Term Paper On Business Inviroment

TERM PAPER ON BUSINESS ENVIROMENT TOPIC: - HANDLOOM INDUSTRY ACKNOWLEDGEMENT The term paper what I have presented is not the made outcome of my own labour alone , there are dozens of hands help’s me to complete all through the program . My sincere thanks to Miss IMPREET KOUR Internal guide for guiding me to work on this term paper.

S UBMITTED BY:-

Sushil Kumar Roll no. A-19 MBA 1st semester

CONTENT 1.Introduction 2.Roll of Handloom sector 3.Ongoing schemes and program 4.Deen Dayal Hathkargha Photsahan Yojana 5. National center for textile design(NCTD) 6.Input support 7.NHDC 8.Credit facility 9.Suggestion 10. PESTEL Analysis 11. Conclusion 12. Reference 13. Article

INTRODUCTION: The Textile industry occupies a unique place in our country. One of the earliest to come into existence in India, it accounts for 14% of the total Industrial production, contributes to nearly 30% of the

total exports and is the second largest employment generator after agriculture. Today, India's textile sector comprises four important segments: � Modern textile mills � Independent Power looms � Handlooms and � Garments

ROLE OF HANDLOOM SECTOR: The Handloom sector plays a very important role in the country’s economy. It is one of the largest economic activities providing direct employment to over 65 lakhs persons engaged in weaving and allied activities. As a result of effective Government intervention through financial assistance and implementation of various developmental and welfare schemes, this sector has been able to withstand competition from the power loom and mill sectors. This sector contributes nearly 19% of the total cloth produced in the country and also adds substantially to export earnings. Handloom is unparalleled in its flexibility and versatility, permitting experimentation and encouraging innovations. The strength of Handloom lies in the introducing innovative designs, which cannot be replicated by the Power loom sector. Thus, Handloom forms a part of the heritage of India and exemplifies the richness and diversity of our country and the artistry of the Weavers. The Office of the Development Commissioner for Handlooms has been implementing, since its inception in the year 1976, various schemes for the promotion and development of the handloom sector and providing assistance to the handloom weavers in a variety of ways. Some of the major programs relate to: � Modernization and Up gradation of Technology � Input Support

� � � � � � �

Marketing Support Publicity Infrastructural Support Welfare Measures Composite Growth Oriented Package Development of Exportable Products Research & Development

The various schemes implemented by the Office of Development Commissioner for Handlooms address the needs of weavers who constitute the disadvantaged social strata and occupational groups, which are at the bottom of the economic hierarchy. Concerted efforts are being made through the schemes and programs to enhance production, productivity, and efficiency of the handloom sector and enhance the income and socioeconomic status of the weavers by upgrading their skills and providing infrastructural support and essential inputs.

ONGOING SCHEMES AND PROGRAMMES: In order to provide financial assistance in an integrated manner to the handloom weavers and strengthen the design segment of the fabric, Government of India had taken new initiatives in addition to ongoing other schemes and programs by launching new scheme, namely, Deen Dayal Hathkargha Protsahan Yojana and set up a National Centre for Textile Design (NCTD) recently.

DEEN DAYAL HATHKARGHA PROTSAHAN YOJANA:

The scheme has come into operation with effect from April 2001. It is a comprehensive scheme for handloom sectors to take care of a wide range of activities such as, product development, infrastructural and institutional support, training of weavers, supply of equipment and marketing support, etc. both at macro and micro levels in an integrated and coordinated manner for an overall development and benefit of handloom weavers. It also, attempts to provide such facilities, which would enable the weavers within co-operative fold as well as outside, to take up production as per the market demand. The scheme attempts to assist the needs of weavers for working capital, basic inputs, creating awareness and to support quality fabric productions through appropriate design intervention for increase in productivity along with provision for publicity, marketing and transport incentives, etc. The Government of India has sanctioned a sum of Rs. 240.69 lakhs and released a sum of Rs. 120.28 lakhs as first installment Central share for implementation of 64 projects.

NATIONAL CENTRE FOR TEXTILE DESIGN (NCTD): National Centre for Textile Design was set-up in January 2001 in Handloom Pavilion, Pragati Maidan, New Delhi to promote traditional & contemporary designs to enable the textile industry, particularly the Handloom sector, to be responsive to the rapidly changing market demand.

Objectives of the Scheme� To link weavers to the market and provide him with adequate tools to respond to the rapidly changing market situation and demands.

� To link all people belonging to the textile industry with the developments in other fields. � To give weavers, workers and designers greater exposure and access to national and international markets thereby giving them a better livelihood and avenues for more sustainable development.

ENFORCEMENT OF HANDLOOMS RESERVATION ACT: The Handlooms (Reservation of Articles for Production) Act, 1985 aims to protect millions of handloom weavers from the encroachment made on their livelihood by the power loom operators and textile mill sector, by reserving certain categories of textile articles for exclusive production by handlooms.

INPUT SUPPORT: Handloom sector is largely dependent on the organized mill sector for supply of its principal raw material namely yarns. This sector uses the bulk of its yarn in the form of hanks. The Central Government ensures regular supply of yarn to the handloom sector by enforcing the order (Hank Yarn Packing Notification) by making it obligatory on the spinning mills to pack a prescribed % of the yarn produced by them in hank form.

MILL GATE PRICE SCHEME: The Scheme was introduced in 1992-93 with an objective of providing all type of yarn to the handloom weavers’ organizations at the price available at Mill Gate.

NATIONAL HANDLOOM DEVELOPMENT CORPORATION (NHDC)National Handloom Development Corporation (NHDC), a Government of India undertaking, is the only agency authorized to implement the scheme. The scheme benefits the following organizations and their member weavers. � All Handloom Organizations of National/State/Regional level. � Handloom Development Centres;

� Handloom producers/exporters/manufacturers registered with the Handloom Export Promotion Council (HEPC) or any other Export Promotion Council under the Ministry of Textiles, or with the State Directors of Industries; � All approved export houses/trading houses/star trading houses for production of handloom items; � Members of recognized/approved handloom associations; � NGOs fulfilling CAPART norms; � Any other agency, with the approval of the Development Commissioner for Handlooms; � All types of yarn required for production of handloom items are covered under the scheme. The Government of India is bearing the entire expenditure under the Scheme. The yarn is being arranged by NHDC from the mills as per the requirement of the user agencies and transported to the go down of the agency.

CREDIT FACILITY: The working capital requirements of the Weavers’ Cooperative Societies (WCS) and State Handloom Development Corporations (SHDC) for production, procurement, marketing, purchase and sale of yarn, National Bank for Agriculture and Rural Development (NABARD) provides refinance facilities through State Cooperative Banks (SCB), District Central Cooperative Banks (DCCB) and Commercial Banks at concessional rates of interest. The National Scheduled Castes and Scheduled Tribes Finance and Development Corporation, National Backward Classes Finance and Development Corporation, National Minorities Finance and

Development Corporation also provides working capital loans to the Weavers identified communities.

SUGGESTIONS TO OVERCOME FROM THESE PROBLEMS: The central government needs to recognize the value of the handloom sector in sustainable development. On its own, the government would never be able to provide employment to such a large workforce. Going by the logic of liberalisation itself, the government in turn ought to formulate, promote and encourage policies that sustain this employment. Government has to ensure a 'level playing field' for this sector towards healthy competition among the different sub-sectors of textile industry. The following are aspects that require immediate attention: 1. Raw Material supply Access to raw material such as yarn, dyes and dyestuffs has become a problem. Weaving is a rural and semi-rural production activity and weavers have to go far to get these raw materials. To top it off, yarn prices are steadily increasing. As a result, there is a perennial shortage of yarn for the weavers. Despite a few schemes, the hank yarn access issue has not been resolved. 2. Raw material prices Handloom primarily uses natural fibres such as cotton, silk and jute. Prices of these fibres have been increasing during production and processing. Cotton production in India is expensive because of intensive and high usage of costly agricultural inputs such as pesticides and fertilisers. Secondly, while the fibre production most often happens in the vicinity of the

weavers, their processing is done in distant areas, and as such the prices to the weaver are higher. 3. Infrastructure and Investment Investment in handloom sector has thus far been limited to input supply costs. There is no investment on sectorial growth. While there have been some piece-meal projects such as work shedcum-housing and project package schemes, they merely perpetuate the existing conditions. There has been no thinking on basic requirements of the producer. Facilities such as land, water and electricity need to be provided in many places that are a harbor for handloom manufacturing. On the other hand, power looms are getting more usable support from the government in procuring land, water and electricity. 4. Design improvements While there are suggestions that handloom sector should increase its design in response to changes in the market, the bottlenecks are many. The lack of change is not due to the weaver not being amenable to change, as is bandied. Rather, it is due to unwillingness of the investor to take risks and provide incentive to weavers for effecting the change. 5. Market for products Handloom products require more visibility. This means better and wider market network. One-off exhibitions organised with the support of government do not suffice. 6. Patenting designs/varieties Handloom designs are not protected. As a result, investors are not interested lest they end up with the risk and those who copy the benefits. Protection options include development of handloom/silk/jute marks and registration under Geographical Indications Act. 7. Free export/import trade - opportunity

Post the WTO Agreement on Textile Clothing, there is going to be more free export and import of textiles. The handloom sector, as a traditional area, can claim some special packages or discriminatory measures, to protect this kind of production. 8. Cooperative system While cooperatives do help in maximizing the benefits for weavers in the entire chain of production, their present condition a cause of concern. The handloom cooperative system is riddled with corruption and political interference. Cooperatives have to become independent of district-level government officers in terms of management and decision-making 9. Intermediaries (individuals/institutions) Government has created a few research, training and input institutions to help the handloom sector. These institutions include weaver service centers, institutions of handloom technology, NIFT, etc. But their performance has been below par and their presence has not helped in Obviating the problems of handloom weavers. 10. Budget allocations Allocations for handloom in national and state budgets are being reduced. This has to be reversed. Budget has to increase with new schemes which address the problems of the sector, in view of the linkage and the need to protect rural employment. 11. Enhancement of Value There is a need for enhancing the value of handloom products through utilisation of organic cotton and organic yarn, application of natural dyes and by increasing the productivity of the looms through research and innovation – for example, changes in the width of the looms and some appropriate technical changes. 12. Competition and unfair competition from mills and powerlooms

Competition is now uneven, with mill and powerloom sector getting subsidies in various forms. Secondly, power looms have been undermining handloom markets by selling their products as handloom. 13. Wages, employment and livelihood issues Wages have not increased in the last 15 years. Some sections of handloom weavers are living in hand-to-mouth conditions, with no house or assets. These issues need to be addressed by the government; at least effectively implement the Minimum Wages Act.

PESTLE is an acronym for Political, Economic, Social, Technological, Legal and Envir onmental factors, Which are used to assess the market for a business or organizational unit strategic plan.

POLITICAL FACTOR AFFECTING: Presently , handloom weavers are facing several livehood crisis because of adverse government policies , golbalisation and changing socio , economic condition . Government have been extremely adverse retrograde and determinental to interest of the handloom weavers Government polocies are increasing influenced by the globalization process induced trade regimes. Control on export get liberalized abd the domestic market become open to import the textile scenario in the country is likely to undergo drastic change in term of skills , input like design , market trend and changing demand therein . Government has created a few

research timing and input unstitution to help the handloom sector but their performance has been below par and their presence had not helped in obviating the problem of handloom weaver. Presently their no subsidies for handloom sector .They are completely withdrawn . Government has to spread the caste and profrssional dimensions of handloom sector . Government has to recognize the role of different communities in the handloom sector and allocate fund appropriately .

ECONOMIC and SOCIAL FACTOR AFFECTING: The Handloom sector plays a very important role in the country’s economy. It is one of the largest economic activities providing direct employment to over 65 lakhs persons engaged in weaving and allied activities. As a result of effective Government intervention through financial assistance and implementation of various developmental and welfare schemes, this sector has been able to withstand competition from the power loom and mill sectors. This sector contributes nearly 19% of the total cloth produced in the country and also adds substantially to export earnings. Handloom is unparalleled in its flexibility and versatility, permitting experimentation and encouraging innovations. The strength of Handloom lies in the introducing innovative designs, which cannot be replicated by the Power loom sector. Thus, Handloom forms a part of the heritage of India and exemplifies the richness and diversity of our country and the artistry of the weavers.

Technological factor effecting Hand weaving has been associated, especially in the post-Independent policy formulations, with notions of ‘cultural heritage’, ‘ancient’, ‘traditional’ industry in the country. In this rhetoric, its significance as an indigenous technology was often forgotten. On the basis of their

structure, handlooms can be divided into a) primitive looms, b) pit looms – throw shuttle and fly shuttle - and c) frame looms*. In the name of technological upgradation, since early Five Year Plans, it was envisaged to convert pit looms into frame looms. Nevertheless, such conversion should take into account the increase in the amount of cloth woven, for frame looms are capable of weaving greater volumes than pit looms and the possibility of marketing this. The greatest disadvantage of frame loom is that it occupies more space and is not easy to operate due to increased vibrations while weaving. Moreover, it also costs much more than a pit loom. Pit loom has the advantage of saving space, less expensive and more health friendly. Besides, only pit looms are 122 capable of making sarees of finer counts with intricate extra weft patterns. Since 1985, technological upgradation of handlooms has been synonymous with the conversion of handlooms into powerlooms. Nonetheless, a detailed study of the impact of such a conversion on labour involved in handlooms, the infrastructure required, channels of marketing the increased volume of cloth produced, rehabilitation of the affected handloom weavers, has never been paid heed. Any conversion, in the name of modernization or technological upgradation, should have the welfare of the weavers as their paramount goal.

Environmental factor effecting Soon after India's independence the Congress Party constituted the Economic Programmes Committee to provide a broad direction to the Congress Governments at the Centre and State levels. The Committee, headed by Jawaharlal Nehru,15 reported in January 1948. Industries producing articles of food and clothing and other consumer goods should constitute the decentralized sector of Indian economy and should, as far as possible, be developed and run on a cooperative basis. Such industries should for most of the part be run on cottage and small scale basis.

This was a large area earmarked for rural, cooperative and small scale industries. The general direction indicated for state intervention was for imposing restrictions on large scale manufacturing of most consumer goods while extending support to traditional systems of production. And yet, it is not likely that foreign trade occupied a major part of the textile economy within India’s economy at any time before 1850. At the end of the eighteenth century, cloth export from India amounted to about 50 million yards , whereas total production within India could not have been smaller than 1800-2000 million yards. Unfortunately, we know far more about the segment of textile production that traded abroad, thanks to European trade records, than about the segment that traded locally and overland. 1

Legal factor effecting Handloom weavers are facing severe livelihood crisis because of adverse government policies, globalisation and changing socioeconomic conditions. The national and state governments do have several schemes pertaining to production inputs, market support and development, meant to safeguard the interests of the weaving community. Ineffective implementation of the schemes and the changed context of textile industry, increasing competition from the power loom and mill sectors have been largely responsible for the crisis in the handlooms. Lack of information to weavers regarding various policies and schemes is no less a significant cause for the dwindling fortunes of the weaver community. Even government departments and implementing agencies related to handloom suffer from inadequate information and data resulting in a widening gap

between policy formulation and implementation. In the recent decades, due to lack of information and fast paced changes, practices in handloom sector became static and apparently redundant.

CONCLUSION: The Handloom Textiles constitute a timeless part of the rich cultural Heritage of India. The element of art and craft present in Indian handlooms makes it a potential sector for the upper segments of market domestic as well as global. However, the sector is beset with manifold problems such as obsolete technologies, unorganized production system, low productivity, inadequate working capital, conventional product range, weak marketing link, overall stagnation of production and sales and, above all, competition from power loom and mill sector. As a result of effective Government intervention through financial assistance and implementation of various developmental and welfare schemes, the handloom sector, to some extent, has been able to tide over these disadvantages. Thus, Handloom forms a precious part of the generational legacy and Exemplifies the richness and diversity of our country and the artistry of the weavers.

REFERENCE: 1. texmin.nic.in/annualrep/ 2. apparel.indiamart.com/industry/handlooms/ 3. www.hepcindia.com 4. texmin.nic.in/tex_07.htm 5. www.ieport.com/epc.htm 6. www.indiatogether.org/2009/dec/eco-handloom.htm

7.indiaMBA.com

Article The penultimate article titled “Ericulture as a Remedy of Rural Poverty in Assam: A Micro Level Study in Barpeta District” by Utpal Kumar De and Manjit Das highlights the role played by ericulture and endi-entrepreneurship in mitigating rural poverty and unemployment in Assam over a long period of time. Ericulture is however not growing at a faster rate due to the lack of capital of the eri rearers and that of the common weavers that prohibits technological invention and innovation. Moreover, the profit rate is not sufficiently high due to lack of organization of the rearers and weavers and hence their poor bargaining power. Ericulture generates employment for a large number of unemployed people, especially for women, partially or fully in its various stages of activities; despite the significant rise in total number of families engaged in ericulture during 1991 to 2005, its share to total workforce declined due to relatively faster growth of other (tertiary) sectors of the economy. The article concludes by observing that endi-entrepreneurship is very important from the point of employment and income generation, which increase the contribution of ericulture substantially. Further, as ericulture is totally manned by tribal women, it not only helps the families by contributing to income but also provides protein full pupae to their children and other family members.

1 M.J. Twomey, “Employment in Nineteenth Century Indian Textiles”, Explorations in Economic History, 20 (1983), pp. 37-57.