Industries Directorate of Industries and Commerce - The Directorate of Industries and Commerce is the nodal agency for planning and implementing various schemes for the promotion of Small Scale Industries in Tamil Nadu. It provides various services through the District Industries Centres such as registration of SSIs, training of entrepreneurs, Industrial guidance, promotes Village and Small Industries by organising Industrial Co-operatives (particularly for match, tea & coir industries) and identifies and promotes craftsmen and artisans engaged in the handicrafts industry. The Department of Industries and Commerce also implements a variety of programmes to provide financial assistance, technical support and guidance service to the existing as well as new industries. These programmes are implemented with an accent on the development and modernisation of industries, up-gradation of technology and quality control. It operates through a network of District Industries Centres (DICs), one in each district, headed by a General Manager. The various activities undertaken by the Department include: 1. Registration and promotion of small scale and tiny industries and industrial Co-operative societies. 2. Sanction and disbursement of various subsidies and incentives such as State Capital Subsidy, Generator Subsidy, Power Tariff Subsidy. 3. Offering various testing facilities for chemicals, metals, metallurgical, electrical, electronic gadgets and appliances. 4. Implementation of centrally sponsored schemes like Self Employment Programmes for the Educated Unemployed Youth and Prime Minister s Rozgar Yojana schemes. 5. Conducting Entrepreneur Development Programmes particularly special schemes for women. 6. Creating awareness about the various policies and programmes of the Government through seminars and dissemination meets. 7. Providing Escort Services to the Entrepreneurs. 8. Maintenance of Special purpose Industrial Estates for Electrical and Electronics Industries. 9. Providing entrepreneurial guidance through Data Bank and Information Centre and technical information sections attached to various District Industries Centres. 10. Identification of new areas with growth potential and providing familiarisation and Incubator facilities to promising entrepreneurs. 11. Conducting Techno-Economic Surveys. 12. Conducting sample and comprehensive surveys. 13. Development and promotion of cottage and handicrafts industries. 14. Training facilities in the field of light engineering, tool and die designing.

5 10.2 Village and Small Industries Assistance for import of capital goods machineries and scarce raw materials. 16. Implementation of Quality Control Act on Electrical household appliances, etc. 17. Export Promotion. 18. Supervision of implementation of special assistance schemes announced by Government in favour of small and tiny sector units. The entrepreneurs are assisted in getting statutory clearances from Local Bodies, Town Planning, Pollution Control Board, Public Health, Factories and other Departments and getting power connections through the Single Window Committee. The District Single Window Committee has been formed with District Collector as its Chairman. A State Level Committee under the Chairmanship of the Chief Secretary to Government periodically reviews the functioning of the District Window Committees in the State. In order to promote Tiny and Rural Industries, 287 Blocks in the State have been declared as Industrially Backward/ Most Backward. Small Scale Industries (SSIs) located therein are eligible for grant of State capital subsidy, Low Tension Power Tariff (L.T.P.T.) subsidy and other concessions. These incentives and concessions are also available to the units located in the Industrial Estates and Industrial Complexes sponsored by Government/ Government Agencies. An outlay of Rs. 200 crore was provided for the Small Scale Industries including Industrial Estates during the Ninth Five Year Plan ( ) of which the expenditure incurred was Rs crores. (61.98%). The details of permanent registration, investment, production in terms of value and employment generated during the Ninth Plan period may be seen from table below: Sl.No. Year Details of Permanent Registration, Investment, Production & Employment Generation Ninth Plan Period (Rs. in lakhs) Permanent Registered Units in Nos Investment Production Employment ( in lakh Nos.) Source: Department of Industries & Commerce The target and achievements in respect of permanent registration and temporary registration during the Ninth Five Year Plan ( ) period are furnished below:

6 Village and Small Industries Year Target and achievements of permanent and provisional registration from Physical target fixed by Govt. Permanent Physical Achievement Physical target fixed by Govt. Provisional (Upto Sep 01) Source: Department of Industries & Commerce Prime Minister s Rozgar Yojana Scheme - (PMRYS) The Prime Minister s Rozgar Yojana Scheme, (PMRYS) for the Educated Unemployed Youth was launched by Government of India on 2 nd October 1993 for encouraging educated unemployed youth to set up self-employment ventures in Industries, Services, Business, etc. Under this scheme training is provided in Government recognised/ approved institutions. During the Ninth Plan Period as against the target of 90,500 persons to be trained, 68,525 persons were actually trained. A total number of 73,672 applications were sanctioned for providing financial assistance to the tune of Rs crores of which an amount of Rs crores was actually dispersed to 59,578 applicants. The subsidy is met entirely by the Government of India. Small Scale Industrial Units The details of new Small Scale Industries Units set up and registered, SSI Units set up by SC/ ST Entrepreneurs registered during Ninth Plan period are given in the table below: New SSI units set up and registered Physical Achievement New SSI Units set up by SC/ST entrepreneurs Registered Target fixed Achievement by Govt. Year Target fixed by Govt. Achievement upto Sep 01 Total

7 10.2 Village and Small Industries 605 Tenth Plan Thrust Areas The following Thrust Areas have been identified for the development of Small Scale Industries in the Tenth Plan. 1. Leather and Leather products 2. Textiles and Readymade Garments 3. Gems and Jewellery 4. Pharmaceuticals 5. Information Technology 6. Bio-Technology 7. Automobile Component 8. Food Processing 9. Coir Industries, etc., The feasible project opportunities, the green areas and suggestions in respect of these industries are set out in the Table below:

8 Table Thrust Areas for SSIs in Tenth Plan (Source: Directorate of Industries and Commerce) Sl. Nature of SSI Feasible Project opportunities Green Areas/District/Places Suggestions No Leather and Leather Products Textile and Ready Made Garments Footwear and Footwear components, full shoes leather chappals, shoe upper, Leather Garments, Industrial Gloves, Leather Caps and Leather products like Leather wallet, Ladies pouch, Leather Belts, Leather Travel goods etc. Readymade Garments such as T-Shirts, Ladies Blouse, Jerseys, Trousers & Gent's Shorts, Pull overs, Gent's Shirts, Ladies Jackets, Industrial and Occupational Garments, Bath robes and shorts, Children Garments etc. Vellore, Ambur, Vaniyambadi, Erode, Dindigul, Trichy, Chennai (Pallavaram) are green areas for Leather and Leather products. Salem, Erode, Namakkal, Coimbatore, Madurai, Chennai Districts. Provide necessary infrastructure support / common Effluent Treatment Plants, CAD/CAM centres with assistance of Government aid. Common facility centre. Industrial Estates with the required facilities for leather processing may be formed for Advance Training in Leather Garments and Leather Goods. Upgradation of technology in the training sector to meet the international environmental standards. Common Facility Centres for pre sewing and post sewing operation may be started in the textile cluster of above districts. Fashion technology training may be provided in select districts. Trade Fairs/Buyer & Seller Meet to be conducted in the areas mentioned above. The terms for availing technical up gradation fund may be made. 3. Gem and Jewellery Natural Diamond cutting and polishing, cultured pearls, Jewellery design (Silver, Gold and Platinum), Gold covering on silver ornaments. Carving of idols/art-shapes out of precious/semi precious stones. Pudukottai, Trichy, Salem, Kumbakonam, Chennai, Erode and Coimbatore. Encourage setting up of training centres to train and impart courses of polishing, finishing and setting on par with international standards for Natural diamond in private sector. Jewellery designing centre and training of manpower.

9 10.2 Village and Small Industries Pharmaceutical Allopathy Medicine such as bulk drugs, cancer drugs, Vitamin Tabs, Ointments, Ayurvedic Tooth Powder.Homeopathic Medicine, Neem paste, Tulasi extract, Palm sugar, Herbal medicines etc. Chennai, Cuddalore, Tuticorin, Madurai, Dindigul, Tirunelveli, Courtalam, Kumbam, Vellore, Nagai, Salem(Yercaud), Namakkal (Kolli Hills), Dharmapuri. To create R & D and product Display Centre for Herbal medicine for imparting knowledge and Training in EOUs. 5. Information Technology International call centre, Domestic call centre, Medical Transcription Centres, E- Commerce, Portal, Dataprocessing centre, CAD/CAM/CAE Service Centre GIS service centre, ERP Training Centre, Video Conferencing Provider etc. All Districts in Tamil Nadu, especially District Head Quarters and Taluk Head Quarters. Creation of IT incubators at selected District Head quarters. To encourage SSI entrepreneurs as well as software technology. To create incubators at selected District Head quarters to encourage SSI entrepreneurs. 6. Biotechnology /Bio Informatics Hybrid Seeds, Tissue Culture, Neem and other Bio-pesticides, bio-fertilizers, botanical extract for plant disease control, Food and Industrial Enzymes.(Pupain, Phytase, Lipase, Enzyme cocktails etc.) Classical fermentation products (antibiotics, immuno modulators etc.) Bio-energy, Surface and additives, Bio-Polymers and Bio-informatics. Bio-Tech Incubators Park near Chennai, Coimbatore. Women's Bio- Technology Park, Kelambakkam. Medicinal Plants Biotechnology park near Madurai. Marine Bio-Technology Park at Mandapam, Ramanad. Bio-Informatics and Genomics Centre (BGC) at TIDEL Park Chennai. Starting of Bio-Technology incubator at Karaikudi. Creation of certain new short duration technician oriented courses at appropriate Universities / Technical Training Centres/ Associations in specific areas. Creating a Data Base for Biotechnology and Bio-informatics. Financing & Infrastructure support. Creation of Bio-technology incubator at Coimbatore and also create a data-base for Bio-Informatics. Creation of industry-university interface.

10 Village and Small Industries 7. Automobile Components Industry Gears, Starter Motors, Radiators, Spark plug, Fuel pump elements, Shock Absorbers, Piston Pairs, Piston rings etc. 8. Food Processing Dehydrated Vegetables & fruits, fuel Briguettes fuels, Egg Powdered Bakery, Sun dried fruits and vegetables, Cold storage, Confectionery, Iodized salt fruit processing tamarind pulp, tamarind concentrate, spices and oleoresins, natural juices, ready to eat. 9. Coir Industries Coir Ropes, Carpets, Door mats, Upholstery, Rubberized coir mattresses, Coir Ply Board, Curled Coir etc. Chennai, Tiruvellore, Kancheepuram, Hosur, Madurai, Trichy, Pudukkottai. Dharmapuri, Erode, Salem, Coimbatore, Theni, Usilampatti, Madurai, Nagercoil, Tuticorin, PUdukkottai, Chennai, Cuddalore, Thanjavur, Vellore, Kancheepuram, Tiruvellore. Thanjavur, Dharmapuri, Tirunelveli. Salem, Nagercoil, To assist the SSI's towards Technology upgradation for graduating them to medium Scale Industries. R & D centre in select areas. Training Centres in select areas. Trade Centres in select areas and mechanisation process to be introduced to upgrade the technology of the SSI sector. Technology centre in the lines of CFTCI. Creation of Common Facility Centre at selected areas. Creation of Product Development Centres at selected areas. Training centres at selected areas.

11 Tenth Plan Programmes During the year , a number of new schemes were or are to be taken up for implementation. New Anna Marumalarchi Thittam under 15 Points Programme of Chief Minister to promote Agro-Based /Food Processing Industries with investment of one crore and above in each of 385 blocks of the State with special package incentives and Escort Support, to generate employment and to uplift rural economy. On-line Registration and issue of Provisional SSI Registration Certificate to new Entrepreneurs through the approved Browsing Centres at District and Taluk Headquarters was inaugurated by the Chief Minister on On-line filing for Permanent SSI Registration Certificate is also proposed to be introduced. The furnishing of data by SSI units through online will also be introduced. Public Private Partnership Concept for maintenance and infrastructure in the Estate, Business Development/ Documentation / Advisory Services / Consultancy Services/ Marketing Assistance, Common Facility Centres and Product Display Business Development Centres, Human Resource Development for development of SSI sector. Under this scheme, a part of Capital Cost shall be borne by the Association / State and Central Government and the Balance Capital Cost shall be obtained as loan from financial institutions. The entire recurring expenditure shall be met by the Associations and the Scheme shall be implemented on no-profit basis and the cost of services shall be charged accordingly. Cluster Development Scheme with 75% of the cost of the Project as Grant will be provided by Government of India towards creation of infrastructure facilities/ services for development of Industrial Clusters. It is proposed to establish the above services mentioned under PPP concept to the needy viable clusters duly getting funds from Government of India. Formation of Export Guidance Cell under the chairmanship of the District Collector in the District Industries Centres to provide information on export activities, potential and procedural matters for export and to initiate measures for development of export in the State. On Going Schemes Centrally Sponsored Schemes 1. Setting up of Nucleus Cells The Nucleus Cell of this Department was created in the year 1977 so as to collect statistics from the registered SSI units through census and to update the data collected in the census by means of sample surveys. This is a centrally sponsored ongoing scheme with 100% financial assistance from Government of India. A Census-cum-Sample Survey and Diagnostic Survey was conducted during 1995 in Dindigul, Tuthukudi, Thiruvannamalai and Nagapattinam Districts. The field level collection of data in these districts

12 Village and Small Industries has been completed and all the collected schedules have been sent to the Development Commissioner (SSI), New Delhi. The 3 rd All India Census of SSI Units was held in October 2002 for which a list of SSI Units registered during the years to was prepared and fed into the N.I.C. A new Scheme of Collection of monthly production details from the selected sample Small Scale Industrial Units was introduced for the purpose of computing Index of Industrial production so as to assess the growth of this Sector. This has assumed national importance because of the present economic scenario. The DC (SSI) has provided Computer Hardware and Software to the 11 selected District Industries Centres and to the district offices for transferring the IIP to the Directorate of National Informatics Centre, and DC (SSI), New Delhi. A sum of Rs crores has been proposed for Tenth Plan for this scheme towards staff costs which will be fully met by Government of India. 2. Prime Ministers Rozgar Yojana Scheme (PMRY) PMRY.scheme for providing Self-Employment to Educated Unemployed Youth was announced by the Prime Minister of India on 15th August 1993 to provide Self-employment opportunities to one million educated unemployed youth in the country. This Scheme benefits persons who are educated unemployed youth in the age group of 18 to 35 years and having passed VIII standard with family income not exceeding Rs. 40,000/- (per annum). The age limit has been relaxed upto 45 Years in respect of SC/STs, Ex-Serviceman, physically handicapped and women from onwards. Preference is being given to those who have received training in any trade in Government approved/ recognised Institutions (I.T.I. etc) for a period of at least 6 months. The Scheme envisages 22.5% reservation for SC/ST candidates and 27% for other backward classes. An outlay of Rs crores is proposed for implementation of the Scheme during Tenth Plan. The entire amount will be borne by Government of India. Centrally Shared Schemes Market Development Assistance State s Share for sale of coir by Indl. Co-operative Socities Market Development Assistance scheme (MDA) has been approved by the Government of India in lieu of 20% coir rebate scheme for the remaining period of Ninth Five year Plan ie. upto As per this scheme the expenditure is to be shared by the Central and State Governments. 10% of the annual turnover can be granted as MDA for this purpose. Under this scheme, all the Coir products are eligible for assistance throughout the year. A sum of Rs crores has been provided for Tenth plan period towards the State s share for this scheme. Entrepreneur Development Institute (E.D.I.) It is proposed to establish an E.D.I. with model of E.D.I. Ahmedabad. This is meant to meet the entrepreneurial needs of the Southern Region in future. Government of Tamil Nadu provided Rs. 50 lakhs during the year

13 10.2 Village and Small Industries with a matching grant from Government of India. During , both Central and State Governments will be contributing equal sum. During Tenth Plan a sum of Rs crores has been provided for this scheme towards State s share. State Schemes 1.Industrial Estates-Maintenance (Maintenance of Additional sheds in TACEL at Vridhachalam.) TACEL Industrial Estate, Vridhachalam comprises of total area of acres and at present there are 64 Units on rental basis. For maintenance of the sheds in the Industrial Estate during the Tenth Plan period a sum of Rs. 10 lakh will be provided. 2. Technical Information Sections in Industrial Estates The Technical Information Sections are functioning at Guindy, Ambattur, Madurai, Pettai, Katpadi, Trichy, Coimbatore and Salem to disseminate information to the industrialists and prospective entrepreneurs. The Sections have libraries containing technical books on Science, Technology, Management, Industrial Information Digests and Journals, Project profiles on SSI and details of ISI specifications for various products. The Technical Information Section, Guindy has a well-furnished auditorium with a video scope system. For the Tenth Plan period Rs. 30 lakhs is provided for maintenance of Technical Information Sections. 3. State Industries Centres EDP Training, Women Entrepreneur Development Programme, Construction of DIC building, maintenance, contribution to specific fund (TTM) etc. It is proposed to train 1,25,000 women entrepreneurs within a period of five years from to at the rate of 25,000 women per year. During the year , 5000 women were trained under Prime Minister's Rojgar Yojana (P.M.R.Y.) Scheme. The balance 20,000 women were trained at a cost of Rs. 80 lakhs. It is proposed to impart training for 25,000 persons per year and also to construct and maintain DIC buildings and to contribute specific funds (TTM) during Tenth Plan period. An amount of Rs crores is provided. 4. Assistance to Coir Industrial Co-operative Societies At present there are 65 Co-operative Societies in the State with 10,050 members with a paid up Share Capital of Rs. 560 lakhs. To modernise the activities of these coir industrial Co-operatives, an Integrated Coir Development Project is being implemented. 21 societies have been identified for 1 st Phase programme at a cost outlay of Rs lakhs. 3 numbers of staff have been sanctioned for the administrative matters of the Coir Section. For the Tenth Plan period a sum of Rs. 20 lakhs is provided to meet the expenditure towards staff cost. 5. Assistance for setting up of Industries (Capital Investment Subsidy to SSI Units) New Anna Marumalarchi Thittam is being implemented for the promotion of Agro based / Food Processing Industries in each of the 385

14 Village and Small Industries blocks of the State with minimum investment of Rs. 1 crore and above with special package of incentives as mentioned below: 1. 15% subsidy on investment in Plant and Machinery limited to Rs. 15 lakhs per block in all the 385 blocks for investments made by the entrepreneurs under this Scheme. 2. Power Tariff Subsidy (LTPT) of 30%, 20%, 10% of energy charges in the first, second and third year respectively from the date of commencement of production or date of power connection, which is later. 3. The units set up under this Scheme will be eligible for Generator subsidy of 15% on the cost of the generator with a maximum ceiling of Rs. 5 lakhs. 4. The units employing more than 50% of their work force from women will be eligible for additional 5% capital subsidy subject to a limit of Rs. 5 lakhs. Besides, a new scheme, viz Interest Subsidy under Technology Upgradation Scheme to supplement the 12% back-end subsidy given by Government of India for technology upgradation of selected categories of industries is implemented through SIDBI. For the implementation of Capital Subsidy Scheme, a sum of Rs. 50 crores is provided for Tenth Plan 6. Technical Training Centre, Guindy Payment to Part time staff Government have since ordered the transfer the courses conducted at Government Technical Training Centre, Chennai and Institute of Tool Engineering, Dindigul, functioning under the control of the Department of Industries and Commerce to the Department of Technical Education. The students admitted prior to the transfer of courses are attending second and third year of the courses. For the conduct of classes for these students during the year and the expenditure towards the faculty has to be met. A sum of Rs. 3 lakhs is provided for above expenditure for 2 years in the Tenth Plan period New Schemes 1. Human Resource Development It is proposed to train at least 1000 workers and 100 managerial staff per year in each of the 10 clusters identified sectorwise and sending them for training to National level Training Institutions for Skill and Managerial Development. It is proposed to meet the above cost of expenditure on 60:40 basis (60% will be borne by the SSI units and 40% will be borne by the Government). A sum of Rs. 20 lakhs is provided for the scheme during Tenth Plan. 2. Product Display Centre At present SSI units are not having any guidance and expertise in import, export, finance, management and marketing aspects so as to enable them to face global competition. They do not have any forum or agency to inform the buyers regarding various products manufactured by the SSI units. Hence, it is proposed to establish Trade Facilitation and Product

15 10.2 Village and Small Industries 613 Display Centres as a Joint Venture with the District Small Scale Industries Associations to improve the marketing. It has also been programmed to conduct Buyer-Seller Meet in these Centres to have one-to- one discussion with them so as to improve the marketing of their products. Government contribution as equity for the project may be 10% of the Project cost. An outlay of Rs. 5 crores is provided for implementation of the scheme during the Tenth Plan period. 3. Common Facility Centre and Technology Mall SSI units could not improve the quality of the products for want of testing equipments due to high cost. Hence, it is proposed to establish Common Facility Centre with the latest modem machineries/ testing equipments to cater to the needs of the SSI units. It is also proposed to establish centralized Common Trade/ Product Development and Design Centre, and Machinery Demonstration Centre under one roof to offer guidance on trade and product display available to SSIs to provide an opportunity to the SSI units to see the working of modern machinery and, to use the latest machinery to manufacture quality products at lesser cost, it is proposed to establish Technology Malls at various centres. An outlay of Rs. 3 crores is provided for implementation of the scheme in the Tenth Plan. 4. Interest Subsidy for Tech. Upgradation It is proposed to provide 5 % Back-end interest subsidy to SSI units for the loan obtained for technology upgradation to supplement Credit Linked Capital Subsidy announced by Government of India so as to help the SSI Units to come out of their present difficulties on account of outdated technologies and to face the global market with quality product at competitive price. An outlay of Rs. 10 crores is provided for implementation of the scheme in the Tenth Plan. 5. Tech & Financial Consultancy support to SSI It is proposed to provide technology and financial consultancy services to the SSIs / Tiny Units in the identified thrust areas and to the needy entrepreneurs. This will enable them to access funds for the projects from Financial Institutions in a credible manner. In this regard expert panel will be drawn for each of the thrust sectors by taking the assistance of reputed companies and individual experts within and outside the country. These supports will make the SSI/ Tiny sector entrepreneurs to become aware of the technological processes, innovative methods being followed at international level to equip themselves to meet the global competition and the growing demand. During Tenth Five Year plan, priority will be given to develop the above mentioned thrust sectors. It is proposed to give incentives for Technical financial consultancy support not exceeding Rs. 1 lakh per unit for 100 SSI units by providing Rs. 1 crore per year and, therefore, the outlay for Tenth Plan will be Rs. 5 crores. Public Sector undertakings under Small Industries SIDCO There are at present 73 Industrial Estates where necessary Infrastructural facilities such as water supply, electricity, roads etc. are

16 Village and Small Industries looked after by SIDCO. This will be continued and new industrial infrastructure will be created in rural areas based on the demand in the Tenth Plan period in accordance with the objectives of the Corporation. NSIC SIDCO Small Industries Development Corporation (SIDCO) for composite Loan Scheme to Tiny Sector Industries National Small Industries Corporation (NSIC) has introduced a new composite term loan scheme for the tiny sector industries. Under this scheme, a total loan upto Rs. 25 lakhs is given towards investment in land and building, plant and machinery and working capital required for the tiny sector units. NSIC with SIDCO will extend the above loan on the single window concept. TANSI The Tamil Nadu Small Industries Corporation Limited (TANSI) was formed in 1965 to take over from the Government, to begin with, 64 departmental small-scale units with net assets amounting to Rs lakhs to be run on commercial lines. These industrial units were started under the plan periods earlier under the control of the Directorate of Industries and Commerce for non-commercial purposes such as i) to serve as Training cum Demonstration Centres; ii) iii) to provide infrastructure for the development of industries; and to ensure dispersal of economic growth. They were later converted into manufacturing units. After transfer of certain units back to Industries Department, two units to TACEL (Tamil Nadu Ceramics Ltd.), one unit to Tamil Nadu Agro Industries Corporation and closure of two units, TANSI was running for a long time 56 units. The activities relating to mining and export of granite blocks were transferred to the Tamil Nadu Minerals Ltd. on its formation. During 1986 four units were transferred to Tamil Nadu Leather Development Corporation Ltd. Certain other units were closed down under restructuring programmes. TANSI is a conglomeration, at present, of 26 production units and 6 Sales Centres. The product lines of TANSI fall under Structurals, Engineering, Foundries, Furniture, Pumps and Pump Spares, Spirit based products, Assembly of TITAN watches, paints and allied products. TALCO The Tamil Nadu Leather Development Corporation Ltd. was established in 1983 with the main objective of developing leather industry in Tamil Nadu by (1) helping tanners by supply of raw materials, chemicals etc., (2) assisting artisans engaged in the manufacture of footwear and leather goods by providing market link, (3) improving skills and efficiency of small artisans, (4) affording infrastructure facilities to prospective entrepreneurs in leather industry and (5) dealing with the problems faced in tannery effluent by establishing Common Effluent Treatment Plants. The Committee headed by Thiru S.V.S. Raghavan to study the performance of the State Public Sector Enterprises recommended the winding up of the Corporation in view of the

17 10.2 Village and Small Industries 615 fact that its 4 leather units were sick and the Corporation was making losses. Government issued orders in October 2000 for closure. Khadi and Village Industries Board has taken over the production units of TALCO. An outlay of Rs crores have been provided to implement the schemes for Small Industries Sector during Tenth Plan. Details of outlay are furnished below: Schemes and Outlay for Tenth Plan (Rs.. in crores) Sl.No Schemes Outlay (A) On Going Schemes Industrial Estates Maintanence 2 Technical Information Sections in Industrial Estates State Industries Centres:- Women Entrepreneur Development 6.97 Programme, Construction of DIC Building, Maintenance of building and contribution to specific fund (TTM). 4 Assistance to Coir Industrial Coop Societies Assistance of setting up of Industries - Capital Subsidy (As per the New Anna Marumalarchi Thittam, this subject is continued only to Agro-based/Food Processing Units to be set up in 385 blocks of the state and earlier subsidies to SSI units are withdrawn by the government. Hence this amount will be utilised on priority basis to the projects under NAMT and the balance amount will be disbursed to the earlier sanctioned cases.) 6 Technical Training Centre, Guindy -- Payment to part-time staff 0.03 (Consequent on the transfer of the courses conducted by the Institute of Tool Room Engineering, Dindigul to Director of Technical Education, an outlay of Rs crores is provided towards the expenditure of faculty for conduct of classes for the students attending second and third year of the courses at Institute of Tool Room Engineering, Dindigul) 7 Market Development Assistance State's Share-for sale of coir by I.C 1.25 Societies 8 Entrepreneur Development Institute 1.50 Total (A) - On going schemes (B) New Schemes Human Resource Development Product Display Centre Common Facility Centre and Technical Mall Interest Subsidy for Technical Upgradation Technical and Financial Consultancy support to SSI 5.00 Total (B) - New Schemes Grand Total (A) & (B) II. Handlooms and Textiles The textile industry is a major foreign exchange earner for the country. It earns more than 35% of the total exports revenue. Textile industry is a predominantly cotton based industry and is facing crisis due to adverse effect of globalisation, excess production, decline in exports, nonavailability of adequate quantity of quality cotton, increase in cotton prices, etc. The Textile Industry is extremely crucial in terms of employment and economic well-being of the State considering that it is next only to Agriculture in the scope of employment.

18 Village and Small Industries Handlooms - Handlooms form a part of heritage of India and richness and diversity of our country and artistry of the weavers. It plays a very important role in the economy. Handloom is the largest economic activity after agriculture. This sector is estimated to provide direct and indirect employment to more than 30 lakh weaver households and about 130 lakh weavers in the country (! ). Due to effective State intervention through financial assistance and implementation of various developmental and welfare schemes, this sector has been able to withstand competition from the powerloom and mill sectors. Production in this sector was 6792 million sq.meters in This sector contributes substantially to the export income of the country. According to the 1987 Handlooms census, there were 4.27 lakh Handlooms in Tamil Nadu. There are as on , 2.83 lakh handlooms functioning in 1414 Primary Handloom Weavers' Co-operative Societies. The Weavers' Co-operative Societies exist in rural and semi-urban areas where there is a large concentration of handloom weavers. All the benefits of the development and welfare schemes implemented by the State Government and the Government of India are channelised through these societies. The average annual production of various varieties of handloom goods by these societies is around 950 lakh metres and the annual sales turn over around Rs. 450 crores. Tamil Nadu has always occupied a pride of place in having the maximum number of handlooms in the country. This sector continues to be alive in spite of setbacks on account of quantum jump in Powerlooms. Although major areas of the State which are dependent heavily on handlooms have been affected on account of lack of demand in the market, there are sectors where handlooms are progressing well. There are about 3 lakh handlooms, of which 1.50 lakh handlooms are within the Co-operative fold. Handloom Weavers Co-operative Societies have been fairly successful in breaking the element of bondedness among Master Weavers and their subordinates. Better wages, welfare measures and the like have gone a long way in this. Co-operative Societies need to continue to be patronised as a welfare measure without ignoring those outside the Cooperative fold. Powerlooms - The decentralised powerloom sector plays an important role in meeting the clothing needs of the country. The powerloom industry produces a variety of cloth both grey as well as processed bearing intricate designs. The contribution of the powerlooms sector to the total cloth production in the country is about 59%, excluding the cloth produced by non-ssi, weaving and hosiery /knitting units. This sector also contributes significantly to the export earnings. There are 3.20 lakh registered powerlooms in Tamil Nadu. These powerlooms are situated within and outside the Co-operative fold. There are nearly 25,000 powerlooms operating in 149 Powerloom Weavers' Cooperative Societies with about 9,000 weaver members. These societies produced lakh metres of cloth valued at Rs crores and effected sales to the tune of Rs crores during The

19 10.2 Village and Small Industries 617 Powerloom Weavers Co-operative Societies mainly produce the cloth required for scheme of free supply of uniforms to school children and distribution of sarees and dhoties. Textiles - The Textile Industry of the State is the forerunner in Industrial development and is providing massive employment. It is predominantly spinning oriented. Out of 1937 large and medium textile mills in the country, 893 mills are located in the State. Similarly, out of 921 small units in the country, 745 are located in the State. The 893 large and medium textile mills include 18 Co-operative Spinning Mills, 17 NTC Mills and 25 Composite Mills. The spinning capacity is million spindles and the labour force 2.32 lakhs. The Textile Industry has a very important role in the industrial field with regard to employment potential and overall economic and commercial activities. This industry enables the Central and State Governments to earn revenue besides foreign exchange through exports. 25% of Indian yarn is exported and 35% of Indian yarn is from Tamil Nadu. Garments - Garments occupy a predominant position in World trade as it is the second fastest growing product category next only to office and telecom equipment. In India, 12% of total exports in India is from the Garment Industry and it provides direct employment to over 20 lakh people. In Tamil Nadu, the garment sector is located substantially around Chennai, with specialisation in cotton fibre garments (2/3 of the total garment exports). Garments includes knitwear but for the purpose of understanding, knitwear has been taken as a separate sub-category. The garments industry around Chennai accounts for over Rs crores in exports. 45% of all garment exports is to the EU and 35% to the U.S. The garment sector has been functioning without any Government help. Knitwear - The Knitwear Industry in the Country is located at Tiruppur in Coimbatore District. Estimated at over Rs crores in exports, this industry has been at the helm of textile exports for a long period of time and has acquired international fame. Its strength is due to skilled manpower and rich raw material base. Processing - Pre-loom and Post-loom processing facilities have not grown adequately to meet the demand of the textile industry. In Tamil Nadu, processing facility is mainly in the unorganised hand dyeing/ hand printing sector. Ninth Five Year Plan ( ) Financial Performance The approved outlay for the Handlooms and Textiles sector for the Ninth Five Year Plan was Rs. 240 crore and the expenditure incurred was Rs crores. The yearwise expenditure incurred during Ninth Plan period is furnished below:

20 Village and Small Industries Handlooms and Textiles-Ninth Plan Performance Financial (Rs. in lakhs) Year Expenditure Total Physical Performance As against a target for the establishment of 100 Handloom Development Centres, 38 Handloom Development Centres were established as on ; similarly, as against a target of 25 Quality Dyeing units, 4 Dyeing units were formed. As on , 86,221 weavers benefitted under Central Thrift Fund. In respect of construction of House-cum-Workshed scheme, 3310 Houses were constructed as against a target of 5000 houses as on units were provided units worksheds to the existing houses as against a target of 10,000 units as on The problems besetting the sector and the issues which will have to be addressed in the Tenth Plan with suggestions / recommendations are detailed in the Annexure. Tenth Five Year Plan ( ) Outlay and Programmes An outlay of Rs.180 crores has been proposed for Handlooms and Textiles for Tenth Plan. The details of programmes to be taken up during the Tenth Plan period are given below. 1. Deendayal Hatkargha Protsahan Yojana Government of India has formulated a new integrated and comprehensive scheme for development and promotion of Handlooms, viz., Deendayal Hathkargha Protsahan Yojana Scheme with effect from The components of this scheme are: (a) Basic Inputs, (b) Infrastructure support, (c) Design Input, (d) Publicity, (e) Marketing incentive/ Rebate and (f) Strengthening of Handloom Organisations. The above scheme was introduced since Government of India have decided to continue this scheme in the Tenth Plan also. The cost is shared between the Centre and States on 50:50 basis. The outlay for the scheme during the Tenth Plan will be Rs. 100 crores.

21 10.2 Village and Small Industries Interest Subsidy Scheme The Interest Subsidy scheme is one of the vital schemes being implemented by the Department from the funds of State Government. From the year , the Interest Subsidy Scheme was one of the component of Government of India's Scheme of Market Development Assistance Scheme. As Market Development Assistance Scheme was discontinued from , the State Government has to meet the cost on the Interest Subsidy. A total outlay of Rs. 22 crores is provided for implementation of this scheme in the Tenth Five Year Plan. 3. Weavers House-cum-Workshed Scheme The Weavers House-cum-Workshed scheme has been under implementation from onwards with State Government subsidy and HUDCO loan. From , the G.O.I., has also been participating in the scheme by sanction of subsidy. A unit of House-cum-Workshed in urban area costs Rs.72,000 which comprises of State Subsidy of Rs. 10,000 (increased from Rs. 7,000), Central Subsidy of Rs. 20,000, beneficiary's contribution of Rs. 5,000 and loan of Rs. 40,000 provided by HUDCO. It is proposed to construct 5000 units (in rural areas and urban areas) during Tenth Plan. The cost per unit of House-cum-Workshed in rural area is Rs /-. The total cost of the project is Rs. 35 crores which includes Government of India s subsidy of Rs.10 crores and State s subsidy of Rs.5 crores. An outlay of Rs. 5 crores has been proposed as State subsidy for this scheme for the Tenth Plan. 4. Insurance Scheme for Handloom Weavers The Government of Tamilnadu is implementing Insurance Scheme for the Handloom Weavers with the financial assistance of Government of India. In the event of death of a member before attaining the age of 60 years, the State Government is sanctioning Rs. 50,000/- for the nominees of the deceased Handloom Weavers towards Insurance amount apart from Co-optex Contribution of Rs. 15,000/- (increased from Rs. 10,000/- with effect from ). The Govt. of India's share towards premium is being claimed every year at Rs. 40/- per weaver. Under this scheme, the State Government meets the amount over and above the Government of India s contribution. The provision for the scheme for Tenth Plan will be Rs crores. 5. Workshed Scheme Apart from House-cum-Workshed scheme, the Government of India has been providing subsidy for construction of Worksheds for the dwellings of the weavers since The cost of Workshed in rural areas is Rs. 9,000 and in case of urban areas Rs. 14,000, for which the beneficiary has to contribute Rs and Rs and the Government of India provides a subsidy of Rs. 7,000 and Rs. 10,000 respectively. It is proposed that the Government of Tamilnadu may also participate in this scheme as in the

22 Village and Small Industries case of house-cum-workshed scheme by providing Rs per unit. During Tenth Plan period, it is proposed to construct 10,000 Worksheds at a cost of Rs. 2 crores % Loss Guarantee Scheme (Assistance to Co-operative Central Banks towards loss sustained in the issue of Working Capital to Weavers Co-operative Societies) Ninety Percent Loss Guarantee Scheme was introduced by Government of India in 1956 with a view to provide Guarantee cover to Cooperative Central Banks and to offset the losses arising out of nonrecovery of loans advanced by them to Handloom Weavers Cooperative Societies under Reserve Bank of India Handloom Finance Scheme. The Government has been extending guarantee in respect of Working Capital Finance extended to Weavers Cooperative Societies from NABARD through Central Cooperative Banks. In case of any eventuality of Primary Weavers Cooperative Societies going into liquidation and where there is no possibility of recovery of dues by the Central Co-operative Banks from such societies, the loss sustained by the Central Co-operative Banks is reimbursed by the Government to the extent of 90%. The exact requirement of funds could not be estimated precisely and, therefore, a token provision of Re.1 crore is allocated for the purpose. The requirement will be taken note of and necessary adjustments made in the Annual Plans and the Mid-Term Appraisal. 7. Creation of Data Bank India is one of the signatories of the World Trade Organisation Agreement The World Trade Organisation will cover the entire global trade and the Agreement is committed to establish an open and liberal global environment, free from any restrictions Therefore, the Indian Industry has to compete with the multinational companies in the domestic market as well as the foreign market. The Agreement on Textiles and Clothing, which is one of the Associate Agreements of the World Trade Organisation, covers the World Trade Textile Trade. Like any other Industry, the textile industry will also face stiff competition to retain and enter new market. To prepare the Textile industry in general and the Handloom industry in particular, the Government has taken initiative to re-orient its focus and activities and programmed to create a 'Data Bank' in the Department so as to build up a reliable Information System on data for market intelligence. It is proposed to establish functionary centres in order to collect market facts on products, total market distribution and their channels, consumers competitions, import rules and regulations, economic factors and specific market characteristics and price trends, the availability and requirements of Handloom products and disseminate this information among the Weavers Co-operative Societies involved in Export business. The provision for this scheme will be Rs. 10 lakhs as State Government subsidy for Tenth Plan.

23 10.2 Village and Small Industries Assistance for conduct of Exhibition including Advertisement & Publicity and Popularisation of Loom World As a part of marketing strategy, Cooperative Societies have decided to market their products under the brand name LOOM WORLD. The various popular varieties such as Silk & Cotton Sarees, Shirtings, Dhoties, Angavastram etc., are exhibited in the Loom World Showrooms. It is proposed to launch such showrooms at Kancheepuram, Anna Salai etc., shortly. To popularize the above concept exhibitions are to be conducted in various places. Initially, Government assistance is required for advertisement and publicity and for conduct of Exhibitions. Five such Exhibitions are proposed every year at a cost of Rs. 4 lakhs including advertisements. An outlay of Re. 1 crore has been proposed as assistance for Tenth Five Year Plan. 9 Scheme for conversion of Handlooms into Powerlooms The Government has decided to reintroduce the scheme of conversion of Handlooms into Powerlooms. A Committee has been constituted by the Government to formulate a new scheme for technology upgradation. It has been programmed to convert 5,000 Handlooms to Powerlooms in a phased manner. An outlay of Rs. 20 crores has been proposed for Tenth Plan. 10. Training for Weavers It is proposed to impart training for 250 Handloom Weavers every year at an estimated cost of Rs per weaver/per annum. The annual commitment for providing training to weavers is Rs. 5 lakhs. An outlay of Rs. 25 lakhs is proposed for this scheme for Tenth Plan. 11. Tamil Nadu Zari Ltd. Tamil Nadu Zari Limited, Kancheepuram is a Public Sector undertaking established for manufacturing and supplying of quality Zari to Silk Weavers Co-operative Societies at reasonable prices. A second unit was also set up at Kumbakonam. The Company produced and sold 64,750 marcs of Zari during It is a profit making unit and has been declaring dividend to Government on its share capital continuously. It has been programmed to modernize the machineries at an estimated cost of Rs. 50 lakhs during Tenth Plan period. An outlay of Rs. 50 lakhs has been proposed for this scheme for Tenth Plan. 12. Tamil Nadu Co-operative Textile Processing Mills Ltd., Erode The Tamil Nadu Co-operative Textile Processing Mills Ltd., Erode was established in 1973 to take up Textile Processing like Bleaching, Dyeing, Mercerising, Printing and finishing of cotton and Synthetic fabrics. The capacity to process is 12 lakh meters/per month. It is proposed to modernize the unit at a cost of Rs. 1 crore during the Tenth Plan Period.

24 Village and Small Industries An outlay of Re. 1 crore has been Tenth Plan. 13. Assistance to Co-operative Spinning Mills proposed for this scheme for With the objective of supplying of good quality yarn at reasonable rates to Cooperative Handloom Weavers without interruption, 18 Cooperative Spinning Mills were set up with an installed capacity of 4.69 spindles. The Spinning Mills produce 50% of the Hank Yarn requirement of Handloom Weavers and Cone Yarn requirement of Powerloom Industries. Except Anna Cooperative Spinning Mills and Bharathi Cooperative Spinning Mills, most of the Spinning Mills are in a financially bad condition. Several Textile mills are closed /on verge of closure. Four Cooperative Spinning Mills have stopped production. Therefore, Government is examining the possibility of privatizing the loss making mills. For one time settlement of liabilities of the Cooperative Spinning Mills, loan assistance will be sanctioned by Government to the Mills. A provision of Rs. 20 crores has been proposed as loan assistance for Tenth Plan period. 14. Tamilnadu Cooperative Spinning Mills Federation Ltd (TANSPIN), Chennai. Tamilnadu Cooperative Spinning Mills Federation Ltd (TANSPIN) was established in the year 1994 to streamline the procurement of cotton at reasonable prices for the member Cooperative Spinning Mills. It fulfils 10% of the total requirement of cotton of the member Mills. The net profit of the Federation is Rs. 25 lakhs for the year It is proposed to expand its activity during Tenth Plan period. An outlay of Rs. 65 lakhs has been proposed towards Share Capital Assistance for Tenth Plan. The details of schemes and outlay proposed for "Handlooms and Textiles" for the Tenth Five Year Plan ( ) are given below: (Rs. in crores) Sl.No. Schemes Outlay Spillover Schemes 1 Deendayal Hathkargha Protsahan Yojana Scheme Interest Subsidy Scheme House-cum-workshed Scheme (Rs HUDCO loan) Insurance scheme for Handloom Weavers Workshed Scheme % Loss Gurantee Scheme 1.00 Total - Spillover Schemes New Schemes 1 Creation of Data Bank Assistance for conduct of Exhibition including Advertising and Publicity for Popularising "Loom World" Conversion of Handlooms in to Powerlooms Training for Weavers Assistance to Tamilnadu Zari Ltd. 0.50

25 10.2 Village and Small Industries 623 (Rs. in crores) Sl.No. Schemes Outlay 6 Asst to Tamilnadu Coop. Textile Processing Mills Ltd., Erode Assistance to Cooperative Spinning Mills Asst to Tamilnadu Coopt Spinning Mills Federation 0.65 Total - New Schemes Total - State Schemes (Handlooms & Textiles) III. Khadi and Village Industries Khadi and Village Industries have been instrumental in generating large scale employment, particularly in rural areas, with low capital investment and short gestation periods. The total employment provided in the country in khadi industry increased from 0.66 million in 1955 to 1.24 million in and from 0.31 million to 4.69 million in Village Industries during this period. Nearly 40% of employment provided by KVIC is to women and 32% to SCs and STs. Khadi and Village Industries play a vital role in providing selfemployment in rural areas utilizing the local resources. Keeping this in view, the Tamil Nadu Khadi and Village Industries Board (KVIB) was established in 1960 with the main objective of providing employment in rural areas. The Board has been pursuing this objective by implementing schemes formulated by the Khadi and Village Industries Commission and the State Government. The Co-operative Societies registered under Khadi and Village Industries Board are undertaking activities approved by Khadi and Village Industries Commission / Khadi and Village Industries Board. Khadi - The Board has established production centres for khadi cotton and poly vastra fabrics in different parts of the State. The major centre for production of khadi cotton and poly vastra fabric is in Tirupur region. Currently 3888 spinners and weavers are being provided employment by the Board directly. Silk - KVIB is known for its exquisite Khadi Silk Sarees, made specially from original Zari, using eco-friendly and Natural dyes. Kumbakonam, Kanchipuram, and Arani are the major centres of production. The Khadi units working under KVIB are indicated below: Sl.No. Khadi No. 1. Rural Textile Centres (spinning Centres) Production Centres Silk Yarn Twisting Centres 5 4. Silk Production Centres Dyeing Units 5 6. Dyeing Bleaching and Printing Unit 1 7. Quilt Unit 1 8. Tailoring Units 3 9. District Godowns Central Godown 1

26 Village and Small Industries Village Industries - KVIB has been promoting Village Industries by establishing production centres in different districts, organizing Co-operative Societies and granting margin money to Entrepreneur for establishing Village Industrial Units. KVIB provides support by providing raw materials required for production, technical guidance and marketing the finished products through the sales outlets. The items produced by the Self-Help Groups are being sold through the Khadi Crafts. Taking advantage of the purchase preference extended vide G.O.Ms.No. 283, Finance (BPE) Department dated , KVIB is supplying furniture, soaps, honey and leather articles to different Government departments. The products of the Board are sold to the public through its public retail outlets, Khadi Crafts, spread through out the State. KVIB has major presence in leather and soap industries, hand made paper, carpentry and blacksmithy and apiculture though more than 58 Village Industries are being promoted. The details of own units of the KVIB under Village Industries sector are indicted below: Sl.No. Industry No.of Units 1. Non edible Oil and Soap Industry Carpentry and Black smithy 9 3. Bee Keeping Processing of Cereals and Pulses 1 5. Pottery and Brick 5 6. Handmade Paper 4 7. Lime 1 8. Aluminium 1 9. Leather 24 Total 166 The production during was as follows: (Rs. in lakhs) Khadi Village Industries Total The employment generated during was as follows: (Rs. in lakhs) Khadi 0.21 Village Industries Total Khadi and Village Industries Board has established Industrial Cooperative Societies both in Khadi and Village Industries sectors. There are 1369 Industrial Co-operative Societies functioning under KVIB out of which 1004 relate to Palm Jaggery and Palm leaf manufacturing.

27 10.2 Village and Small Industries 625 Ninth Plan Performance The total allocation for Khadi and Village Industries Sector for IX Five Year Plan was Rs. 100 crores out of which a sum of Rs crores was released. Out of this amount, 89% was for rebate on sale of Khadi and the remaining amount (11%) for new schemes. Khadi and Village Industries development is also supported by the Centrally Sponsored Programmes such as the Hill Area Development and the Western Ghat Development Programme. The employment generated by Tamil Nadu Khadi and Village Industries Board up to the Ninth Plan period is estimated to be around 16 lakh persons and the value of production in the Units / Co-operative Societies supported by KVIB is estimated at about Rs crores. Tenth Five Year Plan Outlay The main objective of the Khadi and Village Industry Programme during Tenth Plan will be to generate additional employment opportunities for the rural poor and artisans. Tamil Nadu Khadi and Village Industries Board has proposed to create additional employment for 11,100 persons under the Khadi sector and 60,425 persons under the Village Industries sector (totally 71,525) during Tenth Plan period. An outlay of Rs. 70 Crores is proposed in the Tenth Plan for various schemes of Khadi and Village Industries Board and Palm Products Industries under the Tamil Nadu Palm Products Development Board. The details of schemes proposed to be implemented in the Tenth Plan are outlined below: Tenth Plan Programmes I. Khadi Schemes 1. Replacement of Charkhas (Cotton & Polyester) 358 Rural Textiles Centres are running under the control of Khadi Board without required charka accessories. It is proposed to replace the cotton Charkas with 8-spindle charka set. The total capital expenditure required for replacement of 15 Charkas will be Rs. 45 lakhs at Rs. 3 lakhs per Charka. Similarly, it is also proposed to replace the Charkas with 8 spindle charka for weaving polyester cloth at a total cost of Rs. 100 lakhs. 2. Modernization of Looms (cotton) At present 86 Khadi sub centres are working under the control of Khadi Board. It has been decided to produce saleable Khadi varieties by widening 800 looms at a cost of Rs. 2500/- per loom in the first phase. The total cost will be Rs. 20 lakhs. 3. Weaving Centres (Polyvastra) The Board has proposed to enlist 500 looms for weaving polyester cloth. This will create additional employment to 500 weavers during the Tenth Five Year for which an outlay of Rs. 50 lakhs is proposed. 4. Modernization of Silk Looms In order to create additional employment under Silk Industry the Board has proposed to modernize the existing 2000 looms at a cost of Rs. 2500/-

28 Village and Small Industries per loom. An outlay of Rs. 50 lakhs has been proposed in the Tenth Plan for the above scheme. 5. Provision of Jungus and Design Cards In order to create additional employment under silk industry, it is proposed to provide jungus and design cards to 2000 weavers for creating new attractive designs during the Tenth Five Year Plan at a cost of Rs per set. The outlay proposed for the above scheme is Rs. 50 lakhs. 6. Training During Tenth Plan it is proposed to impart training every year in short term, long term and refresher courses to motivate the young entrepreneurs. It is also proposed to establish one State Level Khadi Training Centre. The cost of the Training Programme proposed for Tenth Plan is Rs. 55 lakhs. 7. Modernization of Emporium It is proposed to modernize 5 emporiums exclusively for Sale of silk varieties. An outlay of Rs. 1 crore has been proposed for the above scheme for the Tenth Plan. 8. Rebate Rebate on Sale of Khadi in respect of Tamil Nadu Khadi and Village Industries Board and certified institutions will be continued in the Tenth Plan to safeguard the employment of weavers. An outlay of Rs. 50 crore is proposed for the above scheme for the Tenth Plan. 9. Provision of Computers to District Offices and Important Khadi Krafts It is proposed to create Data Base by providing Computer to District Offices to avoid delay in decision making. 26 Computers with Printers, UPS and Fax Machine are proposed to be purchased. It is also proposed to provide Franking Machine to all Assistant Directors' Offices. The total outlay for the scheme for the Tenth Plan will be Rs. 30 lakhs. II. Village Industries Tamil Nadu Khadi and Village Industries Board is providing assistance by providing training to entrepreneurs for establishing Village Industries, supply of improved tools and equipments, finance, workshed, raw materials, marketing and organizing co-operative societies for groups. Village Industries are employment intensive and require little capital but earnings per worker are low and hence requires to be graded up so as to compete in the highly constrained market. The following schemes are proposed for Tenth Plan for the development of Village Industries. 1. Margin Money to weaker section Under the above scheme artisans of weaker section have to contribute only 5% of the project cost as own contribution and the Bank will sanction 95% of the project cost. Soon after release of 1 st instalment, 30% of the project cost will be sanctioned as Margin Money in the form of back ended subsidy. A sum of Rs. 5 crores is proposed for the scheme during the Tenth Plan.

29 10.2 Village and Small Industries Research and Development of Apiculture under Eastern Ghat Development Programme (EGDP) Beekeeping Beekeeping is an ideal activity for development as a subsidiary occupation providing supplementary income to a large number of rural and tribal people due to the rich flora available in the rural areas. Beekeeping not only offers honey and by-products to mankind but also enriches agrihorticultural crops in quality and quantity by its unique crop pollination services. An outlay of Rs. 3 crores is proposed for the above programme for the Tenth Plan towards cost of starting Bee Nurseries, distribution of Bee Hives and accessories, training in bee-keeping, setting up of Honey processing plants and establishment of a Honey Testing Laboratory. 3. Strengthening of Co-operative Societies of Tribals and Training to Tribals It has been proposed to assist 20 co-operative societies, which were started for the benefit of scheduled caste and scheduled tribe artisans by giving adequate machinery to tools and equipments, etc. at Rs. 2 lakhs per Society. The total outlay will be Rs. 40 lakhs. The Board's departmental units such as hand made paper, foot-wear, pottery, soap, carpentry and blacksmithy and Co-operative societies under village oil, pottery, carpentry and blacksmithy, beekeeping, mat, etc., under TRYSEM do not have adequate facilities. It is proposed to train 500 artisans in District Headquarters in a year and to provide machinery, audio and video etc. for which an amount of Rs. 10 lakhs will be provided in the Tenth Plan. 4. Western Ghat Development Programme Under this programme 30 taluks have been identified in the districts of Tirunelveli, Virudhunagar, Dindigul, Theni, Madurai, Kanyakumari, Coimbatore and Erode to assist artisans under cane and bamboo, mat, leather, beekeeping and distillation of Eucalyptus oil. It is proposed to provide assistance on beneficiary oriented schemes during Tenth Plan under village industries for essential oil extraction, bee keeping, cane and Bamboo, mat and fibre etc., to cover 4000 beneficiaries. The outlay will be Rs. 2 crores. 5. Modernization of Footwear Unit It is proposed to modernize the existing footwear units by providing improved machinery, upgrading the skill of the artisans at an estimated cost of Rs. 10 lakhs per unit. The outlay will be Rs. 50 lakhs for the Tenth Plan. 6. Conversion of Soap Units into Toilet Soap Units There is heavy demand for the Toilet Soaps manufactured by the Khadi Board. The Board is running only one Toilet soap unit. 4 Washing soap units will be converted into toilet soap units. Conversion cost per unit would be Rs. 5 lakhs and the estimated cost for X plan would be Rs. 20 lakhs. 7. Hill Area Development Programme It is proposed to assist 2000 persons through the schemes like distribution of distillation plants, setting up of bee-nurseries, provision of

30 Village and Small Industries machinery and equipments for manufacturing units, jute bag stitching unit, paper bags and paper covers, construction of workshed and other village industries goods. An outlay of Rs. 150 lakhs is proposed during X plan under HADP. 8 Research and Development under Hand Made Paper Industry In order to produce very high-grade variety of Hand Made Paper such as drawing paper for artwork, permanent document paper, greetings cards, stationery item, unique carry bags, watermark certificates, filter and plotting paper etc., it is proposed to take up research and development at a cost of Rs. 15 lakhs. 9. Marketing and Development by conducting Exhibitions, Fashion Shows, etc. It is proposed to conduct thematic exhibitions throughout the year mainly to encourage the traditional artisans to sell their products to the customers at an affordable price. To conduct exhibitions throughout the year at the important Khadi Krafts like Coimbatore, Salem, Trichy, Madurai and Tirunelveli it is proposed to instal/ permanent structures like Galleries, Racks, Showcases, etc., at a cost of Rs. 50 lakhs during the Tenth Plan period. III. Palm Products Industry under the fold of Tamil Nadu Palm Products Development Board Palm Products Industry is one of the major Industries among Village Industries in Tamil Nadu. Tamil Nadu is pioneer in development of Palm Products Industry in India. Out of the estimated 8.59 crores of Palmyrah trees in India, about 5.20 crores of Palmyrah trees are in Tamil Nadu. Tamil Nadu is a potential centre for the growth and development of Palm Products Industry. It also earns foreign exchange by export of Palm Products. The Tamil Nadu Palm Products Development Board which has been functioning with effect from is not directly involved in trading, but 996 Primary Jaggery Manufacturing Co-operative Societies, 8 District Palmgur Marketing Co-operative Federation and one Tamil Nadu State Palmgur and Fibre Marketing Co-operative Federation functioning under the fold of the Board are directly engaged in trading activities. Edible products such as Neera, Palm Jaggery, Palm Candy, Palm Sugar, Palm Fruit Jam, Preserved Nungu and other confectionary products and Non edible items like Palm fibre, Palm Leaf products, Palm Naar products Brush varieties, Baskets, etc are produced and marketed by them. During Ninth Five Year Plan the State Government sanctioned a sum of Rs Lakhs for New Schemes and Rs Lakhs under Western Ghats Development Programme for the implementation of Palm Products Development Schemes. The potential areas of Tamil Nadu have to be utilized by raising Palm trees in Government lands and Panchayat lands so as to provide employment opportunities to the rural palm products artisans and also to prevent soil erosion. It is necessary to introduce new technologies for procurement and preservation of Neera for the production of Palm Products. It is essential to provide funds for Research and Development for inventing a device for climbing Palmyrah trees so as to provide employment to the unskilled and

31 10.2 Village and Small Industries 629 educated employed youth. A sum of Rs crores is proposed in the Tenth Plan for implementation of Palm Products Schemes: Outlay for Tenth Plan for development of Khadi and Village Industries. (Rs. in crores) Sl.No Name of the Scheme Outlay Khadi and Village Industries Schemes A) 1 Khadi Schemes Replacement of Charkhas (Cotton) Modernization of looms (Cotton) Replacement of Charkhas (Polyester) Weaving Centres (Polyvastra) Modernization of silk looms Provision of Jungus and design cards to silk weavers Khadi Scheme Training Modernization of Silk Emporium Rebate Provision of computers and franking machine to District 0.30 Offices and Important Khadi Krafts Total (A) Khadi Schemes B) Village Industries Schemes 1 Margin Money for Weaker section Research and Development and Agriculture under E.G.D.P Strengthening of Co-operative Societies of Tribals and 0.50 Training 4 Western Ghat Development Programme Modernization of Footwear Unit Conversion of Soap Units Hill Area Development Programme Research and Development in Hand Made Paper Industry Marketing and Development for conducting Exhibition, 0.50 Fashion Show etc., Total (B) Village Industries Scheme C) Palm Products Industries Schemes 1 Modernisation of Neera Processing Units Modernisation of Confectionery Units Madavaram Implements for Processing of Palm Jaggery Development of Palm Products under WGDP Development of Palm Industry under EGDP 0.20 Total (C) Palm Products Industries Scheme including Palm 1.65 Industries Total (A + B + C ) 70.00

32 Village and Small Industries IV. Handicrafts The Handicrafts sector is of special significance in the country's economy due to its contribution to employment generation and foreign exchange earning through exports as well as retaining heritage and tradition. There has been no census or study on the handicrafts sector in the State of Tamil Nadu. There are about 30 crafts in the State. The following are major crafts: 1. Stone and stone carving 6. Papier mache 2.Wood based and wood carving 7. Thanjavur Art Plate 3. Metal based (Bronzes & Brass) 8. Temple Jewellery 4. Lace and embroidery 9. Thanjavur Paintings 5. Natural fibres 10. Terracotta It is estimated that there are about 1.60 lakh artisans in the State. The total production figures are not available but it is estimated that each craft person produces crafts worth Rs. 40,000 to Rs. 50,000 per annum - the total annual production would, therefore, be Rs. 600 to Rs. 800 crores. The all India exports of handicrafts during was to the tune of Rs crores out of which the export from the 4 Southern States and Pondicherry was only about 8%. Thus the volume of exports from the State is poor, there is a lack of marketing facilities, lack of information and lack of organised developmental activities in the State. With the primary objective of promoting Handicrafts in Tamil Nadu and also safeguarding the welfare of artisans engaged in various crafts, the Tamil Nadu Handicrafts Development Corporation Limited was formed in the year The Corporation is engaged in Marketing, Production and Training of artisans, etc. The Corporation with its 15 showrooms in Tamil Nadu and four in other States provides regular marketing assistance for the products used by artisans in Tamil Nadu. It has 8 Production Centres in different crafts located at various places in the State. These production units apart from production impart training to artisans in their respective crafts for a period of one year. Apart from its normal marketing activities, the Corporation also undertakes execution of temple orders in Andhra Pradesh, Karnataka States for wood/ silver/ gold temple chariots, wooden temple cars, dwajasthambams, temple and church bells, wooden vahanams, gold covering works, brass grills for Q lines, brass hundials, etc. Ninth Five Year Plan Performance An outlay of Rs. 20 crores was provided for Handicrafts Development Scheme during the Ninth Plan period and a sum of Rs lakhs was released during the Plan period. The above allocation was utilized for the renovation of showrooms, opening of new showrooms and conduct of exhibitions. The statistics in respect of units registered and employment generated for Cottage and Handicraft Industries during Ninth Plan period are as follows:

33 10.2 Village and Small Industries 631 Cottage Industries Handicrafts Industries Ninth Plan Units Employment Units Employment registered generated registered generated Total The production and sales during the Ninth plan period are as indicated below: (Rs. in lakhs) Year Production(Value) Sales (projected) Total Tenth Five Year Plan Outlay and Programmes The Tamilnadu Handicrafts Development Corporation is serving as a full fledged developmental and promotional agency for Handicrafts Development, besides acting as a marketing outlet and trading corporation. An outlay of Rs. 10 crores is proposed for Handicrafts for the Tenth Plan. 1) Ambedkar Hastshilp Vikas Yojana Scheme The Government of India has recently launched Baba Sahib Ambedkar Hastshilp Vikas Yojana Scheme which envisages promotion of Indian Handicrafts by developing Artisans clusters into professionally managed and self-reliant community enterprises. The Corporation has proposed to organise clusters for stone and stone carvings, metal based craft, wood carvings and wood based, Thanjavur Art plates, Thanjavur paintings etc., at a cost of Rs crores initially for the Tenth Plan. 2) Urban Haat Urban Haat on the pattern of Dilli Haat is proposed to be set up in Tamilnadu, preferably around Chennai. Urban Haat will serve as a Tourist Centre and establish a permanent Exhibition Centre for the Craft persons which include cost of construction of hundred sheds at about Rs. 60 lakhs and Rs. 30 lakhs for development of infrastructure. The land is proposed to be obtained from Government free of cost. The outlay proposed for the Tenth Plan is Re. 1 crore.

34 Village and Small Industries 3) Design and Development Centre and Training Three Design and Development Centres are proposed to be set up for the major crafts - stone based, wood based, metal based. It is proposed to construct three buildings at Rs crores and another Rs crores has been proposed for staff and establishment charges. The outlay for Tenth Plan will be Rs.3 crores for the above scheme. 4) Museum A State Handicrafts Museum is proposed to be set up to provide a link between the Traditional and Modern Crafts. The Madras Craft Foundation, Dakshin Chitra one of the landmarks of traditional culture and crafts of the South is already running a museum at East Cost Road at Muttukadu, Kancheepuram District and the Museum will be strengthened during Tenth Plan. An outlay of Rs. 30 lakhs has been proposed for Tenth Plan. 5. Working capital requirements for direct procurement from Artisans TNHDC showrooms, as part of their trading activities, are procuring handicrafts for sales requirement directly from craftsmen according to availability of resources. An outlay of Rs crores has been proposed as working capital assistance during the Tenth Plan period. 6. Upgradation of Technologies Research and Designs It is proposed to develop new designs and upgrade technology during the Tenth Plan period. The scheme will have two parts. First part is to depute persons to Design Centres for advanced training to acquire new technologies and the second part is to invite the services of a designer to do research and introduce new designs. Apart from the master craft persons from the Corporations, production centres, outside craftsmen will also be sponsored for two week programmes. 15 participants will be deputed each year at a cost of Rs lakhs per year, of which Rs.12,000 towards faculty charges and Rs. 60,000 transport charges for faculties are to be incurred by the Design Centre on behalf of the Corporation for the artisans to be deputed. Organising Design Development in three specific crafts will be the second part of the training. An outlay of Rs. 43 lakhs has been proposed for this programme for Tenth Plan. 7. Sanction of matching grant for construction of building for showroom at Erode. A showroom of the Corporation is functioning at Erode in rental premises. The Corporation was able to get a land measuring about 2400 sq.ft. at a cost of about Rs lakhs. The total expenditure inclusive of cost of land, construction and interior decoration comes to about Rs lakhs. The State Government has already sanctioned Rs lakhs for the purpose. An outlay of Rs. 12 lakhs has been proposed for this scheme for Tenth Plan.

35 10.2 Village and Small Industries Sanction of matching grant for opening a sales outlet at Swamimalai For construction of building for the production unit at Swamimalai, Rs. 10 lakhs was sanctioned as a new scheme during and for establishment of a Design-cum-Training Centre for Bronze icons, a sum of Rs. 10 lakhs was sanctioned during Rs. 10 lakh had been deposited with Public Works Department for construction purposes. Out of Rs. 10 lakhs sanctioned during , the Corporation had utilised Rs. 7 lakhs for purchase of land and for construction of composite building. The estimated cost of the building is around Rs lakhs. A sum of Rs. 15 lakhs was sanctioned towards opening a new sales showroom at Swamimalai. Still, the Corporation requires about Rs lakhs for the above works. Due to financial constraints, the Corporation was not in a position to complete the work from its own resources. Hence, State Government will have to provide a sum of Rs. 10 lakhs as matching grant for opening a new sales outlet at Swamimalai during the Tenth Plan. An outlay of Rs. 15 lakhs has been proposed for this scheme for Tenth Plan. Tenth Plan Outlay ( ) The outlay for the Tenth Plan for Handicrafts will be Rs. 10 crores. The schemewise outlay is furnished in the Table below. Handicrafts Sector - Tenth Plan Rs. in crores S. No. Name of the Schemes Outlay 1 Ambedkar Hastship Vikas Yojana Urban Haat Design and Development Centre and Training Museum Working capital assistance for direct procurement Upgradation of Technologies, Research and Designs Matching Grant for Construction of Building for showroom at 0.12 Erode 8 Matching Grant for Opening a Sales outlet at Swamimalai 0.15 Total V. Sericulture Sericulture is a rural industry having high employment generation potential and provides substantial returns to the farmers with relatively low capital investment. It is a labour intensive, agro-based industry providing employment to about 62.5 lakh persons in the country. Sericulture generates employment for 5 persons throughout the year per acre of mulberry garden. It provides employment to rural women in maintenance of garden, transporting of leaves, rearing of silk-worms, cocoon harvesting, cleaning of cocoons and reeling of silk in pest-cocoon sector. This makes sericulture ideal for generation of rural employment and income. This industry is concentrated in the southern states of India viz., Karnataka, Tamil Nadu and Andhra Pradesh. India stands as the second largest producer in the world after China and Tamil Nadu ranks third among the silk producing States in the country.

36 Village and Small Industries In Tamil Nadu acreage under mulberry has increased from 900 acres in 1975 to 27,000 acres in April The production of cocoons and raw silk have also correspondingly increased from 215 tons and 10 tons in 1956 to 5,138 tons and 672 tons in 2000 respectively. At present 47,000 farmers are engaged in Sericulture. Further the industry provides employment to 1,00,000 persons directly and 35,000 persons indirectly in downstream activities of reeling and twisting throughout the year. Ninth Plan Performance To maximise profit, shift from labour intensive methods to technology intensive to reduce cost and improve quality and productivity is a must. In the Ninth Plan, it was decided to address extension system as a group approach to achieve shared goals and to concentrate in potential districts of Dharmapuri, Vellore, Salem, Namakkal, Coimbatore, Erode and expansion of mulberry in other districts under Catalytic Development Programme. It was proposed to strengthen the market information system, develop more skilled personnel through appropriate training, to use improved/ new technology to improve degumming, dyeing and expose to designs, blending with other fibres etc., to promote production and consumption. Efforts were taken towards increasing the leaf yield to the desired level by promoting cultivation of improved mulberry varieties like S1, S36, MR2, etc. Drip irrigation system was popularised among the farmers. They were also educated to use biofertilisers, micro-nutrients, manure and chemical fertilsers and disinfectants to improve the quality and productivity of leaf. Rearing of Bivoltine races like CSR 18x19 was taken up. Human and Institutional Development was taken up by organising Quality Clubs, training programmes, seminars and demonstration camps to upgrade the skills of the farmers, reelers and extension staff. Training of extention staff on Total Knowledge Management was taken up. Sericulture was taken up under the Centrally sponsored programmes like Hill Area Development Programme, Western Ghat Development Programme and Integrated Tribal Development Programme. The outlay for Sericulture for Ninth Plan period was Rs. 40 crores. Out of this an amount of Rs. 3 crores was released which includes new schemes for an amount of Rs crores and the balance was for Area Development Schemes. To provide matching contribution to implement Catalyic Development Programme assisted by Central Silk Board, a sum of Rs crores was sanctioned from Sericulture Development and Price Stabilisation Fund. An external aided project Seri 2000 was implemented at a cost of Rs crore. The total provision was Rs crores and the expenditure was Rs crores. Under Mulberry Expansion against a target of acres the achievement during the Ninth Plan was acres. Under Layings consumption, as against a target of 730 lakh Dfls, the achievement was 583 Lakh Dfls. Cocoon production which was targeted to be M.Tons was M.Tons in the Ninth Plan. Under Raw Silk Production against the target of 3612 M.Tons the achievement was 3109 M.tons. For Employment Generation, the target was fixed at 1,27,266 and against this the actual employment generated was 1,39,210 Nos.

37 10.2 Village and Small Industries 635 Tenth Plan ( ) A number of developments have taken place in recent years including a major breakthrough in tropical Bivoltine Sericulture Technology. A total package has been developed to control diseases of silkworms, a system to reduce labour cost and new high yielding varieties for mulberry and silk production have been developed. India produced 9500 tons in 1987 and reached 14,432 tons in 2001 against the target of 18,954 tons by the end of Ninth Plan. The approach in the Tenth Plan will be to improve productivity and production substantially. The potential available having regard to the growing demand in the global and domestic market needs to be tapped with right investment. Sericulture - SWOT Analysis Strength 1. Strong domestic demand - pull. 2. Comparative advantage such as large production base, availability of land, labour. 3. Established infrastructure Technology 4. Strong Tradition. 5. Organised Co-operative weaving sector. Weakness 1. Inconsistency in output quality. 2. Poor Technology Transfer. 3. Inadequate market linkages for silk sale. 4. Small and scattered production structure. 5. Thin margin. 6. Inadequate emphasis on quality. Opportunities 1. Generates Rural employment. 2. Developed countries are withdrawing from production of required silk slowly. 3. Receding production in China. Threats 1. Falling international prices influencing local price. 2. Unpredictability of China's silk policy. 3. Shift faster to finer fabrics. 4. Falling capabilities of States to invest substantially. Impact assessment of World Trade Organisation - There has not been any significant fluctuation for cocoon and silk yarn productivity in the country with removal of QRs with first April However future growth to a certain extent depends on how the industry reacts on short, medium and long term to the market changes that are sure to affect its competitiveness in the Post GATT regime. Therefore the production of Indian silk must become more technology intensive to increase productivity and income level of the farmer through better technology packages, cost saving technologies and adoption of high yielding varieties. The other area to be focussed upon is to reduce the

38 Village and Small Industries risk involved by offering packages with low investment and providing staff support for disinfection against the disease outbreak. Current demand within India is for about 22,000 tons of mulberry silk, of which about 14,400 tons are produced indigenously. The supply gap is mainly for warp grade silk which constitutes approximately about 42% of the domestic demand preferred in powerlooms mostly of Bivoltine silk. Presently the imported Chinese silk fills this supply gap. Market Linked Production Planning - Cocoon produced in the State continues to flow across the border to Karnataka and only around 50% of produced cocoon is transacted. In case of silk, even the silk converted locally is not transacted in Silk Exchange totally and the marketing organisation TANSILK continues to procure 30 tons of silk from Karnataka to meet the demand of organised sector. Therefore it requires co-ordinated intervention and education of reelers to produce required quality and if production continues without quality linked basis, silk reeling sector will continue to suffer where the margin is thin. There is a need to link reeler and weaver to help each other. Though silk accounts for less than 1% of world production of textile fabrics its value is very significant in trade. Breakthrough Technologies - With break through achievement in production of Bivoltine cocoon demonstrated jointly by Central Silk Board and Japanese International Co-operation Agency (JICA) in Tamil Nadu in Gobi area of Erode district since January 2000, many farmers adopted technologies developed to take up Bivoltine silkworm crops. In the year , it was expected that 20 tons of Bivoltine silk would be produced. The Tenth Plan should have two distinct production lines to meet internal demand of yellow silk used in Handloom sector and Bivoltine silk for both handlooms and powerlooms. Production of Bivoltine silk requires co-ordinated intervention and it involves higher investment for production of bivoltine as it involves facilities like separate rearing shed, shoot rearing racks, proper effective disinfection, ventilation, hygiene and quality leaves for rearing. Growth of powerlooms forced to look for imported silk. The product of handloom sector has been the saree. Of late demand for dress materials and furnishing material in silk has opened up new possibilities. Already a good part of the Chinese yarn is finding its way even into handloom products, because bivoltine silk yarn is preferred as warp on account of its better tensile strength. Therefore, production of Bivoltine silk is to be taken up. Demonstration of Bivoltine Sericulture Technology jointly by scientists of Central Silk Board and Japanese International Co-operation Agency from 2000 invited the attention of progressive farmers to take up bivoltine crops. The Central Silk Board assisted schemes under Catalytic Development Programme were revamped by (a) simplification of schemes, (b) widening the scope and scale of assistance especially for the bivoltine programme, (c) rationalising proportions in sharing subsidy by Central Silk Board and States and weeding out schemes with low level of acceptancy. China reduced its production of silk from a level of 79,000 M.Tons in 1995 to 56,000 M.tons in 2000.

39 10.2 Village and Small Industries 637 New Textile Policy of Government of India - The New Textile Policy of Government of India incorporates the following directives for silk: Objectives 1. Improving Research & Development and effective Transfer of Technology at all stages. 2. Augmenting efforts for the spread of Bivoltine Sericulture. 3. Encouraging clustering of activities of reeling, weaving and strengthen linkages between the producers and industry. 4. Periodically reviewing the import policy for raw silk taking into account the interests of the Sericulturists and exporters. 1. To increase productivity and income through adoption of new technologies developed. 2. To create greater opportunities for gainful employment in rural areas through spreading of Sericulture practices developed to reduce risks. Production Targets Considering the demand and supply pattern the production at the end of Tenth Plan would be 1500 M. Tons of raw silk of which 300 M.Tons (20 %) would be of Bivoltine silk. Sl Details Unit No I Layings Consumption a) Bivoltine b) Cross Breed Lakh DFLs Lakh DFLs II III Total Cocoon Production a) Bivoltine b) Cross Breed M. Tons M. Tons Total Silk Production a) Bivoltine M.Tons b) Cross Breed M.Tons Total Production Strategies 1. Replacement of existing varieties with high yielding mulberry varieties like V 1 and S 54, S 36, etc. 2. Assist farmers in building low cost rearing houses and to acquire improved rearing equipments. 3. Production of Bivoltine eggs in specific grainage by upgrading facilities. 4. Train staff, farmers in Tropical Bivoltine Sericulture Technology and 5. Re-orient post cocoon support with special training programme in specific areas.

40 Village and Small Industries Outlay An outlay of Rs crores is proposed for the Tenth Plan for the Sericulture Schemes. Schemes 1) Mulberry Planting of New Varieties During the Ninth Plan, it was proposed to cover acres for mulberry but as on , 32,640 acres had been brought under mulberry. To promote cultivation of high yielding varieties, it is proposed to assist at the rate of Rs. 500/ acre to 5000 new farmers and others by replacing the existing varieties. The total requirement is Rs or Rs. 25 lakhs for the Tenth Plan. 2) Drip Irrigation to conserve water It is proposed to install drip irrigation system in 500 acres for which subsidy will be provided at the rate of Rs /- for SC/ ST/ Women and Rs /- for others. An amount of Rs lakhs is, therefore, provided for the Tenth Plan. 3) Bivoltine Thrust Programme To produce Bivoltine silk in the State, it is proposed to assist activities such as Rearing Shed, Rearing Equipments, Disinfectants to P1 seed farmers, assistance to establish multi-end reeling basins (Six end basin units and Ten end basin units) and assistance to chawkie rearing centres with a State share assistance of Rs lakhs, Central Silk Board Share of Rs lakhs and Beneficiary share of Rs lakhs. 4) Seri-2000 (EAP) The externally Aided Seri-2000 programme funded by Swiss Agency for Development and Co-operation implemented from onwards will be continued during the Tenth Plan also. The established Sericulture Quality Clubs (SQCs) will be strengthened with assistance for procurement of effective compressor type power sprayer as well as financial assistance towards purchase of inputs. An outlay of Rs. 152 lakhs has been proposed for Strengthening of Quality Clubs and working capital assistance to Small reelers through Sericulture Co-operative Societies with beneficiary share of Rs. 41 lakhs and the remaining amount of Rs. 111 lakh will be the State's share. 5. Capability Upgradation In order to demonstrate Bivoltine Sericulture Technology, it is programmed to expand this programme in the districts of Dharmapuri and Erode during Tenth Plan. An outlay of Rs. 10 lakhs is proposed for the Tenth Plan for training of staff in different institutes in Bivoltine rearing, chawkie rearing, disinfection, pests and disease control, silkworm race maintenance and for trainers' training and seed farmers training, etc.

41 10.2 Village and Small Industries Preparation of Extension and Publicity materials It is proposed to avail assistance from Central Silk Board with matching State's contribution to the tune of Rs. 4 lakhs during Tenth Plan for publicity materials in local language and extension messages appropriate to farmers and reelers. 7. Computerisation and Upgradation of existing facilites To keep pace with development in MIS, upgradation and replacement of system is a necessity. The National Informatics Centre, Chennai studied the requirements of Silk Exchange to improve hardware, software support, etc. A sum of Rs. 10 lakhs has been proposed to update MIS during the Tenth Plan. Area Development programmes Sericulture is an agro-based industry in which tribals are engaged in the hills. Sericulture is an important component in the Hill Area Development Programme, the Western Ghat Development Programme and the Integrated Tribal Development Programme. A total outlay of Rs lakhs is proposed for Sericulture under these programmes for the Tenth Plan period. The details are as follows: (Rs. in lakhs) (A) Hill Area Development Programme (B) Western Ghat Deveploment Programme (C)Integrated Tribal Development Programme Total (A+B+C) Central Silk Board Schemes for Tenth Plan 1. Reimbursement of 50 % of the cost of Mulberry saplings. (Cost Rs. 0.50/ sapling, Central Silk Board Share 50 %, State Share 50 %). 2. Assistance for procurement of Modern rearing equipments required for Bivoltine Sericulture at a cost of Rs. 30,000/ farmer to cover cost of improved mountages like rotary mountages, netrikas, shelf rearing equipments etc. Cost is to be shared on 25 : 25 : 50 basis by Central Silk Board, State and beneficiary. 3. Assistance to promote economic use of water through Drip Irrigation system by sharing 50 % subsidy on 90 : 10 basis by Central Silk Board and State respectively. 4. Supply of Quality disinfecting material for P1 (Seed), F1 (Commercial) Bivoltine farmers by sharing cost on 25 : 25 : 50 basis by Central Silk Board, State and beneficiary. 5. Promotion of Chawkie Rearing Centres at a cost of Rs. 3 lakhs to be shared by Central Silk Board, State and beneficiary on 25 : 25 : 50 basis (Rs lakhs on rearing shed Rs lakhs on equipments)

42 Village and Small Industries 6. Assistance for construction of separate rearing house by sericulturists. Total cost upto Rs lakh/unit. Subsidy 50 % to be shared by State and Central Silk Board equally. 7. Promoting establishment of Multiend reeling machines and provide subsidy at 50 % to be shared by State (15 %) and Central Silk Board (35%). (unit cost 10 Basin 10 End unit Rs lakhs) and 8. Working capital required for Multi end unit will be Rs lakhs. The interest charged will be subsidised to the extent of 5 % by depositing 50 % working capital sanctioned by Central Silk Board. Tenth Plan schemes will be dovetailed to avail the assistance proposed by the Central Silk Board. Tenth Plan Outlay In all, a total outlay of Rs crore is proposed for implementing the Sericulture Schemes during the Tenth Plan, of which Rs crore will be State s share, Rs crore will be from Central Silk Board and Rs crore will be Beneficiaries' contribution/ Credit component. The abstract of Tenth Plan Outlay and yearwise details for State s Schemes are furnished in Statements I & II below. Sl. No Details Statement-I Abstract Of Tenth Plan Outlay Total Outlay State Share Central Silk Board (Rs. in crore) Beneficiary / Credit 1. Mulberry Planting of New Drip Irrigation to conserve water Bivoltine Thrust Programme SERI Capability Upgradation Publicity Materials MIS upgradation Area Development Programme Total

43 10.2 Village and Small Industries 641 Statement - Ii Details Of Tenth Plan Schemes And Outlay (Rs. in crore) Sl.No Schemes Outlay I II New Schemes (State plan) Mulberry - Planting of New Varieties 0.25 M.I.S. - Upgradation 0.10 Capability Upgradation 0.10 Preparation of Extension Publicity materials in local 0.02 languages Catalytic Development Programme a) Installation of drip irrigation system b) Construction of rearing shed c) Procurement of rearing equipments d) Supply of disinfection to P1 Seed farmers e) Assistance to Multiend reeling f) Establishment of Chawkie rearing Centre III. SERI a) Empowerment of Sericulture Quality b) Provision of revolving funds to Sericulture Quality Clubs. c) Exposure visit to Sericulture Qualtiy club members d) Drudgery reduction to charka reelers e) Awareness training to reelers f) Working Capital assistance to small reelers IV Area Development Programme a) Hill Area Development Programme b) Western Ghat Development Programme c) Integrated Tribal Development Programme Total 6.45 Abstract of Tenth Plan Outlay Village and Small Industries Sub-Sectors Outlay (Rs. in crore) 1. Small Scale Industries under the control of department of Industries and Commerce Handlooms and Textiles Khadi and Village Industrie Handicraft Sericulture 6.45 Total

44 Village and Small Industries Annexure Problems / Issues in Handloom and Textiles Sector and recommendations / suggestions (from Working Group's Report) 1. Census: There is an urgent need for a proper Census to be taken on the current population of active handlooms and the type of looms, in the Co-operative sector and otherwise. 2. Modernising the Looms: Various developments have taken place from pit looms to frame looms and upgradation is necessary. For example, the 'pick and pick' looms reduces the strain on the individual. Existing looms need to be replaced by modern looms. Further, smaller frame looms need to be converted into wider width looms for production of Export Varieties. 3. Designs and Innovations: A major strength of the Handloom Sector is that small quantities can be produced and innovative designs can be introduced in a flexible manner. However, the transfer of innovative designs to the handloom sector is not fully integrated in a widespread manner. At present, the design and innovation field in the Handloom Industry has not been strengthened. More stress on CAD / CAM / Centres, tie up with NIFT /SITRA, etc. would need to be ensured. National Institute of Fashion Technology (NIFT) should introduce a separate course on Handloom Designing. The tie-up with Kalakshetra has been a novel experiment that has come through quite effectively. Tapping on ethics sensitivities can help in marketing. All other institutions with traditional arts & crafts could be worked into joint ventures. 4. Marketing: Marketing is a major factor affecting the future of Handloom Weavers and this needs greater attention. Non-marketable varieties need to be identified and discouraged among the Handloom Weavers. In order to compete in the Global Market and to make the Weavers Co-operative Societies viable and also to give continuous employment to the Handloom Weavers, the weavers should be encouraged to resort to Export Oriented Production. The creation of a brand name so as to give unique weightage to the 'hand weave' will go a long way. Societies should market their products through their own sales outlets. Specialised goods produced in particular region can be considered for protection under the Geographical Indication of Goods Act The traditional handloom varieties like Kancheepuram Silk Sarees, Bhavani Jamakkalam and Madurai Sungadi Sarees should be protected under the Geographical Indication of Goods Act Training: Product Diversification needs to be given top priority. A major strength in the State is production of furnishings, made-ups. More expertise is required in understanding International trends, colour forecasts, design development etc. The Karur, Erode, Chennimalai belt needs to be strengthened more with such avenues for development. Silk furnishings have now acquired attention worldwide and this would need a great degree of initiative as the orientation to these furnishings is quite different. There are certain varieties in the State which are no longer marketable. Lungies, Traditional Towels, Kora Sarees are having no longer good market. Such products needs diversification. Fabrics which can be done on Powerlooms should be discouraged on Handlooms. Training programmes for punching of cards, exportable products in collaboration with Weavers Service Centre are the need of the hour. Training programme must be extended for use of tie and dye in Jamakalam weaving. Massive training to the weavers to change the latest designs is absolutely necessary. Cross-cultural visits of weavers to different weaving centres will help to expose them to newer designs.

45 10.2 Village and Small Industries Cotton / Yarn: To face the quality conscious market, Co-operative Societies need quality yarn. The Co-operative Spinning Mills are not in a position to respond to the market need due to obsolete machinery etc. The fluctuations in quality, nonavailability of equal grades of cotton and existence of old outdated machinery are major problems facing the Co-operative Spinning Mills. Greater freedom in the purchase of yarn from the open market will enable weavers Co-operative societies in producing good varieties that would help sale in the open market. 7. Audit And Finance: The audit of the Co-operatives should be by a professional agency. The cost of Co-operative audit is prohibitively high at present. Audit can be done by Chartered Accountants (as has been done in Maharashtra State). With regard to Co-operatives, the salary structure of the Coop. employees and others should be made flexible according to the financial strength of the Society. The co-operative by-laws may be made flexible in order to enable engagement of an employee on contract whenever the financial position is weak. 8. Maintenance of Wage Levels: The Minimum Wages Act 1948 is being implemented by the Labour Department. So far as the Handloom weavers in the Weavers Co-operative Societies are concerned, the payment of minimum wages to the weaver member of the Co-operative Societies besides allowing 10% D.A. hike invariably every year in the light of the Government Orders is ensured. However, the weavers outside the Co-operative fold are not paid 10% D.A. hike every year resulting in a very large difference in the wage component between the weavers in the Co-operative sector and the weavers working under master weavers. As a result, the handloom products produced by the handloom weavers outside the Cooperative fold are much cheaper than that of the goods produced in the Co-operative societies. This affects gravely the saleability of the products of weavers Cooperative societies. A wage policy needs to be evolved which pegs the upper levels in tune to productivity & marketability of products in the weavers Co-operative societies. 9. Legislative changes: A thorough overhaul of the Co-operative Societies Act to incorporate provisions for taking remedial action and management of deficits in stock, to eliminate bogus membership and for fast track provisions for clearance of society's dues etc., is necessary. 10. The Handloom Reservation Act : To protect Handloom Weavers and the Handloom Industry from the onslaught of Powerlooms, the Government of India enacted the Handlooms (Reservation of Articles for Production) Act 1985 for implementation by all States in the Country. In pursuance to the enactment of the above Act, Rules and orders were framed by the Government of India by reserving 22 items exclusively for production in Handlooms. This was challenged by way of several Writ Petitions before various State High Courts. All these Writ Petitions were pooled together and heard by the Supreme Court of India. The Supreme Court of India have dismissed all these Writ Petitions and upheld the reservation of 22 items exclusively reserved for Handlooms. A. Handloom Weavers' Co-operative Societies Marketing is a major factor affecting the future of the Handloom Weavers Cooperative Societies. Co-optex provides the major sales net-work for Weavers Cooperative Societies in Tamil Nadu. However, it is in a position to market only about 25% to 30% of the products produced by Weavers Co-operative Societies. Ideally Co-optex should be procuring atleast 75% of the product produced by Weavers Cooperative Societies. Co-optex is still having to cope with a traditional marketing style which is proving difficult for the societies.

46 Village and Small Industries As a part of market strategy, the Department has recently started Showrooms under the brand name "LOOM WORLD" which have been performing well at Chennai Anna Nagar, Coimbatore and Erode. The Co-operative Societies have been encouraged to market their products in 'LOOM WORLD" Show-rooms. Exhibitions are being conducted under the brand name "LOOM WORLD" so as to popularise the "LOOM WORLD" concept. "Loom World" should be progressively strengthened and enabled to furnish production programme to Primary Weavers Cooperative Societies in a similar manner as that of Co-optex, so that Loom World will market the remaining 25% of the products produced by Weavers Co-operative Societies. Every year, the Government has been issuing orders on D.A. hike on wages for weavers working in the Co-operative societies and this is added to the product costs. This has led to the products becoming unviable in the open market. Every society should be given the freedom to determine wages according to its profitability. Human Resources Development: Massive Training Programmes on improving managerial skills & Computer skills should be given to staff manning the Societies. In order to encourage the Handloom Weavers to upgrade their technology, the Government have recently constituted a committee to work out a new scheme and to suggest suitable schemes for upgrading the societies and converting them into Powerlooms. A suggestion has been made that the Scheme of conversion of Handlooms into Powerlooms introduced in the year 1991 and subsequently withdrawn by the Government during the year 1996 may be re-introduced. B. Spinning Industry During 2002, the global demand is expected to touch 3200 million kgs. and India could very well meet 25% of the demand. Thus, the spinning industry in Tamil Nadu has 'market appeal' at the global level and this requires to be addressed in a serious manner to ensure that mills which are functioning currently do not lend themselves to closure on account of negative factors affecting them. Some of the negative factors affecting the spinning mills industry in Tamil Nadu are obscolescence in machinery, hank yarn obligation impinging on profitability, poor quality of cotton, rigid labour laws, bias against large scale spinning mills and so on. The following policy measures and steps can help modernisation, diversification of yarn, quality maintenance and competitive pricing which in turn will ensure that Tamil Nadu maintains its prime share in national textile capacity: 1. Hank Yarn Obligation: In real terms, there is a need to have a serious look at the hank yarn obligation in the light of its current demand. The Hank Yarn Obligation was meant solely to provide hank yarn for handlooms, but a substantial part of it is being utilised by Powerlooms. An accurate Census would require to be carried out on the actual usage of hank yarn for handlooms so as to reduce the Hank Yarn Obligation. The Hank Yarn Obligation contributes in substantial measure to the losses in the spinning mills. 2. Power -Power is an extremely important factor that affects the spinning mills. The rate per unit in Kerala is Rs per unit, whereas, in Tamil Nadu it is almost double. Several efforts are required to ensure that the power costs do not add up to make the business unviable. The Industry has requested that HSD Oil for captive power consumption in the mills should be provided with sales-tax concession / exemption. Further, gas-based captive power plants should be given permission. 3. Labour: Labour is a major factor that adds to the costs, making any unit unviable. Provisions of the Industrial Dispute Act, Tamil Nadu Industrial Establishment Act, 1981, Contract Labour Regulation and Abolition Act and Employees Provident Fund

47 10.2 Village and Small Industries 645 Act need to be looked into so as to ensure greater productivity and viability of the unit. 4. Taxes & Excise Duty: There is a need for an unbroken modvat chain from fibre to fabric. Excise Duty would need to be further rationalised and brought down. The State Government should encourage setting up of cone dyeing units which will be the first step towards abolishing hank yarn. A specified period of time may be given to set up Cone dyeing units and an incentive should be to give ST exemption for a period of time (Cone dyeing units are not available in Tamil Nadu). Incentives should be given to scrap old / obsolete industry. State financial institutions which are providing funds for modernisation should encourage scrapping of obsolete machinery as a precondition to access substantial finance. Buying new machinery without scrapping old machinery is adding to the inefficiency in the industry. There is an urgent need for setting up Commercial Intelligence Cells to obtain information on spinning industry in other countries. Co-operative Spinning Mills: Out of 18 Co-operative Spinning Mills, production was stopped by 4 Co-operative Spinning Mills due to fluctuations in cotton and yarn rates, non-availability of working capital, wear and tear in the machineries and recent recession in Textile Industry, etc., resulting in the Mills sustaining huge loss. During the past few years, the Government had approved various package measures for revival of all the Co-operative Spinning Mills in the State. As the Central Co-operative Banks and NABARD have not come forward to sanction cash credit continuously, almost all the Co-operative Spinning Mills except Anna and Bharathi Co-operative Spinning Mills are running on huge losses. In the first instance, the Government considered that the following 3 closed Cooperative Spinning Mills be privatised by calling for bids (i) (ii) (iii) Misereor Co-operative Spinning Mills Madurai District Co-operative Spinning Mills Villupuram District Co-operative Spinning Mills Further, the Government ordered that the land and building of North Arcot Co-operative Spinning Mills at Ariyur could be used for the setting up of a Medical College and the other assets of this mill sold by calling for bids and the proceeds utilised for Voluntary Retirement Scheme of workers. The Government has constituted a Committee recently to decide on the modalities of privatization. The Committee shall make its recommendations to the Government. With massive erosion of working Capital and networth, most of the CSMs will need to be downsized or to be wound-up. C. Powerloom Industry 1. Power: The cost and supply of power seriously affect the Powerloom Industry as in the case of spinning mills industry. The cost of Powerloom is extremely high as compared to neighbouring Andhra Pradesh and this is a major factor affecting production costs. Further, erratic power supply also affects power schedules. 2. Low Level of Technology: Most of the plain looms in Tamil Nadu require to be scrapped and replaced by Rapier looms or projectile looms. In fact, six plain looms can be substituted by one rapier loom. A second hand rapier loom from abroad would cost Rs. 15 lakhs. Technology has to be upgraded by scrapping of obsolete

48 Village and Small Industries machinery. Hence, it has been suggested that 25% Capital Subsidy can be provided subject to a maximum of Rs. 3 lakh, for scrapping six plain looms in place of one rapier loom or Shuttleless loom. 3. Credit: As in other sectors of the textile industry, real interest rates are very high and there is scarcity of term credit. Producers have no other choice but to turn to unorganised money markets. There is a need to make credit available at lower rates of interest from financial institutions. 4. Powerloom Machinery manufacturers are conspicuous by their absence in India. Auto/shuttleless looms require to be manufactured in India. This will help to bring down the cost of shuttleless looms. In fact Powerloom manufacturers in Countries such as Taiwan, Italy, Switzerland and Korea could be invited to set up industrial units in the State. 5. Quality: Powerloom fabrics in India are comparatively poor in quality and this is directly related to the technology. Training in quality control is absolutely essential. The Powerloom Service Centres would need to be encouraged in popularising new technology. With regard to the import of modern looms, duty free import should be encouraged where the technology is not available in the country. 6. Marketing Facilitation Centre: There is a need for provision of marketing facilitation centres adjacent to powerloom clusters, that will enable buyers to have an easy access to the producers. At present, buyers from abroad find it extremely difficult to source the best in quality due to lack of a proper interaction centre. Powerloom Development Export Promotion Council (PEDEXIL) can be involved in setting up of interaction centre. 7. Processing: Processing is extremely weak and needs to be strengthened. Processing units that are up-market and have modern technology need to be set up in the State. The value addition after processing is very low and efforts have to be taken to add value by improving processing quality like bleaching, dyeing, printing etc. 8. Quotas: Preferential Quota distribution over the next three years should be linked to Technology Upgradation. This will enable a real boost to efficiency and quality on international standards. Co-Operative Powerlooms and Assistance for Powerloom Sector: The need to draw up a Scheme for upgradation of low value powerlooms into sophisticated powerlooms in this State is highly essential. Towards this object, the Government has constituted a committee recently to suggest suitable measures. The Director of Handlooms and Textiles is functioning as the "State Textile Authority" and is vested with the powers of enforcing Textiles (Development & Regulation) order The Textile (Development and Regulation) Order 1993 came into force on and from The issuance of Powerloom Registration Certificate and its periodical renewal has been dispensed with and a system of filing Information Memorandum and issue of an acknowledgement was introduced. The fee for filing the information memorandum is Rs (Rupees One thousand only) irrespective of the number of looms covered under an Information Memorandum. The fee of Rs is to be paid each time to the Government Account (Powerloom Registration Fund Account) whenever Information Memorandum is filed. Powerloom Registration Fund: As empowered under the Textiles (Development and Regulation) Order 1993, the Government constituted a Powerloom Registration Fund and a Board of Management for it under the Chairmanship of Secretary to Government, Handlooms, Handicrafts, Textiles and

49 10.2 Village and Small Industries 647 Khadi Department. The entire amount collected for registration of Powerlooms have been transferred to Powerloom Registration Fund. Further collections under the registration of powerlooms are being credited to the above fund. This amount has been deposited in the Banks as short-term deposits. This fund can be utilised for providing loan assistance to the Powerloom Weavers Co-operative Societies, setting up of powerloom centre, establishment of design centres for powerlooms, creation of pre-loom and post-loom processing facilities, construction of godowns, opening of showrooms for marketing of powerloom cloth, establishing research and development centres, assistance for modernisations, etc. The Powerlooms in Tamil Nadu are mostly unorganised and the Powerloom productivity is very low. A programme of modernisation of these highly premitive looms in a phased manner is the need of the hour. It has been suggested that loan assistance may be provided from the Powerloom Registration Fund for modernisation of 25,000 Powerlooms during Tenth Five year Plan period at 5,000 Powerlooms per year. D. Garments Industry below: Some areas that require immediate attention to sustain the growth are listed 1. Rich raw material base in cotton and hosiery yarn production could be wasted if the present level of technology is not upgraded. Upgradation of technology can be made possible only if the latest developments in the field are available at international prices. 2. Age restriction on import of advanced second hand machineries should be liberalised wherever the latest technology is not available in India. 3. Crucial factor in determining the quality of garments is in the area of embellishments, trimmings, zippers, etc. These are not available locally in India of the required quality. Duty free import of these items will go a long way in improving the quality and at the same time strengthening the industry at this crucial juncture. 4. Non-cotton export should be permitted to be imported freely (without duty). 5. A major factor affecting the garments industry including knitwear has been the poor facilities for shipping at the Chennai port. 6. Efficient and transparent customs would be required to encourage exports. With just 3 years to go for removal of quotas, it would be advisable for quota distribution to be linked in some way to all units that have decided to upgrade their technology. 7. An Apparel Park oriented towards ready made garments should be located on the outskirts of Chennai to assist garment exporters here. This will greatly encourage foreign buyers and importers from other countries to avail the excellent boarding facilities in Chennai. 8. Research and Training facilities available at NIFT, NID, ATDC should be enhanced with direct tie-up with foreign design and fashion institutions. 9. Uninterrupted supply of power and water in the industrial areas particularly in the Ambattur belt will enable a greater thrust in these areas towards exports. 10. The State Finance Corporations should be encouraged to support financing of investments in the garment sector through TUF and otherwise for higher technology levels and the interest rates should be further reduced (link between higher technology and lower interest).

50 Village and Small Industries 11. Wherever triangle manufacturing systems are in operation with different stages of the value chain being in different countries, it will help to identify the areas that could be developed so as to bring the entire production process into one location and thus directly be beneficial to the entire production process and stabilise the industry being located in the State. E. Knitwear Industry In the context of globalisation, Indian Industrialists and Businessmen have learnt that the bottom line is profitability and to this extent would ultimately relocate if necessary. Therefore, the following aspects need to be looked into: 1. Electricity: Frequent interruptions, voltage fluctuations, unannounced power cuts compounded with lack of proper maintenance on transformers has resulted in a serious production problem for various units. The State that can manage good supply of power will attract more industries. 2. Water: There are over 500 processing units with all of them being dependent on water. The water problem in Tiruppur needs to be looked into immediately. 3. Chennai Port: Due to capacity constraints, very few mother vessels are able to call at Chennai. The current practice of carrying cargo from Chennai in feeder vessels with transhipment at Colombo, Dubai and Singapore entails delays. The capacity and efficiency of Chennai Port should be augmented to work long haul mother vessels. 4. Apparel Park: An Apparel Park should be set up in between Tiruppur - Coimbatore (easier access to export) to enable easy access for foreign buyers and visitors. This will further help to attract more business opportunities. A minimum of 100 to 200 acres of land should be developed for this purpose. F. Processing Industry The developed countries have already begun regulating usage of chemical dyes with eco-friendly measures like banning of AZO and other harmful dyes. Setting up of Effluent Treatment Plants is absolutely necessary. To be recognised worldwide, acquisition of ISO 9000 and ISO certification are important to increase value additions and improve customer acceptability of the products. Processing is the weakest link in Tamil Nadu textile production and there is every possibility that this will weaken the sector so as to affect our brand image in the future and lead to a greater loss of business. With this in mind, the following measures are suggested: 1. Modern Processing units measuring to international standards and in a position to meet environmental norms should be encouraged to be set up. Initially, subsidies would be necessary either in the form of credit or loan to encourage them to set up world class processing facilities and Corporates from abroad would need to be invited to set up a few factories that would enable international quality. A major incentive could be substantial Sales Tax exemption to encourage fresh investments in this field. 2. The network of CAD/CAM computerised colour matching and testing facilities would need to be explored. 3. ISO 9000 / ISO certification would need to be popularised. Seminars and awareness drives by Business Associations are necessary. 4. Higher Interest subsidy would encourage greater development in the processing sector. A subsidy of 15% investment in processing machineries, ETPs etc., would help, alternatively interest free medium term loan can be contemplated.

51 10.2 Village and Small Industries As most of the units are involved in processing for garment units which are already involved in exports, processing facilities should be encouraged irrespective of whether it is in line with exports or not. Products sold within the Country will also require to be of international quality in the light of globalisation. 6. Processing Industry catering to the needs of garment industry may be given deemed export status which will encourage the industry to import quality machines which are not manufactured in India without payment of import duty to meet international standards. 7. A Corpus Fund has to be created for processing sector at State level. 8. Regarding pollution norms, Pollution Control Board instead of acting as a regulatory authority should also act as a advisory body. While establishing Pollution Control Board norms, discussion with industry and institution is necessary and proper norms are to be formulated. 9. Wherever processing units are located there is a problem with regard to hazardous solid waste. Land and seepage facilities should be provided for depositing hazardous solid waste in such a manner as to be seepage proof. 10. Out of all 2200 processing houses, barely 20 are functioning to a satisfactory level. It is estimated that a minimum of 30 to 40 processing houses with a capacity of 30,000 to 50,000 lakh sq. mtrs. are required depending on the sectoral products. A massive promotional drive would be required to identify potential entrepreneurs who are interested in setting-up world-class processing facilities. There is a need to undertake a foreign tour by technical persons belonging to SITRA and financial institutions to places in the world where the processing industry is highly developed in order to set up top class units within the State.