IMPACT OF GLOBALISATION ON TEXTILE INDUSTRIES

IN KANNUR DISTRICT

Minor Project Report

submitted to University Grants Commission,

New Delhi

By

MAHIMA C V

Assistant Professor

Post Graduate Department of Commerce

PazhassiRaja N S S College ,Mattannur

Kannur,Kerala State,India-670702

Submitted to

The UGC-New Delhi

No:MRP(H)-0389/12-13/KLKA004/UGC-SWRO,Dt.23/09/2013

Research Grant Sanctioned by

UNIVERSITY GRANTS COMMISSION

NEW DELHI

DECLARATION

I, MAHIMA C V, hereby declare that the project report entitled “IMPACT OF GLOBALISATION ON TEXTILE INDUSTRIES IN KANNUR DISTRICT” which is being submitted to University Grants Commission, NewDelhi is a bonafied research work done by me with the financial assistance received under Minor Research Project(MRP)scheme of University Grants Commission,New Delhi.

Place: KannurMAHIMA C V

Date: 19/07/2017Assistant Professor

Post Graduate Department of Commerce

Pazhassi Raja N S S College,Mattannur

ACKNOWLEDGEMENT

I express my profound gratitude to God almighty for his blessings for completing this project work successfully.

I would like to express my sincere gratitude to University Grants Commission,New Delhi for sanctioning financial assistance to conduct this study.

I deeply indebted and express my sincere thanks to the staff of District Industries centre,Kannur their valuable guidance and suggestions at every stage of my work.I thank experts and respondents who co-operated with my survey.

I take this opportunity to thank the Librarian and staff at kerala university and Mahatma Gandhi university for their valuable services.

I remember with a special note of thanks to Prof. K N Vijayalakshmi ,former HOD of Commerce ,PRNSS College, Mattannur and Dr.K. Pradeep Kumar ,Former Principal of PRNSS College,Mattannur for their encouragement to complete the study.

I wish to thank Dr.T L RemaDevi,Principal, faculties of commerce,UGC cell co-ordinator and office staff of PRNSS College, Mattanur for their help.

I also express sincere thanks to my friends and familyfor their constant support in completion of the project work.

MAHIMA C V

CONTENTS

LIST OF TABLES

LIST OF FIGURES

ABBREVIATIONS

SL.NO

CHAPTERS

PAGE NO.

I

II

III

IV

V

INTRODUCTION

REVIEW OF LITERATURE

THEORETICAL FRAMEWORK OF STUDY AREA

DATA ANALYSIS AND INTERPRETATION

FINDINGS, SUGGESTIONS AND CONCLUSION

1-7

8-14

15-62

63-86

87-97

BIBLIOGRAPHY

APPENDICES

LIST OF TABLES

Table No.

Title of Table

Page No.

3.1

Capital requirement in textile industry

23

3.2

SWOT Analysis of textile industry

23

3.3

District wise sales outlets under KVIB

53

4.1

Beneficiary schemes of kanjirode weavers society

65

4.2

Range of products for local and foreign market

66

4.3

Financial assistance to education

67

4.4

Retirement benefits from society

68

4.5

Sales turnover of the society

69

4.6

Netprofit of the society

70

4.7

Sales analysis during 2014-2015

70

4.8

Gender wise classification

73

4.9

Age wise classification

74

4.10

Education wise classification

74

4.11

occupation wise classification

75

4.12

Income wise classification

75

4.13

Regularity in using khadi products

76

4.14

Source of khadi products

76

4.15

Duration of using khadi products

77

4.16

Reason behind using khadi products

77

4.17

Source of information about khadi products

78

4.18

Publicity aspects of khadi centre

78

4.19

Factors popularize khadi products

79

4.20

Level of satisfaction and usage of Khadi products in respect of availability and accessibility of khadi products.

79

4.21

Awareness about varieties of khadi products

80

4.22

Satisfaction level with services provided by khadi outlets

80

4.23

Opinion about the statement “using Khadi products once in a week”

81

4.24

Impact of khadi products on cultural values

81

4.25

Opinion about the statement” khadi exhibition and festival outlets are the way to improve sale of khadi products.”

82

4.26

Innovations on khadi products

82

4.27

Importance of khadi products in Kerala

83

4.28

Hindrances in popularity of khadi products

83

4.29

Problems in production

84

4.30

Problems in human resource management

84

4.31

Problem with regard to marketing of khadi products

85

4.32

Problems in export market

85

4.33

Impact of competition on khadi products

86

LIST OF FIGURES

Figure

Title of Figure

Page Number

3.1

Production share of various textile sectors

26

3.2

Production process of Payyanur khadi unit

60

4.1

Sales analysis of Kanjirode weavers

70

4.2

Sources of khadi products

77

ABBREVIATIONS

KVIB:Khadi Village Industries Board

KKVIB: Kerala Khadi Village Industries Board

KVI : Kerala Village Industries

KVIC: Khadi and Village Industries Commission

REGP: Rural Employment Generation Programme

HWCS:Handloom Weavers Co-operative Society

CHAPTER-I

INTRODUCTION

The New Economic Policy is a set of policies and administrative procedures introduced in July 1991 to bring about changes in the economic direction of the country. It has got two major components: Stabilisation and structural reforms. These two policies – Stabilization and Structural Adjustment Policies are introduced as New Economic Policy with the three broad categories, namely Liberalisation, Privatisation and Globalisation (LPG). The real thrust to the globalization process was provided by the New Economic Policy. Globalisation is the process of integration of the world into one huge market through financial flows, trade in goods and services and corporate investment between nations. Globalisation aims at breaking (erasing) the political, economic, social, cultural, ecological, geographical and educational barriers and integrating the whole world into a ‘Global Village’ and allows foreign direct investment in the country and it led to an unequal competition between the giant multinational companies and small scale industries in India.

The product of globalisation process should realize the concepts like “Whole Earth is one Family” and “All people shall be prosperous”. In the globalising world, the economy has changed dramatically to transform into a global economy characterized not only by free trade in goods and services but even more, by free movement of labour, capital, skill and entrepreneurship.Globalisation encompasses the following features: i) Operating and planning to expand business throughout the world; 5 ii) Erasing the differences between domestic market and foreign market; iii) Buying and selling goods and services from/to any country in the world; iv) Establishing manufacturing and distribution facilities in any part of the world based on the feasibility and viability rather than national consideration; v) Product planning and development are based on market consideration of the entire world; vi) Sourcing of factors of production and inputs like raw materials, machinery, finance, technology, human resources, (labour/ workers) managerial skills from the entire globe; vii) Global orientation in strategies, organizational structure, organizational culture and managerial expertise and viii) Setting the mind and attitude to view the entire globe as a single market. Global companies/Institutions plan or venture not only on national markets, but also venture globally and view themselves as a global company/ institute. Executives and employees of such companies/ institutes are trained and tuned in world-wide operations.

As essential conditions for Globalisation, the Governments of various countries should provide the following conditions for smoothening the process i) Liberalizing the rules and regulation of control ii) Removal of Quotas and Tariffs iii) Providing freedom to the business and industry iv) Providing infrastructural facilities v) Removal of bureaucratic hurdles vi) Encouraging research and development vii) Encouraging the competitiveness based on quality, price, delivery, customer service etc. viii) Providing autonomy to the public sector to compete with private sector companies ix) Providing administrative and governmental support x) Developing money and capital markets. Globalisation does not take place in a single instance. It takes place gradually through an evolutionary approach. According to Ohamae, globalisation has five stages. They are: i) Domestic company/institute exports to foreign countries through the dealers or distributors or branches of the home country, ii) In the second stage, the domestic company/ institute exports to foreign countries directly on its own. iii) In the third stage, the domestic company/ institute become an International company/ institute by establishing production and marketing operations in various key foreign countries. 7 iv) In the fourth stage, the company/ institute replicates a foreign company / institute in the foreign country by having all the facilities including R&D, full-fledged human resources etc. v) In the fifth stage, the company/ institute become a true foreign Company / institute by serving the needs of foreign customers just like the host country’s company serves. Thus, globalisation means globalising the marketing, production, investment, technology and other activities.

The goal of each country, regardless of its economic system is to increase productivity so as to fulfil all the needs and wants of its citizens and thus to improve the standard of living of the people. Indian textile industry plays a major role to achieve this objective. Industrialization is the process in which a society transformed from agricultural oriented to industrial oriented through the manufacturing of goods and services. Individual manual labour is often replaced by mechanized mass production and craftsmen are replaced by assembly lines. Industrial development in India has become the yardstick to be applied to judge the countries actual development. The small and medium sized industries play a key role in the growth of textile industries. Economic liberalization and globalization of trade in the country has brought in challenges and opportunities to Indian textile industry particularly in small scale and medium scale industries

The textile industry is one of the main pillar holding the Indian economy in view of its significant contribution to GDP. Indian textile industry is one of the largest leading textile industries in the world. Textile industry in India largely depends on the textile manufacturing and export. The small and medium sized industries play a key role in the growth of textile industries. Economic liberalization and globalization of trade in the country has brought in challenges and opportunities to the Indian textile industry, particularly in small scale and medium scale industries. The present study analyses the effects of globalization on textile industries with special reference to Kannur district.

• Origin of the research problem

Under globalisation, numerous problems have been identified with the textile industry in India. These include shortage of capital, raw material, spare parts and machinery, competition from large scale industries and complicated procedures which must be followed in order to expand a business shortage of imported raw materials, spare and machinery has been added problem mainly due to difficulty of import licenses for these inputs. Under this circumstance, the present study has been attempted to answer the following questions; i) Is there any effect of globalisation policy on the textile sectors in India? ii) Whether the globalisation policy improves the performance of textile industry in India? iii) Is there any significant change in the production, employment, wage, import and export due to the implementation of globalisation in India?

The products of the New Economic Policy by way of liberalized Government policies, Foreign Exchange Regulations etc contributed to the growth of textile industry in India. The textile industries in Kannur district is characterized by high concentration of handloom manufacturing units and related textile manufacturing units, specializing in export oriented items. The uniqueness, richness, finishing and quality of Kannur handloom and textile products were accepted and appreciated worldwide. Almost all the units are small and medium scale and therefore they have to face severe competition from large scale companies. Now most of the textile units in Kannur are facing liquidation because of their reduced competency level. The study concentrates on the adverse affects of Government policies and measures on the small scale textile units.

• Interdisciplinary relevance

The textile units in Kannur district are mostly small and medium sized and it provide employment opportunities to the local weavers and traders. The study concentrates on trade and related aspects but it has an interconnection with economics and sociology. The social background and economic condition of the local people are directly influenced by the textile units situated in this area. Therefore it can said that textile units in Kannur district will contribute to the overall economic development of the Malabar region and the state of Kerala as a whole

Significance of study

The study concentrates on the problems faced by the textile industrial units in Kannur. The study will help to identify solutions to the problems of textile industrial units and will be beneficial to design competitive strategies for the textile industry. The study aims to promote the collective efficiency of small scale textile units to exploit the emerging opportunities of globalization.

Objectives of study

Based on the challenges and problems faced by textile industry , the following specific objectives are framed for the study.

1. To identify the current challenges facing textile industry in Kannur District and also suggest measures to revamp the industry so that it becomes self sustaining in future.

1. To evaluate the performance of Handloom Cooperative Societies,khadhi units and Small Scale Textile Units in Kannur District

1. To analyse the problems faced by weavers and exporters in textile industries in Kannur District.

1. To analyse the schemes offered by Government to textile sector and its effect on the beneficiary units.

Methodology

The present study was conducted on the basis of primary and secondary data. Primary data was collected from individual units, cooperative societies, private exporters and various Government agencies from Kannur District by direct interview and field visit. Structured questionnaire and interview schedules were used for collecting data from the respondents. Secondary data was collected from the published informations by the organizations, journals & publications, books on the relevant subject.

Purposive cum simple random sampling method was followed for the selection of sample respondents and study has been designed as an analytical and descriptive one. Handloom units, khadhi units, private exporters in Kannurdistrict were purposely selected for the study since the textile industry inKannur was most prominent as compared to other districts. The findings of the study were based on both primary and secondary information. For analyzing handloomsector and private exporters, case study method was followed .Here most successful units from private sector and public sector were considered. Information about khadhi sector were collected from the respondents of Payyanur khadhi unit which is most popular in Kannur. The collected data has been analyzed with the help of percentage, ranking method, diagrams etc.

Scope of study

The findings of the study are expected to reveal the actual performance and role of globalisation in the development of textile industry in Kannur district,Kerala. The suggestions of the study could be used by the policy makers and by the prospective entrepreneurs for a sustainable growth of textile industries.

Limitations of the Study

The study has the following limitations

1. The sample size of the respondents for the survey undertaken is very small. Hence the accuracy of the results obtained may be less.

1. The study entirely depends upon the responses of customers and managerial staff and experts in textile sector.

1. Time constraints are considered as another hindrance in the smooth carrying out of the study effectively.

1. The study is conducted based on sampling technique. So there is a chance of sampling errors.

Presentation of the Report

The study consist of five chapters

I Introduction

· Statement of the problem

· Objectives of the study

· Methodology

· Significance of study

· Scope of study

· Limitations of the study

· Chapter Scheme

II Review of literature

III Theoretical Framework of study Area

· Textile industry an overview

· Profile of Khadi and village industry

· Profile of Handloom industry

IV Data analysis and Interpretation

· Case studies

· Survey findings

V Summary of Findings, Suggestions and Conclusion

CHAPTER-II

REVIEW OF LITERATURE

Theliterature review is the description of the literature relevant to a particular field or topic.This chapter aims to provide a general overview of the literature relevant to the study area.

Nayak. A (2009) in his paper "Hard Times for Indian Textiles" referred to the challenges of competitiveness of the Indian Textile Industry under the pressure of global financial crises. High inflation rates and slow industrial growth were discussed as the reasons for the problems of textile exporters.

Balamurugan,(2007) in article " The impact of globalization on Insurance Industry in India" highlighted that the opening up of insurance sector to private players increased competition for the government monopolies (LIC and GIC). For sustaining their competitiveness, they have to upgrade their technology, restructure themselves on more efficient lines and operate as broad run enterprise.

Textile Committee (Under Ministry of Textiles, Government of India)(2003) highlighted the strengths, weaknesses, opportunities and threats of Cannanore Handlooms. The study stated that the growth of units can be achieved by starting training centres, common exhibition centres, design centres, supply chain management system and promotion of Cannanore Brands.

Gunjan.M, Arnab.D, Sanyal .R.K., Nagraj. V (2009) studied the demand and supply for the Bamboo Fabric in India. The research reveals that there exists a demand for bamboo clothing. The global availability of bamboo resource and various factors affecting the supply of bamboo in the Indian context was assessed through secondary research.

Venkachalam. S and Palanivelu P (2010) targeted on the study of marketing strategies of the garment exporters in Tirupur district in Tamil Nadu. This paper captured the increase in demand for Indian garments abroad and obvious marketing problems. The study concluded marketing problems as competition from other countries and Indian companies, quality, export documentation problems, tariff barriers, lack of brand image etc.

RBI findings (1995) on the flow of industrial credit to KVI sector. The report explains the special features of khadhi financing and recommends few measures which would help the khadhi institutions in raising adequate working capital. KVI play a major role in the development of employment opportunities.

Krishna Murthy (2000) in his Articles point out that khadhi and village industries is only potent sector to take up the responsibility of employing masses in viable activities. He state that any plan drawn up for the development of India should aim at the development of agriculture and agro industries like khadhi and village industries.

Dipankar Gupta (2005) in his Article explains the profound changes that are happening in the Indian villages. He find that the Indian villagers experienced a falling rate of growth in agriculture, increasing migration of people from villages to towns and the increasing non- farm employment opportunities. It estimates that about 24% of villagers are engaged in non- agricultural occupations.

Balasubrahmanya (2004) studies the impact of globalization and domestic economic reforms on small industry. These policies have thrown open new opportunities and markets for the small industries which is suffering in terms of growth of units, employment, output and exports. To avail the new opportunities focus has to be turned to technological development and strengthening of financial infrastructure in order to make Indian small industry internationally competitive and contribute to national income and employment.

Mahendra Dev (2004) in his paper examines some important indicators relating to rural India in the Pre and Post liberalization periods and finds that rural India is not ‘Shining’. He states that to make rural development more broad based and balanced, investment, technology and appropriate institutions are needed. He also recommends policy attention in ten key areas of employment, public investment, agriculture, water management, rural non farm sector, health and education, reduction in personal regional and gender inequalities and decentralization and governance. According to Dev, India cannot ‘Shine’ without the ‘Shining’ of rural India

Bhavani (2002) has studied the “problems and prospects of small scale units in the era of globalization”. The study focused on the ongoing changes in the business environment and analyzes their implications for small- scale units. Specifically, it looked at possible ways of improving the competitive strength and commercial viability of small – scale units in the changing context. Apart from general purpose analysis meant for the small scale sector at large, he examined the implications of the changing context with reference to the small – scale units in three industries, namely, garments, electronics and auto components. The author found that liberalization has exposed all industrial units including small units to market competition to a greater extend. This means substantial improvement in various dimensions of technology, namely transformation, organization and information.

Seemanthini Niranjana (2009) in her article Appraising the Indian Handloom Industry highlighted that handloom industry in Hyderabad brought to the fore the issues and concerns facing this largely rural sector. Among other issues, the study concentrated the lack of a reliable database on the handloom industry, and its implications for policy formulation. Field-based research and analysis can form an important basis for building theoretical models and well as strategies for action for the Indian handloom industry.

World Development Reports‘Of networks and markets (2007): The rise and rise of a South Indian town, the example of Tiruppur's cotton knitwear industry’ examined Tiruppur town is the center of a tightly clustered range of activities related to the cotton knitwear industry. The successful and dramatic expansion which has taken place over the last 15 years has meant many more jobs, limited technological improvement, improved quality in yarn and fabric and an increasingly diverse range of garments. For the larger firms in the industry, access to export markets has been the driving force to improving their competitiveness. Wages remain low and working conditions poor, however, perhaps partly because capital concentration has not, on the whole, been accompanied by centralized, vertically integrated production. Nevertheless, clustering and dense interim networks provide advantages for firms of all sizes since process specialization is spatially divisible.

Journal of Business Venturing (2001), in the article ‘How social and human capital influence opportunity recognition and resource mobilization in India's handloom industry’ highlighted Small-scale firms in rural areas play an extremely important role in the development of any country, and especially in developing countries. To understand entrepreneurs who operate in a low-technology industry, we rely on the network perspective on entrepreneurship. In this paper, we investigate how the social and human capital of entrepreneurs (in this case master weavers in the handloom industry) influence their ability to recognize opportunities and mobilize resources. In addition to examining the direct effects, we also explore the possibilities of social capital mediating between human capital, on the one hand, and opportunity recognition and resource mobilization on the other. This paper adds to existing literature in two ways: firstly, we expand the social capital paradigm by including different cultural settings and links to existing studies regarding small enterprises. Secondly, we provide additional evidence to the ongoing debate as to what constitutes a ‘good network’.

J. Ramachandran,Anirvan Pant,Saroj Kumar Pani (2008) in the article’ Building the BoP Producer Ecosystem: The Evolving Engagement of Fabindia with Indian Handloom Artisans’specifies thatRecent research on the base of the pyramid (BoP) has called on firms to initiate market-driven interventions directed at the BoP population with the objective of identifying and pursuing mutually profitable means of attaining meaningful poverty alleviation outcomes. In response, firms as well as scholars have engaged at length with the creation of new products and services for the BoP consumer but paid far less attention to the BoP producer—a member of the BoP population who creates value by producing goods and services for sale in nonlocal markets. Additionally, extant studies have largely focused on snapshot views of BoP interventions by firms, thereby limiting our understanding of the emergence of meaningful poverty-alleviating outcomes over time from these interventions. This paper seeks to redirect attention toward the dynamic of the long-term engagement between the firm and the BoP producer. Using rich qualitative data from Fabindia—an Indian handloom retailer—this paper examines how the engagement between Fabindia and communities of handloom artisans in India has persisted over a period of five decades. We found that, even as it encountered changes in the external environment and pursued newer organizational goals, Fabindia repeatedly renewed its engagement with handloom artisans and facilitated progression in poverty-alleviation outcomes. Building on the insights from the case study, this paper presents a process model that highlights the role of innovative management practices in sustaining engagements between firms and BoP producers over time.

Elbehri Aziz (2004) examines the global trade implications of MFA quota removal on cotton and textile industry. This study compares alternative scenarios of MFA environment and focuses on three sets of issues: (i) impact at the global level, sorting out the global expansion as well as the critical shifts in bilateral textiles and apparel trade pattern; (ii) trade implications for the US in the textile and apparel markets; and (iii) impact of the textile and clothing expansion on global fibre demand. The analysis supports significant trade in apparel shifts in favour of Asian and South Asian suppliers.

Manojit Saha (2005) emphasizes on the end of quota regime that ushers a new era for the Indian textile industry, and offers a huge opportunity for the textile and apparel sector in India. This development is expected to result in higher export possibility for Indian manufacturers to the US and the EU which was restricted previously.

Meenu Tewari (2005) examines India's recent integration into the global apparel trade and the attempt of Indian government to attract FDI into textiles, apparel, and retail. The paper argues about India's quick emergence as a successful textile and garment exporter after years of inward orientation.

Trend analysis of India and China's textile and apparel export to USA post MFA has been undertaken by the FICCI Research Division (2005) for both India and China at three levels: overall export to the US, category-wise exports to the US, and category-wise export to the US.

Agarwal and Dhruv (2004) mention the phasing out of MFA as a one-time event that can lead to drastic shifts in economic wealth from one part of the world to another. The study tries to analyse those segments and companies that stand a chance of gaining from this opportunity.

Ram Upendra Das (2004) explores the prospects for horizontal specialization and industrial restructuring with the help of strengthening trade-investment linkages in this sector in the SAARC region along with adopting some other policy measures. The paper also argues that it will not be easy to change the production processes in these countries especially in the post- MFA era and thus regional cooperation in this sector could be one of the ways to meet the challenges in the post MFA regime.

Samar Verma's (2002) in his paper evaluate the export competitiveness of the Indian textile and clothing sectors. His study first identified the products in the export basket which show promising growth and have weight in the Indian export basket on the basis of recent performance of this sector in the US and the UK market. To enhance the competitiveness, the study highlights the areas requiring government policy intervention. The study concludes that Indian textile industry has immense potential, yet several policy reforms are needed urgently in order to unlock these latent capabilities.

M. Knappe (2004) emphasizes that market access in 2005 will be free of quota restrictions, trade will become more liberal, but it is also likely to become complex. This paper gives an overview about possible trade perspectives beyond 2005 and the challenges and trade uncertainties with which manufacturers in developing countries are confronted. Quotas gave some transparency to the trade flows, this transparency will disappear and will be replaced by an insecure environment. Enterprises in developing countries need to adapt to new requirements imposed by importing governments and buyers but the ability to do so is less developed in least developed countries (LDCs) and small economies than in larger developing economies. All this causes confusion and complexities at the level of importers and exporters. Hence no market player will risk concentrating imports or exports too much on one or two countries.

CHAPTER III

THEORETICAL FRAMEWORK

INDUSTRIALIZATION IN INDIA

Over the years agriculture has been the major lively hood of Indian population. But agricultural land in India cannot absorb such a vast number of workers in a productive and in a profitable way. However, after independence the founding fathers saw the nation progressing in a decent order. Industrialization is the only answer to India’s unemployment and poverty. This triggered change the formulation of programs and strategies to construct a proper infrastructure for speedy industrialization. India has been successful in achieving autonomy in producing different basic capital products after independence. Thus industries will provide employment to vast masses and it help to alleviate poverty and ensure standard of living.

Major industries in India

· Textile industry The Indian textile industry has a great legacy, which is perhaps unmatched in the history of India’s industrial development. India’s textile industry evolved and developed at a very early stage and its manufacturing technology was amongst the best. Prior to colonization, India’s manually operated textile machines were among the best in the world, and served as model for production of the first textile machines in newly industrialized Britain and Germany. Indian textiles were sought after for their finesse, quality and design. Textiles have historically formed an important component of India’s exports.· Food Processing Industry

In terms of global food business, India accounts less than 1.5% in spite of being one of the key food producing nations worldwide. But this on the other hand also indicates the enormous possibilities for the growth of this industry. Supported by the GDP estimates, the approximate expansion of this sector is between 9-12% and during the tenth plan period the growth rate was around 6-8%. Food Processing Industry provides job opportunities to 1.6 million people and it is estimated to expand by 37 million by 2025.

· Chemical Industry:Indian Chemical industry generates around 70,000 commercial goods ranging from plastic to toiletries and pesticides to beauty products. It is regarded as the oldest domestic sector in India and in terms of volume it gives a sense of pride to India by featuring as the 12 largest producers of chemicals. With an approximate cost of $28 billion, it amounts to 12.5% of the entire industrial output of India and 16.2% of its entire exports. Under Chemical industries some of the other rapidly emerging sectors are petrochemical, agrochemical, and pharmaceutical industries.· Software Industry:

Software Industry registered a massive expansion in the last 10 years. This industry signifies India's position as the knowledge based economy with a Compounded Annual Growth Rate (CAGR) of 42.3%. In the year 2010, the industry grew by 7% as compared to 0.59% in 1994-95 and it provides employment opportunities to millions of people all over the world.

· Mining Industry:

The GDP contribution of the mining industry varies from 2.2% to 2.5% only .But contribution to total GDP of the total industrial sector is around 10% to 11%. Even mining done on small scale contributes 6% to the entire mining production. Indian Mining Industry provides job opportunities to around 0.7 million individuals.

· Petroleum Industry:

Petroleum industry started its operations in the year 1867 and is considered as the oldest Indian industry. India is one of the most flourishing oil markets in the world and in the last few decades has witnessed the expansion of top national companies like ONGC, HPCL, BPCL and IOC.

EVOLUTION OF TEXTILE INDUSTRY

The origin of the term, ‘textile' can be traced back to the Latin origin. The textile tradition of India is perhaps the world's oldest textile tradition. The manufacturing plants for making textile fabrics and textile products are termed as textile mills. Textile mills are considered to be one of the largest industries in the Indian subcontinent. The textile mills not only meet the requirements of the domestic economy but also offer employment opportunities to millions of workers in a variety of occupations. Since the past four decades the textile mills underwent a process of persistent growth and development. Textile mills form the basis of textile production. Textile mills take either natural fibers or synthetic fibers and transform them into yarn, the read or webbing. After that the textile mills deals in producing fabric and textile products mostly produced by means of knitting, weaving or tufting. Workers in the textile mills then use complex and automated looms to transform yarns into cloth. This process of textile production has come down to us through centuries. The various products manufactured in the textile mills include both yarn products and fabric products. The yarn products manufactured by the textile mills are blended yarn; cotton yarn; specialty yarn; synthetic yarn. The fabric products of the textile mills include knitted fabrics; woven fabrics and gray and dyed fabrics.

The art of Indian textile is defined at its best by the Indian geography, climate, social customs, availability of the raw materials etc. Many occasional comments about the textile craft of the Indian subcontinent can also be found in the ancient Indian writings. Rig Veda provides us with the first literary information about textiles in India. Even the two ancient Indian epics Ramayana and Mahabharata also relate us about a variety of fabrics used in those times. The past traditions of the textile and handlooms can still be seen amongst the motifs, patterns, designs, and the old techniques of weaving, still employed by the weavers. The Indian textile is popular all across the globe for its beauty, texture and durability. In the recent times Indian textile has found a place in the global market and is offered in an extensive range at economic prices. The household items like needles made of bone as well as a number of spindles unearthed at the excavation sites of Mohenjo-Daro and Harappa amply suggest that the people of those civilizations used homespun cotton for weaving garments. The Indian textile is popular all across the globe for its beauty, texture and durability. Many occasional comments about the Indian textile craft can also be found in the ancient Indian writings. Rig Veda provides us with the first literary information about Indian textile. The past traditions of the Indian textile and handlooms can still be seen amongst the motifs, patterns, designs, and the old techniques of weaving, still employed by the weavers. The popularity of the Indian textiles made most of the European trade companies develop trade relations with India. In the recent times Indian textile has found a place in the global market and is offered in an extensive range at economic prices. The scope for further development in this field is enormous, because we have traditional labour that are well versed with the methodologies and various process adopted by the industry. At the same time the industry has developed new technologies and are using in modern machineries.

HELPFUL DUTY REGIME

The growth of the industry in the last decade has been considerably more than in earlier decades, thanks to the liberal trade and economic policies initiated by the government in the 1990s. The fiscal duty structure has also influenced the growth and structure of the industry. Historically, the fiscal policies for the textile industry have also considered “small is beautiful” and consequence is reflected in structural anomalies and the concentration of downstream segments of the industry in the decentralized sector and decimation of the organized sector.

The Technology of Up gradation Fund Scheme (TUFS), introduced in April 1999, has provided a fresh lease of life to the textile industry. It has helped to overcome technological obsolescence and create economies of scale. It has also helped in the transition from a quantitatively restricted textiles trade to a market-driven export regime. In its operational life span of eight years up to March 31,200, the scheme has propelled investment of more than Rs 86000, crore. The spinning and composite segments have derived the maximum benefit, whereas processing, garmenting, power looms and other segments are links in the textile value chain and yet to realize their full potential.

The government recognizes the potential of garmenting, technical textiles and processing segments for their high value addition and employment generation capabilities and accords high priority to the decentralized power looms segment in the small and medium enterprises dominated textiles economy.

OVER VIEW OF TEXTILE INDUSTRY IN INDIA

Indian is the one of the world's largest producers of textiles and garments. Abundant availability of raw materials such as cotton, wool, silk and jute as well as skilled workforce have made the country a sourcing hub. Indian textile industry has a great legacy, which perhaps unmatched in the history of India’s industrial development. The Indian textile industry is about 1930years old. Cotton is the white gold of India. The cotton industry was firstly setup in Calcutta in 1818.

The weaving and knits sector lies at the heart of the industry. The textile mill industry is one of the oldest industries existed in our country. The British colonization of India and its industrial policies destroyed glorious textile legacy. The British knew that they could not compete with Indian textile industry and as a result resorted to complete destruction of the industry. By 1880 the domestic market had grown to be serviced solely by the British manufacturers. India. One of the world’s largest leading exporters of textiles. One of the aspects of freedom struggle led by the mahatma Gandhi was to weaken the British textile industry by wearing homespun clothes. Gandhi was convinced that the textile sector could a catalyst in advancement of the Indian population by creating employment for the excess labour pool. Post-independence, till about the late 1980s, the government of India put numerous policies and regulations in place to ensure that mechanization did not occur and that labour- intensive textiles were produced, large scale was discouraged by restrictions on total capacity and mechanization of mills. Till 1985, the main concern of government policies was centered on import substitution, protection of existing employment in the organized sector and support for decentralized sector.

India has overtaken Italy, Germany and Bangladesh to emerge as the world's second largest textile exporter. The Textiles Vision Document formulated by the National Manufacturing Competitiveness Council (NMCC) has projected that textiles exports from India will touch US$ 300 billion by the year 2024-25.

Market Size

The most significant change in the Indian textiles industry has been the advent of man-made fibers (MMF). India has successfully placed its innovative range of MMF textiles in almost all the countries across the globe. MMF production recorded an increase of three per cent during the period April-July 2014.

India has been well known for her textile goods since very ancient times. The traditional textile industry of India was virtually decayed during the colonial regime. However, the modern textile industry took birth in India in the early nineteenth century when the first textile mill in the country was established at fort near Calcutta in 1818. The cotton textile industry, however, made its real beginning in Bombay, in 1850s. The first cotton textile mill of Bombay was established in 1854 by a Paris cotton merchant then engaged in overseas and internal trade.

The first cotton mill in Ahmadabad, which was eventually to emerge as a rival centre to Bombay, was established in 1861.The cotton textile industry made rapid progress in the second half of the nineteenth century and by the end of the century there were 178 cotton textile mills; but during the year 1900 the cotton textile industry was in bad state due to the great famine and a number of mills of Bombay and Ahmadabad were to be closed down for long periods by two per cent during April-July 2014. The Indian textile industry has a significant role in the economy as well as in the international textile economy. Its contribution to the Indian economy is manifested in terms of its contribution to the industrial production, employment generation and foreign exchange earnings. It contributes 20 percent of industrial production, 9 percent of excise collections, and 18 percent of employment in the industrial sector, nearly 20 percent to the country’s total export earnings and 4 % to the GDP. In human history, past and present can never ignore the importance of textile in a civilization decisively affecting its destinies, effectively changing its social scenario. Indian Textile Industry is one of the leading textile industries in the world. Though was predominantly unorganized industry even a few years back, but the scenario started changing after the economic liberalization of Indian economy in 1991. The opening up of economy gave the much-needed thrust to the Indian textile industry, which has now successfully become one of the largest in the world.

Indian textile industry largely depends upon the textile manufacturing and export. It also plays a major role in the economy of the country. India earns about 27% of its total foreign exchange through textile exports. Further, the textile industry of India also contributes nearly 14% of the total industrial production of the country. It also contributes around 3% to the GDP of the country. Indian textile industry is also the largest in the country in terms of employment generation. It not only generates jobs in its own industry, but also opens up scopes for the other ancillary sectors. India textile industry currently generates employment to more than 35 million people.

Indian textile industry can be divided into several segments, some of which can be listed as below:

·  Cotton Textiles

· Silk Textiles

· Woolen Textiles

· Readymade Garments

· Hand-crafted Textiles

· Jute and Coir industries

Currently it is estimated to be around US$ 52 billion and is also projected to be around US$ 115 billion by the year 2012. The current domestic market of textile in India is expected to be increased to US$ 90 billion by 2016 from the current US$ 34.6 billion. The textile export of the country was around US$ 19.14 billion in 2006-07, which saw a stiff rise to reach US$ 44.13 in 2015-2016. The Indian textile industry apparel industry occupies a significant position in the global textile map as it is the third largest producer of cotton and cellulose fiber or yarn.

Indian textile industry is highly localized around western India- Ahmadabad and Mumbai, through there are centers at Kanpur, Kolkata, Indore, Coimbatore etc. The structure of the textile industry is both complex and unique. There is power loom sector alone account for 65% for the total in 2004-2005. However, the organized sector accounted for only 3% of the total cloth production during the same period. India is one of the few counties that have presence across the entire value chain of the textiles and apparel business starting from fiber production, spinning, and weaving process to garment manufacturing

Table 3.1

Capital Requirement in Textile Mill Industry

Capital / Additional Machinery Requirement

Sector

Investment required

(Rs cr)

Additional machines required

Spinning

55000

20 million spindles

Weaving

38000

134592shuttle-lesslooms, 109871automaticlooms, 43699semiautomatilooms,48069 plain looms

Knitting

10000

36500 machines

Processing

51000

468 process houses with one lakhs metre per day capacity

Garmenting

40000

2.7 million

Total

194000

-

Source: Facts for you, December 2008

Table 3.2

SWOT ANALYSIS-TEXTILE INDUSTRY

STRENGHTS

· Strong cotton base &strong entrepreneurial class.

· Flexibility in production of small order lots &presence of integrated companies.

· Ability to handle value additions embellishments.

· Adequate labour supply at relatively competitive wages.

WEAKNESSES

· Poor work practices resulting in higher labour cost.

· High internal transport costs due to in sufficient infrastructure.

· Lack of marketing skills.

· Dependence on brokers and traders

· High power cost

· Rigid government labour policy

OPPORTUNITIES

· Improvements in infrastructure and regulations.

· Regulations, research &product development, buyers’ preference for India after China, & understanding buyers’ need because of language advantage.

THREATS

· Sudden appreciation of rupee against the US dollar.

· Trade block and partnerships &the exclusion of India.

· Location disadvantages like long transit time to key markets.

Source:Fact for you 2008

The Indian textiles industry- which directly employs 35 million people, supports cotton farmers with 2.5 crore acres under cotton cultivation, and earns significant foreign exchange- is struggling to survive. The recession across the globe has led to reduced consumption of textile items by importing countries, the cancellation and downsizing of purchase orders, and extended delivery periods.

The Indian textile industry faces many challenges in its effort to become a major player in the global arena, even though there are many positive factors, such as a multi-fibre raw materials base, low cost labour force and a huge domestic market. Here’s an attempt to analyses the production and export of textiles, the share of textile exports in all commodities, and the causes for the struggle of the textile industry.

INITIATIVES TAKEN BY THE GOVERNMENT

Foreseeing the scope for massive expansion in the textiles and clothing industry, the central government has initiated many schemes as follows:

1. The technology up gradation fund schemes was introduced in April1999 initially for five years and later extended till 2012.

2. Technology Mission on cotton was launched in February 2000 with four mini- missions to help improve the development of cotton yards to the improvement in per hectare yield of cotton.

3. National Textile Policy 2000 was announced in November 2000, setting an export target for textiles.

4. Scheme was announced for setting up integrated textile processing parks.

5. A separate mission was set up for technical textiles.

KERALA TEXTILE INDUSTRY –AN OVER VIEW

Kerala economy is transforming into a service economy with high inward remittance and skilled technical human resource. Development of more enterprises by fortifying the skilled human capital and promoting investments including domestic as well as foreign in all sectors to entails in the economic development of the state through employment generation and export oriented is the major objectives. The industry and commerce department is headed by hon’ble minister (Industries and Commerce). The administrative headed of the Industries and Commerce Department is additional chief secretary. The main vision of department of industries of Kerala to achieve high and sustainable economic growth with specific thrust to social objective through rapid industrialization and big leap in commercial activities without affecting ecology and environment. It also helps for creating more employment opportunities to people.

Kerala is the land of opportunities and top in social indices. It also provides large number of opportunities to rural people. A very large number of looms are situated at rural areas. There are men and women who weaving a way of life. Earlier they weave for their own consumption. Increase in production and improvement in transport facilities removed the hindrances of time and eased the exchange of commodities4.

Line of departments

1.Directorate of industries and commerce

2. Directorate of hand loom and textiles

3. Kerala state industrial development corporation

4. Public sector restructuring and internal audit board

5. Khadi and village industries board

6. Directorate of public sector undertaking

Figure: 3.1

Production Share of Various Sectors in 2010-11

Source: Facts for you 2012

PRESENT SCENARIO

Global trade in textile and apparels is expected to increase from US $ 356 billion in2003 to US $ 600 billion by 2010. The way forward for the textile mill sector is through transforming the sector from are source intensive to knowledge intensive, highly innovative sector with high added value products and services. This can only ensure sustainable growth and jobs in the future. It would also help to secure a competitive advantage, which would be based on the best new products and processes in the world. The industry has made tremendous efforts in the last years to invest in new productive assets, to stream line operations and to intensify their innovation activities. To achieve a transformation, investment is needed in technological innovations that would assist industry in its transition from resources intensive to acknowledge intensive sector.

The Indian textile industry has a great legacy, which is perhaps unmatched in the history of India‘s industrial development, India is textile industry evolved and developed at a very early stage and its manufacturing technology was amongst the best. India’s manually operated machines were among the best in the world and served as a model for production of the first textile machines were among the best in world served  as a model for production of the first textile machines in newly industrialized Britain and Germany. India’s textiles were sought after for their finesse, quality and design and attracted people from across the globe like the Chinese, Malaysians, and Portuguese etc. Colonization put an end to India’s glorious textile legacy. By 1880, the domestic market had grown to be served solely by the British manufactures. One of the aspects of freedom struggle led by Mahatma Gandhi was to weaken the British textile industry by weaving homespun clothes, as he was convinced that the textile sector would be catalyst in advancement of the Indian population. Post independence, till 1980, the Government of India put numerous restrictions to ensure mechanization did not occur; labour intensive textiles were produced, which in effect led to increase in newly industrialized Britain and Germany. However, textile industry is vast developing sector and when the competitions are exorbitant especially in its design and quality we have to adopt modern technology management, machine so as to complete with other countries in the international market.

The Indian textile and clothing industry has an overwhelming presence in the national economy. Apart from providing one of the basic necessities of life, the industry contributes about 14 percent to the country’s industrial production, 4 percent to the GDP and 16.63 percent to the export earnings. It is the second largest provider of employment after agriculture. It provides direct employment to 33.17 million people and indirect employment to 54.85 million people through allied sectors, totaling around 88 million. Thus, the growth and all-round development of this industry has a significant bearing on the economy.

India has a dominant position in the world textile economy. It is the second largest producer of row cotton, second largest producer of cotton yarn, second largest producer of cellulosic fiber/yarn, and second largest producer of silks, fourth largest producer of synthetic fiber/yarn and largest loom age and second highest spindlage.

India has a strong multi-fiber row material base, a vast pool of skilled workers, flexible production systems and dynamic entrepreneurial skills.

THE CAUSES OF STAGNATION IN THE TEXTILE INDUSTRY

The economic recession that has set in across the world and affected almost all the world and affected almost all the countries, has hit the textile and clothing industries the most due to fall in the consumption of textile items. Also:

· Indian households are buying less.

· The Cotton Advisory Board has estimated a production of only 322 lakhs bales due to the erratic behavior of the monsoon this year.

· The Textile industry requires power round- the- clock. But Tamil Nadu, which houses a number of textile mills, has been affected badly by power shortages since the beginning of 2008.

· Poor off take of yarn is also a worrying factor for growth.

The Indian textile industry is fighting for survival and is looking for survival and is looking for nourishment. Being a non – import intensive industry and the second largest employment provider round the year; it needs a major thrust in the form of fiscal and non – fiscal measures. This will not only help to maintain a high employment level but will also earn significant foreign exchange for the country. To navigate these difficult times, the industry needs a special economic package that covers all the links of the textile vale chain. And these support measures should reach the industry at the earliest.

HANDLOOM INDUSTRY

Handloom industry is a major traditional vibrant industry of Kerala. Once handloom was the major self-employment generator after agriculture as handlooms could be set up even in mud houses and became a source of supplementary income for the poor farmers of rural areas. But because of various reasons, Kerala handloom industry is facing a negative growth rate. The handloom sales in co-operative sector are also falling. Traditional handloom weavers opting out of the trade because of low wages and hard physical labour. For this reasons new generations are also not been attracted to the production sector. Power and automatic looms are posting severe competition not only in the local market but also in the export sector. The adoption of modern techniques and economic liberalization, however, have made serious inroads into the handloom sector. Competition from power loom and mill sector, availability of cheaper imported fabrics, changing consumer preferences and alternative employment opportunities have threatened the vibrancy, of handloom sector. This industry is mainly concentrated in Thiruvananthapuram and Kannur districts.

Though it is mandatory in a few government departments to source handlooms for uniform fabrics but handloom weavers who do not seem to be much interested due to the pitiable wages which they are getting. Handloom, being a state subject, its development is primarily the responsibility of the state government. The Government of Kerala on its part is now trying to stem the flow of weavers forsaking the handlooms and has allocated a higher amount in the budget, issuing orders to the employees to wear handloom clothes at least once in a week, the policy of promoting and encouraging the sector through a number of policies, programmes and financial assistance. Although these measures have yielded manifold benefits to the handloom weavers and auxiliary workers, yet the sector continues to face several daunting challenges and uncertainties. As a result these organizations experience difficulty in getting working capital loan from financial institutions and resulting in further production loss.

Ninety five per cent of the handloom industry is in co-operative sector and the remaining 5 per cent is owned by private industrial entrepreneurs. The co-operative sector consists of both factory and cottage type societies. There were 648 registered primary handloom weavers cooperative societies in the state as on March 2011. Out of which, 167 are factory type and 486 are cottage type societies and of the total 648 societies, 78 co-operative societies are registered exclusively for women weavers. Out of the total, 53 per cent of co-operatives are located in Thiruvananthapuram district. According to a survey by Department of Economics and Statistics, even though the total number of families engaged in handloom sector is 45040, only 16179 (35.92%) families find their livelihood from weaving or weaving related works as a primary occupation.

The major products the handloom sector producing are dhotis, diminishing materials, bed sheets, grey sarees and lungis, which accounts 67 per cent of total production of the industry. With the emergence of giant cotton mills our handloom industry began to deteriorate. The weavers engaged in handloom weaving could not compete with the productive capacity and technological progress of these mills. The handloom industry in Kerala predominantly uses cotton (yarn) as raw material. A few combinations of fibres like cotton, cotton and viscose on polyester and viscose are also used. Some of the co-operative societies/units also procure yarns in the form of readymade warps from Tamil Nadu through hantex and hanveev.

The government has taken numerous steps for the developments of handloom industry by way of supplying looms and accessories, training for skill upgradation, rebate, market development assistance etc through different organizations. Handloom weavers are.organized at local level to form primary weavers co-operative societies. The. State Handloom Development Corporation has been set up to help the weavers who work outside theco-operative sector. These organizations are working with the objective for providing continuous employment to the weavers and related workers and for improving their standard of living. Despite of all these measures, these organizations have not been fully able to improve the socio-economic conditions of handloom weavers to the desired level. A sizeable number of weavers are still in the l3elow Poverty Line (BPL) category.

Schemes - Directorate of Handloom and Textiles

The following are the schemes, which are implemented/implementing by the Directorate of Handloom and Textiles from year to year mainly through hantex and hanveev for the development of primary handloom weavers co-operative societies -(PHWCS), skill development of weavers, marketing of handloom products, welfare of handloom workers and their family etc (Reference: Directorate of Handloom and Textiles).

1. Government share participation in PHWCS

This scheme is meant for enhancing the net disposable resource position of the handloom cooperative societies for creating assets and for meeting a part of their immediate working capital requirements. At present, the share participation by government is provided in cottage type/factory type/SC/ST societies @ 2, 3 &5 times of the share taken by members respectively. The maximum amount of share participation is Rs. 5 lakh per society per annum.

2. Marketing and export promotion scheme

Object of the scheme is to develop market of handloom products. The following assistance are being given to the handloom co-operative societies, SHGs, hantex and hanveev to develop market for handloom products.

· Export incentive @ 20 per cent of the export turn over subject to maximum of Rs.20 lakh is given

· Assistance is given for conducting.. exhibitions each by hantex and hanveev

· Assistance is given to conduct district level expo, regional handloom expos by the Handloom Directorate during festival periods, conduct buyer seller meet, and to meet additional expenses if any for expos organised under Government of India assistance etc

· Assistance is given to hantex/hanveev/PHWCS to participate in national and international fairs/exhibitions

· Assistance is given for making exquisite handloom products and giving award

· Assistance is given to set up showroom by handloom clusters/societies for marketing handloom products

· It is also for giving assistance to make linkage with major buyer and retailers with handloom societies, hantex, hanveev and individual weavers

3. Providing quality raw materials for weavers and margin money for PHWCS

This scheme is for ensuring timely supply of quality raw materials at reasonable cost to weavers. Hank yarn subsidy is given to weavers through hantex, hanveev and yarn banks. Price subsidy is also being given @ 10 per cent of the purchase price of dyes and chemicals to weavers through hantex, hanveev and yarn banks. At present hank yarn subsidy is being given at the rate of 25 per kg for yarn counts below 40s, 30 per kg for counts below 80s and 40 per kg.above 80s.

Further margin money loan for working capital is also being given to hantex, hanveev and yarn bank to procure and distribute yarn to weavers.

4. Margin money assistance to primary handloom weavers co-operative societies

This scheme margin money grant for PHWCS is for meeting margin money for working capital. Majority of the societies are facing acute shortage of working capital to procure yarn, dyes and chemicals. Hence societies are using only less than 50 per cent of the capacity. To overcome this situation margin money for working capital shall be provided to the society. As per this scheme 40 per cent of the working capital requirement subject to maximum of Rs. 5 lakh shall be given as margin money grant. Ten per cent of the working capital requirement shall be raised by the PHWCS. Remaining 50 per cent shall be obtained as loan from bank. Working capital requirement shall be assessed based on the number of approved working looms in the society.

5. Modernisation of handloom co-operative societies, apex societies, apex organizations, revitalization of PHWCS, promoting high value and value added products, technology upgradation and transfer of new technologies to handloom weavers/workers

The objectives of the scheme are to modernize handloom societies, apex societies, apex organizations and encourage PHWCS and SHGs to produce innovative, high value and value added handloom products. As per this scheme, assistance is given for the renovation/re-building of the factory building/shed and work shed attached to dwelling house of weavers including electrification. Individual weaver working independent is also eligible for repairing and renovation assistance for repairing and renovating sheds attached to their dwelling house, 2 per cent of the annual production of the society is given as product development assistance for manufacturing new/innovative products. Assistance is given for creating pre-loom processing facility for dyeing, warping and sizing and installing spool warping machine for factory type handloom co-operative societies and handloom societies having common work shed. Other assistance is being given only for factory type PHWCS.

Assistance is being given for acquiring machinery and equipment, product design and development and conduct training to produce high value and value added handloom products. Factory type and cottage type co-operative societies are eligible for this assistance.

Assistance is being given to hantex and hanveev for producing innovative high value and value added products with 500 looms of hantex and 400 looms of hanveev. It is also given assistance to modernise pre, loom and post loom facilities of hantex and hanveev. Assistance is given to develop brand equity of hantex and hanveev by a reputed agency and improving marketing skills of persons working in hantex and hanveev show rooms. Assistance is also being given for showroom renovation of hantex and hanveev. Assistance is also given for revitalization of primary factory type handloom weavers societies.

It is also proposed to give grant assistance to weavers of the societies @ 3000 for the replacement of their loom accessories like steel reeds and shuttles etc. This assistance is given to weavers under co-operative fold as well as individual weavers (60% will be for women).

To improve the quality of the handloom products and increase productivity, assistance is given for adopting new technology for increasing productivity of loom, increasing quality of weaving, upgrading/adopting new technology in dyeing, warping and sizing, upgrading/adopting new technology in processing and printing, modernizing warping and yarn sizing facilities, introducing Information Technology (IT) in production, conducting quality development programme and brand creation. Collection and dissemination of national and international technologies/designs are also included under this scheme.

6. Skill development programme

Following assistance are given under the scheme

1. Assistance is given for conducting motivation training programme and technical training to weavers and staff of the handloom weavers co-operative societies.

2. Assistance is given for conducting training on weaving to new people who are interested in weaving, to equip them for weaving and fill up the gap of shortage of weavers in this sector. Training is given through Indian Institute of Handloom Textile Technology (IIHT), Kannur and weavers service centre, Kannur

3. Meeting the full costs of short term training programme on handloom technology, cluster development, marketing and production etc for the departmental staff and staff of the apex organisations involved in handloom development

4. Providing grant for meeting the training expenses for the Institute of Handloom Textile Technology, Kannur

5. Assistance is given for the payment of stipend to the students studying in 3 year diploma in handloom technology course in IIHT, Venkitagiri and Gadag and students in IHTT, Kannur

6. Assistance is also being given for developing new dyes, dying method, colour patterns, designs and development by employing designers or outsourcing designers new looms, nevi methods for pre loom and post loom processing, fibre blending etc with industry institution linkage programme

7. Skill upgradation training for handloom weavers

The objective is to develop inherent artistic skills of the traditional weavers for bringing out unique designs and imperative value added and diversified handloom products. As per this scheme impart three to six months training to 100 talented weavers (in which at least 50 per cent of them will be women) from different parts of the state to develop new designs to qualify them as master weavers and master dyers.

8.Contributory thrift fund

As per this scheme contributory thrift fund, assistance is provided to the weavers for meeting, medical expenses of the subscriber or his/her family members, expenses on marriage and children's education, expenses towards taking share in the society, purchase of house site, construction/purchase/alteration/repairs of their houses etc. Fifty per cent of the fund is proposed to be utilised for women weavers. The scheme is for covering 20,000 weaver beneficiaries. As per the scheme, minimum 8 per cent of wages is recovered frpm weaver and equal percentage is contributed by government.

9. Promotion of master weavers to set up production units and weavers/allied workers motivation programme

Promotion of master weavers to set up production units aim to provide assistance to 25 trained master weavers to set up production units with loan assistance from bank for establishing a handloom unit with at least 10 looms. Under the scheme, master weavers will be provided grant assistance for construction of sheds, purchase of looms/accessories design inputs, margin money for working capital and training for master weaver and weavers.

10. Weavers/allied workers motivation programme

The scheme Weavers/allied workers motivation programme is intends to motivate weavers/allied workers to improve productivity by providing attractive incentives. The scheme aims to provide assistance to 25000 weavers/allied workers.

11. Handloom business incubation centre

The scheme envisages for attracting new generation entrepreneurs to the handloom sector. It, aims for preserving the age' old heritage and promoting entrepreneurs to set up handloom units in the state.

To attract more entrepreneurs to handloom sector, a centre for in native handloom enterprise promotion centre for entrepreneurs shall be started. Design development, dying, warps making' and weaving facility shall be provided in the centre to manufacture and marketing handloom products. Entrepreneurs shall be given space and facility in the centre to manufactureand market handloom products. Entrepreneur can use this facility for making handloom products and marketing handloom products up to maximum of 12 months. After that he shall find a space and setup unit.

Further margin money assistance shall be given to the entrepreneurs to set up units. Entrepreneurs with 10 year experience in handloom weaving or having diploma in handloom or textile technology shall be given preference under this scheme.

12.Share participation to hantex and hanveev

As per the scheme, share participation is given to hantex and hanveev in the ratio 3:2 every year for strengthening their capital base for making them eligible for availing more cash credit facilities from financial institutions.

Fund provided is for design development, working capital for procuring yarn from NationalHandloom Development Corporation (NHDC) and spinning mill, handloom products from primary handloom weavers co-operative societies and individual weavers in the state.

13.Training, study and propagation of handloom product and propagation of handloom mark and survey on handloom industry

The scheme training, study and propaganda is mainly for propagating the use of handloom clothes among the public inside as well as outside the state and the country. Preparation of project proposals, training to staff, conduct seminars and workshops in association with textile committee, assist government in policy formation, purchase of office equipments, software development are also included under the scheme. The preparation of project proposals, conducting of study in handlooms, training to staff, seminars and workshops etc will be implemented in association with,textile committee and weavers service centre etc. Purchase of computers, peripherals, fax machines, photo copiers to the Directorate of Handloom and Textiles and sub offices is also proposed. The scheme also envisages a state-wide propaganda for creating awareness among the public regarding the use of handloom clothes.

The purpose of assistance for propagation of handloom mark scheme is to give grant assistance to the primary handloom weavers co-operative societies, hantex/hanveev individual, private entrepreneurs, SHG to use handloom mark on their products to identify handloom products by customer to get them registered under handloom mark scheme. Under the scheme 100 per cent amount of the registration fee and 75 per cent of cost of labels are reimbursed to the HWCS/hantex/hanveev on a quarterly basis (Handloom Weavers Co-operative Society). It is also to be utilized for making awareness among the customers on handloom mark.

14.Establishment of handloom village and integrated handloom village

The scheme intends to showcase the rich old craftsmanship, evolution of the industry in the region where the weavers are concentrated, and a total overview of the process of activity. Assistance is provided for building infrastructure for establishing handloom village and integrated handloom villages in the state.

15.Establishment of IIHT, Kannur

IIHT, Kannur started functioning during the year 2011. Construction work of building is in progress. Total project cost was Rs.11.54 crore subsequently it has been revised to 19.76 crore. Total an amount of Rs. 11.05 crore had been given to IIHT till 2012-13. An amount of Rs. 8 crore has been provided in the budget 2013-14. An amount of Rs. 71 lakh is required to complete the work. Hence an amount of Rs. 75 lakh is provided in the year 2014-15 to complete the project.

16.Facilities for training in power loom, enterprise creation centre in power loom sector, group insurance scheme (state share) to power loom weavers

1.Training in power loom

Director of Handloom and Textiles is providing training in power loom weaving, designing through Demonstration Cum Training Centre (DCTC), Thiruvananthapuram, IIHT, Kannur, TEXFED (Kerala State Co-operative Textile Federation Ltd) and integrated power loom societies. Hence it is proposed to provide training for the members of the power loom societies and private-entrepreneurs for skill upgradation/job opportunities,

2.Enterprise creation centre in power loom sector (start up village)

The scheme aims to open DCTC, the power loom training centre of department to prospective entrepreneurs as a start up process to set up power loom units. The concept of the scheme is to provide hand holding service to the entrepreneur for a maximum period of one year thereby supporting to build up his own unit by the time. The DCTC is equipped with modern rapier looms, winding machine, sectional warping machine etc to cater the production and training facilities in power loom. There were lot of people interested to set up power loom units in the state but due to lack of knowledge, skill and finance they are not able to setup units on their own. Most of them are now a day going for employment or set up units in other states. The concept of enterprise creation centre in power loom sector will be a solution for initial hurdling stages of an entrepreneur as he will get the infrastructure and guidance from the centre: So rithin the time the entrepreneur could be able to acquire skills in production, marketing etc withrt much risk. :The facilities available in DCTC such as machinery, storage space, and technical guidance etc may be provided at free of • cost for the purpose. The DCTC is now located at Kulathoor, Thirunanthapuram, where the turnout of trainees is less compared to the utility of machinery available. The DCTC is proposed to shift to Neyattinkara integrated power loom society situated atBalaramapuram, which is having lot of idle space and machinery that also can be used for the purpose. The location of Neyattinkara integrated power loom society is an ideal place for getting new entrepreneurs as the place is largely concentrated with weavers. The centre has to be shifted to the premises of Neyattinkara integrated power loom society and some modernisation work to be carried out to equip the centre as development centre for power loom entrepreneurs. Further, fund is required for conducting training and providing handholding service.

17.Group insurance scheme (state share) to power loom weavers

This is a centrally assisted scheme which provides insurance coverage to the workers in the power loom sector. Out of the total premium of Rs. 470 per weaver, Rs. 100 will be provided by LIC (Life Insurance Corporation) of India, Rs. 290 by Government of India directly to LIC of India and the balance amount of ZRs.80 is the weavers 'contributions which will be met by the State Government as government contribution.

18.Share participation to power loom co-operative societies

The scheme is meant for providing government share capital as margin money for working capital and for modernization of power loom co-operative societies for availing loans from financial institutions for technology upgradation.

19.Modernisation of integrated power loom societies under TEXFED

1.Modernisation of power looms

The modernisation will be implemented in a phased manner in the five integrated power loom societies of the state. During the financial year 2012-13 and 2013-14, an amount of Rs. 200 lakh and Rs. 175 lakh respectively has been provided for these societies. Hence in the annual budget 2014-15, a total outlay of Rs. 300 lakh is provided to 4 integrated power loom industrial cooperative societies for the modernization work to Neyyattinkara Society, Kottayam integrated Society, Wayanad and Calicut integrated societies.

2.Production of non-woven technical textile from waste pet bottle

Kerala hi-tech weaving and garments co-operative mills Ltd. (KELTEX) Kuttippuram proposed to implement a project for producing non-woven fabric from discarded materials like pet bottles. The total project cost is Rs.47.50 crore. It is proposed to implement the scheme in a phased manner. During the financial year 2013-14 an amount of Rs. 225 lakh had been provided for the scheme.

(. ,)3. Revival/modernisation of power loom co-operative societies in the state

The scheme intends for the modernization of power loom societies in the state. Most of th power loom societies working with old and ordinary machines and their productivity are also les compared to modern power loom units. To revive the society, modernization is required Automation in these societies needs huge investment. So certain process/attachments in loom could automate. One such automation identified was fixing of electrical warp and weft top motion. On introducing this mechanism one weaver could look after 5 to 8 machine at a time instead of 2 loom.

20. Revitalisation of spinning mills under TEXFED

The scheme envisages for the renovation of plant and machinery of co-operative spinning mills under TEXFED. The modernization projects of Malappuram and Kannur co-operative spinning mills were approved by NCDC (National Co-operative Development Corporation) at ar estimated cost of 1,340 lakh and 1,400 lakh respectively. Out of this amount of 1,112.07 lakh, 1,080.90 lakh have already been drawn and disbursed to these two mills during the period(up to 2011-12). As per the revised project report the estimated cost have been increased to 2,24 (lakh for Malappuram and 2,100 lakh for Kannur co-operative spinning mills. Hence a balance amount of 1,127.91 lakh and 1,019.10 lakh respectively are required for completing the project Out of this amount, during the year 2013-14, an amount of 250 lakh each has been provided ti the mills. Hence an amount of 877.91 'lakh and 769.10 lakh are required for completing the project as envisaged. Hence an amount of 300 lakh each may be provided for these two mills.

Government is considering the modernization/expansion of Thrissur, Alleppey and Quilo Co-operative Spinning Mills with NCDC loan assistance. Total project cost of this spinning mill are 2947 lakh, 3394.26 lakh and 5739.25 lakh respectively. Proposal in this regard ha already been forwarded to government. During the year 2011-12, 150 lakh each has bee sanctioned to Alleppey and Thrissur co-operative spinning mills for its expansion programme. 1 the year 2013-14, an amount of 220 lakh is provided to this scheme. Hence in the annual budg, 2014-15, an amount of 298 lakh is provided for modernization of the above three mills.

21.Assistance to Mala, Malabar, Prico mills, and Alleppy co-operative spinning mill, shat participation to TEXFED

1) Mala co-operative spinning mills

The scheme envisages availing loan assistance to setting up of 25,000 spindles in tvi stages at K. Karunakaran memorial co-operative spinning mill (Mala). It is proposed that in ti first stage 6,000 spindles will be set up and in the second stage 19,000 spindles will be set up in tl mill with the assistance of NCDC. Out of the total project cost of 2,387.55 lakh (Revised projectcost), an amount of Rs. 400.28 lakh has already been provided in the budget 2012-13 and Rs. 200 lakh in 2013-14.

Pricomills -technology upgradation and infrastructure development

Pricomills was established during 1992. The project took start after a lapse of 10 year with term loan assistance of DCB (Development Credit Bank). for 400 lakh and commissioned 6,000 spindles. Later the expansion project was completed during 2008 with term loan assistance of NCDC. The mill started export business and exported 4 containers of hosiery yam to Vietnam. The present facilities are not sufficient for making 100 per cent export. Hence the existing machinery are to be upgraded to suit for making export quality yarn by reducing the fault in the machines and equipments. Hence an amount of Rs. 2,031.40 lakh is required for the purpose. During the year 201314, an amount of Rs. 350 lakh has been provided for the scheme.

Malcotex

Malcotex was commissioned with 6000 spindles during 1997. The expansion project was approved by government/NCDC to Rs. 3,193.60 lakh and out of this Rs. 2,710.04 lakh had been released to the mill against the total project cost of Rs. 4,217.62 lakh for its expansion programme. In the first phase 6,336 was added and commissioned on 7.12.2007. The rest of the expansion works are progressing in a phased manner. During the year 2013-14, an amount of Rs. 250 lakh has been provided for the scheme and in the annual budget 2014-15, Rs. 200 'Allis provided.

Centrally Sponsored Schemes

22. Comprehensive handloom development scheme (IHDS)

Integrated handloom development scheme had been formulated as a centrally sponsored scheme by merging the components with and without modifications of the four schemes implemented during the X Plan. It is necessary to facilitate handloom weavers to meet the challenges of a globalised environment and empower them to chart out a sustainable path for growth and diversification in line with the emerging market trends. Now in the XII Plan the 11-1DS has been changed as comprehensive handloom development scheme. It is an attempt to facilitate the sustainable development of handloom weavers located in and outside identified handloom clusters into a cohesive self managing and competitive socio-economic unit. The scheme has four parts, which are as follows:

1) Development of clusters having loom-age 200 — 500

Cluster Development approach focuses on the functioning of weavers groups. Each group covering 200-500 looms are eligible for financial assistance under this component. One cluster needs 60 lakh. Out of which 80, per cent will be contributed by the Central Government.

2) Financial assistance to handloom organisations

Marketing incentive is given to the handloom agencies for setting conditions, which are conducive to marketing of handloom products. The assistance towards marketing incentive shall be eligible to state handloom corporation, apex co-operative societies and PHWCS. Financial assistance provided is 10 per cent of average sales turnover of last three years. Sharing of the quantum of assistance is on a 50:50 basis between central and state.

23.Group insurance, scheme for handloom weavers (Mahatma Gandhi Bunkar Bima Yojana)

Under the new insurance scheme Mahatma Gandhi Bunker Bima Yojana, out of the total premium of Z 330 per weaver, Z 100 will be provided by LIC of India, Rs. 150 by Government of India directly to LIC of India and the balance amount of Rs.80 is the weavers contributions which will be met by the State Government. It is estimated that 22500 weavers can be included in the scheme.

24.Enforcement machinery

This is a100 per cent Centrally Sponsored Scheme. The outlay is for meeting the expenses of the enforcement machinery for the implementation of handloom reservation act.

KINFRA

Kannur is the land of handloom that conquered global markets, especially in the home furnishing segment. The workmanship of weavers, quality of raw material including water used for processing, and entrepreneurial spirit of the people helped the northern district of Kerala assert its supremacy in handloom exports, which is around Rs 300 crore a year. The new Textile Centre, developed by the Kerala Industrial Infrastructure Development Corporation (KINFRA) under the Textile Centre Infrastructure Development Scheme at Nadukani near Kannur is all set to boost the textile industry in the district which has set a Rs 1000-crore target of exports. The Textile Centre, part of a planned Textile Town, is set up at a cost of Rs 45 crore, of which the State government’s contribution was Rs 20 crore. The centre hosts six main units, all linked to textile and garments production. They are:

* A wet processing plant for dying and winding* A common effluent treatment plant* Bonded warehouse* Water harvesting pond* Hazardous waste treatment plant* A standard design factory

KINFRA would provide a ‘walk in and manufacture’ environment to entrepreneurs in the textile and textile-related industries sector at KINFRA TextileCentre. The dyeing and winding plant is set up at a cost of Rs 24 crore, made available from the ASIDe scheme of the government of India. The plant can process 15 tonne yarn and 70,000 metres of fabric a day. It is meant for the use of the units within the park but can be accessed to by outside units also depending on the availability of slots.

The common effluent treatment plant that can treat 750 cubic metres of effluents a day will be a boon for the units. With the Supreme Court tightening the norms on environmental pollution, many units in the districts were finding it difficult to survive as the cost of setting up and running a full-fledged effluent treatment plant for a single unit would ruin them. Some of them were even facing closure. Several such units are relocating to the Centre.The Textile Centre w