WORKING PAPER
Overseas
Development
Institute
10-1 1 Percy Street London WIP
Tel: 01-580 7683
WORKING PAPEH
No.
10
) THE ROLE OF HAI'IDIC?^AFTS EXPORT" - PROBLEMS
AND PROSPECTS. BASELY ON INDIAN EXPERIElICEt
V i n c e n t ^ C a b l e and Ann lUeston*
'v.
Research
.
' •
O f f i c e r s , Overseas Development I n s t i t u t e
OT>I i n c o l l a b o r a t i o n w i t h I n d u s t r i a l Development S e r v i c e s ,
Hew D e l h i , i s u n d e r t a k i n g a s t u d y o f I n d i a n h a n d i c r a f t
e x p o r t s and t h e i r c o n t r i b u t i o n to I n d i a n economic developraerit.
The s t u d y i s f o c u s s i n g , i n p a r t i c u l a r on f i v e p r o d u c t s : c o t t o n
handlooms, s i l k goods, handknotted c a r p e t s , a r t metalware,
and hand p r i n t e d t e x t i l e s .
ODI Working Papers p r e s e n t i n p r e l i m i n a r y form work
r e s u l t i n g from r e s e a r c h undertaken under the a u s p i c e s o f
the I n s t i t u t e . Views e:cpressed a r e those o f the a u t h o r s
and do not n e c e s s a r i l y r e f l e c t the v i e w s o f ODI.
Coroments
a r e welcomed and s h o u l d be addressed d i r e c t l y t o the a u t h o r s .
0 85003 086
2
July 1
C 0
T E K T S
page
Summary
Section 1
Section 2
1
Handicraft exports: labour i n t e n s i v e
' r i c h man's goods'
H a n d i c r a f t s and handlooms e x p o r t s
2
i n the
I n d i a n economy
10
(a) E x p o r t s
10
(b) Employment
10
(c) The a l t e r n a t i v e use and e f f i c i e n c y
of investment
Section 3
Section 4
Section 5
13
(d) F u t u r e employment and growth
13
(e) The ' q u a l i t y ' o f employment
P r o d u c t i o n and d i s t r i b u t i o n o f h a n d i c r a f t goods
16
lli
(a) O r g a n i s a t i o n o f h a n d i c r a f t s
the s p e c i a l i s t outworker
13
production:
(b) S t r u c t u r e o f d i s t r i b u t i o n
23
C o n s t r a i n t s on t h e h a n d i c r a f t s i n d u s t r y
25
(a) C r e d i t a v a i l a b i l i t y
25
(b) P r o b l e n s w i t h rav7 m a t e r i a l s s u p p l i e s
27
(c) Shortage o f s k i l l e d l a b o u r
30
(d) 'Improved' technology
32
(e) D e s i g n and m a r k e t i n g
35
( f ) D e l i v e r y problems
30
(g) Overdependence on e s t a b l i s h e d markets
3G
Development p o l i c y i s s u e s
41
(a) Labour c o n d i t i o n s and the w e l f a r e o f the
artisan
41
Labour markets and a r t i s a n s
41
Minimum s t a n d a r d s
43
D i s t r i b u t i o n of 'value'
46
(b) A l t e r n a t i v e s t r u c t u r e s : c o - o p e r a t i v e s
47
(c) The urban b i a s
50
(d) T e c h n o l o g i c a l c h o i c e
52
SU1EIA^^Y
H a n d i c r a f t s i n I n d i a have emerged as a s i g n i f i c a n t source o f f o r e i g n
exchange and employment,(1) Under the S i x t h P l a n s u b s t a n t i a l e x p a n s i o n
of t h e s e c t o r i s p r o j e c t e d .
I n i t i a l f i e l d T7ork and secondary s o u r c e s
suggest t h a t t h i s e x p a n s i o n may n o t be as s i m p l e a s e x p e c t e d , and t h a t
i t s b e n e f i t s mAl n o t be as v/idespread as i n t e n d e d .
T h i s paper r e v i e w s
these problems and i s s u e s , and p u t s f o r r j a r d soiae p r e l i m i n a r y s u g g e s t i o n s
as t o hOTj they may be r e s o l v e d , t o ensure t h a t the s e c t o r l i v e s up t o
expectations.
The paper begins by l o c a t i a g h a n d i c r a f t s goods w i t h i n the
vrider c o n t e x t o f development and i n t e r n a t i o n a l t r a d e p r i n c i p l e s . The
r u r a l h a n d i c r a f t s s e c t o r has t r a d i t i o n a l l y been t r e a t e d as one w h i c h v r i l l
i n e v i t a b l y d e c l i n e Tn.thout s u b s t a n t i a l p r o t e c t i o n f r o n mora advanced
nanufacturing processes.
E x p e r i e n c e s i n uany c o u n t r i e s , and w i t h i n I n d i a ,
suggest t h a t i n p a r t t h i s i s t r u e b u t t h a t t h e r e i s an i n p o r t a n t r o l e f o r
h a n d i c r a f t s i n i n t e r n a t i o n a l t r a r l e , as a l a b o u r i n t e n s i v e ' r i c t i man's
good'. Tiiera f o l l o w s background i n f o r m a t i o n on I n d i a n T i a n d i c r a f t (and
handloom) e x p o r t s .
An o u t l i n e i s p r o v i d e d o f how the p r o d u c t i o n and
d i s t r i b u t i o n o f h a n d i c r a f t s (and handloons) i s o r g a n i s e d , t o see i f t h e r e
i s a t y p i c a l form o f o r g a n i s a t i o n and how t h i s might have changed w i t h
the e x p a n s i o n o f e x p o r t s . V a r i o u s problems a s s o c i a t e d w i t h t h e h a n d i c r a f t s
s e c t o r a r e t h e n d i s c u s s e d b r i e f l y ; (a) t h e s c a r c i t y o f w o r k i n g c a p i t a l ;
(b) t h e inadequacy o f raw m a t e r i a l s u p p l i e s ; ( c ) the s h o r t a g e o f s k i l l e d
l a b o u r I (d) the i n a p p r o p r i a t e t e c h n o l o g y , t o g e t h e r w i t h a v a r i e t y o f
f a c t o r s w h i c h c a n l o o s e l y be grouped under t h e term ' n a r k e t i n 3 problems';
(e) t h e l a c k o f d e s i g n i n n o v a t i o n ; ( f ) the d e l i v e r y problems; and (g) t h e
over-dependence on e x i s t i n g m a r k e t s . T h i s i s f o l l o t ^ e d by an e x a m i n a t i o n
of so le i n p o r t a n t i s s u e s i n t h e development o f h a n d i c r a f t s ; (a) the
c o n d i t i o n s o f l a b o u r ; (b) t h e r o l e o f c o - o p e r a t i v e s ; ( c ) t h e urban b i a s ;
and (d) the c h o i c e o f t e c h n o l o g y .
(1)
There i s a need t o c l e a r up some i n e v i t a b l e semantic c o n f u s i o n h e r e
between v a r i o u s o v e r l a p p i n g c a t e g o r i e s . H a n d i c r a f t s i n d u s t r i e s a r e
d i s t i n ; ; u i s h e d by a developed and s p e c i a l i s e d a r t and complex p r o c e s s i n g ;
markets a r e l i u i t e d but u s u a l l y v j i d e l y d i s p e r s e d .
Cottage i n d u s t r i e s
a r e concerned w i t h a r t i c l e s o f household o r l o c a l v i l l a g e use and a r e
c o c r a e r c i a l l y u n i m p o r t a n t . V i l l a g e o r r u r a l i n d u s t r i e s subsume b o t h
c o t t a g e and h a n d i c r a f t s i n d u s t r i e s and o t h e r s c a r r i e d out i n v i l l a g e s ,
p o s s i b l y on a s u b - c o n t r a c t i n g b a s i s ; h a n d i c r a f t s a r e , however, o n l y a
s m a l l p a r t o f t h e t o t a l and a r e n o t c o n f i n e d t o v i l l a g e s .
SECTION 1
EAiraiCRAFTS EXPORTS! LABOUR INTENSIVE 'RICH MAiJ'S GOODS'
T h i s paper i s concerned w i t h goods whose e s s e n t i a l c h a r a c t e r i s t i c s a r e t h a t
the]? a r e hand r a t h e r than machine made, i n c o r p o r a t e s u b s t a n t i a l elements o f
c r a f t s k i l l , and a r e lujcury r a t h e r than e s s e n t i a l i t e m s . T h e i r p a r t i c u l a r
r o l e i n the i n t e r n a t i o n a l economy d e r i v e s frora the f a c t t h a t they are items
f o r w h i c h t h e r e i s a grovjing demand i n TTestem c o u n t r i e s but w h i c h r e q u i r e
such h i g h l y l a b o u r i n t e n s i v e p r o d u c t i o n t h a t - even i n c o m p e t i t i o n t r i t h
machine made items - I n d i a n low wages r e p r e s e n t a p o t r e r f u l source o f
c o K n a r a t i v e advantage ( g i v e n t h a t the goods may o n l y be a c c e p t a b l e t o c o n sumers i f t h e h a n d - c r a f t i n g element i s v i s i b l e i n the p r o d u c t ) .
The r e c e n t r a p i d growth o f h a n d i c r a f t s e x p o r t s from d e v e l o p i n g c o u n t r i e s
( I d c s ) , and e s p e c i a l l y f r o m I n d i a , can be t r e a t e d - on one l e v e l - as an
i n t e r e s t i n g o d d i t y ; but t h e r e a r e p o s s i b l y more g e n e r a l p o i n t s o f n o t e , i n
the realms of t r a d e t h e o r y . The more modern e x p l a n a t i o n s o f p a t t e r n s o f
t r a d e between r i c h and poor c o u n t r i e s have t r i e d t o i n t e g r a t e tt7o s t r a n d s o f
argument. The f i r s t i s the i d e a t h a t s p e c i a l i s a t i o n depends upon f a c t o r
p r o p o r t i o n s , d e f i n e d t o i n c l u d e 'hutaan c a p i t a l ' - h i g h t e c h n o l o g y and s k i l l
i n t e n s i t y - as w e l l as p h y s i c a l c a p i t a l - m a c h i n e r y . As a g e n e r a l r u l e i t has
been e s t a b l i s h e d t h a t r i c h e r i n d u s t r i a l c o u n t r i e s have a comparative advantage
i n m a n u f a c t u r i n g t r a d e v r i t h I d c s f o r goods w i t h a h i g h t e c h n o l o g y and s k i l l
c o n t e n t (such as n o a - e l a c t r i c a l and e l e c t r i c a l m a c h i n e r y , motor v e h i c l e s ,
a i r c r a f t and i n s t r u m e n t s ) . T h i s i s almost c e r t a i n l y s t i l l t r u e o f I n d i a ' s
t r a d e w i t h i n d u s t r i a l c o u n t r i e s , though i t i s l e s s apparent than f o r n o s t
o t h e r I o c s because o f I n d i a ' s s k i l l r e s o u r c e s i n e n g i n e e r i n g , and the e x t e n t
of s u b s i d i e s and o t h e r government i n f l u e n c e s . There i s r a t h e r more
c o n t r o v e r s y about the advantages o f i n d u s t r i a l c o u n t r i e s i n p u r e l y c a p i t a l
i n t e n s i v e i n d u s t r i e s (as d i s t i n c t from those i n w h i c h human c a p i t a l augments
the i m p o r t a n c e o f m a c h i n e r y ) and xrhether the L e o n t i e f Paradox s t i l l h o l d s g o o d , ( l )
The second argument d e r i v e s from, the n a t u r e of the p r o d u c t s themselves.
The s o - c a l l e d 'neo-technology' t h e o r i e s have draxm a t t e n t i o n t o the mechanism
by which i n d u s t r i a l c o u n t r i e s develop a comparative advantage i n 'nev?' p r o d u c t s
independent of f a c t o r endoraients. (2) R i c h c o u n t r i e s have advantages here b o t h
on the s u p p l y s i d e - r e l a t i v e l y abundant t e c h n o l o g i s t s , w i t h companies and
goveraiaents a b l e t o make l a r g e RjD o u t l a y s - and, i n terms of demand, a r e a d y
market f o r new p r o d u c t s . Ldcs acquire, a comparative advantage, on t h i s
i n t e r p r e t a t i o n , i n the 'mature' phase o f the c y c l e , s i n c e a t t h i s s t a g e
t e c h n o l o g y i s w i d e l y d i f f u s e d and p r i c e c o m p e t i t i o n , o f s t a n d a r d i s e d i t e m 3 ,
g i v e s an advantage t o low l a b o u r c o s t p r o d u c e r s (whether o r not the p r o d u c t i o n
(1)
II.G. J o h n s o n , The S t a t e o f Theory i n R e l a t i o n t o the E m p i r i c a l A n a l y s i s ,
i n E, Vernon ( e d ) , The Technology F a c t o r i n I n t e r n a t i o n a l T r a d e ,
U n i v e r s i t i e s N a t i o n a l Bureau Conference S e r i e s 22, Hew Y o r k , 1970.
(2)
R, V e r n o n , ' I n t e r n a t i o n a l investment and i n t e r n a t i o n a l t r a d e i n the p r o d u c t
c y c l e ' , Q u a r t e r l y J o u r n a l o f Economics, 1966.
3. I l i r s c h , L o c a t i o n of i n d u s t r y and I n t e r n a t i o n a l C o m p e t i t i v e n e s s , O x f o r d ,
1967.
nathods a r e r e l a t i v e l y l a b o u r i n t e n s i v e ) . However, t h i s "product c y c l e '
h y p o t h e s i s d e a l s o n l y w i t h cases o f p r o d u c t i n n o v a t i o n and i t s p r e d i c t i v e
power i s weakened soriewhat by w i d e l y v a r y i n g l e n g t h s o f t i n e f o r the
d i f f u s i o n o f t e c h n i c a l knowledfje,
A somewhat w i d e r approach t o p r o d u c t c h a r a c t e r i s t i c s i s t o d i v i d e
t h e n i n t o ' r i c h man's', V o o r nan's' and 'ever3T:tan's' goods. U s i n g t h i s
c l a s s i f i c a t i o n - w h i c h i s based p r i m a r i l y on the income e l a s t i c i t y o f demand
f o r the p r o d u c t s - H i r s c h i s a b l e t o show t h a t t h e r e i s a s t r o n g c o r r e l a t i o n
between p r o d u c t c h a r a c t e r i s t i c s and cotapar.-'tive advantage as r e v e a l e d
through t r a d e and as p r e d i c t e d by f a c t o r endowments. (1) " i c h c o u n t r i e s
tend t o have a comparative advantage i n ' r i c h nan's' goods (which i n c l u d e
e n g i n e e r i n g goods o f v a r i o u s k i n d s , consximer d u r a b l e s , v e h i c l e s , i n s t r u m e n t s ,
b a s i c c h e m i c a l s and p l a s t i c s and w h i c n are i n g e n e r a l t h o s e goods
c h a r a c t e r i s e d by the g r e a t e s t RuJ and s k i l l i n t e n s i t y ) , Ldcs have a
c o r r a r a t i v e advantage i n some 'poor man's' goods ( t e x t i l e s ) and some
'everjraan^s' goods -rhich have i n t e n a e d i a t e income e l a s t i c i t i e s ( c l o t h i n g ,
l e a t h e r , f o o t w e a r , i r o n and s t e e l , r i e t a l s , s h i p b u i l d i n g ) .
F o r Idcs t h e r e a r e f a m i l i a r advantages i n s p e c i a l i s a t i o n based on
f a c t o r endoTviaents; but t h e r e a r e e q u a l l y f a m i l i a r d i s a d v a n t a g e s i n b e i n j i
lock-id i n t o the p r o d u c t i o n o f 'poor Mian's' - o r even 'evetyman's' - goodo:
^ p r o t e c t i o n i s t r e s i s t a n c e t o p r o d u c t s where market gro^Tth i s s l o w and
producars i n r i c h c o u n t r i e s are s e e k i n g t o r e s i s t market p e n e t r a t i o n ; severe
p r i c e c o m p e t i t i o n l e a d i n g t o disadvantageous b a r t e r terms o f t r a d e . I t i s
c o n s i d e r a t i o n s such as these w h i c h have l e d some o f the Far E a s t e r n newly
i n d u s t r i a l i s i n g c o u n t r i e s ( H I C S ) t o develop more t e c h n o l o g y - i n t e n s i v e
i n d u s t r i e s and t o naJ.;e the jump t o the p r o d u c t i o n c h a r a c t e r i s t i c s of r i c h
coui>tries. Sut soae o f these c o u n t r i e s ( S i n g a p o r e , Korea) a r e a l r e a d y
a p p r o a c h i n g a r e l a t i v e s c a r c i t y o f l a b o u r - sami and u n s k i l l e d - and a
change i n i n d u s t r i a l s t r u c t u r e f l o w s l o g i c a l l y from t h i s . For c o u n t r i e s
l i ke I n d i a w i t h a super-abundance o f underemployed w o r k e r s , t h e r e are
c l e a r l y g r e a t advantages t o be g a i n e d , i f they can c o n t i n u e t o develop a
comparative advantage i n l a b o u r i n t e n s i v e i t e m s but a t the savae time
i d e n t i f y p r o d u c t s x^hich i n o t h e r r e s p e c t s are ' r i c h man's' goods, x-rith
r e l a t j . v e l y h i g h income e l a s t i c i t y .
Some such t r a d e s were i d e n t i f i e d by
H i r s c h : p r i n t i n g and p u b l i s h i n g ; f u r n i t u r e . Tlie f i r s t i s nox^r a i^iajor and
expanding a r e a o f Idc a c t i v i t y i n i n t e r n a t i o n a l t r a d e (though d i f f i c u l t t o
u i o n i t o r s i n c e wuch of the p u b l i s h i n g ' t r a d e ' i s i n the form of a s e r v i c e
r a t h e r than a good), and the second i s t o o , though i n h i b i t e d by t r a n s p o r t
c o s t s u n l e s s f u r n i t u r e i s s h i p p e d i n knock-doxm form. H a n d i c r a f t s r e p r e s e n t
another p o s s i b i l i t y . I t s h o u l d be s t r e s s e d t h a t i n a d o p t i n g t h i s
t e r m i n o l o g y we a r e not i m p l y i n g a n a r k a t s o l e l y f o r l u x u r y i t e n s - i v o r y ,
j e x T e l l e r y , or s i l k s ,
'Pdch man's goods', d e f i n e d i n economic terras, i n c l u d e
many a a s s market i t e n s .
(1)
S. H i r s c h , n i c h Man's, Poor Ilan's and Everyman's Goods, K i e l e r
S t u d i e n IVO :Iohr., T u b i n g e n , 1977.
T h i s vievr o f h a n d i c r a f t s as a l a b o u r i n t e n s i v e ' r i c h laans's good has
been s t r o n g l y supported by t h e work o f Ruddle and Ko» who c a l c u l a t e d income
e l a s t i c i t i e s (time s e r i e s and c r o s s - s e c t i o n ) f o r a v a r i e t y o f items w h i c h
c o r r e s p o n d ( v e r y a p p r o x i m a t e l y ) t o h a n d i c r a f t s i t e m s . The o v e r a l l
e l a s t i c i t y e s t i m a t e s cor.tpared f a v o u r a b l y w i t h those f o r manufactures as a
w h o l e , and i n almost e v e r y case were g r e a t e r than one. Time s e r i e s d a t a •
broadly
c o r r o b o r a t e d t h e c r o s s - s e c t i o n d a t a w i t h the e x c e p t i o n o f handnade t e x t i l e s where the e f f e c t o f quotas was p r o b a b l y d e c i s i v e i n p r o d u c i n g
a n e g a t i v e c o e f f i c i e n t . T!ie e v i d e n c e shows t h a t these h a n d i c r a f t items
c o n t r i b u t e a growing share t o I d c e x p o r t s o v e r a l l , and even o f manufactured
exports,
TABLE 1
Income E l a s t i c i t i e s o f lemand f o r D a n d i c r a f t s
Total handicrafts
1,30
(1.60)
Hood
0,99
(1.59)
1,13
0,07
0,35
(1.89)
(-0.3O
(1.14)
1.5&
(-1.14)
1,14
1.22
2.03
(-1.23)
(-0.S7)
(-1.10)
1.12
(2.11)
0.42
(l.C-9)
2.22
0.73
(3.12)
(1.35)
A r t 53ietalware
1.50
(3.56)
Kiscellaneous
1.55
(2.12)
1.75
2.43
1.-C3
1.C5
1.42
1.73
(0.44)
(1.2?)
(2.94)
(3.00)
(3.46)
(1.39)
products
o f w h i c h : wood c a r v i n g and p r o d u c t s
bamboo and r a t t a n i t e n s
b a s k e t s o f bamboo
Textile
products
of which;
handknitted
cotton furnishing
w o o l , l a c e and o t h e r
cotton
ITon-metal i n i n a r a l s
of Tjhich: n a r b l e , p r e c i o u s and
semi-precious objects
c h i n a and earthenware
ceramics
o f w h i c h : headware
g l o v e s (hand seamed)
handbags
furniture
dolls/ornanents
a r t i s t i c goods/antiques
Source: Y-M. Ho and D. Huddle, ' T r a d i t i o n a l and s n a i l s c a l e
c u l t u r a l goods i n i n t e r n a t i o n a l t r a d e and employment*.
J o u r n a l o f l i e v e l o p n e n t S t u d i e s , January 1976.
ilote:
The c o e f f i c i e n t s a r e c a l c u l a t e d from i m p o r t d a t a f o r 15
OSCD cou' t r i e s (US time s e r i e s d a t a i n b r a c k e t s ) .
T i l l s v i e w of h a n d i c r a f t s c o n t r a s t s s h a r p l y vrith the t r a d i t i o n a l
d e v e l o p n e n t v i e w of them as p a r t of a group of l a r g e l y n o n - t r a d e d , nonl e i s u r e a c t i v i t i e s c a r r i e d out by a r t i s a n s i n v i l l a g e s w i t h i n the
a g r i c u l t u r a l s e c t o r (sometimes c a l l e d Z a c t i v i t i e s ) , i n c l u d i n g s p i n n i n g
and handweaving of t e j i t i l e s , manufacture and r e p a i r of t o o l s , p o t t e r y
and c e r e m o n i a l o b j e c t s , d r e s s i n g and t a n n i n g of l e a t h e r . (1)
the
e s t a b l i s h e d v i e w has been t h a t "Z" a c t i v i t i e s d e c l i n e \iith development.
The main r e a s o n f o r d e c l i n e i s t h a t "51" a c t i v i t i e s are ' i n f e r i o r ' i n hone
and f o r e i g n m a r k e t s : demand f o r thera f a l l s as income r i s e s . Urban xrorkers
and m i d d l e c l a s s e s i n p a r t i c u l a r p r e f e r factory-iaade c l o t h e s and shoes and
household d e c o r a t i o n s ( f o r cheapness, or easons of t a s t e ) . I n t h i s way
economic h i s t o r i a n s have e x p l a i n e d the d e c l i n e - and sometimes the
d i s a p p e a r a n c e - of r u r a l i n d u s t r i e s i n A s i a , (2) some o f w h i c h , l i k e
I n d i a ' s , were a t one t i n e major e x p o r t e r s . (3)
I t i s perhaps u s e f u l t o d i f f e r e n t i a t e betxireen two t y p e s of h a n d i c r a f t
goods. F i r s t t h e r e are a r t i s t i c goods of h i g h u n i t v a l u e : what we s h a l l
c a l l l a b o u r i n t e n s i v e ' r i c h nan's* goods. Second t h e r e are u t i l i t a r i a n
items o f low u n i t v a l u e : 'poor nan's' goods, u s u a l l y produced i n c o m p e t i t i o n
w i t h nachine-made i t e n s . The second u s u a l l y have the c h a r a c t e r i s t i c s of
t r a d i t i o n a l "Z" goods; hence the r e c o g n i t i o n by tlie I n d i a n government t h a t
i f they a r e t o be p r e s e r v e d as s o u r c e s of employment t h e y w i l l need t o be
p r o t e c t e d and s u p p o r t e d . The c o n t r a s t between "Z" a c t i v i t i e s and l a b o u r
i n t e n s i v e ' r i c h mans's goods i s i l l u s t r a t e d i n F i g u r e s 1-3.
These are the
(1)
S. Eymer and S. R e s n i c k , *A n o d e l o f an a g r a r i a n economy w i t h
a g r i c u l t u r a l a c t i v i t i e s ' , Anserican Economic Review, 1969.
non-
(2)
S. R e s n i c k , 'A socio-economic i n t e r p r e t a t i o n of the d e c l i n e of ruval
i n d u s t r y under e x p o r t e x p a n s i o n : a comparson anong Burma, P h i l i p p i n e s
and T h a i l a n d ' , J o u r n a l of Sconoraic H i s t o r y , l l a r c h 1970.
P. Schram, ' H a n d i c r a f t s m Conmunist C h i n a ' , C h i n a : ^ i a r t e r l y , 196?.
(3)
For example, I n d i a n handv/oven and h a n d p r i n t e d c o t t o n goods (or c a l i c o s )
were imported on a l a r g e s c a l e i n t o 17th c e n t u r y Europe and t h i s l e d t o
the f i r s t major t r a d e p o l i c y c l a s h between B r i t i s h r i a n u f a c t u r i n g and
I n d i a n e x p o r t i n g i n t e r e s t s (then r e p r e s e n t e d by the E n g l i s h E a s t I n d i a
Company), A f t e r a l o n g , and a c r i m o n i o u s , argument between p r o t e c t i o n i s t
m a n u f a c t u r e r s and f r e e t r a d i n g i n t e r e s t s t h e former p r e v a i l e d ( c . 1700)
u s i n g arguments w h i c h bear a s t r o n g s i m i l a r i t y t o t h o s e used today by
the B r i t i s h t e x t i l e i n d u s t r y . S u b s e q u e n t l y ^ of c o u r s e , B r i t i s h manuf a c t u r e r s were a b l e t o d e v e l o p the s t r e n g t h vrhich e v e n t u a l l y l e d t o the
d e s t r u c t i o n of the I n d i a n handtreaving t r a d e x;hen the I n d i a n market x>ras
throxvn open t o factory-made t e x t i l e s i n the e a r l y 19th c e n t u r y .
For
those x;ho b e l i e v e t h a t p r o g r e s s i n economic i d e a s i s c y c l i c a l r a t h e r than
e v o l u t i o n a r y J, t h e r e i s c o n s i d e r a b l e c o m f o r t t o be d e r i v e d from r e a d i n g
the ' c a l i c o ' p r o t e c t i o n s t o r y . See E. L i p t o n s The Economic H i s t o r y of
E n g l a n d , volume 3^ The Age of M e r c a n t i l i s n . p.39.
C a p i t a l i n t e n s i v e aood ->
c o n v e n t i o n a l p r o d u c t i o n p o s s i b i l i t y c u r v e s f o r a poor c o u n t r y i n a s i m p l e
two p r o d u c t r e p r e s e n t a t i o n o f t h e w o r l d , f o c u s s i n g upon changes i n demand and
i g n o r i n g f o r t h e moment t h e e f f e c t s o f c a p i t a l - l a b o u r s u b s t i t u t i o n f o r
p a r t i c u l a r products. I n a l l three cases, trade r a i s e s the f i n a l e q u i l i b r i u m
onto a h i g h e r ( w o r l d ) i n d i f f e r e n c e c u r v e and i n c r e a s e s the share o f l a b o u r
i n t e n s i v e goods produced; and t h e r e f o r e employment. We have t r i e d t o
r e p r e s e n t t h e case where t h e l a b o u r i n t e n s i v e good i s ' i n f e r i o r ' - l i k e t h e
'Z* a c t i v i t i e s - and i n t h i s case grotTth can reduce i n a b s o l u t e , as w e l l as
r e l a t i v e 5 terms t h e amount o f t h e l a b o u r i n t e n s i v e goods produced i n t h e poor
c o u n t r y ; t h i s i s t r u e even where i n t e r n a t i o n a l t r a d e i s a d m i t t e d , i f i n t e r n a t i o n a l demand a l s o r e n d e r s the good ' i n f e r i o
I n these c i r c u m s t a n c e s
too J t h e terms o f t r a d e bett-jeen l a b o u r and c a p i t a l i n t e n s i v e goods s h i f t s
s h a r p l y a g a i n s t t h e former c a u s i n g d i s t r e s s t o the a r t i s a n s . The n e a r e s t
a p p r o x i m a t i o n we c a n f i n d t o the case w h i c h i n t e r e s t s us i s shoxm i n F i g u r e 3^
where home demand i s i n f e r i o r b u t f o r e i g n denand i s n o t . A good i l l u s t r a t i o n
would be handlooms: as incoraes r i s e i n I n d i a , consumers s w i t c h t o garments
o f man-aada f i b r e f a b r i c s , o r b l e n d s , and IJestern s t y l i n g , w h i l e i n Western
c o u n t r i e s handlooras^are a f a s h i o n i t e m . The same c o n t r a s t i s n o t so s t a r k
f o r o t h e r h a n d i c r a f t items b u t c o u l d w e l l a p p l y t o basketxjares and t r a d i t i o n a l
artvTork; i n c l u d i n g t h a t used i n garment p r i n t i n g .
The demand c h a r a c t e r i s t i c s can be s u n n a r i s e d as i n F i g u r e 4^ ti?hich
c o n t r a s t s t h e h a n d i c r a f t s case w i t h c o n v e n t i o n a l ' r i c h man's', 'everyman's',
'poor man's' and
goods. I t s h o u l d be s t r e s s e d t h a t t h i s i s an ' i d e a l '
r e p r e s e n t a t i o n and m i g h t n o t be r e a l i s e d i n p r a c t i c e . F o r example, w i t h i n any
h a n d i c r a f t i n d u s t r y t h e r e may be a c h o i c e o f overseas (and d o m e s t i c ) n a r k e t s ;
a r a p i d l y g r o i r i n g j b u t a b s o l u t e l y s n a i l $ market f o r h i g h v a l u e ' c r a f t ' i t e m s :
and a l e s s r a p i d l y g r o w i n g , b u t a b s o l u t e l y l a r g e r , market f o r s t a n d a r d i s e d
items - 'everynan's' o r 'poor nan's' goods - i n which t h e h a n d i c r a f t w o r k e r
o e r e l y becoiTies a s o u r c e o f low wage l a b o u r f o r l a b o u r i n t e n s i v e a c t i v i t i e s
t h a t c o u l d be c a r r i e d o u t i n any c o u n t r y . I n the case o f b r a s s w a r e , f o r
example, the b o r d e r l i n e between the two markets i s d i f f i c u l t t o draw b u t t h e
enphasis l i e s more on t h e l a t t e r than t h e former. Another problem may be t h a t
markets n a y be under p r e s s u r e f r o m machine-raade items v;hich can r e p l i c a t e i n
some degree t h e c h a r a c t e r o f t h e c r a f t i t e m . H i e s r e f e r s t o t h e l o s s of l a c e
markets f o r t h i s reason., ( I ) w i t h s i m i l a r problems f o r t h e s i l k t r a d e and, o f
c o u r s e , c o m p e t i t i o n between handloom garments and powerloom s u b s t i t u t e s .
H a n d i c r a f t s p r o d u c e r s may then f i n d themselves back i n t h e t r a p o f p r o d u c i n g
'Z' goodsp u n l e s s c o n t i n u o u s a t t e n t i o n t o d e s i g n and ' c r a f t f a s h i o n ' m a i n t a i n s
t h e i r uniqueness.
"7e s h o u l d , however, acknowledge t h a t the whole concept o f l a b o u r i n t e n s i v e
' r i c h nan's' goods, and the g a i n s frora s p e c i a l i s a t i o n r e s u l t i n g f r o m d i f f e r e n t
p r o d u c t c h a r a c t e r i s t i c s and f a c t o r endowments takes as g i v e n t h e way i n w h i c h
markets r e f l e c t e x i s t i n g i n e q u a l i t i e s . There a r e those who have n o t e d t h e
importance o f t h e h a n d i c r a f t s e x p o r t phenomenon b u t take a f a r more r e v o l u t i o n a r y
and c r i t i c a l vi&j o f i t s s i g n i f i c a n c e ? 'the growing p a u p e r i s a t i o n of p e a s a n t s
(I)
M a r i s M i e s , Housewives Produce f o r t h e World M a r k e t : t h e L a c e Makers o f
H a r s a p a r t ILO World Employment Programme Research.. 1980.
Figure
2; 'Z' goods: i n f e r i o r
home and o v e r s e a s
A = e q v i i l i b r i u m w i t h o u t t r a d e o r growth.
B = equilibrium with trade.
No growth.
C = e q u i l i b r i u m w i t h o u t t r a d e : a f t e r growth.
D =» e q u i l i b r i u m w i t h t r a d e : a f t e r growth,
I ^ " home demand i n d i f f e r e n c e c u r v e s .
W^- w o r l d demand i n d i f f e r e n c e c u r v e s ,
C a p i t a l i n t e n s i v e good
Fl;gyufe 4: R e p r e s e n t a t i o n s o f inc<MBC e l a s t i c i t i e s o f
d i f f e r e n t product types
' • r i c h man's*
'goods
u
i
•poor man's' gopdSy
^(Engelfl_j2u»ve)• everyman' s'
goods
•^'Z* goods
irfcome -••
i n d e v e l o p i n g c o u n t r i e s i s a r e s u l t of t h e i r i n t e g r a t i o n i n t o the n a t i o n a l a n d
i n t e r n a t i o n a l p r o c e s s o f c a p i t a l a c c u n u l a t i o n whereby r u r a l woiien a r e f o r c e d
i n t o the absurd s i t u a t i o n t h a t they produce unnecessary l u x u r y items^ l i k e
lace;, o r o t h e r h a n d i c r a f t s f o r women i n Europe and the USA
The
e x p l o i t a t i o n of wcaen who produce f o r the w o r l d market does n o t o n l y
c o n s i s t i n the f a c t t h a t they are denied a j u s t l i v i n g wage, they a r e a l s o
robbed o f t h e i r energy, t h e i r l i v i n g t i m e j the development o f u s e f u l s k i l l s
and knowledge V7hich they c o u l d have conbined w i t h l o c a l raw m a t e r i a l s t o
produce use v a l u e s f o r themselves'. (1) lie s h a l l t r y t o d e a l Tri.th the n o t i o n
o f ' e x p l o i t a t i o n ' i m p l i e d h e r e , below.
(1)
M a r i a M i e s , o n . c i t . , pp.134-5.
SECTI0ir2
HANDICRAFTS AND HAI?DL00MS EXPORTS I N THE INDIAN ECONOMY
One o f t h e nurposes o f t h e r e s e a r c h i s t o make a comprehensive assessment,
f r o a the v a r i o u s d i s n a r a t e elements a v a i l a b l e , o f t h e c o n t r i b u t i o n m d e by
e x p o r t s o f h a n d i c r a f t s and handlooms t o t h e I n d i a n economy. S i n c e t h e r e i s
onl'f a s n a i l d o m e s t i c market f o r most o f the major p r o d u c t s 5, e x c e p t s i l k
and c o t t o n handlooms (and g o l d j e w e l l e r y anongst the n i n o r i t e n s ) . we a r e
concerned w i t h t h a c o n t r i b u t i o n of these i n d u s t r i e s almost i n t h e i r e n t i r e t y .
(a)
Exports
"One s i n g l e i n d e x o f t h e i r c o l l e c t i v e importance i s i n t e r n s o f the v a l u e
o f e x p o r t s , E:q)ort r e c e i p t s t e l l us n o t h i n g i n themselves about economic
w e l f a r e b u t f o r an economy s e r i o u s l y c o n s t r a i n e d b y b a l a n c e o f payments
p r o b l e n s (as I n d i a now i s a g a i n a f t e r s e v e r a l r e l a t i v e l y c o m f o r t a b l e y e a r s )
they a r e a u s e f u l p o i n t o f d e p a r t u r e . As Table 2 i n d i c a t e s , i n t h e l a s t
y e a r f o r v A i c h f u l l s t a t i s t i c s a r e a v a i l a b l e , . 1973/79, handloovis and h a n d i c r a f t s c o n t r i b u t e d almost a q u a r t e r (23%) o f t o t a l e x p o r t e a r n i n g s . P u t
another way, e x p o r t e a r n i n g s f r o n these p r o d u c t s were g r e a t e r than g r o s s a i d
d i s b u r s a n e n t s f r o m a l l s o u r c e s . Many o f the iteras a r e o f r e c e n t o r i g i n and
so t h e c o n t r i b u t i o n a t the n a r g i n i s r a t h e r h i g h e r than i n d i c a t e d ( t h e i r
share was undsr 7% i n 1970/71, and they c o n t r i b u t e d 34% o f t h e i n c r e m e n t a l
e x p o r t e a r n i n g s over t h e e i g h t y e a r p e r i o d ) . The gross f i g u r e s are m i s l e a d i n g
however. A s u b s t a n t i a l p a r t o f t h e v a l u e o f p r o d u c t i o n nay o r i g i n a t e i n
nachine-nade i n p u t s ; f o r example machine-spun y a r n i n handwoven c l o t h .
S e v e r a l i t e n s have a h i g h i n p o r t c o n t e n t , n o t a b l y c u t diamonds ( a p p r o x i m a t e l y
t t r o - t h i r d s o f e x p o r t v a l u e ) , w h i l e b r a s s , wool and s i l k y a r n a r e a l s o
imported.
But t h e same i s t r u e f o r many o t h e r n a n u f a c t u r e d i t e m s , n o t a b l y
e n g i n e e r i n g goods, w h i c h a r e a l s o energy i n t e n s i v e . A f u l l i n p u t - o u t p u t
anal3'3is and e s t i m a t e s o f t h e o p p o r t u n i t y c o s t o f f a c t o r s employed would be
n e c e s s a r y t o pursue t h i s p o i n t i n d e t a i l , n e v e r t h e l e s s , t h e r e i s no r e a s o n
to assume t h a t t h e o r d e r s o f r e l a t i v e magnitude g i v e n above a r e s e r i o u s l y
nisleading,
(b)
Snployraent
ihe o t h e r major b e n e f i t i s i n terms o f enplo3?Tient, T h i s i s , hox^ever, an
a r e a '^Iiera documentation i s e x t r e m e l y f l i i a s y and rhere major q u e s t i o n s a r e
r a i s e d about v/hat i s meant by 'employment' and 'unemplo3m!ent'. The answer
cannot be d e r i v e d s i m p l y by enumerating the number o f (more o r l e s s ) f u l l t l a e
employed nenbers o f t h e l a b o u r f o r c e . I n c r e a s e d handloom employment i s almost
e n t i r e l y a q u e s t i o n o f i n c r e a s i n g t h e nunber o f days worked p e r y e a r f o r a
g i v e n s t o c k o f loons and weavers. Eaiployraent i n many c r a f t s i s s u b j e c t t o
shar-) f l u c t u a t i o n s i n demand e s p e c i a l l y f o r f o r e i g n f a s h i o n m a r k e t s . Much
enplo3raent i s generated through f o r w a r d and backxjard l i n k a g e s (from handloom
f a b r i c s t o ganaents; f r o n s i l k weaving t o s e r i c u l t u r e ) though i t i s
d e b a t a b l e as t o how nn.ich these a c t i v i t i e s a r e ' a d d i t i o n a l ' , and some c r a f t s
p r o v i d e o f f •farm enplo3mient f o r l a b o u r e r s between c r o p p i n g seasons.
Much
a n c i l l a r y work - and some o r g a n i s e d p r o d u c t i o n - i s c a r r i e d o u t by c h i l d r e n
a l t h o u g h even laore i s p r o v i d e d by women whose c o n t r i b u t i o n t o household
TAiiL2 2
E x p o r t s o f H a n d i c r a f t s and iiandloons frova I n d i a (?<s. mn)
1378/79
I
Randloons
3,029
of w h i c h ; c o t t o n f a b r i c s
c o t t o n nade-ups
c o t t o n gartients
s i l k iteas
other
620
2'i9
1,6C9
401
21
II
C o i r Y a m and lianuf a c t u r e ^
III
Gens and vTe'?ellery
7,227
of which? p r e c i o u s stones
gold jevrellery
silver jewellery
7,106
97
22
Other H a n d i c r a f t s
2,569
IV
o f which? w o o l l e n c a r p e t s
c o t t o n c a r p e t s (rugs and d h u r r i e s )
art netalware
b a u d - p r i n t e d t e x t i l e s and s c a r v e s
a r t - s i l k shawls
e u b r o i d e r e d goods
xroodwares
zari
i v o r y products
imitation jewellery
miscellaneous handicrafts
A l l Indian Exports
oource;
263
994
36
517
254
1?
132
137
39
24
3G
330
57,263
A l l I n d i a H a n d i c r a f t s B o a r d , Ilandloon E x n o r t P r o n o t i o n C o u n c i l
a ~ There i s some debate as t o whether c o i r p r o d u c t s s h o u l d be c o n s i d e r e d
as h a n d i c r a f t s
indastr}/ i s u s u a l l y i g n o r e d by census enumerators. Faced w i t h these
v a r i o u s sources o f a n b i g u i t y o r o m i s s i o n o f f i c i a l e s t i m a t e s o f eaployment
ara o f t e n based on t h e o r e t i c a l c o n s t r u c t s such as the ' f u l l - t i m e j o b
e q u i v a l e n t ' , w h i c h u n d e r s t a t e t h e nunber o f people who depend on c r a f t s
t o r a l a a i o r p a r t o f t h e i r l i v e l i h o o d . On the o t h e r hand, crude e s t i m a t e s
o f j o b nunbers t e l l us n o t h i n g about the o p p o r t u n i t y c o s t o f l a b o u r which
nay be v e r y s m a l l b u t i s u n l i k e l y t o be s e r o - t h e r e i s a s e a s o n a l
p e a k i n g problera, e s p e c i a l l y i n p l a c e s such as P a n i p a t t h e handloom c e n t r e
i n i'aryana, ulien t h e r e a r e l a b o u r s c a r c i t i e s of. sone s k i l l c a t e g o r i e s ,
" l o r e o v e r , t h e r e i s a l e v e l o f e a r n i n g s and o f c o n d i t i o n s below which even
these i n ' a b s o l u t e p o v e r t y ' w i l l n o t work; t h e wage p a y a b l e i n s a a l l f a c t o r i e s
f o r ' l o o a l e s s ' weavers i n p a r t s o f Tai^iil IJadu - "s.C t o 10 f o r a 12-hour day x-^.iile p o s s i b l y ' t o o h i g h ' t o ctsnpeta w i t h novrerlooas, i s b a r e l y adequate t o
a t t r a c t l a b o u r , even i n t h i s p o o r s t a t e ,
liandloCTii weaving i s t h e major source o f h a n d i c r a f t enplojTient i n I n d i a ,
O f f i c i a l a s t i n a t e s o f t o t a l e m l o y i n c n t i n t h i s s e c t o r have bean based on
the aaount of c l o t h produced. The governaent b e l i e v e s t h a t t h e r e a r e r o u g h l y
3,"n loofis i n I n d i a and output f i g u r e s suggest t h a t t h e e q u i v a l e n t o f 2.223
are ' f u l l y o p e r a t i o n a l ' (300 nays p e r annira). As each i s assuned t o p r o v i d e
2,''. j o b s , t h i s g i v e s 5.3n j o b s i n t o t a l . Of t h i s t o t a l , r o u g h l y I n a r e
e n p l o y s d i n the p r o d u c t i c r . o f goods f o r export; (we e s t i m a t e t h a t e x p o r t s o f
handlooius p r o d u c t s c o n t r i b u t e 22-23% o f p r o d u c t i o n by v a l u e , b u t by v o l u n e
the f i g u r e i s p r o b a b l y i n tho. 15-1"% r a n g e ) . I t has t o be renenbered t h a t
o f f i c i a l e s t i r i a t e s o f handloon output a r e p r o b a b l y i n f l a t e d by i l l e g a l
powerloons -massing o f f t h e i r p r o d u c t i o n as handloon made.
On t h e o t h e r hand, the f i g u r e s u n d e r e s t i n a t e the nunber o f people
a c t u a l l y dependent on handloons f o r t h e i r l i v e l i h o o d , nany o f whom a r e o n l y
enployed T>art of t h e y e a r . Even a ' f u l l y employed' weaver may o n l y be
enployed f o r a l i t t l e o v e r 200 days i n the y e a r , two days i n e v e r y e i g h t
b e i n g needed f o r warp p r e p a r a t i o n and f i f t y days b e i n g l o s t when t h e ' p i t
l o o n s ' , used i n T a r . i l Nadu, a r e f l o o d e d i n the monsoon. Thus a t l e a s t I n ,
p o r . s i t l y as nany as 1.5a, a r e employed i n handloon e i r p o r t s .
The remainder o f the h a n d i c r a f t s e c t o r ( e x c l u d i n g c o i r ) i s o f f i c i a l l y
e s t i n a t e d t o employ j u s t over 2m, b u t i t would be s u r p r i s i n g i f t h e m a r g i n
of e r r o r i n t h i s f i g u r e was l e s s than 50%. Our oxm r e s e a r c h e s i n d i c a t e t h a t
enploynent i n t h e hand-nade c a r p e t s e c t o r i s sonswhat l e s s than the government
b e l i e v e s , p o s s i b l y around 255,000. Dia.iord c u t t i n r ; i n G u j a r a t has been
s u b j e c t t o a c j ' c l i c a l f l u c t u a t i o n and t h e lr.bour f o r c e i s now doim f r o n i t s
peak o f 500,000 t o n e a r e r 400,000. Gen c u t t i n g i n J a i p u r p r o b a b l y e n p l o y s
AO,'^00 n o r e .
A.Hing i n t h e nany o t h e r h a n d i c r a f t t r a d e s g i v e s a t o t a l o f
over I n j o b s r e l a t e d d i r e c t l y t o e x p o r t s ; b u t e x a c t b ; how nany i s pure
speculation.
F o r r e a s o n s a l r e a d y a l l u d e d t o , enploj/nent cannot be t r e a t e d as p u r e
' g a i n ' t o t h e I n d i a n economy. Thera a r e o p p o r t u n i t y c o s t s i n t e r n s b o t h o f
the a r t i s a n ' s t i n e and o f r e s o u r c e s f r o n o u t s i d e t h e h a n d i c r a f t s s e c t o r ,
such as l o a n f u n d s . As t o t h e f i r s t , t h e r e i s l i t t l e c o n c r e t e e v i d e n c e b u t
some survey work o f weavers i n X a m a t a k a (not d i f f e r e n t i a t i n g e x p o r t and
hone market based a c t i v i t i e s ) suggests t h a t weavers and t h e i r f a m i l i e s a r e
f o r the .lost p a r t dependent on t h e i r c r a f t work: o n l y 30% oxm l a n d ; f o r 92%
weaving i s the n£in o c c u p a t i o n ; and 75% a r e s e l f - e m p l o y e d a r t i s a n s w i t h a
recogni'-ed o c c u p a t i o n , (1) As t o o u t s i d e r e s o u r c e s , t h e r e a r e p a r t s o f t h e
(1)
Abdul A a i s , R u r a l A r t i s a n s ; Development S t r a t e g i e s and Employment
f e n e r a t i o n . I n s t i t u t e o f S o c i a l and Economic Change, B a n g a l o r e , l l a r c h 1930.
h a n d i c r a f t s e c t o r - the k h a d i and v i l l a g e i n d u s t r i e s - w h i c h , a t l e a s t u n t i l
the F i f t h P l a n , r e q u i r e d e x t e r n a l support even t o m a i n t a i n wages; but f o r
o t h e r s , e s p e c i a l l y h a n d i c r a f t s , the r e l e v a n t ' c o s t ' has been the use o f l o a n
f u n d s , t o \7hich we now b r i e f l y t u r n ,
(c)
The
A l t e r n a t i v e Use
and
E f f i c i e n c y of Investment
One o f the main d i f f i c u l t i e s i n a s s e s s i n g the r e l s t i v e e f f i c i e n c y of
the h a n d i c r a f t s s e c t o r as a u s e r of s c a r c e i n v e s t m e n t funds i s the l a c k of
d a t a , though t h e r e i s sope, r a t h e r u n s a t i f a c t o r y census m a t e r i a l and the
r e s u l t s of s u r v e y s c a r r i e d out by the A l l I n d i a H a n d i c r a f t s Board, (1)
There a r e two c o n c e p t u a l i s s u e s here of some i m p o r t a n c e . F i r s t , ' i n v e s t m e n t '
i s n o r m a l l y d e f i n e d t o i n c l u d e w o r k i n g and f i x e d c a p i t a l and i s i n p r a c t i c e
the former s i n c e f i x e d c a p i t a l - t o o l s , equipment and b u i l d i n g s - i s u s u a l l y
of minor consequence* The i d e a t h a t ' c a p i t a l i n t e n s i t y ' s h o u l d i n c l u d e
^Torking c a p i t a l i s somewhat unorthodox but i n t h i s c o n t e x t i t seems s e n s i b l e ,
and l e g i t i m a t e (and c o n s i s t e n t w i t h n a t i o n a l a c c o u n t i n g p r a c t i c e ) t o t r e a t
s t o c k holdinp: as a form o f c a p i t a l a c c u i a u l a t i o n . Loan c a r i t a l f o r w o r k i n g
c a p i t a l , l i k e f i x e d i n v e s t m e n t , has an o p p o r t u n i t y c o s t . I t can be seen
from T a b l e 3 t h a t the a c t i v i t i e s surveyed a r e , i n g e n e r a l , h i g h l y l a b o u r
i n t e n s i v e i n r e l a t i o n t o the f a c t o r y s e c t o r (the c a p i t a l s l a b o u r r a t i o i s
low) but i n one or two cases - x j o o l l e n c r a f t s , f o r example, and (though t h i s
i s not shoTO) s i l k and diaraond c u t t i n g - the h a n d i c r a f t a c t i v i t i e s are
' c a p i t a l i n t e n s i v e ' because of the h i g h v a l u e o f w o r k i n g c a p i t a l per nan
employed. Gecond, l a b o u r i n t e n s i t y , by i t s e l f , has no v i r t u e , otherxrise
development would c o n s i s t o f governments p a y i n g the unemployed t o d i g h o l e s
and f i l l t h e n i n a g a i n . Development e n t a i l s growth t h r o u g h the a d d i t i o n
of v a l u e , at the v e r y l e a s t t o pay s u b s i s t e n c e e a r n i n g s .
I t can be seen f r o n T a b l e 4 t h a t sone v i l l a g e i n d u s t r i e s have such a
low p r o d u c t i v i t y t h a t , e x p r e s s e d as a d a i l y wage (and t h e r e f o r e e x c l u d i n g
payriients f o r c a p i t a l ) , t h e y f a l l below n o s t p l a u s i b l e e s t i n a t e s of n i n i n u n
e a r n i n g s f o r o t h e r a c t i v i t i e s , and below the l e v e l of income r e q u i r e d f o r
b a s i c s u b s i s t e n c e (which i s n o t to say t h a t they do n o t nake a u s e f u l
contribution to f a n i l y incone).
By c o n t r a s t , handloom and h a n d i c r a f t s
a c t i v i t i e s o p e r a t e a t a s i g n i f i c a n t l y h i g h e r l e v e l o f p r o d u c t i v i t y ( i n the
case o f handlooms, e s p e c i a l l y a t the m a r g i n ) . I t i s n e c e s s a r y , t h e r e f o r e ,
t o see t o what e x t e n t the h i g h l a b o u r / c a p i t a l r a t i o o f the h a n d i c r a f t s and
v i l l a g e i n d u s t r i e s s e c t o r i s o f f s e t by r e l a t i v e l y low l a b o u r p r o d u c t i v i t y .
A measure of the c a p i t a l o u t p u t r a t i o g i v e s sone i d e a of the r e l a t i v e
e f f i c i e n c y w i t h w h i c h the c a p i t a l i s used i n the h a n d i c r a f t s s e c t o r as
opposed t o the r e s t of the econooj', b e a r i n g i n mind the l i m i t a t i o n s of t h i s
measure: a i i b i g u i t y i n the v a l u a t i o n o f a s s e t s when t h e r e a r e d i f f e r e n t
v i n t a g e s o f f i x e d c a p i t a l ; the p o o l i n g o f w o r k i n g and f i x e d c a p i t a l ; the
absence o f m a r g i n a l r a t h e r t h a n average c o m p a r i s o n s ; a l a c k o f means t o
i s o l a t e e x p o r t s f o r t h i s comparison. I n g e n e r a l , ( s e e T a b l e 3) h a n d i c r a f t s
i n d u s t r i e s compare w e l l w i t h the o r g a n i s e d s e c t o r on a c a p i t a l o u t p u t
n e a s u r e - t h e y do n o t , of c o u r s e , r e q u i r e nuch s u p p o r t i i g i n f r a s t r u c t u r e o r
urban development w h i c h can have an e x c e p t i o n a l l y h i g h c a p i t a l o u t p u t r a t i o .
There a r e , hoT-Jever, sone e x c e p t i o n s : k h a d i s p i n n i n g ; w o o l l e n weaving;
(village) pharaaceuticals.
(1)
Summarised f o r the 19SOs i n J a i n and S a v a r a , I n d u s t r i a l i s a t i o n i n the
T h i r d W o r l d , C o n n e r c i a l P u b l i c a t i o n s B u r e a u , New D e l h i , 1930.
TABLE 3
C a p i t a l Output and C a p i t a l Labour P^atios i n I n d i a n H a n d i c r a f t s
T e x t i l e dyeing
Wool-weaving
Carpets
Embroidery
Bamboo/cane
Wood a r t w o r k
Paper
Fur a l e a t h e r a r t w o r k
A r t w o r k o f stones
Ceraraics
G l a s s bangles
A r t metalwear
Jewellery
Perfuiae & o t h e r p h a r m a c e u t i c a l
items
Musical instruments
Others
C/0
C/L
.07
17.1
.69
.43
.50
.30
.C6
.41
.33
1.0
.17
.23
.30
2.9
1,000
22,200
900
300
200
300
500
2,900
500
600
200
500
300
19,500
.46
.03
1,100
1,100
A l l handicrafts
.3
Factory sector
( a l l 'productive' capital)
(fixed capital)
.61
.39
(Rs p e r
man)
300
6,250
3,930
Source;
C a l c u l a t e d frora 1961 census d a t a (see J a i n and S a v a r a , I n d u s t r i a l i s a t i o n
i n the T h i r d World) and A l l I n d i a H a n d i c r a f t s Board e s t i m a t e s .
Note:
C a p i t a l investment i n c l u d e s a l l ' p r o d u c t i v e ' c a p i t a l
working c a p i t a l .
TAH<E 4
including
Average and M a r g i n a l P r o d u c t i v i t y i n V i l l a g e I n d u s t r i e s (Vxs p e r man
—
employed)
Average (1979-80)
I^adi
ICVIC v i l l a g e i n d u s t r i e s
Handlooms
Handicrafts
375
1,725
2,329
10,095
M a r g i n a l (1974-79)
1,104
1,222
5,969
7,250
Source:
C a l c u l a t e d f r o m c o e f f i c i e n t s i n S i x t h P l a n documents.
Note:
I n o r d e r t o e s t i m a t e changes o v e r tirae 1974/75 p r o d u c t i v i t y was
c o n v e r t e d t o 1979/QO p r i c e s u s i n g an average m a n u f a c t u r i n g w h o l e s a l e
price index.
The c r i t i c a l i s s u e however, i s not si.raply one o f r e l a t i v e l a b o u r
i n t e n s i t i e s and p r o d u c t i v i t i e s , but t h e r e l a t i o n s h i p between these
c o e f f i c i e n t s and those of machine s u b s t i t u t e s . As Huddle and Ho put itt
'the r e l a t i v e l y low v a l u e added p e r worker w h i c h n e c e s s a r i l y r e s u l t s from
such a c t i v i t i e s can be m i s l e a d i n g as a p r o d u c t i o n guide i n a s o c i e t y where
l a b o u r has few a l t e r n a t i v e s k i l l s or o p p o r t u n i t i e s , IJhere men must
i n e v i t a b l y compete a g a i n s t a machine i t w i l l e v e n t u a l l y become uneconomic
t o s u p p o r t t r a d i t i o n a l i n d u s t r i e s ; but t h i s i s n o t the case where the hand
producer can command a market - i n t h i s case an e x p o r t market - not a v a i l a b l e
to machine made goods',
(d)
F u t u r e Employment and Growth
G i v e n the l e v e l o f employiaent and f o r e i g n exchange e a r n i n g s p r o v i d e d
by e x p o r t e d h a n d i c r a f t s - i n r e l a t i o n t o the r e s o u r c e s used - i t i s s c a r c e l y
s u r p r i s i n g t h a t the I n d i a n government has h i g h hopes of f u t u r e growth.
The
S i x t h P l a n (1980-35) e n v i s a g e s t h a t employment i n gems and j e w e l l e r y w i l l
i n c r e a s e t o 630,000, w i t h e x p o r t s doubled i n ( r e a l ) v a l u e from 1979/cO,
Other h a n d i c r a f t s a r e e x p e c t e d t o y i e l d another 600,000 new j o b s ( i n c l u d i n g
300,000 i n c a r p e t s ; 100,000 i n h a n d p r i n t i n g ; 40,000 i n a r t metalware)
t o g e t h e r w i t h f u l l e r emplo^nnent f o r e x i s t i n g c r a f t s m e n and a t r i p l i n g o f
e x p o r t s i n r e a l terms. F o r c o t t o n handloora t e x t i l e s the p o t e n t i a l g a i n s
a r e even g r e a t e r ; t h e r e i s under-employment of e x i s t i n g looms and weavers
v a r i o u s l y e s t i m a t e d a t the e q u i v a l e n t o f 2-4m f u l l - t i m e j o b s .
We can g a i n some i d e a o f the importance o f e x p o r t s i n f u t u r e j o b
c r e a t i o n from T a b l e 5, I t i s expected t h a t the c o n t r i b u t i o n t o employment
i n v i l l a g e i n d u s t r i e s o f v a r i o u s k i n d s c o u l d be o f the o r d e r of 6,2a new
j o b s , almost d o u b l i n g employment i n t h a t s e c t o r ; r o u g h l y a q u a r t e r xTOuld
come from e x p o r t s . I g n o r i n g c o i r p r o d u c t i o n and s e r i c u l t u r e , a p p r o x i m a t e l y
750,000 new j o b s would come from e x p o r t s of handlooms and h a n d i c r a f t s goods.
C o n s i d e r a b l e s c e p t i c i s m has been d i r e c t e d towards these p r o j e c t i o n s f o r
a v a r i e t y o f r e a s o n s . (1) The growth r a t e s o f output and employment,
p a r t i c u l a r l y of KVIC i n d u s t r i e s and handlooms, a r e c o n s i d e r a b l y i n excess of
p r e v i o u s l y a c h i e v e d l e v e l s . The i n c r e a s e i n p l a n o u t l a y s i s not e x c e p t i o n a l
i n r e l a t i o n t o p a s t p l a n p e r i o d s when more modest growth was r e c o r d e d .
There
are b o t t l e n e c k s , o f s k i l l , d e s i g n and a d m i n i s t r a t i v e c a p a c i t y ; the degree
of spare c a p a c i t y i s p r o b a b l y more apparent than r e a l ^ e n t a s t e s a r e changing
and s k i l l s need t o be u p d a t e d . Tliere i s assumed t o be no p r o d u c t i v i t y growth
i n handlooms d e s p i t e s u b s t a n t i a l growth i n the p a s t (hence employment
f o r e c a s t s may be i n f l a t e d even i f output i s n o t ) . Encroachment on the h a n d l o o a
s e c t o r by powerlooms and on h a n d i c r a f t s by competing,higher p r o d u c t i v i t y
i n d u s t r i e s , cannot e a s i l y be stopped. TJhile these doubts a p p l y , a f o r t i o r i ,
t o the i n c r e a s e s i n output t o be a c h i e v e d by t h o s e v i l l a g e i n d u s t r i e s
due t o b e n e f i t from the p r o h i b i t i o n o f p r o d u c t i o n f o r the hone market by
l a r g e s c a l e u n i t s , they a p p l y i n p a r t t o e x p o r t s t o o .
(1)
J.C. Sandeeara, 'Small i n d u s t r y p r o d u c t i o n : a q u i c k comment', Economic
and P o l i t i c a l Weekly, A p r i l 1973.
( H i s comcients a p p l y i n p a r t i c u l a r
to t h e 1978-83 D r a f t ) .
TABLE 5
V i l l a g e I n d u s t r i e s i n the S i x t h P l a n
Khadi
Other (KVIG)
village
industries
Output 1979-30
(Rs. nm)
980
3,140
% groxflth p l a n n e d
104
218
45
69
1979-eo/1984-35
A c t u a l % grovrth
1974-5/1979-30
Employment
1979-30 ('000)
1,124
Employment
increase
1979-84 ('000)
416
EmplojiTient
increase
1974-79 ('000)
240
Handlooras
Sericulture
Handicrafts
Coif
17,400
1,310
20,500
360
41
37
56
42
64
65
25
22
35
2,030
560
13,284
6,150
1,600
1,689
2,550
550
770
240
6,216
940
400
530
59
3,063
393
37
41
, 35
E x p o r t share o f
incremental
o u t p u t 1979/30
15
44
42
43
E x p o r t share o f
incremental
output 1974-79
20
51
67
50
(e)
44,190
1,821
E x p o r t share o f
o u t p u t 1979/CO
Source;
Total
C a l c u l a t e d from S i x t h P l a n c o e f f i c i e n t s .
The ' Q u a l i t y ' o f Employment
There i s , f i n a l l y , the q u e s t i o n o f t h e ' q u a l i t y ' , r a t h e r than t h e ' q u a n t i t y ' o f
of employraent. From a w i d e r s o c i a l s t a n d p o i n t t h a n the crude summation o f j o b
numbers, t h e e x p a n s i o n o f h a n d i c r a f t s a c t i v i t y has s e v e r a l a d d i t i o n a l b e n e f i t s ;
emplojraient i n d i s p r o p o r t i o n a t e numbers o f d e p r i v e d groups i n c l u d i n g r e l i g i o u s
m i n o r i t i e s and i n p a r t i c u l a r Muslims who, f o r example, p r o v i d e most o f t h e l a b o u r
f o r c e i n t h e a r t metalware i n d u s t r y , and c a r r y out c e r t a i n a c t i v i t i e s i n t h e s i l k
p r o c e s s i n g i n d u s t r y because o f a h i s t o r i c a l a v e r s i o n o f o r t h o d o x Hindus t o
k i l l i n g l i v e v7oms. The r o l e o f women i s p a r t i c u l a r l y i m p o r t a n t and h a n d i c r a f t s
development c a n h e l p c r e a t e employment o p p o r t u n i t i e s f o r groups such as widows, ( 1 )
(1)
J a s l e e n Dhamija, ' H a n d i c r a f t s ; a source o f employment f o r vjomen i n d e v e l o p i n g
r u r a l economies'. I n t e r n a t i o n a l Labour Review, December 1975,
Other b e n e f i c i a r i e s are ' t r i b a l s ' , and groups w i t h low s o c i a l s t a t u s , A z i z ,
who has suomarised some of the d a t a a v a i l a b l e on r u r a l a r t i s a n s i n K a r n a t a k a ,
n o t e s t h a t most - i n c l u d i n g weavers, p a i n t e r s and c a r v e r s - u n d e r t a k e lower
c a s t e o c c u p a t i o n s , (1) These c a s t e groups are u s u a l l y r e l a t i v e l y low; but
not h a r i j a n s . I n g e n e r a l he found a r t i s a n s t o be among the p o o r e s t s e c t i o n s
of the p o p u l a t i o n ; even i n a r e l a t i v e l y r e m u n e r a t i v e t r a d e , 70% o f a r t i s a n
households were below the p o v e r t y norm, A n a t i o n a l s u r v e y of d e b t and
investment showed t h a t 75% of v i l l a g e a r t i s a n s (of a l l k i n d s ) f e l l i n t o the
p o o r e r s e c t i o n of the r u r a l p o p u l a t i o n , h a v i n g t o t a l a s s e t s w o r t h below
Rs.2,500 (the average was Rs.409), (2) There was a l s o s u b s t a n t i a l
i n d e b t e d n e s s ( a v e r a g i n g Rs.287), m o s t l y t o monej'-lenders and m o s t l y f o r
purposes o f consumption r a t h e r t h a n p r o d u c t i o n .
There i s no s p e c i f i c
i n f o r m a t i o n on the e x p o r t based c r a f t s ( s u p e r f i c i a l e v i d e n c e s u g g e s t s t h a t
a r t i s a n s , h e r e , do r a t h e r b e t t e r - see S e c t i o n 3 ) ,
Tfnile h a n d i c r a f t s p r o v i d e eraployment t o those who might o t h e n ^ i s e n o t
e n j o y i t , wages and c o n d i t i o n s are o f t e n p o o r : 'most p e o p l e engaged i n
t r a d i t i o n a l c r a f t s and i n d u s t r i e s l i v e below the p o v e r t y l i n e . T h e i r p o v e r t y
i s not due t o underemployment o r unemployment; a g r e a t many of t h e s e p e o p l e
are poor d e s p i t e b e i n g f u l l y employed and even w o r k i n g 10-12 hours a day,
(3)
Labour c o n d i t i o n s (poor h e a l t h s t a n d a r d s ; employment of m i n o r s ; i n s e c u r i t y ;
above a l l , d r u d g e r y ) a l s o s t r e t c h the t o l e r a n c e o f even the p o o r e s t ,
A ' c l a s s i c a l ' v i e w of the l a b o u r market would be e s s e n t i a l l y o p t i m i s t i c :
s u b s t a n t i a l l y i n c r e a s e d demand f o r l a b o u r w i l l r a i s e wages and c o n d i t i o n s
t h r o u g h the market mechanism. However, such i s the v a s t n e s s and d e g r e e o£
segmentation of the l a b o u r m a r k e t , the d i s p r o p o r t i o n s of b a r g a i n i n g power and
the l a c k o f i n f o r m a t i o n a v a i l a b l e t o c r a f t s m e n about the market i n w h i c h they
s e l l t h e i r l a b o u r , t h a t we a r e s c e p t i c a l of the a u t o m a t i c i t y of t h i s
mechanism. There are a p r i o r i i n d i c a t i o n s t h a t a s u b s t a n t i a l e x p a n s i o n i n
volume of employment i n some a r e a s (such as diamond c u t t i n g ) has been
accompanied by f a l l i n g r e a l wages and d e t e r i o r a t i n g c o n d i t i o n s . However, i n
g e n e r a l , VTB a c c e p t the premise on w h i c h I n d i a n p o l i c y i s based: t h a t
h a n d i c r a f t and handloora e x p a n s i o n i s a major development because of the
emplojnaent w h i c h i t b r i n g s .
(1)
A b d u l A z i z , R u r a l A r t i s a n s Development S t r a t e g i e s and Employment
G e n e r a t i o n , I n s t i t u t e o f S o c i a l and Economic Change, B a n g a l o r e ,
?4arch 1980.
(2)
A l l I n d i a Debt and Investment Survey 1971-72 ( S e c t i o n on r u r a l
a r t i s a n s ) summarised i n Reserve Banlc B u l l e t i n , March 1973.
(3)
K.K. T a i m a n i , 'Employment g e n e r a t i o n t h r o u g h h a n d i c r a f t c o - o p e r a t i v e s :
the I n d i a n e x p e r i e n c e ' . I n t e r n a t i o n a l Labour Review, J u l y - A u g u s t 1981,
SECTION 3
(a)
The
PRODUCTION AITO DISTRIBUTIOi;! OF IlAimiCSAFTS GOODS
O r s a n i s a t i o n of H a n d i c r a f t s P r o d u c t i o n ; The
S p e c i a l i s t Outworker
H a n d i c r a f t s p r o d u c t i o n , o r g a n i s e d on a l a r g e c o a m e r c i a l s c a l e , i s
g e n e r a l l y c h a r a c t e r i s e d by two f e a t u r e s : f i r s t , a system o f ' p u t t i n g o u t ' or
s u b - c o n t r a c t i n g t o h o u s e h o l d u n i t s f o r p r o d u c t i o n ; and s e c o n d , an advanced
degree of d i v i s i o n o f l a b o u r , h o r i s o n t a l l y between p r o d u c t s and v e r t i c a l l y
between p r o c e s s e s .
Thus M i e s d e s c r i b e s the v i l l a g e lace-making i n d u s t r y as
a k i n t o 'ah i n v i s i b l e assembly l i n e where each (woman) i s a s s i g n e d o n l y t o
make a component p a r t o f the whole w h i c h she never saw l e t a l o n e X7ould ever
use h e r s e l f ' . (1) T h i s system o f advanced s p e c i a l i s a t i o n w i t h i n a c o t t a g e
i n d u s t r y i s by no means c o n f i n e d t o the p r e s e n t t i m e , o r t o I n d i a . Thus,
HobsbaTOT w r i t e s o f 13th c e n t u r y England o f 'the t y p i c a l worker b e i n g some
k i n d of v i l l a g e a r t i s a n or s m a l l h o l d e r i n h i s cottage i n c r e a s i n g l y s p e c i a l i s i n g
i n the laanufacture o f some p r o d u c t ...
The n a t u r e o f such a system of r u r a l
" d o m e s t i c " o r " p u t t i n g o u t " i n d u s t r y spread i t w i d e l y throughout the
c o u n t r y s i d e ' . (2) Mead, w r i t i n g about contemporary T h a i l a n d d e s c r i b e s the
e x t e n s i v e use o f s u b - c o n t r a c t i n g o r ' p u t t i n g o u t ' i n the p r o d u c t i o n o f s i l k ,
w o o d c a r v i n g , f u r n i t u r e , f i s h n e t s , k n i t t i n g , lacquerx-rare and m e t a l b o w l s . I n
s i l k p r o d u c t i o n , f o r example, ' t h e r e are e i g h t s e p a r a t e s t e p s done by e i g h t
d i f f e r e n t groups of h o u s e h o l d e r s each w o r k i n g o u t s i d e the f i r m ' s own workshop
i n a s s o r t e d v i l l a g e s ,,, a l l o f these t a s k s are done on a s u b - c o n t r a c t i n g
b a s i s : the u n s k i l l e d work g e n e r a l l y by c h i l d r e n , the more h i g h l y s k i l l e d
a c t i v i t i e s by women (and sometimes men)', (3)
One of t h e b e s t examples i n I n d i a o f the d i v i s i o n of l a b o u r i n h a n d i c r a f t s i s t o be found i n b r a s s w a r e p r o d u c t i o n , the l a r g e s t component o f the
a r t metalware c a t e g o r y , and t h e t h i r d l a r g e s t h a n d i c r a f t e x p o r t ( e x c l u d i n g
handlooms). There a r e s i x p r o c e s s e s i n v o l v e d i n the p r o d u c t i o n o f t h e
t r a d i t i o n a l enamelled b r a s s v a s e s e x p o r t e d from Moradabad ( U t t a r P r e d e s h ) ,
w h i c h account f o r about 90% o f brassware e x p o r t s . These are (a) c a s t i n g the
b a s i c shape, u s u a l l y i n two o r t h r e e p i e c e s , (b) b r a z i n g the p i e c e s t o g e t h e r ,
(c) m a c h i n i n g o r p l a n i n g them down t o get a smooth f i n i s h , (d) e n g r a v i n g ,
(e) c o l o u r i n g i n the engraved d e s i g n w i t h l a c , and ( f ) p o l i s h i n g . Each p r o c e s s
i s c a r r i e d out i n a d i f f e r e n t u n i t o r c o t t a g e , . S i m i l a r l y , f o r c a r p e t s the
(1)
M a r i a M i e s , Housewives Produce f o r the ITorld M a r k e t ; The Lace Makers o f
Harsapur, o p , c i t ,
~~"
(2)
3 , J , HobsbaxOT, I n d u s t r y and E m p i r e , P e l i c a n , 1969,
(3)
D.C, Mead, S u b c o n t r a c t i n g i n R u r a l Areas of T h a i l a n d , R e s e a r c h Paper No,5,
C e n t r e f o r A p p l i e d Economics R e s e a r c h , K a s e t s a r t U n i v e r s i t y , Bangkok,
T h a i l a n d - 1 9 3 1 and P. d i a r s o a l b u t . The S i l k I n d u s t r y i n T h a i l a n d ,
C o n f e r e n c e Paper No,17, C e n t r e f o r A.pplied Economic R e s e a r c h , K a s e r t s a r t
U n i v e r s i t y , 1981,
p,29,
y a r n p r e p a r a t i o n ( s p i n n i n g , w a s h i n g , d y e i n g ) i s performed i n one p l a c e , t h e
k n o t t i n g i n a n o t h e r , and each o f t h e f i n i s h i n g p r o c e s s e s i n o t h e r s ( t y i n g
o f f t h e warp ends and b i n d i n g t h e w e f t ; 'washing* t h e c a r p e t t o fade t h e
c o l o u r s and g i v e i t a sheen; s e p a r a t i n g t h e t h r e a d s , c l i p p i n g and embossing).
In t e x t i l e p r i n t i n g the block o r screen p r i n t i n g processes a r e c a r r i e d out i n
u n i t s s e p a r a t e f r o m those r e s p o n s i b l e f o r t h e d y e - f i x i n g and washing o f t h e
p r i n t e d c l o t h . There i s l e s s d i v i s i o n o f l a b o u r i n t h e j e w e l l e r y s e c t o r
l a r g e l y because t h e r e a r e fewer p r o d u c t i o n p r o c e s s e s i n v o l v e d b u t i n t h e
diamond c u t t i n g i n d u s t r y t h e b a s i c p r o c e s s e s o f c u t t i n g and p o l i s h i n g a r e
c a r r i e d o u t by d i f f e r e n t groups o f w o r k e r s .
The essence o f s u b - c o n t r a c t i n g , p a r t i c u l a r l y when p r o d u c t s and
p r o c e s s e s a r e s p e c i a l i s e d , i s t h a t a r t i s a n s do n o t d e a l d i r e c t l y w i t h each
o t h e r , n e i t h e r f i n a n c i a l l y n o r , o f t e n , p h y s i c a l l y . The c o n t r a c t o r m a i n t a i n s
the f l o w o f m a t e r i a l s and f i n a n c e , s u p p l y i n g i n p u t s t o t h e o u t w o r k e r s ,
c o l l e c t i n g t h e i r f i n i s h e d goods and p a y i n g them, A . b r a s s e n g r a v e r would n o t
buy a smooth b r a s s shape from t h e p l a n e r , and s e l l h i s engraved shape t o a
l a c q u e r e r , n o r would an i n d i v i d u a l c a r p e t weaver buy h i s wool f r o i a a m i l l o r
a dye house, and s e l l h i s k n o t t e d c a r p e t t o a f i n i s h e r . I n s t e a d they a r e
i n t e r l i n k e d by a m a n u f a c t u r e r , i e . a p e r s o n w i t h c a p i t a l m a n a g e r i a l
c a p a c i t i e s , and l i n k s w i t h e x p o r t e r s , i f n o t a c t u a l l y an e x p o r t e r h i m s e l f .
The m a n u f a c t u r e r - o r , r a t h e r , h i s ageiit - s u p p l i e s t h e raw m a t e r i a l s t o t h e
u n i t c a r r y i n g o u t t h e f i r s t p r o c e s s , When t h i s i s completed t h e s e m i f i n i s h e d p r o d u c t i s r e t u r n e d t o t h e m a n u f a c t u r e r - o r h i s agent - f o r
c h e c k i n g , b e f o r e b e i n g passed on t o t h e u n i t c a r r y i n g out t h e f o l l o w i n g
p r o c e s s , ans s o on u n t i l t h e good i s completed, f i n a l l y checked and packaged
ready f o r e x p o r t . Even t h e p a c k a g i n g may be c a r r i e d o u t b y a s e p a r a t e u n i t .
I n p r a c t i c e t h i s v e r t i c a l S p e c i a l i s a t i o n may be o n l y p a r t i a l l y r e a l i s e d ,
I'iJhile t h e r e i s scsne s p e c i a l i s a t i o n i n t e x t i l e s ( r e e l i n g , t w i s t i n g , d y e i n g ,
xTeaving f o r s i l k ; s i z i n g , d y e i n g , weaving f o r c o t t o n ) , / t h e main p r o c e s s o f
weaving i s u s u a l l y c a r r i e d o u t , t o g e t h e r w i t h t h e a n c i l l a r y p r o c e s s e s , by
i n d i v i d u a l f a m i l i e s , t h e r e a r e , f o r example, some handloora ' f a c t o r i e s ' u s u a l l y s m a l l , w i t h under a dozen v^reavers, a l t h o u g h i n K e r a l a they a r e much
l a r g e r . B u t t h e dominant mode o f p r o d u c t i o n i n handloom t e x t i l e s remains
the h o u s e h o l d o u t w o r k e r .
The f r a g m e n t a t i o n o f p r o d u c t i o n and t h e predominance o f o u t w o r k i n g
might appear, a t f i r s t s i g h t , as d y s f u n c t i o n a l t o t h e development o f an
e x p o r t i n d u s t r y geared t o l a r g e s c a l e p r o d u c t i o n , and m e e t i n g d e l i v e r y d a t e s
and s t r i c t q u a l i t y c o n t r o l . Indeed, one o f t h e s u r p r i s i n g f e a t u r e s o f t h e
h a n d i c r a f t s i n d u s t r y i s t h a t a l t h o u g h p r o d u c t i o n and e x p o r t s have expanded
r a p i d l y , t h e s t r u c t u r e o f p r o d u c t i o n g e n e r a l l y has n o t changed. E x i s t i n g
u n i t s have n o t grown ( i e , t h e i r c a p a c i t y has n o t g r e a t l y i n c r e a s e d though
the c a p a c i t y u t i l i s a t i o n may h a v e ) .
I n s t e a d t h e number o f u n i t s has r i s e n .
I n Moradabad, f o r i n s t a n c e , t h e number o f e s t a b l i s h m e n t s i n v o l v e d i n a r t
raetalware
grew from 2,537 i n 1961 t o 4,000 i n 1971 as o u t p u t a p p r o x i m a t e l y
doubled i n r e a l terms. (1) Some m a n u f a c t u r e r s , i t i s t r u e , have attempted
(1)
A l l I n d i a H a n d i c r a f t s B o a r d , A r t Metalware a t S e l e c t e d
Survey R e p o r t , 1973.
Centres,
to i n t e g r a t e t h e i r workers by s e t t i n g up f a c t o r i e s o r workshops where sorae
o r a l l o f the p r o c e s s e s a r e c a r r i e d out t o g e t h e r . L a r g e c a r p e t m a n u f a c t u r e r s
have s e t up loomsheds o r 'Karkhanas'; i t has been e s t i m a t e d t h a t t h e s e
account f o r about 30% o f c a r p e t o u t p u t i n Kashmir, 50-60% i n A g r a and J a i p u r ,
but o n l y 10% i n the m a j o r Bhadohi-I'Iirzapur c a r p e t b e l t . I n o t h e r words, f o r
the c a r p e t i n d u s t r y as a whole no more than 20% o f t o t a l output i s produced
i n f a c t o r i e s . S e v e r a l l a r g e garment f a c t o r i e s have been s e t up i n r e c e n t
y e a r s , m a i n l y i n Bombay, D e l h i , J a i p u r and C a l c u t t a , but a l a r g e nuBiber have
been f o r c e d t o c l o s e as a r e s u l t o f v a r i o u s p r o b l e m s , and m a n u f a c t u r e r s
have r e v e r t e d t o the o u t w o r k i n g system.
The p e r s i s t e n c e o f complex outxTOrking systems - even where t h e r e i s a
demand f o r l a r g e s c a l e p r o d u c t i o n t o meet r a p i d f a s h i o n changes and s h o r t
d e l i v e r y times - suggests t h a t i t has c o n s i d e r a b l e advantages over f a c t o r y
o r g a n i s a t i o n , a l t h o u g h these advantages may be p e r c e i v e d d i f f e r e n t l y by
m a n u f a c t u r e r s and a r t i s a n s . The f i r s t major advantage i s f l e x i b i l i t y .
For
the m a n u f a c t u r e r f l e x i b i l i t y l i e s i n n o t h a v i n g the overheads o f a f i x e d
l a b o u r f o r c e ; w o r k e r s are commissioned as and when demand r e q u i r e s them.
The
advantage i s n o t e n t i r e l y one s i d e d . The p r e s s u r e f o r such a system comes
n o t o n l y frora the c a p i t a l i s t e n t r e p r e n e u r but a l s o , t o a d e g r e e , f r o m the
artisan.
I n the handloora weaving i n d u s t r y o u t w o r k i n g has c o n s i d e r a b l e
a t t r a c t i o n s f o r the worker o v e r ' f a c t o r y ' l a b o u r ; indeed ' f a c t o r y ' handloom
workers a r e the most d e p r i v e d members o f the weaving, community who cannot
a f f o r d a loom o r have no space a t home t o i n s t a l l one.
The o u t w o r k e r can
c o n t r o l the pace o f h i s own p r o d u c t i o n ( i e . he can work l o n g e r h o u r s t h a n the
f a c t o r y w o r k e r , and when he chooses) and can supplement h i s own e f f o r t s vrith
f a m i l y l a b o u r . There a r e p a r a l l e l s w i t h the s m a l l h o l d e r f a r m e r i n r e l a t i o n
to the wage l a b o u r e r .
A second a t t r a c t i o n i n outworking may be t h a t those who o r g a n i s e
p r o d u c t i o n a r e a n x i o u s t o p r e s e r v e the u n i q u e n e s s of each c r a f t s m a n ' s p r o d u c t s ,
x A i c h may d i s a p p e a r i f they work en masse. (ITe a r e s c e p t i c a l on t h i s p o i n t ,
however: i t seems t h a t most h a n d i c r a f t m a n u f a c t u r e r s and e x p o r t e r s a r e p r e p a r e d
to s a c r i f i c e t h e u n i q u e n e s s o f i n d i v i d u a l o b j e c t s i n r e t u r n f o r a l a r g e r
volume o f o u t p u t . )
Q u a l i t y i s o f t e n c o n t r o l l e d i n c o t t a g e p r o d u c t i o n by h i r i n g
e x p e r i e n c e d c r a f t s m e n (or master craftsmen) as s u b - c o n t r a c t o r s , and i f the
q u a l i t y i s low, by making d e d u c t i o n s from t h e i r commission (and they i n t u r n
w i l l c u t the p i e c e r a t e p a i d t o the x r o r k e r ) . T h i s q u a l i t y c o n t r o l s y s t e n
i l l u s t r a t e s a more g e n e r a l p o i n t t h a t under an outworker system i t i s p o s s i b l e
to m a i n t a i n some advantages o f s c a l e and c e n t r a l i s a t i o n where t h i s i s n e c e s s a r y
- d e v e l o p i n g o v e r s e a s m a r k e t s , i n s t a n d a r d i s i n g q u a l i t y , o r g a n i s i n g raw m a t e r i a l
f l o w s , f i n a n c i n g w o r k i n g c a p i t a l - i n a c o n t e x t where t h e r e a r e ho economies
of s c a l e i n p r o d u c t i o n i t s e l f , and Xi^ere the h o u s e h o l d i s the optimum p r o duction unit,
A t h i r d advantage, t o b o t h m a n u f a c t u r e r s and c r a f t s m e n , i s t h a t o u t w o r k i n g
p e r m i t s p r o d u c t i o n t o be c a r r i e d out i n v i l l a g e s and s m a l l towns r a t h e r than
in cities.
I n t h i s way the xrorker i s saved b o t h economic c o s t s ( t r a v e l ,
h o u s i n g ) and t h e non-economic c o s t s of d i s r u p t i n g e s t a b l i s h e d s o c i a l
r e l a t i o n s h i p s ; the m a n u f a c t u r e r can a l s o pay lot^jer wages as a consequence.
I t would be n a i v e t o i m a g i n e , however, t h a t the r e l a t i o n s h i p between
m a n u f a c t u r e r s and c r a f t s m e n i s n e c e s s a r i l y evenhanded. O u t w o r k i n g ,
e s p e c i a l l y when combined w i t h advanced s p e c i a l i s a t i o n , p o t e n t i a l l y
s t r e n g t h e n s the p o s i t i o n o f the former i n r e l a t i o n t o the l a t t e r .
The
m a n u f a c t u r e r has f u l l c o n t r o l over key s t a g e s i n the c h a i n ; raw m a t e r i a l
s u p p l y , c r e d i t and m a r k e t i n g . He ( u s u a l l y he r a t h e r t h a n she) w i l l be i n
a p o s i t i o n to p i c k and choose amongst l a r g e numbers of v i l l a g e s and v i l l a g e r s .
The w o r k e r s , by c o n t r a s t , are more l i k e l y t o corapete w i t h each o t h e r s i n c e
t h e y are much more numerous than the f i r m s ; and s i n c e they work a t hone
r a t h e r t h a n t o g e t h e r t h e r e i s l i t t l e encouragement t o o r g a n i s e c o l l e c t i v e l y .
The a r t i s a n i s u n a b l e t o s t o c k f i n i s h e d p i d u c t s i n the hope of o b t a i n i n g a
h i g h e r p r i c e s i n c e the m a n u f a c t u r e r - t h r o u g h h i s agent - i s the main source
of c r e d i t and t h i s c r e d i t can i n t u r n l e a d t o debt bondage, espec3.ally i f
extreme p o v e r t y l e a d s t o dependence on c r e d i t f o r consumption. I n sone cases
debt dependence a r i s e s from raw m a t e r i a l advances; i n o t h e r s i t a r i s e s f r o n
a r t i s a n s pawning t h e i r raw m a t e r i a l s and o t h e r a s s e t s . For exaiuple, the
s i l k weaving a r t i s a n s of ICancheepuram pa\m the ' z a r i ' - the g o l d and s i l v e r
t h r e a d used i n s a r e e s : ' d u r i n g the r a i n i n g season the l o o n s l i e i d l e , the
g o l d t h r e a d s t u r n r e d and the s i l k t h r e a d s b r e a k . A t t h i s t i n e t h e y m o s t l y
paxm the z a r i and s i l k t h r e a d s and l i v e on t h a t . The z a r i they now get i s
b a r e l y enough t o complete a s a r e e .
So they m a i n l y depend on the master
weavers f o r l o a n s ' . (1) The v u l n e r a b i l i t y o f the f o r m a l l y independent but
p r a c t i c a l l y dependent h o u s e h o l d worker has been g r a p h i c a l l y i l l u s t r a t e d i n
the case of the B i d r i , c r a f t s m e n ( s i l v e r and g o l d i n l a y e r s ) J 'on tv/o a c c o u n t s
the worker i s a t a d i s a d v a n t a g e ; f i r s t l y he i s u n a b l e t o s e c u r e r e g u l a r
s u p p l i e s of h i s vax-j m a t e r i a l s a t r e a s o n a b l e r a t e s due t o l a c k of r e s o u r c e s .
As a r e s u l t , he i s n o t a b l e t o accumulate s t o c k s w i t h a v i e w of m a r k e t i n g
them a t the p r o p e r time when he vrould be i n a p o s i t i o n t o o b t a i n r e a s o n a b l e
p r i c e s f o r h i s p r o d u c t . In o t h e r words he does not p o s s e s s " h o l d i n g power".
Second he does n o t p o s s e s s n e c e s s a r y funds f o r f i n a n c e and m a r k e t i n g .
This
i n c l u d e s s t o r a g e c o s t s and c o s t s i n v o l v e d i n the e s t a b l i s h m e n t of m a r k e t i n g
o u t l a y s i n d i s t a n t p l a c e s ' . (2) The p o s i t i o n of the a r t i s a n who owns h i s
own equipment, and p r e m i s e s , t h u s becomes s c a r c e l y s u p e r i o r t o t h e wagel a b o u r a r t i s a n who does o u t w o r k i n g on a p i e c e r a t e b a s i s . The q u e s t i o n of
E x p l o i t a t i o n ' i n h a n d i c r a f t s w i l l be d e a l t w i t h l a t e r ; the i s s u e s are
complex, v a l u e - l a d e n and not as c l e a r cut as a t f i r s t appears. S u f f i c e i t
t o s a y , t h a t - whether o r n o t t h i s c o n s t i t u t e s ' e x p l o i t a t i o n ' - the p r i m a r y
o b j e c t i v e i n home-based p r o d u c t i o n i s t o cut the c o s t of l a b o u r .
The immediate i n c e n t i v e f o r m a n u f a c t u r e r s t o l o o k f o r a l t e r n a t i v e s t o
f a c t o r i e s i s t h e i r f e a r o f o r g a n i s e d l a b o u r - such Workers are more a c c e s s i b l e
t o u n i o n i s t s (and p o l i t i c i a n s ) than v i l l a g e v7orkers - and t h e i r e x p e r i e n c e s
of l o c k o u t s and s t r i k e s , i n c l u d i n g l a b o u r u n r e s t i n h a n d i c r a f t f a c t o r i e s .
I n 1978 the c a r p e t i n d u s t r y i n J a i p u r stopped f o r t h r e e and a h a l f months
when weavers and c o n t r a c t o r s went on s t r i k e , demanding h i g h e r r a t e s . . I t
i s r a r e f o r outworkers t o t a k e comparable i n d u s t r i a l a c t i o n . I t c o u l d be
(1)
C.S. L a k s h m i , ' S i l k weavers of Kancheepuram', The Economic Times, Sombay,
18 October 1901.
(2)
li.'S. Upadhyoy, Economics of the H a n d i c r a f t s
1973,
p.21.
I n d u s t r y , New
Delhi,
argued t h a t such d i s r u p t i o n would be l e s s l i k e l y t o o c c u r i f c o n d i t i o n s i n
t h e s e f a c t o r i e s were b e t t e r but t h i s c o u l d add t o o v e r h e a d s , and i t i s t h i s
w h i c h i s the c r u x o f the problem. A l l of the main h a n d i c r a f t i n d u s t r i e s
are s u b j e c t t o i n t e n s e p r i c e c o m p e t i t i o n between I n d i a n e x p o r t e r s , and
i n t e r n a t i o n a l l y , r e s u l t i n g i n s t r o n g p r e s s u r e t o cut overheads. M a n u f a c t u r e r s
are a l s o concerned t h a t i t i s d i f f i c u l t t o d i s m i s s workers when demand i s
c y c l i c a l and s u b j e c t to f a s h i o n changes, which g r e a t l y adds t o f a c t o r y c o s t s .
The F a c t o r i e s A c t i s y e t another source of added overheads. Under t h i s ,
m a n u f a c t u r e r s must p r o v i d e c e r t a i n b a s i c f a c i ! " ' . t i e s and i f they employ t e n
workers o r more t h e y must pay bonuses, x/hile i f 50 or more a r e employed, the
m a n u f a c t u r e r s must make c o n t r i b u t i o n s t o a p r o v i d e n t f u n d on the w o r k e r s '
b e h a l f . An a s s o c i a t e d c o s t i s t h a t f a c t o r y o p e r a t i o n s must be r e g u l a r l y
i n s p e c t e d by government o f f i c i a l s .
I t seems, however, t h a t the power of the
A c t tends t o be e x a g g e r a t e d ; t h e r e a r e fexf i n s p e c t i o n s by government o f f i c i a l s (1)
and where an attempt i s made to e n f o r c e the law a m a n u f a c t u r e r may f i n d i t
cheaper to pay a f i n e than t o improve w o r k i n g c o n d i t i o n s . F o r i n s t a n c e , a
garment m a n u f a c t u r e r i n Bombay p r e f e r r e d to pay a f i n e e v e r y s i x months than
t o i n s t a l l the t o i l e t f a c i l i t i e s which he was l e g a l l y o b l i g e d to p r o v i d e as he
employed a l a r g e number o f women,
A coriiTion x^ay o f c i r c u m v e n t i n g r e s t r i c t i o n s on o r g a n i s e d p r o d u c t i o n i s f o r
the raanufacturer t o h i r e out v a r i o u s p a r t s o f h i s f a c t o r y t o s u b - c o n t r a c t o r s
xjho i n t u r n a r e i n charge o f up t o n i n e w o r k e r s . The s u b - c o n t r a c t o r i s p a i d
a c o m r i i s s i o n and the workers are p a i d on a p i e c e r a t e b a s i s . I n p r i n c i p l e
then even vrhen w o r k e r s are under the m a n u f a c t u r e r ' s r o o f he s t i l l does not d e a l
w i t h them d i r e c t l y , though i n p r a c t i c e he c l e a r l y has more c o n t r o l o v e r thera
and t h e i r work. T h i s type o f ' m i n i ' - f a c t o r y p r o d u c t i o n may s u b s t i t u t e f o r
the p u t t i n g out system vihere the t e c h n i c a l equipment i s u n s u i t a b l e f o r home
x7orking, f o r exaiaple i f i t i s too b i g (as are some d h u r r y looms) o r r e q u i r e s
e l e c t r i c i t y . I t may a l s o be p r e f e r r e d i f s t r i c t q u a l i t y c o n t r o l i s i m p o r t a n t .
For i n s t a n c e the p r i c e of a c a r p e t i s a f f e c t e d by how w e l l i t has been f i n i s h e d ,
i e . k n o t t e d , bound, c l i p p e d , and embossed, so these processes may be c a r r i e d out i n
a f a c t o r y . S i m i l a r l y , xrhere the v a l u e of the raxir m a t e r i a l i s h i g h , as i n
s i l k garments, the raanufacturer may want ot keep c l o s e r c o n t r o l over workmanship t o e n s u r e t h a t r e j e c t i o n r a t e s are low.
Rather s u r p r i s i n g l y , t h i s
argument has n o t persuaded gem m a n u f a c t u r e r s i n J a i p u r t o s e t up f a c t o r i e s
even t h o u g h the e x o o r t market demands h i g h s t a n d a r d s ; as much as 30% o f the
nany stones e x p o r t e d on consignment b a s i s i n 1979/30 x<rere r e t u r n e d as b e i n g
o f poor q u a l i t y . (2) Most stones are c u t i n s m a l l , s e p a r a t e , workshops
employing l e s s than f i v e p e o p l e . Diamond c u t t i n g e s t a b l i s h a e n t s i n Bombay and
S u r a t are somevjhat l a r g e r because of the need f o r s u p e r v i s i o n and f o r poxrer
equipment, but a ' f a c t o r y ' of more t h a n 20 xrorkers i s u n u s u a l . The emergence
i n i n t e r n a t i o n a l markets of I n d i a n cut and p o l i s h e d s m a l l diamonds has been
a c c o m p l i s h e d a l m o s t e n t i r e l y t h r o u g h these s m a l l u n i t s . Moreover a t t e m p t s t o
(1)
T h i s i s s u p p o r t e d by II, S t r e e f k e r k , 'Too l i t t l e t o l i v e on, too much t o
d i e on. Employment i n s m a l l s c a l e i n d u s t r i e s i n r u r a l South G u j u r a t ' ,
Econcanic and P o l i t i c a l Weekly, A p r i l 1981, p,661,
(2)
R a j a s t h a n C o n s u l t a n c y O r g a n i s a t i o n , R e p o r t on the S t a t u s of t h e
I n d u s t r y i n R a j a s t h a n , 1931,
Lapidary
break t h i s dominance by u n i t s s e t up i n M a l a y s i a and Ghana, employing l a r g e
numbers o f workers o p e r a t i n g under f a c t o r y d i s c i p l i n e , have f a i l e d , even
w i t h s u b s t a n t i a l e x p a t r i a t e a s s i s t a n c e . A c h a r a c t e r i s t i c of t h e s e ' m i n i f a c t o r y ' a c t i v i t i e s i s t h a t t h e y are g e o g r a p h c a i l l y c o n c e n t r a t e d , u s u a l l y
i n towns, p e r m i t t i n g c l o s e s u p e r v i s i o n and c o n t r o l t o be r e c o n c i l e d w i t h
s m a l l s c a l e p r o d u c t i o n . (1)
I t i s , o f c o u r s e , not o n l y i n I n d i a t h a t b u s i n e s s responds i n t h i s way
t o r e g u l a t i o n of o r g a n i s e d p r o d u c t i o n .
Outworking and ' m i n i - f a c t o r i e s ' are
a common f e a t u r e o f garments' p r o d u c t i o n wotldvride. Perhaps the c l o s e s t
a n a l o g y i s the p r o d i g i o u s growth of the I t a l i a n ' b l a c k economy' w h i c h , as
i n I n d i a , has drawn h e a v i l y on t r a d i t i o n a l c r a f t s k i l l s i n t e x t i l e s , stone
c u t t i n g and l e a t h e r work t o produce a major e x p o r t i n d u s t r y . Perhaps the
most comprehensive use of s u b - c o n t r a c t i n g as a f o r n of m a n u f a c t u r i n g
o r g a n i s a t i o n has been i n J a p a n , where h a n d i c r a f t o r i e n t a t e d a c t i v i t i e s have
been substimed i n a much more e x t e n s i v e network of s m a l l f i r m s , many u s i n g
m a c h i n e r y , a l b e i t secondhand. (2)
To summarise; the o r g a n i s a t i o n of h a n d i c r a f t s p r o d u c t i o n i n I n d i a i s
i n f l u e n c e d by two d i v e r g e n t f o r c e s : one i s towards l a r g e s c a l e o r g a n i s a t i o n ;
the o t h e r towards s m a l l s c a l e p r o d u c t i o n .
Seen i n t h i s l i g h t the p r e dominance o f s m a l l ' i n e f f i c i e n t ' , 'fragmented* u n i t s i s l e s s i n a p p r o p r i a t e
t h a n i t a t f i r s t appears. But the c a p a c i t y f o r l a r g e s c a l e o r g a n i s a t i o n
c l e a r l y demands a c o n s i d e r a b l e i n p u t of entrepreneur-ship, x^^ether i n
' m a n u f a c t u r i n g ' ( i e . managing a complex outrrorker o r s u b - c o n t r a c t i n g s y s t e a ) ,
f i n a n c i n g , o r m a r k e t i n g o v e r s e a s . The e x t e n t t o w h i c h these i n p u t s are
a v a i l a b l e from the p r i v a t e and/or p u b l i c s e c t o r , c r u c i a l l y a f f e c t s the
industry's capacity f o r expansion.
(b)
The
Structure of D i s t r i b u t i o n
^/•Ihile we have demonstrated r e a s o n s f o r the fragmented c h a r a c t e r of
p r o d u c t i o n , we have i m p l i e d t h a t the systera o f c o n t r o l and ox^nership on a
l a r g e s c a l e . There a r e two c r i t e r i a t o c o n s i d e r here (though f o r some
p r o d u c t s they o v e r l a p ) . The f i r s t i s the management o f p r o d u c t i o n - xrhat
xre have c a l l e d ' m a n u f a c t u r i n g ' a l t h o u g h the m a n u f a c t u r e r may w e l l be a
f i n a n c i e r o r a master c r a f t s m a n who has b u i l t up a s u b - c o n t r a c t i n g b u s i n e s s ,
! l a n u f a c t u r e r s ' o p e r a t i o n a l s i s e s v a r y g r e a t l y even i f , at. the top end, they
are c o n s t r a i n e d by t h e i r a b i l i t y t o manage v e r y l a r g e and complex networks
(though management can be d e l e g a t e d t o master weavers, a g e n t s , s u p e r v i s o r s
and so o n ) , and a l s o by w o r k i n g c a p i t a l a v a i l a b i l i t y , of x^hich more be 1 ox/.
I n the s i l k weaving b u s i n e s s a ' t y p i c a l ' m a n u f a c t u r e r c o u l d have 50 crafts'.aen
w o r k i n g f o r him, as s u b - c o n t r a c t o r s o r as p a i d employees, v j h i l e i n c o t t o n
x/eaving i t c o u l d be as many as 1000.
I n most o t h e r t r a d e s ' o p t i m a l s c a l e ' i s
w i t h i n t h i s range.
(1)
The u r b a n b i a s of the h a n d i c r a f t s i n d u s t r y i s d i s c u s s e d
below.
i n greater
detail
(2)
S. Watanabe, ' S u b c o n t r a c t i n g , i n d u s t r i a l i s a t i o n and employment c r e a t i o n ' ,
I n t e r n a t i o n a l Labour Review, J u l y / A u g u s t 1971.
S. P a i n e , 'Lessons f o r I d c s from Japatfe e x p e r i e n c e vrith l a b o u r commitment
and s u b c o n t r a c t i n g i n the m a n u f a c t u r i n g s e c t o r ' , O x f o r d B u l l e t i n of
Economics and S t a t i s t i c s , v o l . 3 3 , no.2, 1971, p.122.
C. B e r t h a n i e u and A. Hanaut, 'Can i n t e r n a t i o n a l s u b c o n t r a c t i n g promote
i n d u s t r i a l i s a t i o n ? ' . I n t e r n a t i o n a l Labour Review, May/June 19S0.
The second p o i n t t o c o n s i d e r i s i n t e r n a t i o n a l m a r k e t i n g .
Here one would
e x p e c t t h a t t h e r e a r e s u b s t a n t i a l economies of s c a l e . E x j o r t i n g i s , a f t e r
a l l , a complex and d i f f i c u l t b u s i n e s s w i t h a wide range o f p r o b l e m s : f r o m
the c h o i c e o f the c o r r e c t product ( d e s i g n and c o l o u r ) , t o c o n t a c t vrLth
i m p o r t e r s / w h o l e s a l e r s / r e t a i l e r s , knowledge o f i m p o r t r e g u l a t i o n s ( t a r i f f s ,
documentation r e q u i r e d ) , s e c u r i n g s h i p p i n g space, and knowledge o f e x p o r t
p r o c e d u r e s (doctmientation, s u b s i d i e s . The premise i s t h a t these problems
s h o u l d d i m i n i s h w i t h i n c r e a s i n g o u t p u t - l a r g e 'manufacturers' s h o u l d be b e t t e r
a b l e t o s o l v e them than s m a l l e r ones. As the problems become more i m p o r t a n t ,
eg. i f the amount o f documentation i n c r e a s e s o r d e s i g n s and c o l o u r s change
more f r e q u e n t l y , t h i s w i l l h i n d e r the emergen-e o f s m a l l e x p o r t e r s o r e x p o r t e r /
r o a n u f a c t u r e r s . One would e x p e c t , t h e r e f o r e , t h a t the e x p o r t t r a d e would be
dominated by a r e l a t i v e l y s m a l l number o f e x p o r t e r s . Indeed, o r g a n i s a t i o n s
l i k e the government-owned H a n d i c r a f t s and Kandlooas E j q j o r t s C o r p o r a t i o n (HHEC)
have been a b l e t o expand t h e i r b u s i n e s s p a r t l y because o f t h e i r a b i l i t y t o
h a n d l e l a r g e volumes, and the economies o f s c a l e i n m a r k e t i n g .
Y e t , e x p o r t i n g of most h a n d i c r a f t s , l i k e p r o d u c t i o n , i s s u r p r i s i n g l y
fragmented. Even i n a t r a d e i n v o l v i n g l a r g e w o r k i n g c a p i t a l r e q u i t e m e n t s ,
such as diamonds, t h e r e a r e o v e r 1000 competing e x p o r t e r s . There a r e s t r o n g
p r e s s u r e s f o r market e n t r y : from merchants t r y i n g t o f i n d a mechanism f o r
employing ' b l a c k money' p r o d u c t i v e l y and m t h p o s s i b i l i t i e s f o r f o r e i g n
exchange c o n v e r s i o n ; and i n r e c e n t y e a r s f r o m f o r e i g n i m p o r t e r s who have become
i n c r e a s i n g l y i n v o l v e d i n the p r o d u c t i o n o f goods they buy f r o m I n d i a . I n the
l a t t e r c a s e , the most common p a t t e r n i s f o r i m p o r t e r s t o v i s i t t h e i r I n d i a n
s u p p l i e r s t o d i s c u s s the d e s i g n s and c o l o u r s of the p r o d u c t s t h e y want made,
and p o s s i b l y t o g i v e a d v i c e on p r o d u c t i o n t e c h n i q u e s , and t o watch o v e r the
p r o d u c t i o n o f a few samples. I n a d d i t i o n , some i m p o r t e r s have agents i n I n d i a
who c o n t r o l the q u a l i t y c f p r o d u c t i o n , ensure t h a t d e l i v e r y s c h e d u l e s a r e met,
and check the e x p o r t documentation. T h i s has p r o b a b l y h e l p e d a new g e n e r a t i o n
o f medium-sized m a n u f a c t u r e r s t o move i n t o t h e e x p o r t market themselves r a t h e r
t h a n h a v i n g t o e x p o r t through an I n d i a n m a r k e t i n g o u t l e t . There a r e c e r t a i n
c o s t s i n v o l v e d : the m a n u f a c t u r e r s may have t o a c c e p t a lower p r i c e f o r t h e i r
p r o d u c t s (and I n d i a lower ejcport e a r n i n g s ) t h a n i f t h e y were a b l e t o p e r f o r m
the m a r k e t i n g f u n c t i o n s t h e m s e l v e s ; and the dependence on i m p o r t e r s f o r market
i n f o r m a t i o n i s r i s k y as i t i s d i f f i c u l t f o r I n d i a n m a n u f a c t u r e r s t o m a i n t a i n
t h e i r exports i f t h e i r partners c o l l a p s e .
One of the consequences o f easy e n t r y i n t o e x p o r t i n g i s t h a t most e x p o r t e r s
a r e o p e r a t i n g from below the optimum s c a l e r e q u i r e d t o b u i l d up an e f f i c i e n t and
independent o v e r s e a s network. Because e x p o r t i n g i s h i g h l y c o m p e t i t i v e , i t i s
sometimes c l a i m e d t h a t newcomers ' s p o i l the m a r k e t ' , and so h e l p f o r e i g n i m p o r t e r s
to t a k e advantage o f p r i c e c u t t i n g between I n d i a n e x p o r t e r s (though the c o r o l l a r y
i s t h a t t h e r e a r e fewer monopoly r e n t s b e i n g earned by t h i s p a r t i c u l a r group of
'middlemen'). E s t a b l i s h e d f i r m s have o f t e n e x p r e s s e d a p r e f e r e n c e i n t h e s e
c i r c u m s t a n c e s f o r some form of c a r t e l i s a t i o n o r f o r the k i n d o f o r g a n i s e d l a r g e
s c a l e e x p o r t i n g a s s o c i a t e d w i t h the Japanese ' Z a i b a t s u ' , One answer g r a d u a l l y
emerging i n r e s p o n s e t o the e x p o r t i n g needs of s m a l l ( i n c l u d i n g h a n d i c r a f t
e n t e r p r i s e s ) i s the s p e c i a l i s t 'export-house' o f w h i c h t h e r e a r e now 300 i n I n d i a ,
These houses p r o v i d e e x p o r t s e r v i c e s f o r s m a l l p r o d u c e r s and share the p r o f i t , and
a r e b e i n g encouraged by f i s c a l means. P r e c e d e n t s a r e n o t , however, e n c o u r a a i n g ,
Mies n o t e s how ' a n a r c h i c ' c o m p e t i t i o n between l a c e e x p o r t e r s l e d t o the u n d e r m i n i n g
of q u a l i t y s t a n d a r d s , u n d e r - q u o t a t i o n and m i s r e p r e s e n t a t i o n . Y e t , d e s p i t e a t t e m p t s
by the A l l I n d i a H a n d i c r a f t s Board t o o r g a n i s e e x p o r t e r s o v e r a 20-year p e r i o d ,
j e a l o u s y between e s t a b l i s h e d and new e x p o r t e r s has p r e v e n t e d any agreement.
SECTION 4
CONSTRAINTS ON THE HANDICRAFTS INDUSTRY
The s p e c t a c u l a r expansion o f handlooms and h a n d i c r a f t s e x p o r t s i n the 1970s
has h i g h l i g h t e d those t h i n g s w h i c h I n d i a has i n abundances c o n s i d e r a b l e
w i d t h and depth o f t r a d i t i o n a l s k i l l and c r a f t s m a n s h i p ; l a b o u r , m l l i n g ( o r
o b l i g e d ) t o work a t l o w wages and i n poor c o n d i t i o n s ; e n t r e p r e n e u r s capable o f
raounting a s u b s t a n t i a l o r g a n i s a t i o n a l e f f o r t . I t a l s o demonstrates t h e
advantages f o r I n d i a o f i n d u s t r i e s r e q u i r i n g n e g l i g i b l e f i x e d c a p i t a l and
energj'. But c o n s t r a i n t s have appeared, some o f w h i c h a r e s e r i o u s .
(a)
Credit Availability
C r e d i t a v a i l a b i l i t y i s c r u c i a l both f o r export expansion i n general
and more s p e c i f i c a l l y f o r t h e a r t i s a n s t o a c h i e v e an e q u i t a b l e b a r g a i n i n g
r e l a t i o n s h i p w i t h 'manufacturers' o r d l . s t r i b u t i n g f i r m s . H a n d i c r a f t s
p r o d u c t i o n , as p r e s e n t l y o r g a n i s e d u s i n g t r a d i t i o n a l t e c h n i q u e s , r e q u i r e s
l i t t l e o r n e g l i g i b l e f i x e d c a p i t a l . But access t o w o r k i n g c a p i t a l i s c r u c i a l .
For some h a n d i c r a f t s raw m a t e r i a l c o s t s n e r u n i t o f output a r e h i g h ( e g .
c a r p e t s , s i l k , p r e c i o u s s t o n e s ) , and t h e p r o d u c t i o n p r o c e s s may be so s l o w
t h a t an a r t i s a n b u y i n g h i s own raw m a t e r i a l s has t o w a i t some t h r e e t o s i x
months (as i n the case o f c a r p e t s o r s i l k ) b e f o r e r e c o v e r i n g these c o s t s .
I n the case o f s i l k weaving t h e vrorking c a p i t a l r e q u i r e d f o r one loom a l o n e
may be Rs.10,000, and f o r a medium-sized master weaver perhaps as much as
Rs.500,000. B u l k b u y i n g o f raw m a t e r i a l s i s o f t e n n e c e s s a r y t o ensure a
s t e a d y s u p p l y throughout the y e a r , o r t o ensure output o f c o n s i s t e n t q u a l i t y
(eg. t o ensure t h a t a l l t h e c o l o u r e d wool used i n a s i n g l e c a r p e t i s o f
the same dye l o t ) and maybe t o g e t
lower p r i c e s . F o r i n s t a n c e t h e r e a r e
two wool s e l l i n g seasons when p r i c e s a r e l o w and d h u r r y m a n u f a c t u r e r s p r e f e r
to buy a l l t h e i r r e q u i r e m e n t s .
S m a l l independent weavers who cannot r a i s e
the c a p i t a l t o buy i n b u l k a r e f o r c e d t o buy i n o f f - s e a s o n p e r i o d s when
s p e c u l a t o r s have e n t e r e d t h e market and wool i s o n l y a v a i l a b l e a t h i g h e r
p r i c e s . I n o r d e r t o compete w i t h t h e m a n u f a c t u r e r s ' d h u r r i e s , t h e y have t o
lower t h e i r own wages.
Sometimes t h e r e i s a system o f c r e d i t a v a i l a b l e t o b o t h m a n u f a c t u r e r s
and a r t i s a n s as i n t h e case o f the w o o l l e n y a m s u p p l i e d t o t h e c a r p e t
i n d u s t r y on around 60 days c r e d i t . But t h i s o n l y o p e r a t e s i n t h e BhadohiM i r z a p u r a r e a , xjhere t h e r e i s a h i g h c o n c e n t r a t i o n o f c a r p e t m a n u f a c t u r e r s ;
i n o t h e r a r e a s , such as A g r a and J a i p u r , m a n u f a c t u r e r s pay cash f o r t h e i r w o o l .
Even i f c r e d i t xirere a v a i l a b l e t o t h e a r t i s a n s f o r t h e i r i n p u t s , they would
s t i l l r e q u i r e f i n a n c e t o c o v e r t h e i r l i v i n g c o s t s , e s p e c i a l l y where t h e
p r o d u c t i o n p r o c e s s i s s l o w , as i n c a r p e t k n o t t i n g . Under t h e p r e s e n t system
m a n u f a c t u r e r s g i v e advances t o t h e a r t i s a n s w o r k i n g f o r them, c h a r g i n g
i n t e r e s t , and t h i s can e a s i l y develop i n t o debt bondage o r more s u b t l e forms
of dependence. The A l l I n d i a Debt and Investment Survey showed ( g e n e r a l l y )
t h a t i n s t i t u t i o n a l a g e n c i e s (banks, c o - o p e r a t i v e s , government) p r o v i d e d o n l y
5% o f t h e t o t a l b o r r o w i n g o f a r t i s a n h o u s e h o l d s .
70% was f r o m money-lenders,
l a n d l o r d s and t r a d e r s . Of t h i s , 40% was a t r a t e s o f 12.5-32.5% i n t e r e s t
p e r annum and on 15% was h i g h e r s t i l l .
For the poorest households i n t e r e s t
r a t e s were g e n e r a l l y h i g h e r . 64% o f a l l borroxi?ing was f o r consumption, n o t
p r o d u c t i o n , r i s i n g t o 04% f o r p o o r e r groups.
I n s t i t u t i o n a l finance played
a s m a l l r o l e f o r e i t h e r cohsumpticn o r p r o d u c t i o n p u r p o s e s , p a r t i c u l a r l y f o r
poorer s o c i a l c l a s s e s .
I n p r i n c i p l e , banks are meant t o a s s i s t b o t h m a n u f a c t u r e r s and
a r t i s a n s t o meet t h e i r w o r k i n g c a p i t a l r e q u i r e m e n t s by p r o v i d i n g what i s
knovm as ' p a c k i n g c r e d i t ' , i e , up t o 75% of t h e i r w o r k i n g c a p i t a l f o r up
t o 180 days a t 12% i n t e r e s t (6% below t h e market r a t e ) . The C e n t r a l Bank
i s committed t o g i v i n g a r t i s a n s , l i k e s m a l l f a r m e r s , p r i o r i t y i n c r e d i t
a l l o c a t i o n . But banks a r e r e l u c t a n t t o l e n d w i t h o u t adequate s e c u r i t y and
tend t o a l l o c a t e c r e d i t t o a few, w e l l - e s t a b l i s h e d m a n u f a c t u r e r s who have
e x p o r t o r d e r s f r o m customers knovm t o the bank. Even ijith t h i s a s s i s t a n c e ,
c r e d i t can be a problem f o r the m a n u f a c t u r e r s .
One of the l a r g e s t c a r p e t
m a n u f a c t u r e r s i n M i r z a p u r argued t h a t attempts t o upgrade t h e i r c a r p e t s
(a move v/hich t h e government i s encouraging) \^re b e i n g f r u s t r a t e d by a
s e r i o u s c a s h - f l o w problem. As c a r p e t s become f i n e r , the consumption o f w o o l
per square metre o f c a r p e t r i s e s , as does the turnaround t i m e . The banlcs,
however, have n o t been w i l l i n g t o extend e x t r a c r e d i t f o r l o n g e r p e r i o d s and
the company has o n l y been a b l e t o c o n t i n u e i t s improvement progrannae by
borrowing money from, i t s p a r e n t company.
Once a h a n d i c r a f t i s ccanpleted and ready f o r e x p o r t , banks p r o v i d e
what i s known as 'Dreshiptient f i n a n c e ' t o e x p o r t e r s , on p r e s e n t a t i o n of t h e
s h i p p i n g documents, t o c o v e r the d e l a y b e f o r e they r e c e i v e payment f r o m the
i m p o r t e r s . T h i s i s much more common than p a c k i n g c r e d i t and i s open t o b o t h
l a r g e and s m a l l e x p o r t e r s . As w i t h p a c k i n g c r e d i t , i t u s u a l l y c o v e r s 75%
of the v a l u e o f the goods f o r up t o ISO days a t an i n t e r e s t r a t e o f 12%,
s u b s i d i s e d by the Reserve Bank of I n d i a . I f i m p o r t e r s d e l a y payitient f u r t h e r
the c r e d i t can be extended, b u t a t the f u l l 18% i n t e r e s t r a t e .
I n a d d i t i o n the government p r o v i d e s 20% cash a s s i s t a n c e f o r h a n d i c r a f t
e x p o r t s and t h i s has encouraged many manufacturers t o become e x p o r t e r s .
(The scheme i s a l s o d e s i g n e d , i n the case of c a r p e t s , t o encourage h i g h e r
q u a l i t y e x p o r t s - and t o d i s c o u r a g e u n d e r - i n v o i c i n g - by g i v i n g more a s s i s tance t o e5q)orts o f h i g h e r u n i t v a l u e . ) The s u r v e y o f t h e gem i n d u s t r y i n
J a i p u r , however, found t h a t most e n t r e p r e n e u r s knex^ n o t h i n g o f these
government i n c e n t i v e s . (1) Some e x p o r t e r s doubt whether i t has r e a l l y a s s i s t e d
them; t h e y argue t h a t i m n o r t e r s use i t as an excuse t o f o r c e p r i c e s doxm (but
t h i s may i n t u r n h e l p t o expand s a l e s ) . Government sponsored c o - o p e r a t i v e s
are b e t t e r a b l e to o b t a i n xrorking c a p i t a l , but then they r a r e l y e x p o r t .
S p e c i a l s t a t e schemes (such as D i f f e r e n t i a l I n t e r e s t Rate Schemes) d e s i g n e d
t o h e l p a r t i s a n s have h e l p e d , but surveys show t h a t a l a r g e m a j o r i t y of
a r t i s a n s cannot r e a l i s e l o a n s because o f l a c k o f s e c u r i t y o r l a c k o f i n f l u e n c e .
The i m p l i c a t i o n s o f xzorking c a p i t a l shortage a r e s e v e r a l . F i r s t , i t i s
h o l d i n g back e x p a n s i o n i n some c a t e g o r i e s . Diamond e x p o r t e r s c l a i m t h a t w h i l e
i n o t h e r diamond c u t t i n g c o u n t r i e s bank f i n a n c e can cover over 75% of r e q u i r e raents (Belgium) o r even 90% ( I s r a e l ) , i n I n d i a o f f i c i a l a g e n c i e s p r o v i d e
$13(Xa a g a i n s t r e q u i r e m e n t s of $700m. The d i f f e r e n c e has t o be s e l f - g e n e r a t e d ;
but ( t h e y c l a i m ) p r o f i t s are now b e i n g squeezed, making t h i s d i f f i c u l t .
In
p r a c t i c e those with r e s o u r c e s a v a i l a b l e a r e o f t e n merchants eager t o f i n d an
o u t l e t f o r ' b l a c k money', r a t h e r than e n t r e p r e n e u r s xd-th a deeper arid more
l o n g term c o m i t i t e n t t o b u i l d i n g up the i n d u s t r y . Second, w o r k i n g c a p i t a l
l i m i t a t i o n s a f f e c t b a r g a i n i n g power s i n c e the a b i l i t y t o h o l d on t o s t o c k s o f
f i n i s h e d p r o d u c t s and raw m a t e r i a l s i s a major f a c t o r i n f l u e n c i n g the c a p a c i t y
(1)
R a j a s t h a n C 6 n s u l t a n c y O r g a n i s a t i o n i opifcit-j-
- 7.1 -
R'sxiinise r e t u r n s front the market.
Thus, i i u p o r t e r s i n TJestern c o u n t r i e s
tend to have an advantage over e x p o r t e r s ; s p e c i a l i s e d e x p o r t e r s , who a r e
t r a d e r s w i t h f i n a n c i a l means, o v e r m a n u f a c t u r e r s ( o r garments e s t a b l i s h m e n t s
over t h e i r f a b r i c s u p p l i e r s ) ; and m a n u f a c t u r e r s over t h e i r outworkers and
wage eraployees.
to
(b)
Problems V7ith Raw M a t e r i a l S u p p l i e s
The I n d i a n h a n d i c r a f t s i n d u s t r y f a c e s many problems w i t h r e s p e c t t o i t s
raw m a t e r i a l s ( o r semi-processed i n p u t s ) ; problems o f poor q u a l i t y ,
i n s u f f i c i e n t q u a n t i t y and h i g h e r p r i c e s thc,n those p a i d by the o r g a n i s e d
s e c t o r . T h i s i s s u r p r i s i n g as one assumes t h a t , i f items have been
t r a d i t i o n a l l y produced i n an a r e a , they would have been adapted t o use raw
materials available locally.
I t seems l i k e l y t h a t the r a p i d e x p a n s i o n of
p r o d u c t i o n f o r o v e r s e a s markets has been l a r g e l y r e s p o n s i b l e f o r c r e a t i n g
t h i s raw m a t e r i a l s p r o b l e r a w h i c h was n o t i n e v i d e n c e when o n l y a l i m i t e d ,
and p r o t e c t e d , d o m e s t i c market was b e i n g s e r v e d (eg. f o r s i l k s a r e e s and
g o l d j e w e l l e r y ) . Rather t h a n r u n through a l i s t of the d i f f e r e n t problems
f a c e d by each h a n d i c r a f t i n d u s t r y , we s h a l l f o c u s here p r i m a r i l y on c a r p e t s ,
w h i c h i l l u s t r a t e n o s t o f the p r o b l e n s .
The h a n d l o o n , c a r p e t and wood i n d u s t r i e s are a l l s a i d t o have p r o b l e n s
of u n a v a i l a b l e and poor q u a l i t y i n p u t s . Q u a l i t y depends b o t h on the p h y s i c a l
c h a r a c t e r i s t i c s of the raw m a t e r i a l s ( c o t t o n , w o o l , s i l k and wood i n these
c a s e s ) , on the way they have been p r o c e s s e d and on the a v a i l a b i l i t y of
s u b s i d i a r y i m p o r t s (dyes i n t e x t i l e s ) . T a k i n g the exatiple o f c a r p e t s f i r s t ,
some o f the Mogra and C h o k l a V70ols a v a i l a b l e i n I n d i a a r e o f the c o a r s e
q u a l i t y r e q u i r e d f o r hand-knotted c a r p e t s . But t h e r e i s n o t enough t o
s a t i s f y c a r p e t m a n u f a c t u r e r s ' demands, and t h e y have been f o r c e d t o use b l e n d s
w i t h i n f e r i o r types of w o o l , w h i c h has i n t u r n d e p r e s s e d t h e p r i c e s of t h e i r
c a r p e t s . The s h o r t a g e has been made worse by competing demands f o r t h i s
type of TTool from the defence s e c t o r ( f o r use i n m i l i t a r y c l o t h i n g ) and f r o n
the growing machine-raade c a r p e t i n d u s t r y (which m a i n l y s u p p l i e s the d o m e s t i c
market).
There a r e t h r e e ways of s o l v i n g the s h o r t a g e ; expanding the d o m e s t i c
s u p p l y of such w o o l s , r e s e r v i n g t h e i r use f o r hand-knotted c a r p e t s , o r
alloT-Ting i m p o r t s . To date the I n d i a n goverttnent has emphasised the f i r s t .
There has been l i t t l e p r i v a t e development o f d o m e s t i c wool s u p p l i e s ( e x a c t l y
TJ?iy i s n o t c l e a r ) and i t has been l e f t t o the government a t b o t h c e n t r a l
and s t a t e l e v e l s t o i n t r o d u c e sheep b r e e d i n g progranmes (which a l s o have
l a r g e employment p o t e n t i a l ) . A c c o r d i n g t o m a n u f a c t u r e r s these progranraes
have n o t y e t p r o v e d s u c c e s s f u l and they have t h e r e f o r e asked f o r wool i m p o r t s
to be l i b e r a l i s e d . A t p r e s e n t wool i m p o r t s a r e a l l o w e d , b u t a t a v e r y h i g h
r a t a o f d u t y ( 7 5 % ) , C a r p e t e x p o r t e r s may c l a i m a d u t y r e b a t e but o n l y i f
t h e y can prove how much i m p o r t e d wool t h e i r c a r p e t s c o n t a i n . T h i s i s n e a r l y
i r a p o s s i b l e as the wool ( l a r g e l y from Mew Zealand) i s i m p o r t e d by y a r n
s p i n n i n g m i l l s f o r b l e n d i n g w i t h I n d i a n w o o l . The c a r p e t e x p o r t e r cannot
knoT<7 e x a c t l y how nuch o f each type o f wool went i n t o h i s c a r p e t s . I t i s
o n l y p o s s i b l e i f he i s a m a n u f a c t u r e r w i t h h i s own s p i n n i n g f a c i l i t i e s .
In t h i s case he can a p p l y t o the government f o r an open g e n e r a l l i c e n c e t o
i n p o r t wool d u t y - f r e e , p r o v i d e d t h a t he g i v e s a f i x e d sum o f money as a bond
to the government (on w h i c h the i n t e r e s t p a y a b l e i s e q u i v a l e n t t o a d u t y o f
about 1 0 % ) . As P a k i s t a n a l l o w s the i m p o r t o f Nev/ Zealand wool d u t y - f r e e , most
I n d i a n m a n u f a c t u r e r s cannot a f f o r d t o pay the h i g h duty on i m p o r t s and s t i l l
compete w i t h P a k i s t a n e x p o r t e r s . The government i s r e p o r t e d l y u n w i l l i n g t o
l i b e r a l i s e i m p o r t s , even under a d u t y - f r e e t a r i f f q u o t a , on the grounds t h a t
imported wool c o u l d be d i v e r t e d to o t h e r i n d u s t r i e s and so would d e p r e s s
deiiand f o r d o m e s t i c p r o d u c t i o n w h i c h i t i s t r y i n g t o promote. M a n u f a c t u r e r s
c l a i i ' . , hovrever, t h a t the c a r p e t wool i s too c o a r s e (below 56 c o u n t s ) f o r most
o t h e r w o o l l e n items and leakage would be m i n i m a l .
S i n i l a r problems and c h o i c e s have a r i s e n *n the handlooci s e c t o r .
T^en
c o t t o n f o r s p i n n i n g i s i n s h o r t s u p p l y , m i l l s have tended t o squeese out
s c a t t e r e d handloom weaving coramunities i n o b t a i n i n g the y a r n . M o r e o v e r ,
c o - o p e r a t i v e s have a p r i o r c l a i m over master weavers, r-irho predominate i n the
e x p o r t t r a d e . I n o r d e r to remedy raw m a t e r i a l s h o r t a g e s ( w h i l e l i m i t i n g
i n p o r t s ) the a u t h o r i t i e s have f o r c e d weavers t o use blended y a r n s i n c o r p o r a t i n g
5% v i s c o s e . U n f o r t u n a t e l y t h i s o c c a s i o n a l l y i n c l u d e s c o t t o n handloom weavers
who s e l l o v e r s e a s on the b a s i s o f 100% c o t t o n - as whGn the A u s t r a l i a n s , i n t e r
a l i a , r e f u s e d t o accept the blended y a m p r o d u c t s as q u a l i f y i n g f o r d u t y - f r e e
admission.
A p a r t i c u l a r l y s e r i o u s c r i s i s arose i n the handloom s e c t o r i n l a t e
1980 w i t h the l a c k o f a v a i l a b i l i t y o f hank y a r n of low c o u n t . As an emergency
measure m i l l s were r e q u i r e d t o produce s p e c i f i e d amounts o f s c a r c e r y a r n t y p e s
but the l o n g - t e n n i n s e c u r i t y r e m a i n s . Handloon weavers a l s o have s e r i o u s
p r o b l e n s i n o b t a i n i n g the f u l l range o f h i g h q u a l i t y , f a s t , d y e s , e s p e c i a l l y
those which a r e i m p o r t e d .
I n the c i l k i n d u s t r y , t o o , a p a r t i c u l a r l y c r i t i c a l raw m a t e r i a l shortage
i n 1981 s e v e r e l y a f f e c t e d s i l k e x p o r t s , and handloom weavers i n p a r t i c u l a r .
A
f a i l u r e of the t a s s a r s i l k crop and damage t o m u l b e r r y l e d t o b i g i n c r e a s e s o f
200-300% i n the p r i c e o f raw s i l k , and t h i s was i n t u r n r e f l e c t e d i n the c o s t
o f spun s i l k and n o i l s i l k . A f t e r r e p r e s e n t a t i o n s by the i n d u s t r y i t was
p e r m i t t e d t o import ravr s i l k and y a m f r e e o f d u t y . Sut t h i s does not d e a l w i t h
the long-term problems of e n s u r i n g s u p p l i e s o f I n d i a n s i l k w h i c h are o f adequate
q u a l i t y and o£ comparable (and s t a b l e ) p r i c e t o those p r e s e n t i n i n t e r n a t i o n a l
m a r k e t s . The problems of raw m a t e r i a l s u p p l y i n the s i l k weaving i n d u s t r y i n
the t r a d i t i o n a l c e n t r e of Kancheepuram a r e compounded by l i m i t e d i n t e r s t a t e
t r a n s a c t i o n s . The main m u l b e r r y groxiring a r e a i s j u s t a c r o s s the b o r d e r i n
I C o l l e g a l and the s u p p l y o f 'Khora', the weaving m a t e r i a l , i s pre-empted by the
K a r n a t a k a s i l k weavers and merchants.
These examples show t h a t i n h a n d i c r a f t s , as i n a l l i n d u s t r i e s , t h e r e i s a
c h o i c e t o be made between e x p o r t s of lower u n i t v a l u e (as a r e s u l t of u s i n g
loT-er q u a l i t y i n p u t s ) but w i t h a h i g h share of I n d i a n v a l u e added, and e x p o r t s
o f a h i g h e r u n i t v a l u e (and p o s s i b l y h i g h e r volume) but lox^rer s h a r e o f I n d i a n
v a l u e added and a h i g h e r share o f imported i n p u t s . The government has g e n e r a l l y
chosen the f i r s t o p t i o n , b u t sone m a n u f a c t u r e r s f e e l t h a t the second o p t i o n
would g i v e a l a r g e r t o t a l n e t v a l u e added t o I n d i a , I n some c a s e s i t i s
i n c o n c e i v a b l e t h a t the d o m e s t i c raw m a t e r i a l s e c t o r would be s a c r i f i c e d t o a s s i s t
the e x p o r t p r o c e s s o r s ( t h e r e a r e , f o r example, a t l e a s t 2ia cr more employed i n
s e r i c u l t u r e and a s s o c i a t e d a c t i v i t i e s ) . But e l s e w h e r e l i b e r a l i s a t i o n of
imported i n p u t s i s more e a s i l y a c h i e v e d and t h e r e has been something o f a move
i n t h i s d i r e c t i o n w i t h i n p o r t l i b e r a l i s a t i o n o f , f o r exaiaple, b r a s s . More
s y m p a t h e t i c c o n s i d e r a t i o n has a l s o been g i v e n t o g o l d i m p o r t s a g a i n s t g o l d
j e w e l l e r y e x p o r t s , though a workable scheiae has n o t y e t e v o l v e d .
One
r e a s o n f o r c o n s e r v a t i s r a on t h i s p o i n t raay be t h a t I n d i a i s viary o f d e v e l o p i n g
a h a n d i c r a f t s i n d u s t r y - one employing many people - w h i c h depends on imported
m a t e r i a l s . A r e l a t e d f e a r i s t h a t any i i a p o r t scheme n o t t i g h t l y c o n t r o l l e d
c o u l d l e a d t o abuse. F o r example i t i s g e n e r a l l y r e c o g n i s e d t h a t I n d i a ' s
g r e a t e s t p o t e n t i a l i n j e w e l l e r y i s i n the s k i l f u l i n l a y i n g o f g o l d vrith
p r e c i o u s s t o n e s . The government i s , hov/ever, concerned t h a t t h i s c o u l d
l e a d t o a smuggling o f domestic g o l d onto w o r l d markets where p r i c e s a r e
h i g h e r . I t i n s i s t s t h e r e f o r e t h a t g o l d j e w e l l e r y e x p o r t s s h o u l d be d i r e c t l y
o f f s e t a g a i n s t m a t c h i n g g o l d i m p o r t s . The C e n t r a l Bank r e c e n t l y proposed
a scheme w h i c h vrould o f f s e t q u a n t i t i e s o f 'mports a g a i n s t e x p o r t s b u t t h e
t r a d e r e f u s e d t o accept t h e r i s k o f p r i c e f l u c t u a t i o n s and demanded v a l u e
f o r v a l u e compensation (which the government thought the t r a d e would
m a n i p u l a t e ) . On such i s s u e s p r o g r e s s has been s t a l l e d .
The t e c h n o l o g y (both t h e equipment and t h e t e c h n i q u e ) i n v o l v e d i n
p r e p a r i n g the raw m a t e r i a l i s a l s o c r u c i a l . O f t e n a more c a p i t a l - i n t e n s i v e
t e c h n o l o g y may h e l p t o improve t h e q u a l i t y of i n p u t s . I n the case o f xrood,
s e a s o n i n g i s r e q u i r e d b e f o r e t h e wood can be c a r v e d ; t r a d i t i o n a l t e c h n i q u e s
n o t o n l y take more time b u t a l s o may n o t g i v e t h e even r e s u l t s t h a t TJestern
methods c a n . I n c o t t o n handlooms, even t h e m i l l spun y a r n i s o f t e n o f such
a p o o r q u a l i t y , i n terms o f s t r e n g t h , f i n e n e s s and evenness, t h a t the
q u a l i t y o f t h e c l o t h i s a f f e c t e d . T r a d i t i o n a l s i l k growing and r e e l i n g
p r o c e s s e s a f f e c t t h e q u a l i t y o f t h e s i l k y a r n . F o r c a r p e t s the t r a d i t i o n a l
v a t - d y e i n g t e c h n i q u e s a r e unable t o produce as c o n s i s t e n t a c o l o u r i n g as
the nevv'er systems used by some c a r p e t m a n u f a c t u r e r s .
The s p i n n i n g o f t h e
y a m i t s e l f i n some b a d l y equipped m i l l s i s s a i d t o be v e r y poor and t h e
wool may shed b a d l y a f t e r t h e c a r p e t i s made, ( I n o r d e r t o d i s t i n g u i s h
these c a r p e t s f r o m those m d e o f i n f e r i o r w o o l s , sorae o f t h e l e a d i n g c a r p e t
m a n u f a c t u r e r s have adopted t h e woolmark. As w e l l as g u a r a n t e e i n g t h a t a
c a r p e t i s made from pure w o o l , i t i s a s i g n t h a t t h e wool i s o f a h i g h
q u a l i t y and t h a t i t has been mothproofed,) T h i s i s s u e merges hot^rever i n t o
the vrider q u e s t i o n o f t h e c h o i c e o f t e c h n o l o g y i n h a n d i c r a f t s , d i s c u s s e d
belovr.
F i n a l l y , another problem w h i c h can r e s u l t f r o m imported ravr m a t e r i a l s
i s l a c k o f c o n t r o l over s u p p l i e s . T h i s a p p l i e s i n p a r t i c u l a r t o t h e gems
and j e w e l l e r y i n d u s t r y , I n d i a n diamond m a n u f a c t u r e r s have t o buy t h e i r
stones from the C e n t r a l S e l l i n g O r g a n i s a t i o n (CSO) w h i c h m a i n t a i n s a n e a r monopoly over w o r l d s u p p l i e s . I t i s argued t h a t one o f t h e reasons I n d i a
i s unable t o i n c r e a s e u n i t v a l u e o f i t s diamond e x p o r t s i s t h a t i t can o n l y
buy s m a l l s t o n e s , . a s t h e CSO r e f u s e s t o s e l l i t any o f t h e l a r g e r s t o n e s .
M a n u f a c t u r e r s ( o r t h e i r b r o k e r s who buy diavfonds from CSO i n Antwerp) a r e
unable t o c h a l l e n g e t h i s p o s i t i o n f o r f e a r t h a t t h e i r p u r c h a s i n g r i g h t s w i l l
be xd.thdraTO t o t a l l y . T h i s s i t u a t i o n may improve w i t h t h e r e c e n t d e c i s i o n
by Z a i r e t o s e l l i t s diamonds i n d e p e n d e n t l y , n o t through CSO, and a l s o w i t h
n e g o t i a t i o n s between t h e I n d i a n government and v a r i o u s A f r i c a n governments
over c o l l a b o r a t i o n i n diamond p r o c e s s i n g , i n r e t u r n f o r e x p o r t s o f roughs
to I n d i a ,
(c)
Shortage o f S k i l l e d Labour
I t i s o f t e n suggested by government spokesmen t h a t one o f the m a j o r
c o n s t r a i n t s on the development o f h a n d i c r a f t s e x p o r t s f o r I n d i a i s t h e s h o r t a g e
o f s k i l l e d l a b o u r . T h i s i s p a r a d o x i c a l g i v e n the v a s t s u p p l y o f s k i l l e d
I n d i a n a r t i s a n s but i s perhaps e x p l a i n e d by the way i n w h i c h many s k i l l s
have been a l l m / e d t o l a p s e , by the f a c t t h a t e x p o r t i n g c a l l s f o r s p e c i a l new
t e c h n i q u e s , and the c o n c e n t r a t e d g e o g r a p h i c a l c e n t r e s of p r o d u c t i o n .
In
g e n e r a l , t r a i n i n g d e v e l o p s through the market mechanism. F o r example, t r a i n e e
diamond c u t t e r s ( u s u a l l y young men) have t o pay an ' e n t r y f e e ' t o an i n s t r u c t o r ,
a master c r a f t s m a n , x^o t r a i n s t h e n on an a p p i n t i c e s h i p b a s i s . Government
a u t h o r i t i e s b e l i e v e , hox^7ever, t h a t t h e r e a r e l i m i t s t o what can be a c c o m p l i s h e d
through t r a d i t i o n a l p r i v a t e c h a n n e l s .
F i r s t , i t i s argued t h a t the normal
market response of h i g h e r xirages t o a t t r a c t l a b o u r w i l l r a i s e p r i c e s and so
reduce the demand f o r I n d i a n h a n d i c r a f t s . The government may want t o maximise
employment i n the s e c t o r r a t h e r t h a n r a i s e x-rages. Second, t h e r e may be a
s e r i o u s time l a g b e f o r e the s l : i l l s a r e a c q u i r e d . T h i r d , m a n u f a c t u r e r s may
be u n w i l l i n g t o bear the t r a i n i n g c o s t s e s p e c i a l l y x d t h the p u t t i n g - o u t s y s t e n ,
x>7hich means t h a t xrorkers a r e not bound t o the m a n u f a c t u r e r s who have p a i d f o r
t h e i r t r a i n i n g . S i m i l a r l y , a r t i s a n s may be u n a b l e t o b e a r the c o s t s o f
t r a i n i n g t h e i r c h i l d r e n or r e l a t i v e s - e i t h e r the d i r e c t c o s t s r e s u l t i n g f r o n
damage t o the p r o d u c t on which the c h i l d i s w o r k i n g o r f r o m d i s t r a c t i o n
a f f e c t i n g the o u t p u t , o r the i n d i r e c t , o p p o r t u n i t y , c o s t s where the c h i l d o r
r e l a t i v e xrould o t h e r w i s e be i n v o l v e d i n a g r i c u l t u r a l p r o d u c t i o n .
I n o r d e r t o remove these c o n s t r a i n t s , the government has u n d e r t a k e n a
v a r i e t y o f h a n d i c r a f t s t r a i n i n g schemes. T r a i n i n g has been g i v e n p r i o r i t y
o v e r a l l o t h e r a s p e c t s o f h a n d i c r a f t s development: e x p e n d i t u r e i n 1977/73
aiiiounted t o Rs, l a l t h s 396, o r 63% of c e n t r a l government e x p e n d i t u r e under the
P l a n on h a n d i c r a f t s : i n the 1980-35 p e r i o d i t i s planned t h a t a t o t a l R s . l a k h s
7346 be spent on t r a i n i n g , i e , 51% of h a n d i c r a f t s e x p e n d i t u r e , ( I ) By f a r the
l a r g e s t amount (97% i n 1977/78 and 67% i n 1980-85) has been a l l o c a t e d f o r
c a r p e t s , f o l l o w e d by a r t metalware (12% i n 1980-05), cane and bamboo ( 7 % ) ,
h a n d p r i n t e d t e x t i l e s ( 6 % ) , and gems and j e w e l l e r y ( 3 % ) . S t a t e governments
have a l s o been f i n a n c i n g t r a i n i n g programmes; f o r i n s t a n c e o f the 900 c a r p e t
t r a i n i n g c e n t r e s opened by 1930, 398 were sponsored by s t a t e governments.
I n most cases the t r a i n i n g schemes are i n t e n d e d n o t o n l y t o s t r e n g t h e n
the n a t i o n a l p r o d u c t i o n base f o r the v a r i o u s h a n d i c r a f t s , but a l s o t o spread
the r e g i o n a l d i s t r i b u t i o n o f h a n d i c r a f t s p r o d u c t i o n i n t o r u r a l and e c o n o m i c a l l y
backxirard a r e a s and t o encourage the p a r t i c i p a t i o n o f p a r t i c u l a r l y d i s a d v a n t a g e d
groups, such as VTomen and c h i l d r e n o f v e r y poor p a r e n t s ( l a n d l e s s l a b o u r e r s , e t c ) .
I t i s d i f f i c u l t t o e s t i m a t e the e x t e n t of the s k i l l e d l a b o u r s h o r t a g e .
As mentioned above t h i s x - r i l l depend p a r t l y on one's v i e w of the o p t i m a l l e v e l
o f vrages, o f o u t p u t , and o f the nxmber of days of employment, as v r e l l as o f
the ' n a t u r a l ' i n c r e a s e i n the number o f a r t i s a n s . Most o f f i c i a l e s t i m a t e s
appear t o have been made on a r a t h e r crude b a s i s , comparing e x i s t i n g employment
and o u t p u t w i t h planned o u t p u t and assuming a f i x e d o r s l i g h t l y f a l l i n g
employmentsoutput r a t i o . Tliese f i g u r e s are n e c e s s a r i l y rough because t h e r e i s
(1)
A l l I n d i a H a n d i c r a f t s Board, Government o f I n d i a , P l a n P r o p o s a l s f o r
H a n d i c r a f t s , S i x t h F i v e Year P l a n (1980-35) and Annual P l a n (1981-82).
l i t t l e r e l i a b l e d a t a on t h e number o f p e o p l e employied i n each h a n d i c r a f t
i n d u s t r y , l e t a l o n e on t h e hours worked, o r on t h e ' n a t u r a l ' r a t e of i n c r e a s e
i n the labour f o r c e .
Many m a n u f a c t u r e r s (even i n the c a r p e t i n d u s t r y ) argue t h a t t h e r e i s
no need f o r government sponsored t r a i n i n g schemes as t h e n a t u r a l i n c r e a s e
i s enough t o s a t i s f y l a b o u r demands. The c o s t s t o a r t i s a n s o f t r a i n i n g
t h e i r c h i l d r e n a r e s a i d t o be m i n i m a l .
I'ifhere n a t u r a l i n c r e a s e i s n o t
s u f f i c i e n t t h e l a r g e p o o l s o f unemployed ( o r underemployed) l a b o u r f r o n
r u r a l a r e a s a r e a v a i l a b l e f o r employment 'i t h e l e s s s k i l l e d p r o c e s s e s - of
X7hich t h e r e a r e many under t h e e x i s t i n g d i v i s i o n o f l a b o u r . M a s t e r
c r a f t s m e n can p e r f o r m the s k i l l e d t a s k s ( e g . i n b r a s s w a r e , s k e t c h i n g t h e
p a t t e r n t o be engraved) l e a v i n g t h e more r o u t i n e work ( i n t h i s c a s e , t h e
a c t u a l e n g r a v i n g ) t o t h e new e n t r a n t s t o t h e i n d u s t r y . IJhat i s more
d i f f i c u l t i s e n s u r i n g t h a t t h e newly t r a i n e d workers s t a y i n t h e i n d u s t r y ,
d e v e l o p i n g t h e i r s k i l l s and e v e n t u a l l y becoming master c r a f t s m e n , r a t h e r
than b e i n g a t t r a c t e d by t h e p r e s t i g e o f a government c l e r i c a l j o b , o r pushed
out by t h e d r u d g e r y and poor w o r k i n g c o n d i t i o n s o f h a n d i c r a f t s p r o d u c t i o n .
D e s n i t e these o p i n i o n s t h e r e i s e v i d e n c e o f a shortage o f l a b o u r i n
c e r t a i n a r e a s . F i r s t , i n , some a r e a s p i e c e r a t e s have r i s e n , l e a d i n g t o
h i g h e r r e a l wages r e l a t i v e t o o t h e r j o b s i n t h e a r e a , as a means of
a t t r a c t i n g t h e a d d i t i o n a l l a b o u r r e q u i r e d t o meet growing e x p o r t p r o d u c t i o n .
I n t h e h e a r t o f t h e Bhadohi-Mirgapur c a r p e t b e l t some o f t h e h i g h e r q u a l i t y
c a r p e t m a n u f a c t u r e r s have t o compete w i t h each o t h e r f o r t h e more advanced
weavers. Rather than r a i s e p i e c e r a t e s , however, they p r e f e r t o o f f e r
f r i n g e b e n e f i t s t o keep t h e i r workers l o y a l t o them. Sometimes p i e c e r a t e s
r i s e when l a r g e e x p o r t o r d e r s a r e koaown t o have been p l a c e d , w h i c h e x p o r t e r s
are i n a h u r r y t o complete. Second, t h e e x t e n s i v e use o f m i g r a n t l a b o u r
suggests t h e r e a r e s e v e r a l i n s t a n c e s o f l o c a l i s e d l a b o u r s h o r t a g e .
Migrant
l a b o u r can o n l y p a r t l y s o l v e t h i s p r o b l e m as t h e r e a r e c e r t a i n times o f t h e
year ( n o t a b l y d u r i n g h a r v e s t s and f e s t i v a l s ) when m i g r a n t vjorkers r e t u r n t o
t h e i r a g r i c u l t u r a l homes. T h i r d , i n t h e c a s e o f c a r p e t s , m a n u f a c t u r e r s have
j o i n e d w i t h some o f t h e s t a t e governments ( n o t a b l y UP) i n r u n n i n g t r a i n i n g
c e n t r e s , on the b a s i s t h a t they l a t e r employ t h e newly t r a i n e d weavers.
I t has been suggested, however, t h a t m a n u f a c t u r e r s take p a r t i n these t r a i n i n g
schemes, n o t because they a r e u n a b l e t o f i n d s k i l l e d l a b o u r elsewhere b u t
because the t r a i n e e s a r e o f f e r e d t o t h e n f r e e . The s t a t e p r o v i d e s the
overheads and t h e t r a i n e e s ' s t i p e n d s ; t h e m a n u f a c t u r e r has o n l y t o pay a
nominal r e n t and t o s u p p l y t h e rax^ m a t e r i a l s . A rough measure o f t h e need f o r
s k i l l e d l a b o u r XTOuld be t h e nunber o f t r a i n e e s from these c e n t r e s , and those
r u n by t h e A l l I n d i a H a n d i c r a f t s B o a r d , x^ho remai.n i n the i n d u s t r y , l e s s t h e
number o f c h i l d r e n who would have e n t e r e d t h e i n d u s t r y anyway. But t h i s
f i g u r e i s n o t known.
There i s no o v e r a l l shortage o f handloom weavers b u t one of t h e
b o t t l e n e c k s t o expansion of t h e s i l k i n d u s t r y i n K a r n a t a k a i s the l a c k o f
s i l k vreavers ( p o s s i b l y because o f t h e narrow c a s t e base f r o n w h i c h xireavers
a r e r e c r u i t e d i n t h a t s t a t e ) . C o t t o n weavers a r e t h e r e f o r e b e i n g
r e t r a i n e d f o r s i l k . Weavers' c e n t r e s a r e t h e f o c u s o f e f f o r t s t o develop
more s p e c i a l i s e d s k i l l s . A l t h o u g h c o t t o n handloon weavers a r e i n abundant
s u p p l y , t h i s i s l e s s t r u e o f x^reavers equipped t o use the more s p e c i a l i s e d
looms - w i t h j a l a h s , j a c q u a r d s , s h i f t i n g s h u t t l e s , p a d d l e s - needed t o produce
the n o v e l t y o r complex vreaves, even though i t i s t h i s s m a l l o r d e r b u s i n e s s i n
l A i c h the hand c r a f t s m a n has an advantage over machines.
(d)
'Improved'
Technology
I t i s one o f t h e paradoxes o f h a n d i c r a f t s t h a t w h i l e t h e y a r e
d e v e l o p m e n t a l l y a t t r a c t i v e because o f t h e i r low r e q u i r e m e n t s f o r machinery
i n r e l a t i o n t o l a b o u r they a r e o f t e n i n h i b i t e d by a l a c k o f adequate o r
modern machineryk
A common c o m p l a i n t o f manuf--:turers i s t h a t t h e t e c h n o l o g y
used by t h e i r workers i s o l d and u n s u i t a b l e , t h e r e f o r e p r o d u c t i o n i s s l o w e r
and the q u a l i t y o f t h e p r o d u c t i s i n f e r i o r when compared w i t h t h a t o f
competing p r o d u c e r s i n o t h e r c o u n t r i e s . T r a d i t i o n a l t e c h n o l o g y i s o f t e n
u n s u i t a b l e when goods a r e b e i n g made f o r an e x p o r t market which r e q u i r e s a
l a r g e volume o f items o f c o n s i s t e n t q u a l i t y w i t h i n a s h o r t space o f t i m e .
The c o m p l a i n t i s d i r e c t e d a t t h e government w h i c h i n i t s d e s i r e t o maximise
employment - and save f o r e i g n exchange - i s wary o f improved t e c h n o l o g y i n
the h a n d i c r a f t s i n d u s t r y , VThere t h i s means more machines. There i s an e x c i s e
d u t y o f some 30% On t h e use o f machinery.
I n a d d i t i o n , many f o r e i g n machines
must pay an i m p o r t d u t y and a r e o f t e n (though d e c r e a s i n g l y ) banned. The e x c i s e
d u t y i s r e p a y a b l e on e x p o r t o f t h e f i n i s h e d p r o d u c t , b u t i t s t i l l a c t s as a
d e t e r r e n t t o t h e use o f new t e c h n o l o g i e s . Another d e t e r r e n t i s t h e l a r g e
c a p i t a l c o s t o f new m a c h i n e r y , w h i l e l a c k o f investment i n R&D i s a l s o seen
as a problem.
There have been some changes i n the t e c h n o l o g y used i n h a n d i c r a f t
i n d u s t r i e s . These changes have n o t been w i t h o u t p r o b l e m s , thus d e m o n s t r a t i n g
how t h e government's c a u t i o n c a n be j u s t i f i e d . I n the c o t t o n and s i l k handp r i n t i n g i n d u s t r y , s c r e e n p r i n t i n g t e c h n i q u e s have begun t o d i s p l a c e t r a d i t i o n a l
b l o c k p r i n t i n g . M a n u f a c t u r e r s a r e i n f a v o u r o f t h i s change as s c r e e n p r i n t i n g
can t r i p l e o u t p u t , produce a more e/en p r i n t , and have b e t t e r r e g i s t r a t i o n .
But h a n d - p r i n t e r s a r e n a t u r a l l y w o r r i e d about r e d u n d a n c i e s . A d i s t i n c t i o n can
b r o a d l y be made between new machinery which i s c a p i t a l 'deepening' - r a i s e s
the r a t i o o f c a p i t a l t o l a b o u r - and t h a t which i s 'widening' - i n c r e a s e s t h e
range ox p r o d u c t s o r v a r i e s t h e output b u t does n o t r e p l a c e l a b o u r by c a p i t a l .
M a n u f a c t u r e r s cannot always be expected t o be s e n s i t i v e t o t h e d i s t i n c t i o n i t i s o f t e n d i f f i c u l t t o e s t i m a t e ex ante - b u t governments have t o be.
A few exaniples w i l l be quoted h e r e o f i n s t a n c e s t ^ e r e t h e u s e o f o u t d a t e d
t e c h n o l o g y i s s a i d t o be a c o n t r a i n t on I n d i a ' s a b i l i t y t o compete i n t h e w o r l d
market f o r h a n d i c r a f t s . The broader q u e s t i o n o f t h e c h o i c e o f t e c h n o l o g y xjill
be c o n s i d e r e d l a t e r . To i l l u s t r a t e how s e n s i t i v e an i s s u e t h i s i s , i t i s xrorth
q u o t i n g t h e case o f a c a r p e t m a n u f a c t u r e r who used a s e t o f r a i l s on p u l l e y s
t o s t r e t c h h i s c a r p e t s i n t o shape a f t e r they had been washed. I t was argued
t h a t the p u l l e y s formed a machine and t h e r e f o r e the c a r p e t s would be s u b j e c t
t o e x c i s e d u t y . The m a n u f a c t u r e r had t o a p p e a l h i s case i n c o u r t and won i t
o n l y a f t e r two y e a r s .
I n t h e b r a s s i n d u s t r y around 90% o f t h e work i s done b y hand u s i n g
t r a d i t i o n a l t e c h n i q u e s . Povrer i s g e n e r a l l y o n l y used t o d r i v e l a t h e s used i n
p l a n i n g and p o l i s h i n g , and f o r e l e c t r o p l a t i n g . The need t o 3.ncrease t h e speed
and s c a l e o f p r o d u c t i o n , t o reduce c o s t s and t o improve the q u a l i t j r of the
p r o d u c t s , has encouraged m a n u f a c t u r e r s t o use more raechanised t e c h n i q u e s .
In o r d e r t o reduce e n g r a v i n g t i m e , some b r a s s moulds are b e i n g made w i t h
a p a t t e r n a l r e a d y engraved on them, w h i l e i n o t h e r cases the p a t t e r n i s
stamped on, o r engraved w i t h a c i d . F u r t h e r advances are p o s s i b l e : p r e s s u r e
d i e - c a s t i n g f o r the newer p l a i n b r a s s items b e i n g produced, such as b u i l d e r s '
ware; b e t t e r s i l v e r - p l a t i n g equipment would a l l o w h i g h e r q u a l i t y (and
v a l u e ) items t o be produced than i s p o s s i b l e w i t h the crude t e c h n o l o g y
p r e s e n t l y used. I n b o t h c a s e s , however, the expense i n v o l v e d i s s a i d t o
be too l a r g e f o r i n d i v i d u a l m a n u f a c t u r e r s and the new t e c h n i q u e s can o n l y
be adopted v j i t h government a s s i s t a n c e - tb ugh the r e l a t i v e s i z e of s o c i a l
c o s t s and b e n e f i t s i s not i m m e d i a t e l y o b v i o u s .
C a p i t a l c o s t s and e x c i s e d u t y have d e t e r r e d c a r p e t m a n u f a c t u r e r s frora
u s i n g machinery t o wash t h e i r c a r p e t s . At p r e s e n t a l l c a r p e t s i n I n d i a a r e
xjashed m a n u a l l y : b u c k e t s of water a r e poured onto the c a r p e t and the w a t e r
i s then rubbed i n t o i t with wooden s c r a p e r s r e s e m b l i n g brooms. T h i s p r o c e s s
i s r e p e a t e d many t i n e s f o r up t o two h o u r s , i n the c o u r s e o f " h i c h as much
as 10% o f the wool i s l o s t . Many c a r p e t s a r e revrashed by machine i n the
i m p o r t i n , c o u n t r y , p a r t i c u l a r l y i n the US.
Machine washing can be used t o
g i v e d i f f e r e n t t y p e s o f l u s t r e ( a n t i q u e , g l o s s y , e t c ) t o the c a r p e t w i t h l i t t l e
wool l o s s , g i v i n g the c a r p e t a l o n g e r l i f e .
I t i s a c o s t l y process i n West Germany i t c o s t s Rs.30-90 p e r square metre - and so i s n o r m a l l y
o n l y g i v e n t o t h e h i g h e r q u a l i t y c a r p e t s . Even s o , the e x i s t i n g c a p a c i t y
i n i m p o r t i n g c o u n t r i e s i s s a i d t o be i n a d e q u a t e , r a s u l t i n s i n a d e l a y of
two t o t h r e e months b e f o r e the c a r n e t s can be s o l d . I t i s argued,
t h e r e f o r e , t h a t were I n d i a t o s e t up i t s oi-m washing p l a n t , m a n u f a c t u r e r s
vrould be a b l e to r e a l i s e h i g h e r u n i t v a l u e s . There would be a l o s s of
enployi'iant, but t h i s would be l i m i t e d t o some 400 p e o p l e p r e s e n t l y washing
the h i g h e r q u a l i t y c a r p e t s . The major problem i s the s i z e o f investment
i n v o l v e d . A s i n g l e p l a n t , c a p a b l e o f p r o c e s s i n g 10% o f I n d i a ' s e x p o r t s ,
would c o s t sone R s . l | - 2 c r o r e s ( e x c l u d i n g d u t y ) .
The use o f mechanised t o o l s f o r f i n i s h i n g c a r p e t s i s a l s o thought t o
be c r u c i a l f o r I n d i a t o i n c r e a s e i t s c o m p e t i t i v e n e s s w i t h I r a n and C h i n a .
A l l P e r s i a n carpets are c l i p p e d w i t h e l e c t r i c shears, w h i l e i n China
embossers use e l e c t r i c s c i s s o r s . Once a g a i n t h i s improves b o t h p r o d u c t i v i t y
and q u a l i t y . What the e f f e c t on employment would be i s d e b a t a b l e ; sotae
sources c l a i m t h a t t h e r e i s a s h o r t a g e o f embossers w h i l e o t h e r s c l a i m t h a t
the d e c l i n e i n e x p o r t o f C h i n e s e - t y p e c a r p e t s (as a r e s u l t o f c o m p e t i t i o n
f r o n China) has l e d t o a s u r p l u s o f embossers. The i n t r o d u c t i o n o f e l e c t r i c
s c i s s o r s nay o n l y nop up t h i s unenplojrment p r o v i d i n g o t h e r f a c t o r s
a f f e c t i n g c o m p e t i t i o n w i t h C h i n a ( n o t a b l y poor q u a l i t y of y a m ) can be
overcome. I f n o t , unemplojrment of embossers i s l i k e l y t o grow.
In the handweaving i n d u s t r y q u i t e s n a i l a d a p t a t i o n s , w e l l t r i t h i n the
range of e x i s t i n g t e c h n o l o g i c a l knowledge c o u l d c o n s i d e r a b l y a s s i s t the
weaver t o r a i s e the q u a l i t y and q u a n t i t y of o u t p u t . I n the case o f the n o r e
p r i m i t i v e narrox^- looms, f o r example, a s i m p l y p u l l e y ( f o r the warp) and
changed reeds would p e r m i t g r e a t e r w i d t h s of c l o t h t o be woven and g r e a t e r
l e n g t h s o f warp t h r e a d t o be used (the l a t t e r r e d u c i n g the p r e p a r a t i o n time
and p e r m i t t i n g the t h r e a d t o be k e p t under c o v e r throughout the y e a r ) .
The
p r o d u c t i v i t y of t h e t y p i c a l t r a d i t i o n a l p i t l o o n (about 5 metres per 8 hour
day) c o u l d be r a i s e d t o 6 metres i n an improved frarae loom, and 8 metres i n
a semi-automatic loom, (The c l a s s i c i n s t a n c e o f lainor a d a p t a t i o n s t o a r t i s a n
t e c h n o l o g y making enormous s t r i d e s - i n p r o d u c t i v i t y terms - i s o u t s i d e the
e x p o r t s e c t o r ; the i n c r e a s e by almost t h r e e times i n the d a i l y p r o d u c t of
the wooden ambar c h a r k a o v e r the t r a d i t i o n a l c h a r k a s p i n n i n g wheel.) These
i n c r e m e n t a l advantages a r e of c o n s i d e r a b l e importance i n h e l p i n g handlooms
compete a g a i n s t powerlooms; as i n j a l a h and j a c q u a r d a t t a c t o e n t s w h i c h h e l p
to produce and m u l t i p l y d e s i g n s . There a r e numerous o t h e r examples, amongst
the m i n o r c r a f t s , of s i m p l e improvements y i e l d i n g c o n s i d e r a b l e p r o d u c t i v i t y
g a i n s : i n the case o f p o t t e r y , b a l l - b e a r i n g s n the wheel can t r i p l e o u t p u t ;
hand o p e r a t e d Sespador machines can double the e x t r a c t i o n r a t e , and more t h a n
h a l v e the time i n f i b r e p r o c e s s i n g ; the m e t a l c r a f t s of K a m a t a k a a r e h e l d
back by l a c k o f e l e c t r i c i t y f o r m e t a l t u r n i n g machines; l a c q u e n r a r e p r o d u c t i o n
i n Goa needs e l e c t r i c saws, f r e t w o r k machines, a s e a s o n i n g p l a n t and o t h e r
s i u a l l i t e m s . (1) I n g e n e r a l , g r e a t improvements can be uiade s i m p l j ' by
a t t a c h i n g e l e c t r i c motors t o c r a f t s m e n ' s t o o l s , though o f c o u r s e t h i s can be
done o n l y where e l e c t r i c i t y i s a v a i l a b l e .
Gems and j e w e l l e r y p r o d u c e r s argue t h a t newer t e c h n i q u e s a r e r e q u i r e d i f
I n d i a i s t o raove upmarket i n t o the p r o d u c t i o n o f l a r g e r , h i g h e r v a l u e diamonds
i n c o v a p e t i t i o n x/ith I s r a e l , Belgiu-Ti and the USA.
P r e s e n t c u t t i n g and p o l i s h i n g
xaethods are v e r y sloxr; machines xTould n o t o n l y r a i s e p r o d u c t i v i t y , but a l s o
h e l p t o s t a n d a r d i s e p r o d u c t s and t o g i v e a b e t t e r f i n i s h .
But c a u t i o n i s
n e c e s s a r y h e r e ; a f o r e i g n a d v i s e r t o the diamond c u t t i n g i n d u s t r y has r e c e n t l y
p o i n t e d o u t t h a t i t i s a d a p t a t i o n o f e x i s t i n g t o o l s r a t h e r than fundamental
re-equipment (xsrhich c r e a t e s p r o b l e n s o f maintenance) w h i c h i s needed.
Traders
are a l s o l e s s c e r t a i n than they were t h a t I n d i a s h o u l d t r y . t o adapt i t s
t e c h n o l o g y t o produce b i g diamonds, s i n c e they have proved p a r t i c u l a r l y
v u l n e r a b l e to the doxm t u r n i n w o r l d demand.
I n some cases the t e c h n o l o g y i s j u s t n o t a v a i l a b l e t o I n d i a n m a n u f a c t u r e r s .
There a r e , f o r example, s e v e r a l c r a f t s x^rhich have n o t y e t t a k e n o f f as e x p o r t
i t e n s , and one f a c t o r c o u l d be the u n a v a i l a b i l i t y of key items of equipment.
I n d i a i s thought t o have an enoraous p o t e n t i a l i n the f i e l d o f x-7ood c a r v i n g
but i t s c r a f t s m e n l a c k t h e knowledge and equipment (which i s a v a i l a b l e i n
c o a p e t i n g T h a i l a n d ) t o s c u l p t b a s i c shapes x j h i l e economising i n the use of
e x p e n s i v e h a r d v7ood. A major c o n s t r a i n t i n the c u r r e n t l y v e r y l i m i t e d e x p o r t
o f s i l k c l o t h and madeups i s the poor q u a l i t y o f f i n i s h g i v e n t o the s i l k as
a r e s u l t of u s i n g crude t e c h n i q u e s - s i l k v d i l e i s g i v e n a sheen by b e a t i n g
i t on a p i e c e o f wood. The b e s t q u a l i t y s i l k i s produced i n S w i t z e r l a n d ,
n o r t h e r n I t a l y and J a p a n , x/here t e c h n i q u e s a r e s a i d to be h i g h l y s o p h i s t i c a t e d .
But I n d i a n m a n u f a c t u r e r s X'irere n o t a b l e t o c o n s i d e r a d o p t i n g t h e s e t e c h n i q u e s
u n t i l v e r y r e c e n t l y , because the d e t a i l s x<rere s e c r e t . T h i s suggests the need
n o t o n l y f o r i m p o r t e d equipment but f o r a g r e a t e r h a n d i c r a f t s R&D e f f o r t .
By
c o n t r a s t x r i t h t h e r e s e a r c h budget o f t e x t i l e m i l l s , t h a t of t h e h a n d l o o n s i l k
and c o t t o n weaving o r g a n i s a t i o n , i n p r o d u c t and p r o c e s s development, i s
t r i v i a l l y small.
There a r e many o t h e r i n s t a n c e s where R?;D e f f o r t would be u s e f u l t o
improve p r o d u c t i v i t y and r a i s e q u a l i t y . For example, one p r o b l e m f a c i n g many
of the t e x t i l e based c r a f t s ( c a r p e t s , c o t t o n w e a v i n g , h a n d p r i n t i n g ) i s the
h a l t i n p r o d u c t i o n caused by the monsoon, T l i i s c o u l d be s o l v e d by the
i n t r o d u c t i o n of d r y i n g machinery o r f a s t d r y i n g dyes o r by the use o f b e t t e r
looms ( l i k e those used i n K e r a l a ) , Most m a n u f a c t u r e r s a r e t o o s m a l l o r
r i s k a v e r s e t o undertake e x t e n s i v e R&D, and so t h i s t a s k has become the
government's r e s p o n s i b i l i t y . Under the S i x t h P l a n v a r i o u s d e s i g n and
t e c h n i c a l development c e n t r e s X v ' i l l be s e t up a t a t o t a l c o s t o f around
Rs,750 l a k h s , f o r c a r p e t s (lOO.CX)), gems and j e w e l l e r y (150,00),
woodenware ( 5 0 . 0 0 ) , t o y s and d o l l s ( 5 0 , 0 0 ) , h a n d p r i n t i n g ( 3 7 , 9 0 ) , cane,
g r a s s and bamboo items (34,60), p o t t e r y (10,00), t e x t i l e weaving and
p r i n t i n g ( 9 , 2 2 ) , and f i b r e c r a f t ( 7 , 0 0 ) . Our g e n e r a l e v a l u a t i o n so f a r
i s t h a t the a u t h o r i t i e s a r e c o r r e c t t o approach the q u e s t i o n o f new
t e c h n i q u e s f o r h a n d i c r a f t s w i t h c a r e , and case by c a s e . But w i t h i n these
l i m i t a t i o n s t h e r e s t i l l appears a g r e a t d e a l of scope f o r a d a p t a t i o n
and i m p o r t e d t e c h n o l o g y ,
(e)
D e s i g n and M a r k e t i n g
The use o f b e t t e r machines f o r h a n d i c r a f t s , w h i c h improve p r o d u c t i v i t y
and widen p r o d u c t r a n g e , h e l p s t o r e s o l v e the fundamental dilemma i n the
m a r k e t i n g of h a n d i c r a f t s - t h a t h a n d i c r a f t s cannot be produced 'en masse'
(otherx-jise they l o s e much o f t h e i r a p p e a l ) ; b u t a t the sane time t h e y need
t o be marketed on a l a r g e s c a l e w i t h s t a n d a r d i s a t i o n o f q u a l i t y . The f a i l u r e
o f I n d i a n s i l k m a n u f a c t u r e r s t o r e s o l v e t h i s dilemma i s g r a p h i c a l l y
i l l u s t r a t e d by a l e a d i n g m a n u f a c t u r e r ; ' s i n c e esqport demand comes i n s h o r t
r a p i d s p u r t s and the e x p o r t market i s t i n e o r i e n t a t e d , the f i r s t v i c t i m i s
q u a l i t y . Because o f c o m p l a i n t s i n q u a l i t y , r e - o r d e r s are d i f f i c u l t and
p r i c e - r e a l i s a t i o n goes doxm x/hich i n t u r n l e a d s t o market r e s i s t a n c e t o
I n d i a n p r o d u c t s ' , (1) T h i s i s p a r t l y e x p l a i n e d by ' a n t i q u a t e d and p r i m i t i v e '
processing techniques.
But i t i s n o t o n l y a q u e s t i o n o f new machines but a l s o o f e v o l v i n g
d e s i g n s t o meet changing consumer demand, and f a s h i o n . F o r exaiaple, i t
has been noted t h a t w h i l e ' j a c q u a r d looms h e l p i n p r o d u c i n g and m u l t i p l y i n g
d e s i g n s the s u c c e s s f u l attempts made i n soma c e n t r e s have n o t been s u s t a i n e d
,,, The looms c u r r e n t l y r e m a i n u n u t i l i s e d , the c o l o u r schetaes a r e poor and
the d e s i g n s o r i g i n a l l y e v o l v e d have n o t been improved upon nor e f f o r t s
made t o e v o l v e new d e s i g n s ' , (2)
Yet i t i s p r e c i s e l y i n doing t h i s t h a t
handloons have a unique advcntage,
Ilandloon p r o d u c t s a r e , i n f a c t , i d e a l l y
s u i t e d f o r f a s h i o n markets,
Handlooms are c a p a b l e o f p r o d u c i n g 100 n e t r e s
p e r d e s i g n p e r c o l o u r , X'/hereas a mechanised m i l l needs an o r d e r f o r 12,000
n e t r e s t o produce one d e s i g n i n f o u r c o l o u r c o m b i n a t i o n s .
Sone i m p o r t e r s ,
t h e r e f o r e , p r e f e r handlooms f o r f a s h i o n markets as t h e y can t r y a number o f
p r o d u c t s , d e s i g n s and c o l o u r s e c o n o m i c a l l y i n t h e i r r e s p e c t i v e m a r k e t s .
F a s h i o n changes and t h e r e f o r e t h e r e i s a need f o r an i n d u s t r y w h i c h can
c a t e r q u i c k l y f o r e v e r y change i n f a s h i o n r e q u i r e m e n t s , w i t h new p r o d u c t s ,
nex'T d e s i g n s and new c o l o u r s . (3) Handloons can produce c o m p l i c a t e d d e s i g n s
(1)
S. Kumar ( S i l k A s s o c i a t i o n o f I n d i a ) , Economic Times, Bombay, December
1931.
(2)
K. X a s t u r i & P.S.S. S r i n i v a s a n , E c o n o a i c Times, Bombay, G March
(3)
K.R. Pande, 'Haudloom i n d u s t r y ; s t r a t e g i e s f o r m a r k e t i n g ' . Economic
T i n e s , Bombay, 20 May 19C1.
1982.
e x t r a warp, e x t r a w e f t , d o b b i s , j a c q u a r d s , mixed f a b r i c s , s p e c i a l t y p e s o f
f a b r i c s i n s m a l l q u a n t i t i e s and keep on changing the d e s i g n s and c o l o u r s
e c o n o m i c a l l y . I t i s d i f f i c u l t f o r the mechanised m i l l s t o do t h i s .
Therefore,
i t i s i n t h i s a r e a t h a t handlooms have an edge over t e x t i l e m i l l s .
P r o d u c t development, des5.gn and f a s h i o n are p a r t i c u l a r l y i m p o r t a n t i n
s u s t a i n i n g the grox«7th o f h a n d i c r a f t s i n Western m a r k e t s . E a s t e r n European
markets w h i c h absorb a l a r g 6 p r o p o r t i o n o f I n d i a ' s b r a s s w a r e e x p o r t s , b e s i d e s
a nunher o f o t h e r p r o d u c t s , a r e s a i d t o be l e s s denanding i n t h i s r e s p e c t .
T h i s p a r t i } ' r e f l e c t s t h e o r g a n i s a t i o n o f m a r k e t i n g t h e r e ; i t can t a k e up t o
t'^'o o r t h r e e y e a r s f o r a change i n consumer deniond t o r e a c h the d e c i s i o n n a k e r s
i n the i n p o r t i n g agency, i d i e r e a s 7.n t h e West t a s t e s can change i n s i x nonths
and i n o o r t e r s must respond t o them. However, E a s t e r n Europe i s g e n e r a l l y more
i n t e r e s t e d i n t r a d i t i o n a l a r t i s t i c itevas than the West. F o r i n s t a n c e the USS":
buys a l o t of t r a d i t i o n a l b r a s s v a s e s , wit', e n g r a v i n g and e n a m e l l i n g , f r o n
L'oradabad, w h i l e Western Europe and the UG p r e f e r t o buy s i m p l e , p l a i n b r a s s
o b j e c t s and o b j e c t s nade out o f w h i t e n e t a l .
Only a few m a n u f a c t u r e r s are a b l e t o develoD t h e i r own d e s i g n s , p a r t l y
as a r e s u l t of s c a r c e f i n a n c e and p a r t l y because o f inadequate i n f o m a t i o n about
t a s t e s i n f o r e i g n m a r k e t s . I n a d d i t i o n , a r t i s a n s who a r e p a i d c n a p i e c e r a t e
b a s i s w i l l s u f f e r a f a l l i n t h e i r wages each t i n e they have t o l e a r n a nevr
d e s i g n o r t e c h n i q u e . They are t h e r e f o r e n o t encouraged t o i n n o v a t e t h e n s e l v e s .
A n o t h e r p r o b l e n i s the tendency of m a n u f a c t u r e r s t o copy each o t h e r . There can
be no p a t e n t i n g o f d e s i g n s - moreover the s y s t e n o f outworking makes i t
d i f f i c u l t to keep d e s i g n s s e c r e t u n t i l t h e goods are on the m a r k e t . What
happens i s t h a t the market i s o f t e n f l o o d e d w i t h s i n i l a r i t e m s , w h i c h can
depress p r i c e s s e v e r e l y . F o r examnle, when i n 1973/79 t h e r e were over 5,000
l o o n s i n P a n i p a t (the p r o d u c t i o n , c e n t r e f o r u p h o l s t e r y ) a l l p r o d u c i n g the saijie
t y p e of c l o t h ( h i s s a r ) f o r b e d c o v e r s , l a r g e l y f o r e x p o r t t o the USA, w i t h i n a
y e a r the market had c o l l a p s e d .
I n t r a d e w i t h the West, the d e s i g n s ( c o l o u r s , f i n i s h , e t c ) a r e i n c r e a s i n g l y
p r o v i d e d by the i m p o r t e r , who s o n e t i n e s v i s i t s I n d i a t o o v e r s e e the p r o d u c t i o n
of p r o t o t y p e s . T h i s poses s e v e r a l problems. F i r s t o f a l l i t has i n c r e a s e d the
danger of t r a d i t i o n a l d e s i g n s d y i n g out through d i s p l a c e m e n t by f o r e i g n ones.
Of course i n sorae c a s e s , such as c a r p e t s , t h e r e a r e no t r a d i t i o n a l d e s i g n s .
I n d i a has always produced c a r p e t s based on P e r s i a n , C h i n e s e , T u r k i s h and
French (Aubusson) d e s i g n s . O f t e n the p r o d u c t i s so a l i e n t o the c r a f t s m e n t h a t
t h e y do not u n d e r s t a n d how i t i s t o be used - i e , the s t r e s s e s i t w i l l undergo
i n t h e f u n c t i o n s i t has t o p e r f o r m .
For i n s t a n c e few c r a f t s m e n e v e r use
c a r p e t s o r b r a s s p l a n t h o l d e r s , o r wear s i l k d r e s s e s , so t h e y do n o t
a p p r e c i a t e which o f t h e i r t a s k s are c r u c i a l and n u s t be done w i t h s p e c i a l c a r e .
Second, i t has meant t h a t n a n u f a c t u r e r s (and the c r a f t s m e n ) have become v e r y
dependent on t h e i r b u y e r s and t h i s has p r o b a b l y d e p r e s s e d the p r i c e s t h e y can
o b t a i n f o r t h e i r goods. On the o t h e r hand, one of I n d i a ' s advantages over
i t s c o m p e t i t o r s ( n o t a b l y Korea and Taiwan i n b r a s s , C h i n a i n c a r p e t s ) i s i t s
f l e x i b i l i t y ; i t i s x i r i l l i n g t o produce s n a i l runs o f p r o d u c t s t o i m p o r t e r s '
s p e c i f i c a t i o n s . And t h i s nay a l l o w m a n u f a c t u r e r s t o r a i s e t h e i r p r i c e s
s l i g h t l y . E x a c t l y what the n e x t e f f e c t i s , t h e r e f o r e , remains ambiguous.
I n o r d e r t o overcome t h i s l a c k o f d e s i g n i n n o v a t i o n the government
has s e t up v a r i o u s d e s i g n c e n t r e s . Some a r e b e i n g r u n by the A l l I n d i a
H a n d i c r a f t s B o a r d , s p e c i f i c a l l y f o r h a n d i c r a f t s , i n a d d i t i o n to the
a a t i o n a l I n s t i t u t e of D e s i g n a t Abaedabad, Less than 1% o f t o t a l p l a n n e d
e x p e n d i t u r e on h a n d i c r a f t s (F.s,100 l a k h s ) w i l l be spent s p e c i f i c a l l y on
d e s i g n development i n 1930-85, but t h e r e w i l l a l s o be some d e s i g n
i n f o r m a t i o n r e s u l t i n g frora the c r a f t i n s t i t u t e s mentioned i n 4(d) above.
I'Jhether t h e s e f a c i l i t i e s w i l l r e a l l y h e l p t o r e v e r s e the p r e s e n t dependence
on f o r e i g n i m p o r t e r s i n Europe and the US remains t o be seen, !Jhere i t
c o u l d h e l p , hoxrever, i s i n b r e a k i n g i n t o new markets w h i c h we c o n s i d e r
below. The s i t u a t i o n i n handlooms i s a re''.atively happy one i n t h i s r e s p e c t
and p r o v i d e s a p r e c e d e n t f o r o t h e r h a n d i c r a f t s e c t o r s . E x p o r t e r s of
handloom f a b r i c s base t h e i r a p p e a l on d e s i g n i n i t i a t i v e s t a k e n i n I n d i a ,
s t i m u l a t e d by bod.ies such as the HHSC and the H e a v e r s ' C e n t r e s , T h e r e ,
the danger i s l e s s one o f l a c k of d e s i g n i n i t i a t i v e than i t s e r n u l a t i o n
elsewhere (eg, F r e n c h m i l l s no-T make 'crepe I n d i e n ' ) . By c o n t r a e t ,
t h e r e i s l i t t l e d e s i g n i n i t i a t i v e among garment e x p o r t e r s ; i n s t e a d i t comes
frora import houses and r e t a i l s t o r e s i n the TJest.
Running through the arguments about d e s i g n o r p r o d u c t i o n i n n o v a t i o n
are s e v e r a l d i f f e r e n t t h r e a d s , o f t e n c o n f u s e d , and we s h o u l d c o n c l u d e by
t r y i n g t o s e p a r a t e them. F i r s t , t h e r e i s the q u e s t i o n o f whether d e s i g n
o r p r o d u c t i n n o v a t i o n s h o u l d be l e d by i m p o r t e r s and f o l l o v r e d by
'dependent' e x p o r t e r s o r v i c e v e r s a . T h i s i s an a r e a where n a t i o n a l i s m
i s n o t v e r y h e l p f u l . There i s presximably an optimum c o K b i n a t i o n which nay
v a r y from p r o d u c t to p r o d u c t and t^hich w i l l iaaximise the v a l u e added, of
e x p o r t s and employment, i n the l o n g term, and may w e l l emphasise the
e x p o r t e r s ' c a p a c i t y t o adapt t o changing deraand r a t h e r than t o mould i t ,
I n d i a ' s most s u c c e s s f u l e x p o r t s - garments, c a r p e t s , diamonds - a r e a l l
based on e s s e n t i a l l y d e r i v a t i v e d e s i g n s . Second, t h e r e i s the r e l a t e d
q u e s t i o n o f ' q u a l i t y ' v e r s u s 'mass' p r o d u c t i o n ( r e l a t e d , s i n c e f o r e i g n
demand may l e a d i n e i t h e r d i r e c t i o n ) . Mass p r o d u c t i o n emphasises output
and ec/jplo37ment r a t h e r i n the manner o f a f a c t o r y - b a s e d l a b o u r i n t e n s i v e
i n d u s t r y ( i n d e e d many m a n u f a c t u r e r s see no r e a s o n why ' h a n d i c r a f t s ' s h o u l d
be d i f f e r e n t i a t e d from i n d u s t r i e s , as i n d e e d i t i s n o t i n the p r o d u c t i o n
of p l a s t i c f l o w e r s i n Kong Kong), A l r e a d y , i n brassware f o r example, any
p r e t e n s i o n s of an ' I n d i a n ' , l e t a l o n e an a r t i s t i c , c h a r a c t e r have been
abandoned i n the p u r s u i t o f s a l e s of cheap a s h t r a y s and ' k n i c k - k n a c k s '
t o Western markets.
There a r e , i n d e e d , d i s a d v a n t a g e s i n b e i n g h i t c h e d
t o a (Western) l u x u r y r a t h e r t h a n a mass m a r k e t . But f o r many c r a f t s
t h e r e may be room f o r b o t h : t h a t i s , t h e r e i s scope f o r u s i n g I n d i a ' s v a s t
p o t e n t i a l f o r p r o d u c i n g l a b o u r i n t e n s i v e manufactisres, drawing i n p a r t i c u l a r
on the r u r a l p o p u l a t i o n through s u b - c o n t r a c t i n g arrangements, X'/hile a t t h e
same time r e t a i n i n g a c a p a c i t y t o produce more lu^curious items o f h i g h
q u a l i t y and a r t i s t i c a p p e a l ( p r o v i d e d , o f c o u r s e , t h a t the e x p o r t e r
r e a l i s e s t h a t they a r e d i f f e r e n t ! ) . T h i r d , t h e r e i s a d i s t i n c t i o n t o be
made between n o v e l t y and q u a l i t y . The emphasis of p o l i c y d i s c u s s i o n tends
t o be on the f o r m e r , but i t i s the l a t t e r w h i c h i s p r o b a b l y mote c r u c i a l
t o expanded e x p o r t volumes and goods p r i c e s : t e x t i l e f a b r i c s xirhich are f a s t
and w i t h o u t f a u l t s ; b r a s s f l o x f e r vases xjhich do n o t l e a k ; p r e c i o u s metalvrare
xrhich i s h a l l m a r k e d .
(f)
D e l i v e r y Problems
A h a n d i c r a f t p r o c e s s i s , almost by d e f i n i t i o n , slow. Handloom weavers
can produce on average 5 t o 6 metres a day and, f o r complex weaves, no more
t h a n 2 n e t r e s a day.
The o r g a n i s a t i o n a l p r o b l e n s of m e e t i n g l a r g e u n i f o m
o r d e r s can be immense and as X7e have seen, handloon vreavers have an
advantage o v e r mechanised weavers o n l y f o r s m a l l o r d e r s (under, say, 20,000
m e t r e s ) , A f r e q u e n t c o m p l a i n t of m a n u f a c t u r e r s i s t h a t i m p o r t e r s do n o t
u n d e r s t a n d the speed o f d e l i v e r y problem w h i c h a handloom o r h a n d i c r a f t
i n d u s t r y has.
Some problems a r e , however, manmade and I n d i a ' s i n f r a s t r u c t u r a l problems mean t h a t a l l e x p o r t s a r e -lagued by problems of
inadequate r o l l i n g s t o c k , poor and congested r o a d s , d e l a y s i n p o r t s , l a c k o f
c o n t a i n e r f a c i l i t i e s , h i g h f r e i g h t c h a r g e s , e t c . For h a n d i c r a f t s , t h e s e
problems may be s l i g h t l y worse because o f the d i s p e r s e d n a t u r e of p r o d u c t i o n
( p a r t i c u l a r l y i n handlooms) o r , n o r e g e n e r a l l y , because o f the remoteness o f
the c e n t r e s o f p r o d u c t i o n f r o n sea and a i r p o r t s . Many h a n d i c r a f t s r e q u i r e
s p e c i a l p r o t e c t i v e p a c k i n g t o p r e v e n t damage - t a r n i s h i n g o f the b r a s s and
s i l v e r p l a t e d i t e m s , w a r p i n g o f the wooden i t e m s , c r u s h i n g of t h e bamboo
i t e m s . The r e s u l t i n g i n c r e a s e s i n c o s t s can e x c l u d e some p r o d u c t s , such as
cane b a s k e t r y i t e m s o r blown g l a s s , frora e x p o r t a l t o g e t h e r , u n l e s s t h e y a r e
i t e n s w h i c h no o t h e r c o u n t r y produces (such as r e e d c h a i r s , f o r w h i c h f r e i g h t
i s 350% o f t h e f , o . b , c o s t ) . F r e i g h t r a t e s are v e r y h i g h f o r a nunber o f
p r o d u c t s . F o r wooden c a r v i n g s the f r e i g h t r v a l u e r a t i o i s as nuch as 60%,
T h i s can be p a r t l y reduced by moving away from s h i s h a wood t o the more
e x p e n s i v e w a l n u t and sandalwoods. F o r b r a s s w a r e , sea f r e i g h t t o Hamburg can
be as nuch as 20-25% o f the f,o,b, c o s t - tv/ice the anount from Taiwan w h i l e i n l a n d f r e i g h t and p a c k i n g a l o n e can account f o r 12% of the f , o , b ,
c o s t . For c a r p e t s , sea f r e i g h t i s nuch l e s s - Rs.15-16 p e r square m e t r e ,
o r r o u g h l y 2-5% o f the f . o . b , c o s t of the c a r p e t . A n o t h e r problera i s t h a t
sorae m a j o r c o m p e t i t o r s g e t l a r g e f r e i g h t s u b s i d i e s . F o r i n s t a n c e C h i n a and
Y u g o s l a v i a have t h e i r mm
s h i p p i n g l i n e s w h i c h charge r a t e s w e l l belox^ those
o f the c o n f e r e n c e l i n e s used by most I n d i a n h a n d i c r a f t e x p o r t e r s .
(g)
Overdependence on E s t a b l i s h e d M a r k e t s
The b u l k of I n d i a ' s h a n d i c r a f t e x p o r t s a r e s o l d i n a s m a l l number o f
developed c o u n t r y m a r k e t s .
From the p r e l i m i n a r y d a t a a v a i l a b l e i t seems
t h a t f o r sorae p r o d u c t s (and sub-product c a t e g o r i e s ) t h i s c o n c e n t r a t i o n i s
h i g h . F o r example about 50% c f a l l hand-knotted c a r p e t s are e x p o r t e d t o
West Germany, w h i l e the USA and USSR between them buy r o u g h l y 55% o f
brassware e x p o r t s (see T a b l e 6),
As with any e x p o r t i n d u s t r y such o v e r dependence on a few markets p r e s e n t s p r o b l e n s f o r h a n d i c r a f t s . I n p a r t i c u l a r
i t c o n s t r a i n s the development of e x p o r t s ; n o t o n l y i s t h e grovrth i n demand
i n a few markets l i k e l y t o be lower t h a n i f new markets were b r o a c h e d , b u t
a l s o t h e r e i s the r i s k t h a t a sudden change i n t a s t e o r economic c o n d i t i o n s
v j i l l l e a d t o a f a l l i n demand. A few exaraplea w i l l i l l u s t r a t e how v u l n e r a b l e
sone h a n d i c r a f t e x p o r t e r s a r e . I n Germany the demand f o r I n d i a n c a r p e t s
f e l l s h a r p l y i n 19C0/3I, T h i s was p r i m a r i l y a t t r i b u t e d t o t h e 20% d e c l i n e
i n the DIt, a l t h o u g h o t h e r s have s u g g e s t e d t h a t the market slumped as a r e s u l t
o f the r e c e s s i o n , w i t h excess s u p p l i e s and h i g h s t o c k s . T h i s s i t u a t i o n was
made worse by the s m a l l number o f buyers r e l a t i v e t o the number o f e x p o r t e r s
(or t h e i r agents) hoping t o s e l l i n West Germany, Another problem x^ras t h a t
Gerraan i m p o r t e r s o p e r a t e d a l o o s e form of c a r t e l ; t h e y began t o r e f u s e t o
TABLE 6
Dependence on F o r e i g n M a r k e t s : % e x p o r t s t o p a r t i c u l a r c o u n t r i e s
(value)
Handloons^ (1973/79)
"r,A
35
Gems and J e w e l l e r y ^ (1979) 29
W.
Germany
10
Belgium
USSR
UK
3
21
-
3
C a r p e t s ^ (1930)
30
50
-
10
5
lirassware*^ (1930)
30
10
-
30
5
Sources:
a
b
c
d
Handloon Exports P r o m o t i o n C o u n c i l
Gens and J e w e l l e r y , May 1980, p.29,
Estimates
Estimates
Notes:
- insignificant
accept o r d e r s , when these had a l r e a d y been s h i p p e d , u n l e s s e x p o r t e r s reduced
p r i c e s t o take i n t o account sone o f the f a l l i n the v a l u e of the DM.
No
i m p o r t e r would a c c e p t an o r d e r which had been r e f u s e d by a n o t h e r .
Indian
e x p o r t e r s d i d not have the f i n a n c i a l b a c k i n g o r o r g a n i s a t i o n to b r i n g the
c a r p e t s back t o I n d i a , n o r t o h o l d t h e n i n customs warehouses u n t i l i m p o r t e r s
accepted theni. They were t h e r e f o r e f o r c e d t o s e l l a t lower p r i c e s or t o g i v e
i i p o r t e r s l o n g e r c r e d i t . Sone m a n u f a c t u r e r s f e e l t h a t t h i s s i t u a t i o n c o u l d
have bean a v o i d e d i f the government had i n s i s t e d t h a t a l l c a r p e t e x p o r t s were
p a i d f o r by i r r e v o c a b l e l e t t e r o f c r e d i t (as i s the case f o r t e x t i l e s ) , o r
i f a l l e x p o r t e r s had t o have a minimuEi t u r n o v e r o f , say, Rs.50 l a k h s . A t
p r e s e n t f o r e i g n i m p o r t e r s have t o o much power, p a r t i c u l a r l y when they know
t h a t they buy such a l a r g e share o f I n d i a ' s e x p o r t s .
One way of r e d u c i n g these p r o b l e n s would be t o d i v e r s i f y i n t o nex\'
m a r k e t s , p a r t i c u l a r l y i n the M i d d l e E a s t and L a t i n . \ n e r i c a . . Some m a n u f a c t u r e r s
have begun t o v i s i t these a r e a s , but n o s t a r e too s m a l l t o do so i n d i v i d u a l l y
and t h e r e f o r e depend on i n i t i a t i v e s t a k e n by the government-run H a n d i c r a f t s
and Handloons E x p o r t C o r p o r a t i o n (KIIEC). The IZ-B^C has shoTvroons i n Hamburg,
P a r i s , Z u r i c h , Nex7 Y o r k , Tokyo and N a i r o b i , w h i c h a r e d e s i g n e d t o i n t r o d u c e
f o r e i g n i m p o r t e r s to the wide range o f h a n d i c r a f t s produced i n I n d i a , and i n
sone i n s t a n c e s a l s o t o a c t as r e t a i l o u t l e t s . I t i s c l a i m e d t h a t t h e breakt h r o u g h o f I n d i a n c a r p e t s i n t o the German market was l a r g e l y the r e s u l t o f the
IIHEC s e t t i n g up a warehouse i n Hamburg i n the l a t e 1960s. Trade f a i r s and
e x h i b i t i o n s a r e o r g a n i s e d by the A l l I n d i a H a n d i c r a f t s Board (AIHB), w h i c h
i n a d d i t i o n t o i t s o t h e r a c t i v i t i e s i s the e x p o r t promotion c o u n c i l f o r a l l
h a n d i c r a f t s , as x r e l l as by t h e s e p a r a t e e x p o r t promotion c o u n c i l s , xjhich
have been s e t up by m a n u f a c t u r e r s o f gems and j e w e l l e r y , a p p a r e l , handlooms,
wool and c a r p e t s (x/ith government s u p p o r t ) . To date most of these f a i r s
have been i n t h e more t r a d i t i o n a l markets ( i n c l u d i n g VJest Germany, t h e USA
and USSR). Under the S i x t h P l a n some R s . l 5 0 l a k h s w i l l be spent on f u r t h e r
e x h i b i t i o n s on a l l c o n t i n e n t s , except A f r i c a , xn.th p r i o r i t y b e i n g g i v e n
to gens and j e w e l l e r y .
There i s soEe debate i n I n d i a as t o the e f f e c t i v e n e s s of such
government o r g a n i s a t i o n s in b r e a k i n g i n t o new m a r k e t s . Some m a n u f a c t u r e r s
f e e l t h a t a more s u c c e s s f u l a l t e r n a t i v e might be e x p o r t houses as d i s c u s s e d
above. The scope f o r d i v e r s i f i c a t i o n and development o f e x p o r t s does, of
c o u r s e , a l s o depend c r i t i c a l l y on the degree Of openness o f i m p o r t i n g m a r k e t s .
Market a c c e s s b a r r i e r s - p a r t i c u l a r l y t h e q u e s t i o n of quotas on handlooms i s d e a l t w i t h i n a s e p a r a t e paper.
SECTION 5
(a)
DEVELOPMENT POLICY ISSUES
Labour C o n d i t i o n s and the W e l f a r e o f the A r t i s a n
The i s s u e o f vrages and c o n d i t i o n s i n the h a n d i c r a f t s i n d u s t r y i s one
o f the most d i f f i c u l t , j'^et i m p o r t a n t , P o l i c y q u e s t i o n s . I t i s d i f f i c u l t
because i t arouses s t r o n g and c o n f l i c t i n g emotions amongst d i f f e r e n t
groups of p e o p l e , each of whom c l a i m t o have the i n t e r e s t s o f the a r t i s a n
at h e a r t , and because i t c e n t r e s on t h a t most e l u s i v e of concepts • e x p l o i t a t i o n ' . On the one hand t h e r e a r e those who see the e x p a n s i o n o f
h a n d i c r a f t s i n terms of economic a l t e r n a t i v e s . S i n c e the ' o p p o r t u n i t y
c o s t ' o f l a b o u r i s c l o s e t o z e r o , and the p r o d u c t i v i t y o f a r t i s a n l a b o u r
i s v e r y low i t c o u l d be argued t h a t a low but p o s i t i v e r e t u r n t o work cannot
be r e p r e s e n t e d as ' e x p l o i t a t i o n ' . On the o t h e r hand, t h e r e a r e those
concerned w i t h t h e unequal b a r g a i n i n g p o s i t i o n o f a r t i s a n workers and
t h e i r i n a b i l i t y t o o r g a n i s e i n the f a c e o f more w e a l t h y and p o w e r f u l
m a n u f a c t u r e r s and merchants and r i c h consumer i n t e r e s t s . I n t h i s case
' e x p l o i t a t i o n ' o f l a b o u r may e x i s t , b o t h i n the M a r x i s t sense o f e x t r a c t i n g
' s u r p l u s v a l u e ' and a l s o p o s s i b l y i n the M a r s h a l l i a n sense o f x^ages b e i n g
lower than l a b o u r ' s p r o d u c t .
Tlie p o l i c y i m p l i c a t i o n s o f these v i e w s o f t h e w o r l d a r e , n a t u r a l l y ,
q u i t e d i f f e r e n t : the f i r s t p o i n t i n g t o the need f o r maximum e x p a n s i o n o f
h a n d i c r a f t (and o t h e r ) a c t i v i t y i n o r d e r to r a i s e the demand f o r l a b o u r
i n r e l a t i o n t o c u r r e n t excess s u p p l y ; the second p o i n t i n g t o the need f o r
more s t r e n ^ t h e n i n c i n
the
organisation
of
artisans,
to
the
elimination
of
'unnecessary' middlemen, and t o S t a t e p r o t e c t i o n o f workers i n t h e form o f
minimum wages and c o n d i t i o n s . I t i s , o f c o u r s e , p o s s i b l e to b e l i e v e
t h a t the main p r o b l e n i s one of low p r o d u c t i v i t y and inadequate demand
f o r l a b o u r w h i l e a l s o b e l i e v i n g t h a t sone degree o f ' e x p l o i t a t i o n ' t a k e s
p l a c e . I n the case o f ' M a r s h a l l i a n ' e x p l o i t a t i o n the p r o p o s i t i o n i s ,
a t l e a s t , p o t e n t i a l l y t e s t a b l e , and t h e problem r e m e d i a b l e by removing
n o n o p s o n i s t i c elements i n the l a b o u r market. !fe s i h a l l l o o k a t the q u e s t i o n
i n i t i a l l y from t h e viexTpoint o f a f r e e l a b o u r market; then a t the observance
o f ninimuri ' s u b s i s t e n c e ' s t a n d a r d s o f wages and c o n d i t i o n s ; and, t h i r d , a t
the c o n t r o v e r s y about 'middlemen*.
Labour markets and a r t i s a n s . The a n a l y s i s o f l a b o u r markets i s always
dogged by such fundamental d i f f i c u l t i e s as u n s c r a n b l i n g cause and e f f e c t
and s e p a r a t i n g out the r e l a t i o n s h i p between xrages and employment f r o n
changes i n s p e c i f i c o r aggregate demand and growth i n p r o d u c t i v i t y l e v e l s .
Thus, i t i s p o s s i b l e i n I n d i a t o f i n d cases o f h i g h underemployment
a p p a r e n t l y caused by wage r i g i d i t y ( K e r a l a ) , h i g h unemployment d e s p i t e low
and f l e x i b l e wages ( B i h a r ) , h i g h employment s u s t a i n e d by downward wage
f l e x i b i l i t y (Madhya P r a d e s h , R a j a s t h a n ) , and low unemployment c o - e x i s t i n g
w i t h r e l a t i v e l y h i g h wages (Punjab and i l a r r y a n a ) . There a r e s i m i l a r
v a r i a t i o n s betx^een h a n d i c r a f t c e n t r e s and over t i m e . I n some h a n d i c r a f t s ,
a t l e a s t , r e a l x^rages appear t o have improved. I n E h a d o h i - M i r z a p u r w o r k e r s
have been a b l e t o buy a fex? consumer d u r a b l e s ( r a d i o s , b i c y c l e s ) and t o
improve t h e i r houses. Some have managed t o accumulate s a v i n g s w h i c h they have
i n v e s t e d i n l a n d , o r they have bought raw m a t e r i a l s and become s m a l l manuf a c t u r e r s s u b - c o n t r a c t i n g work t o o t h e r a r t i s a n s . I n an expanding i n d u s t r y
i n d i v i d u a l s have been a b l e t o move up the s k i l l h i e r a r c h y t o the p o s i t i o n
o f master c r a f t s m a n . The p o s i t i o n o f workers i n the c o t t o n x/eaving and
g e m - c u t t i n g i n d u s t r i e s , however, does n o t appear ( a l b e i t on v e r y
f r a g m e n t a r y e v i d e n c e ) t o have improved s i g n i f i c a n t l y and may even
have d e t e r i o r a t e d w i t h expanding demand because o f r a p i d e n t r y i n t o
the i n d u s t r y , i l i e s a l s o c i t e s l a c e w o r k i n g (but w i t h o u t e v i d e n c e )
as a c a s e o f e x p a n s i o n w i t h f a l l i n g r e a l wages.
I n g e n e r a l , however, i t c a n be s a i d - t h e e v i d e n c e i s s e t o u t
below - t h a t v/orkers a r e p a i d more than they would be i n a l t e r n a t i v e
( a g r i c u l t u r a l o r • i n f o r m l ' s e c t o r ) a c t i v i t i e s . And i t i s t h e d e c l i n e ,
r a t h e r t h a n e x p a n s i o n , o f markets f o r h a n d i c r a f t s w h i c h has been t h e
c h i e f w o r r y o f r u r a l a r t i s a n s , e s p e c i a l l y women. (1) M o r e o v e r , where
l a b o u r markets have been a l l o w e d t o X7ork f r e e l y - a s i n T h a i l a n d r u r a l h a n d i c r a f t wages appear t o have r e f l e c t e d r e l a t i v e s c a r c i t i e s
q u i t e a c c u r a t e l y , r i s i n g s i g n i f i c a n t l y f o r p r o d u c t s i n demand and a t
seasons o f peak demand, and a t h a r v e s t t i m e s . (2) I n I n d i a , however,
t h e r e i s some e v i d e n c e t h a t due t o market i m p e r f e c t i o n s - i n c o m p l e t e
freedom t o move ( o f xTOmen e s p e c i a l l y ) , i n c o m p l e t e knov/ledge, u n e q u a l
power - some a r t i s a n wages a r e a c t u a l l y l e s s than p r o d u c t i v i t y m e r i t s :
'the r e a l s i t u a t i o n e x i s t i n g i n (the) iiandloom i n d u s t r y i s t h a t wages
a r e l e s s t h a n t h e v a l u e o f t h e m a r g i n a l p h y s i c a l p r o d u c t ....'. (3)
This i s p a r t l y a t t r i b u t e d t o the a b i l i t y o f manufacturers t o tap
s u p p l i e s o f c h i l d r e n (4) and x^omen x-7orkers. (5)
And t h e ' o p p o r t u n i t y
c o s t o f women's t i m e (housework) o r c h i l d r e n ' s ( l e a r n i n g ) i s n o t
measured i n market e s t i m a t i o n s .
(1)
U m Ram Nath, 'Ilomen; P r o g r e s s on Development', A c t i o n i n
Development, No. 76, J u l y 1930.
(2)
D.C. Meads S u b c o n t r a c t i n g
(3)
T. Y a g a i a h j 'Handloon I n d u s t r y i n I n d i a ' s Y o j a n a ; 16 December 1979.
(4)
I n I n d i a 'among t h e u n o r g a n i s e d i n d u s t r i e s , t h e h a n d i c r a f t s s e c t o r
draws t h e l a r g e s t number o f c h i l d r e n . U n o f f i c i a l l y s i t i s c o n ceded t h a t 3 0 % o f l a b o u r engaged i n t h i s i n d u s t r y a r e c h i l d r e n ' ,
Sumantra B a n e r g j e e j C h i l d Labour i n India^, A n t i - S l a v e r y S o c i e t y ,
London 19795, p. 18.
(We s u s p e c t t h a t t h i s f i g u r e i s v e r y much
on t h e h i g h s i d e . )
(5)
A s R u t h D i x o n sayss 'Women X7ho produce h a n d i c r a f t s a t home
t y p i c a l l y u n d e r v a l u e t h e i r work because they a r e n o t used t o
a t t a c h i n g a xoonetary v a l u e t o t i n e , and because they f r e q u e n t l y
d e f i n e t h e i r handixrark - o f t e n i n t e r r u p t e d by d o m e s t i c c h o r e s as an i n c i d e n t a l s p a r e - t i n e a c t i v i t y . The amount o f p r o f i t i s
not i m p o r t a n t ~ any r e m u n e r a t i o n a t a l l i s b e t t e r t h a n none so l o n g a s t h e raw m a t e r i a l s a r e p a i d f o r ' . R u r a l Women a t Work,
Johns Hopkins U n i v e r s i t y Press, 1978^ p.57.
i n R u r a l Areas o f T h a i l a n d ,
op. c i t .
Labour market i m p e r f e c t i o n s may d i s t o r t i n a d i f f e r e n t way, by
d e p r e s s i n g wages below those of a l t e r n a t i v e sources of ('market) income.
One of the consequences of depressed wages appears t o be a l o s s and
d e m o r a l i s a t i o n of the most s k i l l e d and e x p e r i e n c e d c r a f t s m e n who a r e
r e q u i r e d t o develop the h i g h q u a l i t y and s o p h i s t i c a t e d d e s i g n s i n w h i c h
I n d i a ' s t r a d i n g comparative advantage l i e s . Thus, i n the s i l k c e n t r e of
Kancheepuram, 'weavers a r e abandoning a l l time consuming d e s i g n s ' s i n c e the
s m a l l e x t r a payment does not j u s t i f y i t ! ' no one i s b o t h e r e d about the
t e x t u r e o r q u a l i t y of weaving anymore. T h i s i s a p o v e r t y r i d d e n j o b , 'ile
are n o t a l l o w i n g our c h i l d r e n t o be weavers', (1) Many weavers (of c o t t o n
handlooms) who are d i s s a t i s f i e d \n.th the I'^w l e v e l of e a r n i n g s i n the
handloom i n d u s t r y are l e a v i n g t h e i r a g e - o l d t r a d i t i o n a l work i n s e a r c h of
employment elsewhere i n the c i t i e s , t h e r e b y i n c r e a s i n g the p r o c e s s of
u r b a n i s a t i o n ' , (2) But i n h a r d i c r a f t s , h e r e d i t a r y s k i l l s and the l i f e l o n g
attachment of whole f a m i l i e s t o a t r a d e r e p r e s e n t the 'human c a p i t a l ' base
on vrhich the i n d u s t r y r e s t s and i n s e c u r e o r inadequate r e t u r n s to wor!;ers
and u n r e s t r i c t e d s u p p l y can be s e l f - d e f e a t i n g . T h i s was w e l l u n d e r s t o o d by
the 19th c e n t u r y I n d i a n c r a f t g u i l d s , vjhich v r h i l e they 'are condemned by
iiany f o r f i x i n g the h o u r s of l a b o u r and the aiaount o f work t o be done i n
them, by s t r i c t laws ... n o n e t h e l e s s ... by t h e i r s t u b b o r n r e s i s t a n c e f u r t h e r
s t i m u l a t e d by c a s t e p r e j u d i c e , v r h i l e t h e y oppose a l l i n n o v a t i o n , s t i l l
c o n t i n u e i n t h i s f o l o r n way, t o s e r v e a b e n e f i c i a l end, i n m a i n t a i n i n g f o r
p r o b a b l y another g e n e r a t i o n , the t r a d i t i o n a l e x c e l l e n c e of the ... a r t s
of I n d i a a g a i n s t the f i e r c e and m e r c i l e s s c o m p e t i t i o n of the E n g l i s h
m a n u f a c t u r e r s ' . (3)
Minimum s t a n d a r d s .
The above comments s e r v e t o q u a l i f y , r a t h e r than t o
r e f u t e , our b r o a d l y o p t i m i s t i c judgment t h a t h a n d i c r a f t wages and c o n d i t i o n s ,
as w e l l as eraployment, would g e n e r a l l y improve i n response t o i n c r e a s e d
demand, and xrith improved c a p a c i t y t o s u p p l y .
There i s , however, a r a t h e r
d i f f e r e n t approach t o l o o k i n g a t wages and c o n d i t i o n s : i n terms of a b s o l u t e
minimum s t a n d a r d s .
T h i s i s e a s i e r s a i d than done; t h e r e are s e r i o u s
p r o b l e m s , n o t a b l y the l a c k of d a t a on wages and c o n d i t i o n s i n the h a n d i c r a f t
s e c t o r and a l s o the l a c k of o b v i o u s c r i t e r i a t o use i n e v a l u a t i n g one's
f i n d i n g s , T'Jhat i s i n v o l v e d i s n o t s i m p l y a q u e s t i o n of wages but of p h y s i c a l
c o n d i t i o n s . I n sorae h a n d i c r a f t s a c t i v i t i e s , f o r example, t h e r e i s a d e f i n i t e
h e a l t h r i s k - i n the form of TB and o t h e r chest i l l n e s s e s , (4) Even t o take
the more s t r a i g h t f o r w a r d a r e a of wages, as most a r t i s a n s are p a i d on a p i e c e
r a t e b a s i s , wages can o n l y be c a l c u l a t e d i f the average p r o d u c t i v i t y per
hour i s known, and the number of hours worked. P i e c e r a t e s v / i t h i n an i n d u s t r y
can v a r y frora p l a c e to p l a c e ; a t the h e a r t o f the c a r p e t b e l t i n B h a d o h i M i r E a p u r , f o r i n s t a n c e , r a t e s are much h i g h e r t h a n on the o u t s k i r t s . Another
(1)
C,S, L a k s h i m i , ' S i l k weavers of Kancheepuram', The Economic Times,
Bombay, 13 October 1931.
(2)
T. Y a g a i a h , 'Handloom i n d u s t r y i n I n d i a ' , Y o j a n a , 16 December 19791.
(3)
S i r George Birdwood, I n d u s t r i a l A r t s of I n d i a , 1930,
(4)
'Those engaged i n h a n d p r i n t i n g have t o d e a l w i t h c h e m i c a l dyes;
t h o s e engaged i n a r t brassvrare have t o vjork xd-th open B h a t t i e s ; those
engaged i n c a r p e t weaving i n h a l e w o o l d u s t ; xroodcarvers i n h a l e xrood
d u s t ' . A l l I n d i a H a n d i c r a f t s B o a r d , Annual R e p o r t , 1978-79, p.13,
p.39.
d i f f i c u l t y i s t h a t a c e r t a i n p r o p o r t i o n of a worker's output nay be r e j e c t e d
as s u b - s t a n d a r d and d e d u c t i o n s made from h i s wages a c c o r d i n g l y .
Deductions
may a l s o be nade i n l i e u o f i n t e r e s t charges where a m a n u f a c t u r e r had
advanced c a p i t a l f o r equipment purchase o r g i v e s a votk&r p a r t o f h i s wage
p a c k e t ' i n advance or a c t s n o r e g e n e r a l l y as a money-lender. The n a t t e r i s
f u r t h e r c o n p l i c a t e d by the f a c t t h a t i n sorae i n s t a n c e s wages nay r e f e r t o a
f a m i l y u n i t r a t h e r t h a n a s i n g l e w o r k e r . The 'average' wage i s a l s o r e n d e r e d
o f q u e s t i o n a b l e s i g n i f i c a n c e by the law wages of t r a i n e e s . Those i n the
diarriond c u t t i n g i n d u s t r y pay to j o i n the p r o f e s s i o n - i n e f f e c t , a n e g a t i v e
wage - i n e x p e c t a t i o n of h i g h e r r e t u r n s l a t e r i
F i n a l l y t h e r e i s the p r o b l e n
of f l u c t u a t i o n s i n work. I n b o t h handloom and r a r p e t vreaving a nunber of days
a r e ' l o s t ' - i n the sense t h a t t h e r e i s no d i r e c t payment f o r them - i n warp
p r e p a r a t i o n and i n w i n d i n g on the warp. For handloons t h i s can occupy as
much as two days i n e i g h t , A l o t of work i s s e a s o n a l , p a r t l y because i n p o r t
demand i s s e a s o n a l (a l a r g e p r o p o r t i o n of the minor h a n d i c r a f t s , s u c h as b r a s s ware, i s s o l d a t C h r i s t n a s w h i l e a l o t of handloom garments a r e produced f o r
suanar wear) and p a r t l y because of v a r i a t i o n s i n the weather such as monsoons
which a f f e c t production ( t e x t i l e p r i n t i n g , carpet f i n i s h i n g ) .
I n 1973 c a r p e t
xreavers i n B h a d o h i - M i r s a p u r vjorked o n l y 265 d a y s , though t h i s f i g u r e i s
b e l i e v e d t o have r i s e n s i n c e w i t h the growth i n e x p o r t s , w h i l e i n 1980 w o r k e r s
i n the gem i n d u s t r y i n J a i p u r worked o v e r 300 days. Not o n l y do the nuiaber
of days worked f l u c t u a t e w i t h i n a y e a r but a l s o f r o n one y e a r t o the n e x t .
I n 1900 the d e c l i n e i n f o r e i g n demand f o r brassware l e d t o a f a l l i n the
average number o f days worked i n the i n d u s t r y i n Moradabad, from s i x t o f o u r a
week,
T'Je have endeavoured i n T a b l e 7 t o summarise some d a i l y wage d a t a f o r the
purpose o f comparison. As can be s e e n , r e p o r t e d wages compare r e a s o n a b l y w e l l
w i t h ninimuiTi a g r i c u l t u r a l wages f o r w h i c h t h e r e i s s t a t e l e g i s l a t i o n (and
these a r e w i d e l y u n d e r c u t ) .
I t might be n o t e d t h a t a y e a r a f t e r t h o s e wages
were r e c o r d e d , the U n i o n Labour M i n i s t r y recommended a u n i f i e d n a t i o n a l
a i n i m u n d a i l j r wage of Rs,7 t o 8 as f r o n J a n u a r y 1932.
Even the p o o r e s t c l a s s
of a r t i s a n - the handloom weavers - were (and are) g e n e r a l l y p a i d n o r e t h a n
t h a t . But the q u e s t i o n t h e n a r i s e s as t o whether h a n d i c r a f t s s h o u l d be compared
t o a g r i c u l t u r a l wages or i n r e l a t i o n t o o r g a n i s e d i n d u s t r y , ' H a n d i c r a f t s ' , as
we have seen, r e p r e s e n t s a continuum of p r o c e s s e s from v i l l a g e h o u s e h o l d
i n d u s t r i e s t o urban o r s e n i - u r b a n f a c t o r i e s x^hich have b e e n b r o k e n i n t o s n a i l
u n i t s , i n o r d e r t o a v o i d the i r i p o s i t i o n of f a c t o r i e s l e g i s l a t i o n . The q u e s t i o n
o f the b a s i s o f comparison i s of p a r t i c u l a r importance when c o n f r o n t e d by the
q u e s t i o n of c h i l d labour.
In v i l l a g e s i t i s considered unusual f o r c h i l d r e n
n o t t o be e n p l o y e d t e n d i n g a n i n a l s and a s s i s t i n g t h e i r p a r e n t s w i t h f a r m v/ork.
But under the F a c t o r y A c t , c h i l d employment i s , i n t h e o r y , s t r i c t l y r e g u l a t e d .
The F a c t o r y A c t - xjhich e s t a b l i s h e d h y g i e n e and s a f e t y s t a n d a r d s , o b l i g a t o r y
p a i d h o l i d a y s , r e s t r a i n t s on c h i l d l a b o u r , and p r o v i d e s a base l i n e f o r o t h e r
laws such as p r o f i t s h a r i n g bonuses - a p p l i e s o n l y t o f i r m s u s i n g n o n - a n i m a l
t r a c t i o n and vAiere t e n or more l a b o u r e r s x-rork. The l o g i c b e h i n d the e x c l u s i o n
of s m a l l s c a l e u n i t s i s p a r t l y economic - nany x/ould be u n a b l e t o a f f o r d the
o b l i g a t i o n s , and xfould have t o c l o s e ; p a r t l y because the c h a r a c t e r o f work i s
d i f f e r e n t - w i t h o u t the h a z a r d s of machinery and the need t o r e l a t e work speeds
t o those of m a c h i n e s ; and p a r t l y p r a c t i c a l - c o n t r o l s c o u l d n o t be p o l i c e d .
TThile sone h a n d i c r a f t s p r o d u c t i o n can r e a s o n a b l y be compared, i n the use o f
c h i l d r e n , t o p e a s a n t f a m i n g , sone i s a l s o on the b o r d e r l i n e o f what i s c o v e r e d
by the F a c t o r y A c t . H e r e , c h i l d l a b o u r has a more ambiguous l e g a l (and
e t h i c a l ) b a s i s . Yet i t i s u n d o u b t e d l y xiddespread, and s u r v e y s by the Government'
TABLE 7
E s t i m a t e s o f Wages
weaver
handprinter
Cotton
Silk
10-12
(TN)
20-30 (R)
25-50 (K,
10-20
Carpets
weaver
washer
finisher/embosser
(UP)
(UP)
50-60
35-40
40-50
20
15
Gems and J e w e l l e r y
cutting/polishing
TN)
20-25
10-15
17-27
Brass
caster
aachiner
engraver
lacquerer
nolisher
(Rs./day)
(G)
15-18
A g r i c u l t u r a l l a b o u r e r s (minimum wages 1979)'
G u j a r a t (G)
Karnataka (K)
Raj asthan(R)
T a m i l Nadu (TN)
U t t a r Pradesh (UP)
West B e n g a l (TIB)
5.50
3.25-5.60
4.25-5.00
3.50-5.00
4.50-6.50
7.25
a - Commerce, 27 December 1980,
p.1216.
Labour Bureau have shoxra t h a t c h i l d l a b o u r i s e x t e n s i v e i n handloom and
c a r p e t weaving. I n p a r t s of T a m i l Nadu about a t h i r d of the workers i n handloom v/eaving a r e aged under 14, c h i l d r e n work 9 to 10 hours a day, e a r n i n g
l e s s t h a n Rs.5 per day (1979 r a t e ) and the use of c h i l d r e n , w h i l e l e s s , i s
a l s o s u b s t a n t i a l i n K e r a l a . The c a r p e t s i n d u s t r y i n ICashmir ( l e s s so i n
M i r z a p u r - B h a d o h i ) eviploys l a r g e numbers o f c h i l d r e n where -wages a p a r t ' c o n d i t i o n s l e a d t o t h e i r h e a l t h b e i n g r u i n e d . The v e n t i l a t i o n and l i g h t i n g
i n p a r e t l i e i r e y e s i g h t , the c o t t o n f l u f f they b r e a t h e e n t e r s t h e i r l u n g s , the
hunched up p o s i t i o n i n x^hich they s i t a t work f o r l o n g hours s t u n t s t h e i r
growth. None are covered by h e a l t h i n s u r a n c e , nor are they g i v e n a r e g u l a r
and p r o p e r m e d i c a l check-up'. (1) Thera a r e , c l e a r l y , i n s t a n c e s where
c o n d i t i o n s f a l l below even those w h i c h n i g h t be expected by poor people i n a
poor c o u n t r y .
(1)
P r e n Vishwanathan, ' C h i l d l a b o u r i n I n d i a : Survey on c h i l d r e n and
c h i l d l a b o u r ' . Economic Times, 10 A p r i l , 1932.
D i s t r i b u t i o n of ' v a l u e ' . The t h i r d approach to the q u e s t i o n of wages and
c o n d i t i o n s i s t o l o o k a t the d i s t r i b u t i o n of 'value'.betvreen p r o d u c e r s '
wages and p r o f i t s ; bettTeen the a r t i s a n s and d i s t r i b u t o r s . There i s a f a i r
degree of consensus t h a t ( t o quote the A l l I n d i a H a n d i c r a f t s Board) ' w h i l e
the denar.d f o r h a n d i c r a f t s b o t h i n the i n t e r n a l and e x t e r n a l markets has
i n c r e a s e d s u b s t a n t i a l l y , commensurate b e n e f i t s have not been f l o w i n g t o the
c r a f t s p e r s o n s . I n f a c t , t h e r e are i n s t a n c e s of g r o s s under-payraent of
wages, u n f a i r d e d u c t i o n s and unwarranted r e j e c t i o n s of the p r o d u c t s o f f e r e d
by the w o r k e r s ' . (1) I t i s , however, one t h i n g t o argue t h a t the b e n e f i t s
of e x p a n s i o n c o u l d be b e t t e r d i s t r i b u t e d ; i t i s a n o t h e r t o q u e s t i o n the
whole l e g i t i m a c y and u s e f u l n e s s of the p r i v a t e e n t r e p r e n e u r . Moes, f o r
example, a c t u a l l y c a l c u l a t e s an approximate ' r a t e of e x p l o i t a t i o n ' o f l a c e
workers of almost 300%, w h i c h i s the r e l a t i o n s h i p between the s u r p l u s o v e r
a r t i s a n s ' wages i n the f i n a l p r i c e s and wages - and c o n c l u d e s : 'the e x p o r t e r s
and t r a d e r s g a i n f r o m one woman's d a i l y p r o d u c t i o n almost t h r e e times the
amount t h e y pay her as wages'* (2) Most o t h e r v r r i t e r s , l e s s f o r m a l l y but
o f t e n more v i t u p e r a t i v e l y , argue (pr assxime) t h a t the p r o f i t s o f 'middlemen'
r e p r e s e n t ' e x p l o i t a t i o n ' : 'the f r u i t s o f the i n d u s t r y are a c t u a l l y grabbed by
the u s u r i o u s money l e n d e r s and e x t o r t i o n a t e middlemen*. (3)
'The bane o f
h a n d i c r a f t s m a r k e t i n g i s the l a r g e number of middlemen t h a t t h r i v e a t the
expense of the a r t i s a n on the one hand, and consumer a t the o t h e r ' (4)
...
'where the markets are w i d e r and expanding ^ g . toys and l a c q u e r w a r e ) the
a r t i s a n i s e x p l o i t e d by the middlemen; i t was found t h a t the s a l e p r i c e by
such i n t e r m e d i a r i e s t o consumers has a a i a r g i n v a r y i n g from 25% t o 150% and
t h a t t o r e t a i l e r s f r o m 6.3% t o 112.5%' (5) ... ' c o t t a g e i n d u s t r i e s s u f f e r
under p r e d a t o r y middlemen. F a m i l i e s work under a middleman v/ho s u p p l i e s them
w i t h raw m a t e r i a l s and c r e d i t , b o t h a t i n f l a t e d p r i c e s , and buys o f f them
t h e i r p r o d u c t i o n , a t low p r i c e s , creaming o f f from the r e t u r n t o l a b o u r a
f a t m a r g i n as the reward f o r h i s o r g a n i s a t i o n a l work', (6)
The viexiT o f economics w h i c h these statements r e p r e s e n t i s , however, v e r y
f a r removed frora t h a t vrhich sees d i s t r i b u t i o n as no l e s s u s e f u l o r n e c e s s a r y
than p r o d u c t i o n , and r e c o g n i s e s t h a t ' p r e d a t o r y ' middlemen p e r f o r m an i n v a l u a b l e
e n t r e p r e n e u r i a l f u n c t i o n : i d e n t i f y i n g market demands and b r i n g i n g t o g e t h e r
n e c e s s a r y i n p u t s . On t h i s i n t e r p r e t a t i o n ' e x p l o i t a t i o n ' cannot be equated
w i t h markups (the a d d i t i o n of 300-400% t o f .o.b. p r i c e s may w e l l be e x p l i c a b l e
l a r g e l y i n terms of wages and s a l a r i e s i n the d i s t r i b u t i o n s e c t o r o f i n d u s t r i a l
(1)
Annual l i e n o r t , 1978-79.
(2)
M i e s , o p . c i t . , p.107,
(3)
B. Subramanian, B, Ramakrishna Rao, A, Babu Eao, Handicaps of
H a n d i c r a f t s , I ^ r u k s h e t r a (Andhra U n i v e r s i t y ) , J a n u a r y 19S2,
(4)
See M,H.
p.21.
(5)
Abdul A z i z , o p . c i t .
(6)
P a u l H a r r i s o n , 'The
23 A u g u s t , 1979.
Uphadyaya, Economics of H a n d i c r a f t s
I n d u s t r y , New
f r u i t s of r u r a l i n d u s t r y ' . New
India
Delhi,
Scientist,
1973,
countries).
' E x p l o i t a t i o n ' a r i s e s o n l y i f 'super-nortaal' p r o f i t s a r i s e due
to monopoly power i n s u p p l y o r demand. There seems t o be a g e n e r a l
tendency f o r a r t i s a n s t o be much l e s s o r g a n i s e d than the m a n u f a c t u r e r s
who
c o n t r a c t them, and I n d i a n e x p o r t e r s t o be l e s s o r g a n i s e d than i m p o r t e r s .
The most extreme example of t h i s p r o g r e s s i o n i s diamond c u t t i n g , where
s e v e r a l hundred thousand a r t i s a n s work d i r e c t l y o r i n d i r e c t l y f o r j u s t over
ICOO m e r c h a n t / e x p o r t e r s who^ i n t u r n , buy roughs f r o m , and s e l l diamonds t o ,
one major agency: the C e n t r a l S e l l i n g O r g a n i s a t i o n (de B e e r s ) . But i n
g e n e r a l (and w i t h the major e x c e p t i o n of diamonds) t h e r e i s r e a s o n a b l y
f r e e e n t r y a t a l l stages of d i s t r i b u t i o n and the scope f o r s q u e e z i n g out
'excess' p r o f i t s would seem t o be l i m i t e d
There remains the p r a c t i c a l q u e s t i o n o f whether w o r k e r s ' c o n d i t i o n s
c o u l d be improved w i t h o u t a f f e c t i n g the demand f o r e x p o r t s .
The government
(at b o t h s t a t e and c e n t r a l l e v e l ) has t r i e d t o i n t r o d u c e l e g i s l a t i o n on
minimura wages, f o r some h a n d i c r a f t s , and on w o r k i n g c o n d i t i o n s . But the
d i s o r g a n i s e d n a t u r e of h a n d i c r a f t s p r o d u c t i o n and the u n d e r l y i n g problem
o f excess l a b o u r s u p p l y has made t h i s l e g i s l a t i o n l a r g e l y i n e f f e c t i v e , i n
the same way t h a t the F a c t o r i e s A c t i s f o r o r g a n i s e d p r o d u c t i o n . Even i f
i t were e f f e c t i v e , i t would o n l y xrork i f the demand f o r l a b o u r was i n e l a s t i c
( t h a t i s , i f Kachine s u b s t i t u t i o n p o s s i b i l i t i e s were l i m i t e d ) and f o r e i g n
demand p r i c e i n e l a s t i c ) . Another approach i s t o t r y t o r e p l a c e p r i v a t e
d i s t r i b u t i o n , i n whole o r i n p a r t .
(b)
A l t e r n a t i v e S t r u c t u r e s ; Co-operatives
There a r e two ways f r e q u e n t l y suggested t o improve l a b o u r c o n d i t i o n s :
the p r o v i s i o n by the government o f raw m a t e r i a l s and/or m a r k e t i n g o u t l e t s
to enable a r t i s a n s t o work i n d e p e n d e n t l y , and the e s t a b l i s h m e n t of
c o - o p e r a t i v e s . Two o t h e r s w h i c h tend t o be o v e r l o o k e d , p r o b a b l y because
t h e i r l i n k s w i t h c h a r i t i e s make them appear u n v i a b l e on a l a r g e s c a l e , a r e
v o l u n t a r y s o c i e t i e s and a l t e r n a t i v e m a r k e t i n g o r g a n i s a t i o n s (AMOs).
In p r i n c i p l e , c o - o p e r a t i v e o r g a n i s a t i o n of p r o d u c t i o n s h o u l d s o l v e many
of the probleras o f the s e c t o r . I t o f f e r s the p o s s i b i l i t y of l a r g e s c a l e
o r g a n i s a t i o n f o r many independent p r o d u c e r s , economies o f s c a l e i n raw
m a t e r i a l purchase and d i s t r i b u t i o n , and an o p p o r t u n i t y , by p r o v i d i n g an
independent source o f w o r k i n g c a p i t a l , f o r a r t i s a n s t o d i s e n t a n g l e
themselves from r e l a t i o n s h i p s x-rith middlemen w h i c h e n t a i l debt and u n e q u a l
b a r g a i n i n g power. C o - o p e r a t i v e s a r e , moreover, o f f i c i a l l y f a v o u r e d and
e n j o y f i n a n c i a l c o n c e s s i o n s and access t o raw m a t e r i a l s .
I t i s e x t r e m e l y d i f f i c u l t to g e n e r a l i s e s e n s i b l y and b r i e f l y about
the e x p e r i e n c e o f c o - o p e r a t i v e s s i n c e t h e r e a r e d i f f e r e n t k i n d s - producer
as opposed t o m a r k e t i n g - i n v o l v i n g d i f f e r e n t degrees o f s h a r i n g by members,
d i f f e r e n t t i e r s o f c o - o p e r a t i v e management and d i f f e r e n t r e l a t i o n s h i p s w i t h
s t a t e and u n i o n government o r g a n i s a t i o n . I n g e n e r a l , however, those xrjho
have reviewed t h e i r e x p e r i e n c e have come t o d i s c o u r a g i n g c o n c l u s i o n s , (1)
(1)
F o r example, C,P,S, N a y a r , A Case Study o f I n d u s t r i a l C o o p e r a t i v e s
i n Tuaikur, Centre f o r S t u d i e s i n D e c e n t r a l i s e d I n d u s t r i e s , Borabay,
1979,
A l t o g e t h e r i t i s e s t i m a t e d t h a t t h e r e are 15,000 r e g i s t e r e d handloora
c o - o p e r a t i v e s i n I n d i a and some 1,600 f o r o t h e r h a n d i c r a f t s . E x a c t l y how
many a r e a c t i v e i s a moot p o i n t . More than a t h i r d o f the handloom
c o - o p e r a t i v e s a r e s a i d t o be dormant, and n e a r l y t h r e e - q u a r t e r s o f the
h a n d i c r a f t c o - o p e r a t i v e s , a r a t e o f dormancy s i m i l a r t o t h a t of c o - o p e r a t i v e s
i n the economy as a whole, (1) Some of the a c t i v e ones do not a c t u a l l y
o p e r a t e as c o - o p e r a t i v e s ; o f t e n they have been s e t up by p r i v a t e m a n u f a c t u r e r s
t o take advantage o f s p e c i a l p r i v i l e g e s such as s u b s i d i s e d i n p u t s , w i t h o u t
any fundamental changes t o the wage s t r u c t u r e , (2)
Perhaps the most s e r i o u s l i m i t a t i o n of c o - o p e r a t i v e s i n h a n d i c r a f t s i s
t h a t t h e y are too l i m i t e d i n s c a l e , r e s o u r c e s , or i n q u a l i t y of management
to o f f e r t h e i r members a comprehensive a l t e r n a t i v e t o p r o d u c i n g f o r p r i v a t e
s a l e . And, as a consequence, members work most o f the tirae f o r t h e n s e l v e s ,
h a v i n g found s e l f employment t o be more r e g u l a r and no l e s s r e m u n e r a t i v e .
Craftsmen may be a t t r a c t e d t o work o u t s i d e the c o - o p e r a t i v e by the g r e a t e r
v r i l l i n g n e s s of master c r a f t s m e n o r money-lenders t o advance money (even i f
t h i s l e a d s t o dependence) w h i l e the c o - o p e r a t i v e ( f o r the b e s t of r e a s o n s )
i s r e l u c t a n t t o l e n d members f o r p r i v a t e consumption. Even i f t h e y are w e l l
irun and r e s p o n s i v e t o members, c o - o p e r a t i v e s almost c e r t a i n l y r e l y on s t a t e
o r u n i o n government f o r raw m a t e r i a l s s u p p l y , f i n a n c e and m a r k e t i n g o u t l e t s .
In some cases these government o r g a n i s a t i o n s a r e i n f l e x i b l e and i n e f f i c i e n t
so t h a t the c o - o p e r a t i v e s a r e u n a b l e to keep t h e i r members f u l l y o c c u p i e d ,
and t h e y n u s t t h e n t u r n t o p r i v a t e m a n u f a c t u r e r s and s u b - c o n t r a c t o r s t o
supplement t h e e r incoraes, IThere c o - o p e r a t i v e s a r e w e l l run and supported by
a r e l a t i v e l y e f f i c i e n t and committed s t a t e government - as itt T a m i l Nadu they have expanded t o c o v e r over h a l f of a l l handlooras but have l i t t l e impact
i n the e x p o r t s e c t o r where market d i s c i p l i n e s are h a r s h e r (though some apex
s o c i e t i e s , l i k e Cooptex, a r e now e x p o r t i n g ) . But the consequence of h a v i n g
a h e l p f u l s t a t e government i s t h a t c o - o p e r a t i v e s e f f e c t i v e l y become s t a t e - r u n
o r g a n i s a t i o n s , w i t h government r e p r e s e n t a t i v e s i n f l u e n c i n g many of the
management d e c i s i o n s o f t e n through seconded s t a f f , and t r i t h government
agencies r e s p o n s i b l e f o r p r o v i d i n g raw m a t e r i a l i n p u t s and f o r m a r k e t i n g the
product.
The l o g i c a l e x t e n s i o n of t h i s approach i s f o r s t a t e - r u n h a n d i c r a f t
o r handloora complexes r a t h e r t h a n c o - o p e r a t i v e s , and sone h a n d l o o n e x p o r t c e n t r e s
a r e b e i n g developed.
One f u r t h e r r e a s o n why c o - o p e r a t i v e s have become o n l y m a r g i n a l l y
i n v o l v e d i n e x p o r t s i s t h a t e x p o r t e r s and i m p o r t e r s p r e f e r n o t t o d e a l w i t h
them, f e a r i n g t h a t p r o d u c t i o n w i l l be d i s r u p t e d by i n f i g h t i n g o r t h a t the
d e s i g n , q u a l i t y c o n t r o l and speed of o u t p u t w i l l be r e l a t i v e l y low as a
r e s u l t of poor nanagenent and l a c k of d i s c i p l i n e . . Even government a g e n c i e s
such as the HIiEG and s t a t e h a n d i c r a f t c o r p o r a t i o n s , w h i c h s e l l h a n d i c r a f t s
i n I n d i a through t h e i r own emporia and were s e t up t o buy d i r e c t l y from
c o - o p e r a t i v e s as w e l l as i n d i v i d u a l a r t i s a n s , have found i t e a s i e r t o buy
from p r i v a t e m a n u f a c t u r e r s o r middlemen whom they d e s c r i b e as a ' n e c e s s a r y
e v i l ' s i n c e o n l y they can guarantee d e l i v e r y and q u a l i t y . Only 10 o f the
(1)
K.K. T a i n i n i and K. C h e l l a p p a n , Dormancy among I n d u s t r i a l C o - b p e r a t i v e s ,
V i a k i n t h Mehta I n s t i t u t e o f C o o p e r a t i v e Management, Pune, 1975.
(2)
Upadhyaya ( o p . c i t . ) p.32 quotes the c o - o p e r a t i v e s o r g a n i s e d by B i d r i
p r o d u c e r s as a b l a t a n t attempt by f a c t o r y ovmers t o 'hoodwink' the
goveriMnant and t a k e advantage of f a c i l i t i e s .
2,000 s u p p l i e r s t o the G e n e r a l Cottage I n d u s t r i e s Emporium, f o r example, are
c o - o p e r a t i v e s . For the s t a t e emporia the s i t u a t i o n i s worse; manjr emporia
managers do not appear t o know what c o - o p e r a t i v e s e x i s t i n t h e i r s t a t e .
D e s p i t e t h i s e x p e r i e n c e , the goverviment i s determined t o c o n t i n u e
promoting c o - o p e r a t i v e s . Some Ss.75C l a k h s w i l l be spent under the S i x t h
P l a n , p r p v i d i t g a s s i s t a n c e t o 300 h a i i c i i c r a f t s o c i e t i e s w i t h a t o t a l of 50,000
members, s e t t i n g up apex c o - o p e r a t i v e s i n each s t a t e , and a t the n a t i o n a l
l e v e l a f e d e r a t i o n of a l l h a n d i c r a f t c o - o p e r a t i v e s . For handlooms, the
government support of c o - o p e r a t i v i s a t i o n , w h i c h i s c h a n n e l l e d through the
s t a t e l e v e l handloom development c o r p o r a t i o n s , vill
be much l a r g e r .
V o l u n t a r y s o c i e t i e s i n v o l v e d iv thp. p r o d u c t i o n of h a n d i c r a f t s have
Q.ike /i'lOs) t h e same b a s i c o b j e c t i v e s as c o - o p e r a t i v a s , namely t o improve
the l o t of the w o r k e r s , but they operate i n a s l i g h t l y d i f f e r e n t way.
F i r s t , t h e i r management comraitte?^ tend t o i n c l u d e non-workers, though no
government r e p r e s e n t a t i v e s . Second, Lhey get l i t t l e ( i f any) government
support - t h e y a r e n o t e l i g i b l e f o r e p e c i ^ l c r e d i t , a s s i s t a n c e i n the s u p p l y
of raw m a t e r i a l s , nor f o r s p e c i a l treatment i n the a l l o c a t i o n o f e x p o r t
l i c e n c e s f o r garments, an i t e m which many groups produce. T h i r d , t h e y
u s u a l l y i n v o l v e an e d u c a t i o n a l i n p u t . Most s o c i e t i e s do n o t e x p o r t through
government o r g a n i s a t i o n s o r p r i v a t e e x r o r t e r s but through l o c a l l y based
e q u i t a b l e m a r k e t i n g a g e n c i e s , vjhich a r c n o r m a l l y n o n - p r o f i t making o r g a n i s a t i o n s ; above a l l they p r e f e r t o eirport themselves as o n l y then can t h e y
c l a i m the c a s h a s s i s t a n c p . cpna to vc-'^ip-tavad
e x p o r t e r s of h a n d i c r a f t s .
O f t e n , however, t h i s i s o n l y p o s s i b l e w i t h the a s s i s t a n c e o f f o r e i g n - b a s e d
AMOs.
AMOs such as Oxfam T r a d i n g and T r a i d c r a f t i n the UK o r Gepa i n l-Jest
Germany, l a r g e l y o p e r a t e on a c o i s n e r c i a l b a s i s , as t h e y have t o compete a t
the m a r g i n w i t h commercial h a n d i c r a f t i m p o r t e r s and r e t a i l e r s (though i n t r a m a r g i n a l s a l e s are u s u a l l y t o s y m p a t h e t i c customers x/ho are w i l l i n g t o pay
p r i c e s h i g h e r than i n commercial s h o p s ) . But by c u t t i n g out middlemen t h e y
aim t o i n c r e a s e the r e t u r n s t o the p i o d u c e r s . A p o r t i o n of any p r o f i t s made
i s u s u a l l y reimbursed t o the p r o d u c e r s i n the form o f a s o c i a l p r o j e c t f o r
t h e i r coiamunity, w h i l e some may be g i v e n t o h e l p new producer groups.
In
a d d i t i o n , u n l i k e most commercial i m p o r t e r s , t h e y o f f e r the producer groups
a s s i s t a n c e i n the form of a d v i c e on improved p r o d u c t i o n t e c h n i q u e s , new
d e s i g n s , b e t t e r p a c k a g i n g , e x p o r t procedures and m a r k e t i n g , t o h e l p them
upgrade t h e i r o u t p u t . They may a l s o p r o v i d e groups w i t h advances o f up t o
40% of the v a l u e o f t h e i r o r d e r s , t o buy t h e n e c e s s a r y raw m a t e r i a l s . AJ^Os
r a r e l y have the f i n a n c e ( o r e x p e r t i s e ) t o i n i t i a t e producer groups o r even
t o s u b s i d i s e them once they have been s e t up, except by p r o v i d i n g t h i s
a d v i c e f r e e . Groups must a l r e a d y be a b l e t o produce and s e l l h a n d i c r a f t s ;
and t o a v o i d c r e a t i n g a dependent r e l a t i o n s h i p , AMOs i n s i s t t h a t each group
must s e l l p a r t o f i t s output i n d e p e n d e n t l y , p r e f e r a b l y t o the l o c a l market.
( T h i s , however, o f t e n means s e l l i n g t o f o r e i g n t o u r i s t s r a t h e r than t o
I n d i a n s , w h i c h can be as v o l a t i l e a b u s i n e s s as e x p o r t i n g . )
I t i s too e a r l y t o e v a l u a t e the success o f AtlOs and v o l u n t a r y groups^
though one p o i n t i s c l e a r l y emerging, T l i i s i s t h a t the l e a r n i n g p r o c e s s i s
v e r y slow and i t nay be a l o n g tirae b e f o r e the groups are a b l e t o e x p o r t
m t h o u t h e l p frora the MlOs. Another p o i n t i s t h a t t h e i r l a b o u r c o s t s are
h i g h n e a r l y a l l goods bought by MOs
are a t h i r d more e x p e n s i v e than i f t h e y
had been bought frora p r i v a t e m a n u f a c t u r e r s . T h i s does n o t mean n e c e s s a r i l y
t h a t wages i n v o l u n t a r y s o c i e t i e s are h i g h e r ; r a t h e r i t seems t h a t p r o d u c t i v i t y
i s u s u a l l y lower.
S u b s t a n t i a l iraprovements w i l l be needed b e f o r e the groups
a r e a b l e t o compare w i t h p r i v a t e m a n u f a c t u r e r s .
(c)
The
Urban Bia.s
The h a n d i c r a f t s i n d u s t r y , b e i n g composed of s m a l l u n i t s w i t h l i t t l e
c a p i t a l r e q u i r e d , i s seen by many p o l i y n a k e r s as a p o t e n t i a l s o u r c e o f
employment f o r a t l e a s t sone of the m i l l i o n s of unemployed r u r a l w o r k e r s .
And one major r e a s o n advanced f o r the d e s i r a b i l i t y of l a b o u r i n t e n s i v e
h a n d i c r a f t ' o u t w o r k i n g ' i s t h a t i t r.iinimises r u r a l - u r b a n m i g r a t i o n .
Our
i n p r e s s i o n i s , , hcrever;, t h a t many h a n d i c r a f t s a c t i v i t i e s are l o c a t e d i n o r
around urban a r e a s .
As S a v a r a has n o t e d ; 'there are r e a s o n s t o b e l i e v e t h a t
the 60% share o f t o t a l employment i n r u r a l c r a f t s ( i n 1961) n i g h t have d e c l i n e d
t o 50% f o r the r e a s o n t h a t t h e r e has been a c o n t r a c t i o n o f a r t i s a n s i n u r b a n
a r e a s and toxms due t o e x p o r t o r i e n t a t i o n o f h a n d i c r a f t s ' . (1)
At p r e s e n t h a n d i c r a f t s p r o d u c t i o n i s q u i t e c o n c e n t r a t e d b o t h r e g i o n a l l y
and t d t h i n r e g i o n s . A c c o r d i n g t o one e s t i m a t e s i x n o r t h e r n s t a t e s a c c o u n t f o r
over 65% o f h a n d i c r a f t s e x p o r t s ( e x c l u d i n g geras and j e w e l l e r y and handlooms) and
75% of p r o d u c t i o n s UP •- 40%; P a j a s t h a n - 10%? Jaimnu and K a s h n i r s D e l h i ,
Haryana and Punjab - around 5% each. I J i t h i n t h e s e s t a t e s t h e r e a r e s e v e r a l
major u r b a n h a n d i c r a f t c e n t r e s 5 eg. i n UPj Moradabad f o r b r a s s w a r e ^ Bhadohi
and M i r z a p u r f o r c a r p e t s ^ i n G u j u r a t ^ S u r a t f o r diamond c u t t i n g , R a j a s t h a n ^
J a i p u r f o r s e n i - p r e c i o u s s t o n e s and o t h e r i t e m s ; i n Haryana, P a n i p a t f o r
d h u r r i e s and h o u s e h o l d l i n e n . Over 75% o f handloom f a b r i c d e s t i n e d f o r e x p o r t
o r i g i n a t e s i n the s o u t h p m a i n l y i n T a m i l NadU;; and p r o d u c t i o n f o r e x p o r t i s
c o n c e n t r a t e d i n c e r t a i n c e n t r e s . There a r e problems h e r e i n d e f i n i n g what i s
an urban i n d u s t r y as opposed t o a v i l l a g e o r r u r a l i n d u s t r y . But i t seems
c l e a r t h a t p r o d u c t i o n of h a n d i c r a f t s i s not as s i m p l e a s o l u t i o n to r u r a l
unenplojraient as o r i g i n a l l y t h o u g h t .
The r e a s o n s f o r such c o n c e n t r a t i o n o f h a n d i c r a f t s p r o d u c t i o n a r e f a i r l y
o b v i o u s , i n c l u d i n g m a n a g e r i a l ^ t e c h n o l o g i c a l and i n f r a s t r u c t u r a l f a c t o r s j
and d i s t r i b u t i o n c o s t s . The m a n a g e r i a l c o n s t r a i n t i s perhaps the most
i m p o r t a n t i n r e s t r i c t i n g the s p r e a d of e x i s t i n g b u s i n e s s i n t o r u r a l a r e ^ s .
As e x p l a i n e d above, the fragmented s t r u c t u r e o f h a n d i c r a f t s p r o d u c t i o n
r e q u i r e s a l a r g e m a n a g e r i a l i n p u t s c o - o r d i n a t i n g the v a r i o u s u n i t s t o ensure
a c o n t i n u o u s f l o w of p r o d u c t i o n (and employment) and s u p e r v i s i n g them t o c o n t r o l
the q u a l i t y of t h e i r o u t p u t . Many are f a n i l y b u s i n e s s e s and t h e r e i s a
g e n e r a l r e l u c t a n c e t o s h a r e the nanagenent w i t h n o n - f a m i l y employees.
To
sone e^ftent t h i s c o n s t r a i n t can be overcome by the use o f s u b - c o n t r a c t o r s ;
f o r i n s t a n c e t h i s has a l l o w e d the k n o t t i n g p a r t o f the c a r p e t i n d u s t r y t o
spread out f r o n Bhadohi and M i r z a p u r t o v i l l a g e s as f a r as 30 m i l e s away.
(1)
J a i n Savaras o p . c i t , j p.122.
Sometimes the t e c h n o l o g y i s i n a p p r o p r i a t e f o r r u r a l p r o d u c t i o n .
F o r i n s t a n c e 5 i n t h s case o f d h u r r i e s _ w h i c h are on average 3 f e e t w i d e ,
the f r a r i e l o o a s (which cannot be f o l d e d away) are s i m p l y too l a r g e f o r
the average r u r a l (or even urban) h o u s e h o l d . Even i f the loom c o u l d be
•modified, the h i g h l e v e l of o u t p u t (3 d h u r r i e s of 8-12 metres i n l e n g t h
oer l o o n per day) r e q u i r e s a l a r g e volume o f w o o l , too b u l k y t o be s t o r e d
i n the average house o r t o be d i s t r i b u t e d d a i l y by the m a n u f a c t u r e r s .
The
use of e l e c t r i c a l l y d r i v e n t o o l s and machines ^ as f o r example i n the
p l a n i n g and p o l i s h i n g p r o c e s s e s of the b r a s s w a r e i n d u s t r y and i n gen
p o l i s h i n g , a l s o b i a s p r o d u c t i o n towards urban a r e a s where e l e c t r i c i t y
i s n o r a r e a d i l y a v a i l a b l e . As t e c h n o l o g y i s upgraded and machines are
i n t r o d u c e d t o reduce the anount of drudgery i n h a n d i c r a f t s p r o d u c t i o n ,
t h i s b i a s m i l be i n c r e a s e d . E x p o r t e r s a l s o r e q u i r e a n i n i n u n aiiount of
i n f r a s t r u c t u r e ( t e l e x , telephone, h o t e l s ^ etc) f o r d e a l i n g with f o r e i g n
importers.
Another p r o b l e n i s the t r a n s p o r t c o s t i n v o l v e d i n the d i s t r i b u t i o n
of raw m a t e r i a l s t o r u r a l c r a f t s m e n and the c o l l e c t i o n of the f i n a l p r o d u c t .
These c o s t s can be q u i t e h i g h and are o n l y j u s t i f i e d where the v a l u e - a d d e d
i s a l s o h i g h ; as i n the c a r p e t i n d u s t r y ^ o r where r u r a l vrages are nuch lower
than i n the urban c e n t r e . I n the brassx^are and gem c u t t i n g i n d u s t r i e s the
t i n e taken to do each p r o c e s s i s q u i c k . F o r b r a s s t h i s means t h a t a l a r g e
volume o f s e m i - f i n i s h e d p r o d u c t s has t o be s h i f t e d d a i l y .
I n the case o f
gens a l t h o u g h the v a l u e - a d d e d t o f r e i g h t r a t i o i s h i g h , the atiount of
c a p i t a l t i e d up i s a l s o h i g h , and the p o s s i b i l i t y o f d e l a y X/rill d e t e r
m a n u f a c t u r e r s f r o n sending s t o n e s i n t o r u r a l a r e a s .
D i s t a n c e can a l s o
cause s e r i o u s d e l a y s i n the p r o d u c t i o n p r o c e s s i f an a r t i s a n runs out of
rax; n a t e r i a l s ,
Sone of the l a r g e r c a r p e t m a n u f a c t u r e r s have s e t up
d i s t r i b u t i o n c e n t r e s t o overcone t h i s d i f f i c u l t y . More c e n t r e s a r e r e q u i r e d
i f the i n d u s t r y i s t o spread f u r t h e r .
A l l these f a c t o r s have h e l p e d t o c r e a t e h a n d i c r a f t c e n t r e s ; once
c r e a t e d they have t h e i r ox/n m u l t i p l i e r e f f e c t , a t t r a c t i n g l a b o u r and
c o n t i n u i n g t o grow. I n sone c a s e s , s u c h as Moradabad and B h a d o h i , t h e y
appear t o have become q u i t e c o n g e s t e d , and m a n u f a c t u r e r s have t h e r e f o r e t r i e d
t o e s t a b l i s h new c e n t r e s . I n D e l h i v a r i o u s a t t e m p t s have been made t o s e t
up b r a s s n a k i n g and a l s o c a r p e t k n o t t i n g u n i t s , but these have g e n e r a l l y been
unsuccessful.
Sorae m a n u f a c t u r e r s are a l s o t r y i n g t o e x t e n d t h e i r p r o d u c t i o n base i n t o
r u r a l a r e a s , where lower wages can o f f s e t the d i s a d v a n t a g e s mentioned above.
A d h u r r y m a n u f a c t u r e r i n P a n i p a t has been a b l e t o h a l v e .his c o s t s by
engaging 100 women i n about 10 v i l l a g e s some 30 m i l e s ax-ray t o xjeave
d h u r r i e s f o r h i n . T h e i r p i e c e r a t e xrages are s a i d t o be much lower because
t h i s i s not t h e i r f u l l - t i m e o c c u p a t i o n ; they produce o n l y 2 t o 3 r u g s a
month. Such a s l o w p r o c e s s i s not s u i t a b l e f o r i n t e r n a t i o n a l t r a d e where
the demand i s i n c r e a s i n g l y f o r l a r g e o r d e r s t o be d e l i v e r e d w i t h i n a s h o r t
space o f t i m e . The b u l k o f p r o d u c t i o n ( i n t h i s c a s e ) w i l l t h e r e f o r e have
t o remain i n the urban a r e a s .
I n M i r z a p u r a c a r p e t raanufacturer i s
d e v e l o p i n g s u p p l i e s of handspun y a m from shepherds i n the f o o t h i l l s of the
H i m a l a y a s . A t p r e s e n t these shepherds s p i n o n l y a s m a l l p e r c e n t a g e o f
t h e i r XTOOI p r o d u c t i o n f o r t h e i r oxra u s e , and the r e s t i s s o l d t o the
yam
spinning m i l l s *
A l t h o u g h the c o l l e c t i o n c o s t s , w h i c h are borne by the
m a n u f a c t u r e r 5 a r e h i g h , t h e s e a r e o f f s e t by the much lower c o s t of the
handspun y a r n and by the f a c t t h a t i t s p h y s i c a l p r o p e r t i e s a r e much b e t t e r
f b t k n o t t e d C a r p e t s than m i l l s p u n y a r n .
I n A p r i l 1901 handspun xrool c o s t
Rs.37 %& 43 per k g , , i e . P.s.27 t o 33 f o r the raw xrool and Rs.lO f o r the
s p i n n i n g , compared t o Rs.50 t o 55 f o r the a i l l s p u n y a r n .
One r e a s o n t h i s
e x p e r i m e n t i s more l i k e l y t o be s u c c e s s f u l than the d h u r r y example above i s
t h a t i t i s concerned x r i t h p r e p a r a t i o n o f a rax? m a t e r i a l , xrhere the speed o f
p r o d u c t i o n i s n o t so i m p o r t a n t as t h e r e i s no q u e s t i o n o f d e s i g n s becoming
outdated.
To sum up, i t seems t h a t the e x p o r t e x p a n s i o n of most h a n d i c r a f t
i n d u s t r i e s i s b y - p a s s i n g the r u r a l a r e a s .
I n some cases t h i s i s f o r
t e c h n o l o g i c a l r e a s o n s . But i n g e n e r a l i t i s because o f poor i n f r a s t r u c t u r e ,
l e a d i n g t o h i g h t r a n s p o r t c o s t s , and the d i f f i c u l t y of f i n d i n g s k i l l e d l a b o u r ,
raw m t e r i a l s s u p p l i e s and m a r k e t i n g o u t l e t s . The government (both a t s t a t e
and c e n t r a l l e v e l s ) has r e c o g n i s e d t h e s e problems and has s e t up many t r a i n i n g
c e n t r e s i n r u r a l a r e a s , p a r t i c u l a r l y f o r c a r p e t s . But u n t i l b a s i c i n f r a s t r u c t u r e
i n r u r a l a r e a s i s a l s o improved, the nexrly t r a i n e d l a b o u r w i l l tend t o r a i g r a t e
t o the e x i s t i n g p r o d u c t i o n c e n t r e s .
(d)
Technological
Choice
The q u e s t i o n o f a p p r o p r i a t e t e c h n o l o g y f o r the I n d i a n h a n d i c r a f t s i n d u s t r y
has a l r e a d y been r a i s e d i n the d i a l c u s s i o n above o f the c o n s t r a i n t s t o e x p o r t s
(secti<?n 4 ( d ) ) . j:iex7 t6Ctfni(|uis Aie s a i d t o be r e i i u i r e d t o c r e a t e new markets
6 t t o ciiirtiKiete w i t h O t h ^ r e x p o r t e r s o f h a n d i c r a f t s , on q u a l i t y , q u a n t i t y and
p r i c e , t h e y niay a l s o h e l p t o r a i s e i n d i . v i d u a l xrorkers' wages and t o reduce
thfe d r u d g e r y i n v o l v e d i n many o f the s t a g e s o f p r o d u c t i o n .
But a t the sane
t i m e t h i s c o u l d reduce o v e r a l l employment i n the h a n d i c r a f t s i n d u s t r y .
In
a d d i t i o n new t e c h n i q u e s a r e c a p i t a l - i n t e n s i v e and a c c e s s t o c a p i t a l i s
skewed, f a v o u r i n g the l a r g e r m a n u f a c t u r e r s and so l e a d i n g t o a n o r e concentratedJstructure of production.
The c h o i c e o f t e c h n o l o g y i n v o l v e s a c o m b i n a t i o n o f e n g i n e e r i n g , c o n n e r c i a l ,
economic and s o c i a l c o n s i d e r a t i o n s . The government has l i m i t e d d i s c r e t i o n
b u t can a f f e c t the c h o i c e , p a r t i c u l a r l y by v a r y i n g the a v a i l a b i l i t y o f , and r a t e o f
d u t y on, i m p o r t e d equipment, and by i t s oxm r e s e a r c h e f f o r t s . An e c o n o m i c a l l y
e f f i c i e n t c h o i c e o f t e c h n i q u e w i l l need t o r e c o g n i s e t h a t 'market' f a c t o r
p r i c e s - i n t e r e s t r a t e s and x/ages, and a l s o f o r e i g n exchange r a t e s - do not
r e f l e c t r e l a t i v e s c a r c i t y i n s o c i a l terms. The c o n s i d e r a b l e body o f l i t e r a t u r e
i n shadox7 p r i c i n g i n I n d i a s u g g e s t s t h a t - x-rith many q u a l i f i c a t i o n s t o allox-r
f o r d i f f e r e n c e s i n c a p a c i t y u t i l i s a t i o n between i n d u s t r i e s , s e a s o n a l i t y , and
l o c a l l a b o u r market c o n d i t i o n s - i t i s p r o b a b l y c o r r e c t t o a p p l y a shadox? xrage
d i s c o u n t o f about 50% o f the market xrage dnd a 50% premium (on some a c t i v i t i e s
much more) t o the c o s t o f c a p i t a l and a s i n i l a r premium t o f o r e i g n exchange. (1)
I f c o s t - b e n e f i t a n a l y s i s was a p p l i e d a c c o r d i n g t o t h e s e p r i n c i p l e s t h e r e would
be a p r e d i s p o s i t i o n a g a i n s t more s o p h i s t i c a t e d t e c h n o l o g y even when c o m m e r c i a l l y
v i a b l e ^ But t h e r e i s one i m p o r t a n t e x c e p t i o n ; the case when o u t p u t (and i n t h i s
case escports) i s i n c r e a s e d so t h a t p r o d u c t i v e eraployment i s i n c r e a s e d o v e r a l l ,
even i f l e s s l a b o u r i n t e n s i v e methods are u s e d . I f some more s o p h i s t i c a t e d
machittSS ar6 used t h e r e f o r e t o expand the o v e r a l l s a l e s o f h a n d i c r a f t i t e m s ~
by i n c r e a s i n g v o l u n e p r o d u c t i o n w i t h i n a s p e c i f i e d t i a e p e r i o d o r p e r m i t t i n g
access t o new q u a l i t y ranges - then i t c o u l d be j u s t i f i e d e c o n o a i c a l l y
as w e l l as c o ^ s a e r c i a l l y .
I n the case of t e x t i l e s - weaving and f i n i s h i n g - the i s s u e o f t e c h n o l o g i c a l c h o i c e can be posed i n terms of s e v e r a l c l e a r l y d e f i n e d c h o i c e s
f o r x^hich i t i s p o s s i b l e , i n g e n e r a l terms, t o e v a l u a t e the economic c o s t s
and b e n e f i t s . I t s h o u l d be s t r e s s e d t h a t c o n p a r i s o n s are based on some
v e r y approximate e s t i m a t e s of such i n f o r m a t i o n as the t o t a l investment i n
handloom w e a v i n g , and the number o f weavers. Technology, o f c o u r s e , i s not
s t a t i c e i t h e r . I t a l s o assumes v/e a r e c o i t p a r i n g u n i f o r m p r o d u c t s ( s a y ,
one s t a n d a r d t i e t r a of c l o t h ) .
A l t e r n a t i v e Heaving
Hand
(1)
(2)
(3)
(4)
(5)
(6)
b
InvestiSent ( t o t a l )
(Rs, mn)
3.93
Technologies
Looia Type'
HonHigh speed
Power
automated
automatic
(cotton) ( m i l l ) l o o a ( m i l l ) loou
2,51
2.39
Shuttlelass
( m i l l ) loom
10,7C
30,37
Investment per
VTorker (Fts,)
300
Average M o n t h l y
Wages (Rs,)
175
4,950
9,122
70,000
421,416
300
500
550
600
Labour c o s t
(Rs, metre)
1,65
Capital cost
(Rs, metre)
0,13
(A) + ( 5 :
1,73
0.29
0,25
0,15
0,14
0,08
0,03
0,37
1,72
0,37
0,33
0,53
1,05
Source:
From P,K, Adhyaru, P, A r u b h a i , B,V, I y e r , P.C, Mehta, J,G, P a r i k h ,
'Appropriate technology f o r I n d i a ' , Indian T e x t i l e J o u r n a l ,
October 1930,
Notes:
a - s i n g l e s h i f t work i n handlooms; 3 s h i f t work on powered
machinery
b - investment c o s t s i n c l u d e p r e p a r a t o r y work
c - annual c a p i t a l c o s t per n e t r e c a l c u l a t e d by d i s c o u n t i n g a t
16% over 10 y e a r s .
The most s t r i k i n g f e a t u r e o f these e s t i m a t e s i s the h i g h l y u n f a v o u r a b l e
economies o f handweaving i n r e l a t i o n t o b o t h powerlooras and the l e s s
s o p h i s t i c a t e d m i l l - l o o m s , We have n o t allox/ed f o r shadow p r i c i n g but i t
would r e q u i r e l a b o u r t o have a z e r o o p p o r t u n i t y c o s t t o approach the
economic e f f i c i e n c y of powerloora and non-autoraatic m i l l s - and, f o r t h i s ,
the whole o f the wage xrould c o n s t i t u t e , i n e f f e c t , a s u b s i d y , Moreover,
i n r e l a t i o n t o powerlooin p r o d u c t i o n handloosas are not o n l y l a b o u r i n t e n s i v e
b u t a l s o (and s u r p r i s i n g l y ) c a p i t a l i n t e n s i v e and i t i s t h i s w h i c h most s e r i o u s l y
undermines the economic b a s i s of p r o d u c t i o n - though, of c o u r s e , the c a p a c i t y
use and e s t i m a t e s o f investment c o s t are e x t r e m e l y i m p r e c i s e and m i g h t l o o k
v e r y d i f f e r e n t i f adapted f o r the v i n t a g e and r e p l a c e m e n t c o s t of equipment.
I n p r a c t i c e , t h e r e f o r e , i f handlooms a r e t o be p r e s e r v e d , i t c o u l d o n l y
be f o r s o c i a l r e a s o n s and by r e g u l a t i n g the c o m p e t i t i o n t o X'rtiich t h e y a r e
s u b j e c t e d . I f l a b o u r c o s t s were s u b s t a n t i a l l y d i s c o u n t e d and a premium
a p p l i e d t o c a p i t a l c o s t s , d e c e n t r a l i s e d powerlooms would u n d o u b t e d l y emerge
over m i l l - l o o m s as the most e c o n o m i c a l l y e f f i c . \ i n t s o l u t i o n ; b u t not handlooms. T h i s ' i n t e r m e d i a t e ' s o l u t i o n - the s u p e r i o r i t y i n economic terms i n
d e v e l o p i n g c o u n t r i e s of semi-cuitomatic looms over b o t h c a p i t a l i n t e n s i v e
advanced m i l l m a c h i n e r y and handlooms ( a t l e a s t f o r mass p r o d u c t i o n ) - i s
c o n f i r m e d by s t u d i e s i n b o t h I n d o n e s i a and K o r e a , (1)
The above c o n c l u s i o n s
h a v e , however, t o be m o d i f i e d t o t a k e account o f non-homogeneous p r o d u c t s .
Handweaving can h a n d l e o r d e r s i n s m a l l q u a n t i t i e s vrithout l o s s i n e f f i c i e n c j r
o r i n c r e a s e i n c o s t o r w a s t e , and complex c o l o u r p a t t e r n s , p r o v i d e d t h a t
f a b r i c s have a low d e n s i t y and low w i d t h . E x p o r t s can e n l a r g e t h i s
( i n h e r e n t l y l i m i t e d ) demand over and above the home market r e s e r v e d f o r
h a n d l o o n s . The q u e s t i o n o f p r o d u c t d e f i n i t i o n a p p l i e s , a l s o , i n the o p p o s i t e
sense; m i l l s seek advanced m a c h i n e r y as nuch f o r q u a l i t y reasons as c o s t .
But these crude e s t i n a t e s do suggest a key r o l e f o r e x p o r t s ; i n c r e a t i n g a
s p e c i f i c denand f o r h a n d l o o n p r o d u c t s w h i c h i n s u l a t e s them f r o n machine
competition.
I n the case o f b o t h h a n d l o o n and powerloom weaving the f i n i s h i n g p r o c e s s
- d y e i n g and p r i n t i n g - i s a l s o performed o u t s i d e f a c t o r i e s , much o f i t i n
the s n a i l s c a l e s e c t o r (the need f o r such f i n i s h i n g b e i n g nuch g r e a t e r i n the
c a s e o f pox/erloons). There a r e t e c h n o l o g y c h o i c e s t o be nade h e r e t o o ,
though the n o r e l a b o u r i n t e n s i v e o p t i o n s are l a r g e l y c o n f i n e d t o t h e
f i n i s h i n g o f powerloom f a b r i c s ( t h e m i l l s e c t o r , l a r g e l y , c a r r i e s out i t s
own p r i n t i n g , and i s g e a r e d , n o r e , t o nan-nades) w h i l e t h e handloom weavers
u s u a l l y c a r r y out d y e i n g b e f o r e h a n d ) .
The main t e c h n i q u e s employed i n the
d e c e n t r a l i s e d s e c t o r a r e r o l l e r and (hand) s c r e e n p r i n t i n g as w e l l as the
t r a d i t i o n a l b l o c k p r i n t i n g . F r o n T a b l e 9 below i t can be seen t h a t r o l l e r
p r i n t i n g - t h e n o s t c a p i t a l i n t e n s i v e o f the v a r i o u s v i l l a g e i n d u s t r y
t e c h n i q u e s - compares f c i v o u r a b l y w i t h o t h e r t e c h n o l o g i e s i n terms of l a b o u r
and c a p i t a l c o s t (and t h i s i s even more the case where runs a r e s h o r t and
d e s i g n s complex - i n J e t p u r , one o f the main ' c o t t a g e ' i n d u s t r y f i n i s h i n g
c e n t r e s , p r i n t l e n g t h s average around 500 n e t r e s and f o r each d e s i g n and c o l o u r
c o m b i n a t i o n around 100 n e t r e s ) . The main c o n s t r a i n t on the e x p a n s i o n o f t h i s
k i n d o f p r i n t i n g has proved t o be a s h o r t a g e o f s k i l l e d w o r k e r s - and
p o l l u t i o n - r a t h e r than t h e economics of p r o d u c t i o n .
(1)
H. H i l l , 'The economics of r e c e n t changes i n the weaving i n d u s t r y ' .
B u l l e t j . n o f I n d o n e s i a n Economic S t u d i e s , J u l y
1930.
Y.I'T.Rhee and L.E. W e s t p h a l , 'A m i c r o e c o n o m e t r i c i n v e s t i g a t i o n i n t o c h o i c e
of t e c h n o l o g y ' . J o u r n a l o f Development Economics, v o l . 4 ,
1977.
TABLE 9
Comparison of P r i n t i n g
Technology
Hand s c r e e n
printing
".oiler
printing
(1)
Capital
c o s t per
worker (Rs)
notary screen
printing
(imported
equipment)
66,700
133,300
(3)
Labour
cost
(T^s/aei-re)
Capital
cost
(Rs/metre)
(3) *
0.17
0.03
0.20
400
0.G2
0.02
0.04
450
0.0 8
0.20
0.23
475
0.04
0.15
0.13
3,300^
23,600^
Automatic
f l a t b e d screen
printing
(2)
Average
monthly
wage
Technologies
Source:
As i n T a b l e 3
IJotes:
a - Investment c o s t r e l a t e s t o the c o s t of t a b l e s i n the
handscreen/roller techniques.
The c o s t of screens and
i s not i n c l u d e d but i s l e s s i m p o r t a n t .
b - Single s h i f t operations
i n hand s c r e e n p r i n t i n g .
c - C a p i t a l c o s t per metre as i n T a b l e 3.
(4)
rollers