Pic- 01 Chanderi saree, February 2021
Vision and Strategy to rejuvenate Handloom Textiles –
Case study of Chanderi Handlooms [1]
Rohit Kumar Parmar Free lance [2]
IES (Retd)
Former Senior Economic Adviser
Government of India
Key words:
Chanderi, capital expenditure, cluster, cobb-douglas production function, competition, data envelopment analysis, exports, extra weft motifs, fabric, family labour, GST, handloom textiles, imports, input markets, poverty, productivity, restricted imports, saree, schemes, skill, tana-bana, textile parks, tradition, weaving.
I. Introduction:
The Indian handloom textiles sector is a spectrum of all that is known or not known, perceived or not perceived – great tradition; global brand and recognition sans modern marketing and advertising; high skill levels, family traditions and labour; clusters of manufacture dedicated to a differentiated product/ segment[3]; tiny, micro and macro economic dimensions; use of eco-friendly methods; now neglect of the sector; low volumes, so low profitability, low incomes and so poverty of the (highly skilled) weaver; non-transformation to modern manufacturing processes; need to incrementally modify, restructure and upgrade looms and practices to enhance productivity and output, retaining the original character; inefficient input markets, with low competition and very little improvements either to augment supplies (domestically or through unrestricted and duty free imports) or enhance competition; piecemeal understanding of issues and problems the sector faces and solutions by the government in the form of technology upgradation schemes and establishing parks, etc.; and finally recognition of the need to preserve and promote them (handloom textiles sector) from low income and low profitability to high productivity and higher incomes; and finally policy and action that is driving the sector towards closure.
Economic changes such as demonetisation, [4] changes due to phasing out of Generalised Scheme of Preferences (GSP), introduction of the complicated GST[5], red tape laden Remission of Duties and Taxes on Exported Products (RoDTEP) scheme, which are a drain on time and other resources of the weaver. A weaver with low literacy level and subsistence income is expected to periodically file online returns and keep documents for several years in order to claim a tax credit, which may be refused due to (mis) interpretation of a rule. [6] He either engages an accountant or if he is capable of doing the same, does so at the cost of his main work of weaving.
This author has been arguing for doing away with the input credit system in GST, to be replaced with lower GST rates. [7] However, the handloom sector (both inputs and output) should be exempt from GST.
Levy of GST is done in an environment where most businesses are making profits on loans taken from public sector banks, seldom repaid; do not pay any taxes; seek and obtain concessions from the exchequer at the cost of other claimants who have a better right (by any yardstick, except that being presently adopted); and lead luxurious life styles.
Another shock was given due to covid lockdown, when in the clusters there was lockdown, sans covid. There was disruption in work, wages, demand, livelihood, with scant relief available. An already crippled sector finding it difficult to recover from the several shocks, was subjected to another shock.
This paper is a very modest attempt to make some suggestions to improve productivity, profitability of the handloom textiles sector, taking the case study of Chanderi fabric. Discussions in this paper can be adapted/applied for other clusters of handlooms textiles and/or handlooms also. The scheme of the paper follows. After this introduction, the second section covers features of Chanderi fabric. The third section details the determinants of productivity and the reasons for studying the same. It also cites some studies on productivity of the sector. The fourth section details the determinants of profitability distinct from productivity and the reasons for studying the same. The fifth section reviews government schemes and programmes for the textiles sector. The sixth section covers implications of the announcements in budget 2021-22. The seventh section covers suggestions to increase productivity through improvement in processes and markets for inputs. The eighth section concludes the findings with some suggestions.
II. Chanderi Fabric:
Chanderi fabric is synonymous with Chanderi, a weaver’s town in Ashok Nagar (District), Madhya Pradesh, India, located near the upper (south) end of the river Betwa. [8] Chanderi amongst the best known handloom clusters, occupies a special place in the handloom textiles sector, because of centuries old weaving specialty of weaving finely textured fabrics of silk and cotton with zari work. A large share of the population of Chanderi is associated with the manufacture of Chanderi fabric.
The Chanderi fabric is hand woven by traditional methods and evolved and developed over centuries and passed down over generations. Chanderi fabric, a beautiful blend of cotton, silk thread and zari, are of three kinds- Pure Silk, Chanderi Cotton and Silk Cotton. Chanderi shimmering cotton fabric are known for their sheer texture, light weight, a glossy transparency, that sets them apart from other textiles and is suited for summer wear.
Pic- 02 Chanderi suit, February 2021
Chanderi Saree interspersed with delicacy of extra weft motifs, has satisfied tastes of royalty over centuries. The motifs used in Chanderi sarees moved from natural {hamsa (swans), asharfi (gold coins), trees, fruits, flowers and heavenly bodies} to geometric designs.
Weaving of Chanderi, till around 1920s, was white/ off-white cloth with ends fringed with zari or golden thread, which accounted for its delicate texture. Chanderi fabrics have gradually moved from traditional soft pastels to combinations of bright colour borders on an off white base, or red on black. (Pic-01) They have also moved to non-saree fabric like suits. (Pic-02)
Chanderi cloth is composed of tana (the warp length-wise stretched set of threads), through which the bana (the weft) is woven back and forth. Only hand-spun cotton thread was used, even in the tana, even though it was barely strong enough to hold the tension. Weavers were highly skilled workers as they had to be extremely careful while handling the delicate cotton yarn.
III. Determinants of productivity:
Productivity is the ratio of output to factor input/s. A favourable ratio suggests higher productivity. Improvement in productivity means higher output from the same input/s or using lesser input/s for the same output. The comparison of productivity could be over time (inter-temporal) or with other worker/s (inter-personal), or with other cluster/s (inter-regional/cluster). With a homogenous output and single factor input labour, it is easy to measure productivity, the ratio between output and factor input. The process gets complicated as the output ceases to be homogenous or there are multiple outputs, and/or more than one factor input. [9]
A simple measure of productivity adopted in the context of Chanderi cluster is the `number of days it takes to weave a saree’. Similar measures were adopted by the International Motor Vehicle Programme (IMVP) for automobile manufacturers across the world when subject to competition from Japanese manufacturers -number of cars per employees and the number of hours taken to assemble a car. [10]
The productivity measure can be modified to `number of meters of Chanderi fabric produced per man hour’, with suitable weightage for the quality/ intensity of the design. For example, in a five meter fabric (equivalent to a six yard saree) with design or motifs in one meter covering pallav (decorated part of a saree worn across the chest), border, blouse piece (possible with extra length design and pattern), could be given additional weightage. Similar adjustments/ weightage can be given for other variations.
The reason for studying productivity is that any attempt to increase the income of labour (weaver) in the cluster (Chanderi or other) is possible only if productivity increases. Majority (66.3 percent) of the weaver households earn less than Rs. 5,000/- per month. (GOI, 2019). Accordingly, schemes/ programmes, etc. of the government should clearly identify benefits in terms of increases in productivity that are unambiguously quantifiable, preferably in physical units.
Scope for increase in labour productivity in Chanderi fabric by increasing large quantities (in absolute and/or relative terms) of capital is limited, since this would shift them (Chanderi fabric) out of the handloom cluster. This is one reason to move from measures of partial productivity like ratio of output to a factor input (meters of fabric per man hour) to measures based on production function.
The implications of higher productivity (Figure 1) include higher output from the same set of resources; reduction in variable cost of production; distribution of fixed costs over a larger volume, reduction in manufacturing cost; improving the bottom-line; higher profit and returns; scope to cut price and increase volumes; room to innovate and increase high value designer products with same resources.
Figure- 01 - The cycle of higher productivity
Production functions, especially Cobb-Douglas [11] production function has been used to measure production and productivity, in relation to inputs and total factor productivity (TFP) which results from improvements in the processes, etc. Banerji (2007) has used Cobb-Douglas production function to identify sources of growth for selected Indian industries including textiles.
Dhiman and Sharma (2019) suggest that increase in productivity in Indian textile industry is needed to increase output and to improve competitiveness in the domestic and international markets. They have highlighted limitations of labour data in ASI database.
Husain (2016) empirically tested the Cobb-Douglas production function for six industries including Garments and Textiles in Bangladesh and found the coefficient for K is 0.30 and L is 0.61 for Garments, implying that labour is more productive than capital, which was also true for the Textiles sector. There is a limitation in data adopted for labour, since it adopts only permanent workers (officials managers, personal) as L, thereby excluding non-permanent workers.
Data availability is a major limitation with estimating the production function for the handloom textiles sector. Adopting proxies, skews the results of the estimator.
Nurunnajib (2018) estimated the Cobb-Douglas production function for five Manufacturing Industries including Textiles in West Sumatra, Indonesia and found returns to scale for Textiles have a value of 1.0018.
The cited and other studies (Parmar, 1994) have a detailed exposition of the use of production function to quantify relations of input and output and also productivity, which is also covered below.
While it would help if there are empirical studies estimating production functions in India, especially in the textiles and handloom textiles sector, absence of such estimates (of production functions) should not prevent drawing conclusions from existing studies of other countries.
A typical Cobb-Douglas production function is represented as
Q = A L α K β
where
Q is Output
L is Labour
K is Capital
α is the elasticity of output with respect to Labour and gives the share attributable to Labour
β is the elasticity of output with respect to Capital and gives the share attributable to Capital
α + β give the returns to scale. If inputs are doubled and output doubles, there are constant returns to scale. If inputs are doubled and output increases by more than double, there are increasing return to scale. If inputs are doubled and output increases by less than double, there are decreasing return to scale.
A is a positive constant called the efficiency parameter and provides for technological change. Improvements in total factor productivity for the Chanderi cluster are suggested in this paper.
The respective marginal productivity for inputs are given in the following equations
MP L = δ Q/ δ L = α A L α-1 K β.= α Q/ L (1)
MP K = δ Q/ δ K = β A L α K β-1. = β Q/ K (2)
From equation (1), it is clear that marginal productivity of labour decreases, as the amount labour employed increases.
Accordingly, increases in productivity have to come either through (small) increases in capital or through increases in A (Total Factor Productivity. We examine both adopting different approaches. In respect of increases in capital, we study past trends to identify any pattern.
Similarly in respect of A, an attempt is made to breakdown the process of weaving into components and try to identify and suggest improvements.
IV. Determinants of profitability
Profitability is different from productivity. While higher productivity is essential for profitability, it does not necessarily ensure profitability. Higher productivity is a necessary but not a sufficient condition for profitability.
Profitability depends upon market conditions of input and output markets. Profitability is also impacted by capacity utilisation, which is dependent upon the demand conditions as also the supply constraints.
Profit =Total Revenue – Total Cost
π = (P x Q) – (FC + VC x Q)
π = FC + Q (P – VC) (3)
Where
π is profit
P is price per unit of output
Q is quantity of output
FC is fixed cost (independent of quantity of output)
VC is variable cost (changes with output)
In equation (3), profit π is positively corelated to Q, quantity of output and P unit price of output. This implies that if quantity produced/sold is higher, then profit π will also be higher. Similarly, if the price at which the quantity sold is higher, then profit π will also be higher.
However, profit π is negatively corelated to both FC (fixed cost) and VC (variable cost).
While steps need to be taken to increase both Q and P, steps also need to be taken to free up market for inputs and increase competition, so that FC and VC do not increase. This is essential since π (profit) can never be positive unless revenue is greater than total/ variable cost.
π = (P x Q) – (FC + VC x Q)
for π > 0
(P x Q) – (FC + VC x Q) > 0
P x Q > (FC + VC x Q)
Assuming FC = 0 in the limiting case, then
P x Q > VC x Q
P > VC
i.e., unit price realised is greater than unit cost. This is the equilibrium condition in the short run under monopolistic competition.
However, in the long run
P x Q > (FC + VC x Q)
has to be fulfilled.
Few measures to increase Q are suggested below
Two pronged strategy is needed to increase Q, first measures to increase demand and second measures to increase output, largely through increases in productivity.
The Fourth All India Handloom Census, 2019-20 (GOI, 2019) has identified reasons for looms remaining idle, which are - lack of market demand (50 percent), non-availability of weavers (27 percent), and lack of capital/ funds (23 percent). Clearly enhancing demand takes high priority.
Several steps have been taken by textile entrepreneurs to increase demand for Chanderi fabric by working intensely on designs and popularising them. A google search of Chanderi saree yielded over 40,00,000 results. [12] Steps outside the domain of google search also exist. Continuous (24 x 7) improvements in a dynamic competitive are required. Non-traditional use of Chanderi fabric in stoles, men shirts, men kurtas need further promotion.
The Chanderi cluster creates value that supports around 50 lakhs forward linkage designer, which alone is good reason to invest in it. While each of these individual entities must be contributing to the Chanderi cluster, there is need to create a direct connect between the final user and weaver. This will help the weaver to customize the fabric, enhance value for his produce and earn a little more.
In an Information Technology (IT) enabled world, this is possible through web pages, mobile or other applications (apps), visual depicting and calling, exchange of designs, altering colour and design combinations on a virtual drawing board, etc. While this should stay in the private sector, institutions in the sector (National Institute of Fashion Technology, NIFT or Indian Institutes of Handloom Technology, IIHT or some other institution) could consider surveying them and also provide a directory. The directory should be open source with facility for on-line editing. The survey could cover any/or all aspects of the sector - consumer, weaver, supply chain, input markets, cost, price, quality, skills, and so on. This will help to identify present gaps and suggest a path for growth.
Steps to increase Q through increases in productivity are discussed in section VII.
V. Government schemes and programmes:
Responding to every need of the textiles sector, government created a scheme, thinly spreading resources, large share of which is spent on non-capital expenditure, possibly wages, and only a trickle reaching the weaver. It also results in inefficient government intervention and a drain on the exchequer. A listing of the schemes is done only to show the wide shelf, which results in thin spread of resources. The listing for the textiles sector followed by the handloom textiles sector are given in Annexure I.
As argued in part III, capital expenditure plays a key role in increasing productivity of the textiles sector, including handloom. At the cost of repeating, the Fourth All India Handloom Census, 2019-20 (GOI, 2019), found that 23 percent of the looms remained idle, due to lack of capital/ funds.
However, trends of expenditure of Ministry of Textiles given in table 1 below, show a decline in capital expenditure of (-) 77.74 percent, from a peak of Rs. 179.89 crores in 2016-17 to Rs. 40.03 crores in 2021-22 (BE). Percentage of capital to total expenditure also declined from a high of 3.16 percent in 2015-16, to a low of 0.35 percent in 2018-19.
One implication of decline in expenditure on capital is that increases in productivity in the Textiles sector are unlikely to happen because of increases in capital and is a cause of concern.
Assuming the life of a loom to be 30 years and adopting straight line depreciation, an annual depreciation of 3.33 per cent of capital takes place. In order to prevent erosion of capital (capacity of the loom), at least 3.33 per cent capital expenditure should be incurred annually, which is not happening and is worrisome. Capacity of loom, if expenditure equivalent to depreciation does not take place would increase breakdown, reduce efficiency and result in obsolescence.
The trend of declining capital expenditure in the textiles sector needs to be arrested and reversed at the earliest, with suitable monitoring of the handloom textile sector also.
VI. Budget 2021-22 for the textiles sector:
Budget speech 2020-21 has two paragraphs for Textiles sector, reproduced and analysed below.
Para 41 speaks of setting up of 7 Mega Investment Textiles Parks over three years.
41. To enable the textile industry to become globally competitive,
attract large investments and boost employment generation, a scheme of
Mega Investment Textiles Parks (MITRA) will be launched in addition to the
PLI scheme. This will create world class infrastructure with plug and play
facilities to enable create global champions in exports. 7 Textile Parks will
be established over 3 years.
These parks are likely to start production after 2024-25 and so will not increase employment, output or exports till then. Assuming a complete roll-out by 2024-25, depending on the occupancy of these parks and the capacity utilization by the occupants, benefits of increased employment, output or exports will accrue.
The second paragraph in budget speech 2020-21, is reduction in Basic Customs Duty (BCD) rates on caprolactam, nylon chips and nylon fibre & yarn to 5 percent in the name of rationalization of import duties.
181. The Textiles Sector generates employment and contributes
significantly to the economy. There is a need to rationalize duties on raw
material inputs to manmade textiles. We are now bringing nylon chain on
par with polyester and other man-made fibers. We are uniformly reducing
the BCD rates on caprolactam, nylon chips and nylon fiber & yarn to 5%.
This will help the textile industry, MSMEs, and exports, too.
The actual benefit would, however, depend on the extent to which the cut in duties is passed on to the weaver, to reduce his cost of production. The Ministry of Finance (Department of Revenue) and the Textiles should monitor the reduction, after adjusting for reduction in global prices, if any.
Further, bringing products of the nylon genre at par with polyester and other man-made fibres would translate into benefits, only to the extent that they are substitutes.
However, non-textile products that use nylon as inputs such as umbrella and parachute fabric, airbags, curtains, carpets, tire cord, conveyor belts, rope, fishing nets and line; and other products that use engineering grade plastic nylon chips in manufacturing automotive parts, gears, high-pressure pipes, food packaging, pharmaceutical packaging, electronic products, stand to benefit, depending on the extent to which the cut in duties is passed on to the user. Any reduction in duty on inputs is a welcome measure, if it is passed on to the user and the Ministry of Finance (Department of Revenue) and the concerned Ministries should monitor the passing of reduction, after adjusting for reduction in global prices, if any.
VII. Suggestions for improvement:
Suggestions for improvement are loosely grouped and detailed in following sub-parts.
VII.1 Aggregate approach to improving production processes:
The entire list of processes in all stages of weaving of Chanderi fabric need to be listed with at least two parameters each, including amount of time taken, and whether the activity entails working on the loom. The exercise should also specify separately, any time of transition from one process to the other. This information then needs to be arranged in descending order and the first three items (as in ABC analysis in management) identified for reduction by a specified percentage, by improvement by the IIHTs/other institutions, in a competition. The reduction can be in all and/or any part of the process. Use of tools like the Data Envelopment Analysis (DEA) shall help to draw up an (dynamic) efficiency frontier, which could be an activity-wise goal for each enterprise to achieve.
The rationale for separating activities with and without the loom is that the latter (without) should not restrict the output from the loom and can be considered for outsourcing.
In an iterative process, efforts should be made to reduce the time taken to weave, by a specified percentage each year, say 3-5 per cent. This shall help to continuously increase productivity and reduce the cost of weaving the Chanderi/ other fabric.
The process of weaving the Chanderi fabric is analysed for each stage, in order to suggest improvements in all/ any stage. These are only indicative suggestions, which need to be further built upon.
VII.2 Improving individual processes:
1. The Dyeing Process
Dyeing is an important part of the process and starts with dissolving the fast colour dye in warm water. The threads are dipped into this solution (colour dye in warm water) for a while before being taken out. Depending on the quality of the dye, the threads are dipped again for some time. They are then washed with plain water and soaked in a solution of warm water, detergent and soda. Finally, the threads are washed once more and hung on bamboo poles to dry. Once they are dry, they are sent back to the weavers for further processing.
There is scope to reduce time and cut costs in the dyeing process, an indicative listing of which is
i. Selectively facilitate market driven mechanised dyeing of threads in commonly owned/provided facilities. The facility should be a state of art one, able to regulate time and temperature, and save energy, time and costs. An eco-friendly mechanisation will help reduce consumption of energy, water, detergent, etc.
ii. Introduction of quality (including natural) dyes will help to reduce their consumption and/or lengthen the duration of the colour, adding value to the fabric. There are large areas in Chanderi, including the Handloom Park that can be taken up for cultivation of natural dyes as a commercial activity.
iii. Finally, the process of drying of threads is relatively efficient during the (warm) summer months, and efforts should be made to complete the dyeing and drying before the onset of winters. This may require planning to identify colours required during the winter months. It may also require some additional inputs and capital for the same.
2. Post dyeing process
There are several stages in the post dyeing process, which are detailed below. In a limited way, the sketch at Pic -03 helps to understand some of the processes.
Loosening and winding on reels
In the post dyeing process, the yarn is loosened and wound on reels, for preparation of the warp and weft.
Warping
The yarn is wound on pirns with a charkha (spinning wheel) for use in the weft, an activity performed by members of the weavers’ family.
Winding on bobbins
The warp yarns are wound on bobbins, arranged across a wooden frame called reel. Yarns from these reels pass through a reed to be wound around a vertical drum.
Passing The Warp Through The Reed
The warp threads are then joined to the old warp threads, with a deft twist of the hand of the women folk.
The above four processes do not involve the loom and can be considered for outsourcing, including mechanization, since it would leave the `handloom character’ untouched. This will improve utilization and productivity of the loom.
VII.3 Design:
Two types of designing is done in the Chanderi saree. The first is the main design of the saree containing the border, the motifs, colour combinations, etc., provided by the ordering party. In the case of big trading houses, a laminated paper with design, threads to be used and the location of motifs, etc., is provided to the weaver. The second is the more exquisite motif or booty designing which is done by the master weaver on a graph paper.
Before the actual weaving begins, the weaver sets the design of the border and the pallav by tying the respective ends to a vertical harness called jala (net), which process takes 3-4 days. Reduction in the time taken to prepare the jala (net) of the design either through mechanization or outsourcing, shall increase the productivity of the weaver and should be explored.
The motifs are produced with the help of an extra weft, a fine skilled process that slows down the entire weaving, since the motifs are moved manually. The extra weft needs to be integrated with the main weaving as an additional dimension in the loom, which should be considered by the IIHTs.
It is in the design stage that several time and cost saving improvements need to be introduced, alongside the introduction of computers, training of the weaver/ family member, in design preparation and in real-time consultation/simulation with the buyer. The clusters should have free lance or job workers to assist weavers in the preparation of the design and also interaction with the buyer.
A listing of activities where improvements can be introduced should be done.
VII. 4 Weaving
During the post-dyeing and weaving process, the loom is idle for a host of reasons including non-availability of an additional set of parts of the loom. Solutions to the idling of the loom need to be found.
Weaving is performed by one or two very skilled weavers of the same family, which needs to be expanded.
Pic- 03 Sketch of parts of a loom and their functions
The Chanderi fabric does not require any post loom process and is cut off the loom, to be packed and sold. This is due to the fact that Chanderi Fabric use Single Flature yarn, a quality retained since the glue of the raw yarn is not taken out. The degumming of the raw yarn gives shine and transparency to the finished fabric. This process needs to be adopted by other clusters.
VII. 5 Sourcing of Raw Material
In an Information Technology (IT) enabled world, virtual connectivity through web pages, mobile or other applications (apps), visual depicting and calling, information of price, quality, colour, etc. should be easier to exchange, and should be done as a commercial activity.
There are several locations from where raw material is sourced – Zari from Surat; Silk initially from Karnataka, partially substituted by imported Korean, Japanese and Chinese silk; Cotton yarn from Coimbatore and Jaipur (with issues of minimum order quantity). Connectivity to Chanderi with these locations/ports can improve the sourcing of raw material by the weaver.
VII. 6 Export of Chanderi
Though Chanderi products have a high export potential, only around 10 percent of the total production is exported. The main reason for looms remaining idle is the lack of market demand (50 percent), hence the need for a non-incentive based focus on exports.
VII.7 Poor connectivity and infrastructure:
Chanderi town is 37 km from Lalitpur, a railhead, however, most superfast trains on the Delhi -Bhopal route do not stop at Lalitpur. Jhansi should be the preferred railhead to disembark. Along National Highway 44 (till Lalitpur), Chanderi is 215 kms from Gwalior the nearest airport. Chanderi is 55 km from Ashok Nagar, the district headquarters. Poor connectivity would be impacting supply of raw material, and also preventing designers and other professionals from making trips. The concerned organizations should identify steps to improve connectivity to Chanderi.
Accommodation is limited with two of Madhya Pradesh Tourism hotels, providing middle level facilities and food, also not located near any of the weaving clusters.
VIII. Findings and suggestions:
Productivity increases are vital to increase competitiveness of the handloom textiles sector and incomes of the weaver in Chanderi. Measuring productivity including through the Cobb-Douglas production function suggests that labour productivity can increase only through small increases in capital and through improvements in processes that are captured in the total factor productivity measure A in the Cobb-Douglas production function.
Accordingly, schemes/programmes, etc. of the government should focus on increasing productivity by clearly identifying benefits in terms of changes in productivity.
While profitability is impacted by productivity, it is also impacted by reduction in the manufacturing cost and is dependent on the market conditions of the inputs market. Freeing up markets for inputs or enhancing competition in them, can help to increase profitability.
There are benefits to be reaped by a direct connect between the final user and weaver through customizing the fabric, which should be Information Technology (IT) enabled through web pages, mobile or other applications, visual depicting and calling, exchange of designs, altering colour and design combinations on the virtual drawing board, etc.
There is a decline in capital expenditure during 2016-17 to 2021-22, accompanied with a decline in percentage of capital to total and is a cause of concern. Any capital expenditure of less than 3.33 per cent results in erosion of capacity of the loom. The trend in reduction in capital expenditure needs to be first arrested and then reversed.
A strategy to increase productivity at aggregate and individual process level needs to be worked out and implemented, which could include facilitating mechanisation and outsourcing.
The strategy should also help individual enterprise to improve efficiency with respect to itself, other enterprises adopting Data Envelopment Analysis, with respect to a dynamic frontier. Such a frontier can be drawn up for each stage of producing the fabric.
Market driven mechanisation including dyeing of threads should be facilitated. Scheduling activities like dyeing in summer months where it (dyeing) is efficient should be facilitated.
Inputs and output of the handloom sector should not be exempt from GST. Finally, connectivity to Chanderi needs to be improved to facilitate movement of material and persons.
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Annexure I.
List of government schemes for the textiles and the handloom textiles sector
A. Textiles Sector
1. Technical Textiles Scheme
1.i Pilot to set up Incubation Centres in Apparel Manufacturing
1.ii Pilot Phase of Textile Industry Workers’ Hostel
1.iii Centrally Sponsored Scheme For Integrated Processing Development Scheme (IPDS)
1.iv Development of Mega Cluster Scheme-Handlooms Cluster Development Scheme
2. Silk Sector Schemes
2.i Silk Samagra- Integrated Scheme for Development of Silk Industry
2.ii Catalytic Development Programme (CDP) in Project Mode
3. Scheme for Integrated Textile Parks (SITP)
3.i Scheme for Grant for Apparel Manufacturing Units under Scheme for Integrated Textile Park (SITP)
4. Handloom Sector Scheme
5. Technology Upgradation Fund Scheme
6. Powerloom Sector Schemes
6.i Development of Knitting & Knitwear Sector under PowerTex India
7. PowerTex India
7.i Powerloom Cluster Development Scheme (CPCDS)
B. Handlooms Textiles Sector
Handloom Schemes
1. Comprehensive Handloom Cluster Development Scheme
2. Comprehensive Handlooms Development Scheme
3. Revival, Reform and Restructuring Package
4. Yarn Supply Scheme
5. North Eastern Region Textile Promotion Scheme
5.i Cluster Development Project in NER
5.ii Technological Upgradation of Handlooms in NER
5.iii Market Promotion of Textiles and Handloom Products in NER
6. Handlooms Weavers Comprehensive Welfare Scheme
6.i Mahatma Gandhi Bunkar Bima Yojana
6.ii Health Insurance Scheme
Endnotes:
[1] Author acknowledges the comments of Shri Anil Dube; and an anonymous former colleague on the paper. He is also grateful for views and time spent by weavers and others engaged in weaving the Chanderi saree. [2] Author has in posts on his website (https://rohitkparmar.wixsite.com/site), twitter (https://twitter.com/rohitkparmar?s=09), facebook (https://www.facebook.com/me/), linkedin (https://www.linkedin.com/in/rohit-kumar-parmar-841b4724) been writing on a range of subjects - consumer affairs, economics, festivals, historical places, income tax, law, management, policy, poverty, and on the impact of Covid. He can be reached at rohitkparmar@yahoo.com. Starting 1992, the author has been writing on Direct Tax Reforms in `The Economic Times’. Some of these are available on his website. [3] By differentiating products, firms in a monopolistically competitive market ensure that its products are imperfect substitutes for each other. As a result, brand loyalty is created. [4] There are several reports on reduction of work, wages, demand, livelihood, disruption of all types, loss of time and money in conversion to new currency, due to demonetization in the handloom sector including in Chanderi. Two links give some details, https://en.gaonconnection.com/in-chanderi-an-eerie-silence-prevails-in-streets-that-used-to-resonate-with-the-sound-of-khat-khat-all-day-long/ https://www.newslaundry.com/2017/09/13/demonetisation-and-gst-handloom-weavers-in-pms-constituency-bear-the-burden [5] The impact of GST on the handloom sector has been studied by Monami Sinha (2019). [6] The input credit system is fraught with glitches as brought out by the CAG Report Union Government, Department of Revenue (Indirect Taxes – Goods and Services Tax, Central Excise and Service Tax) Report No. 1 of 2021, https://cag.gov.in/webroot/uploads/download_audit_report/2021/Union_INDT_GST-CA__1_2021-0605ada1e04e151.14994928.pdf [7] https://m.facebook.com/story.php?story_fbid=1954480034675419&id=100003403253504 https://m.facebook.com/story.php?story_fbid=3682919898498082&id=100003403253504 [8] Almost all rivers in India flow from North to South, however, Betwa flows from South to North. [9] Data Envelopment Analysis and Production functions can measure productivity in multi input/output scenarios. [10] Oliver and Wilkinson 1992, detail how improvements in productivity drove the growth of the automobile sector, helping it to face competition from Japanese automobile manufacturers. [11] Cobb-Douglas (1928) [12] The following link showed the number https://www.google.com/search?q=chanderi+saree+designs&oq=chanderi+saree+&aqs=chrome.1.69i57j69i59j0l6j0i457j0.6583j0j15&sourceid=chrome&ie=UTF-8
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