Revitalizing Rural Non-Farm Sector in Hooghly
*Saumitra Mohan


Creation of employment and income opportunities for the rural people has always been a top priority for the Government. The importance of rural non-farm sectors (RNFS) lies in the fact that it generates new jobs with relatively low direct investments, by utilizing local skills and resources or by meeting local demands by adoption of simple techniques.

NABARD (National Bank for Agricultural and Rural Development) and other government agencies have come together to implement the District Rural Industries Project (DRIP) to bring about an industrial rejuvenation in Hooghly district of West Bengal with respect to small-scale and cottage industries. The objectives of the study have been following:
· To identify and map the profile of the existing Rural Non-farm Sector (RNFS) activities and their distribution in Hooghly district, to be harnessed through credit and promotional support by banks, government departments, other developmental agencies, voluntary agencies (VAs) and NABARD;
· To identify the sectors with faster growth potential with the present infrastructure in terms of backward and forward linkages, market, technology and the perspectives in the light of improved infrastructural and institutional support;
· To suggest support mechanisms for facilitating marketing, technology upgradation, credit delivery, backward and forward linkages, ancillarisation/subcontracting and promotional support through NGOs/VAs;
· To develop a benchmark for future assessment and evaluation of the potential with regard to establishment of small/micro enterprises, employment generation, income generation, value addition, infrastructure development and credit absorption; and
· To establish database for RNFS in the district.
Hooghly district comprising eighteen blocks houses more than 17000 registered units of cottage and small-scale industries (Bureau of Applied Economics and Statistics, GoWB, 2003) and offers a great scope for development of cottage and small-scale industries. The selection of Hooghly under DRIP and the necessity of undertaking the present study possibly justify this assumption.
The methodological approach to the study involved a series of steps starting from stakeholder interaction and data collection to analysis of potentiality within the framework of institutional, financial and policy guidelines along with a critical review of industry specific components like marketing, technological upgradation, capacity building for suggesting improvement options to finally arrive at a consolidated improvement package presented in the form of an action plan.

Data have been collected both from primary and secondary sources. For primary data collection, tools like Structured Questionnaires for stakeholders, Focus Group Discussion, Interview, and Observation have been administered. A purposive sampling method has been adopted looking into the concentration of different kinds of industries in different Blocks with various characteristics to achieve greater representation.

The generated information led to the analysis of potentiality, which has been based on Porter’s Diamond Model, a standardized and established model for industry analysis. The modified Diamond Model included six factors for analysis each of which in turn had several constituent aspects. The constituent factors have been collated through a weighted cumulative model to arrive at the Potentiality Index (PI), weights being decided through an objective approach of stakeholder feedback analysis and researchers’ insight in industry dynamics. The analysis based on Potentiality Index and the District and Block’s Feedback converged to a point of unanimity in identifying the potential industries.
As observed from the analysis, the most potential industries are a mix of traditional and emerging activities. While Zari Chikan emerges as the most potential area of intervention because of high demand conditions, it is closely followed by Plastic Containers which is a Haldia downstream industry. Handloom, although not a very vibrant industry at present, still holds on to its position because of its high employment absorption capacity. Gunny bag making occupies an important position because of its linkage with cold storages, potato being the major vegetative produce of the region. Equally potential are industries like elastic tape, spices, agarbatti, nylon rope that have a mass clientele and could be operated at the SHG scale. Several other industries like Oil Crushing, Food Processing, Paper board, Wire net, Sports net, Bakery etc have occupied a priority position considering their ensuing demand and profitability conditions.
Hooghly district like any other district is characterized by the concentration of a few traditional activities evolved either by the patronage of a few prominent personalities or through a direct linkage with the available raw material resources. Majority of these industries operate in the Cottage Scale like Zari Chikan, Bell Metal, Boat Making, Fishing Wheel and several such. With the faster pace of development and the effects of globalization the micro enterprises in rural areas started facing competition from each other as well as from the organized sector. The 'Cluster Development Approach' has been considered a strategic initiative to help small-scale enterprises to withstand the challenges thrown up by competition and globalization. This calls for a focused assistance at clusters producing similar or inter-related range of goods and services. The District Administration, particularly the DIC (District Industrial Centre), is the key player in Cluster Development. NGOs also have a major role to play in the development and nurturing process.
Marketing in the RNFS in Hooghly as in other rural contexts, is largely dominated by middlemen (mahajan, hawkers or collectors) who enjoy a significant proportion of the profit, while the producers are left to struggle with the minimum share benefits accruing from value addition. The artisans specific to activities like Zari Chikan, Bell Metal, Handloom etc are mostly tagged to the middlemen for acquiring raw material and for the commercial disposal of finished items. Practically, they work as jobbers for the middlemen. Thus, the challenge in marketing of RNF products lies in reducing the barriers to direct commercialization and improving value appropriation to artisans. This could be achieved through assimilation of market intelligence through a MIS (Management Information System), particularly for products which have the potential of exploring higher order markets within and without the state.

Further, in view of various constraints, the rural market development and revitalization approach may bring better results. Along with the existing rural markets the district has identified a few spots for specialized markets to be developed as a product promotional programme. Handloom market in Dhaniakhali Block and Agricultural Super Market at Kamarpukur are prospective locations for rural markets. A rural market should also be developed in and around Dankuni to avail of the available infrastructural and communication facilities. However the markets need to be equipped with online marketing facilities to establish communication links all over India. Non-farm sector information can get through the Internet if each GP (Gram Panchayat) has a small information office.

Some of the activities in the Cottage and SSI sector need serious interventions in market related technology development for revival and development. The majority of the industries, which rank high in terms of Potentiality Index, do not need technological upgradation to operate in the present scale. Handloom, however, needs serious re-engineering in terms of diversification of items and related technology introduction. Further market linked diversification and technological innovations have been suggested for industries and activities like Jute, Brass and Bell Metal, Boat making, Key and Key Head, and Banana Processing. Areas of farm and non-farm linkages have been explored. It is established by now that to foster the development and expansion of farm/non-farm linkages, there must be an emphasis on improving agricultural technology. Backward and forward production linkages require modern agricultural-production systems.
While the RNFS aims to open up new avenues in front of women by providing preferences to woman-headed families and women entrepreneurs, several studies show that patterns of participation in the RNFS is commonly along lines of gender. The present study also reveals that there are differences across industries/activities with regard to participation of women. It is observed that in case of certain products like bell metal, wire net, polished powder for spectacle, vermi-compost, soap, craft paper etc., there is absence of female employees. On the other hand, soft toys making or hand embroidery are primarily carried out by women. Data also show that, the activities, where both male and female employees are engaged, also vary in their level of participation.
The study has also identified certain specific activities where women participation can be increased through creating awareness, imparting training which in turn would help in developing self esteem and empowering women in the society. Special consideration has been given to SHG (self-help groups) activities as those activities in general promote female involvement with certain mandatory provisions under SHG development programme particularly in case of SGSY (Swarna Jayanti Gram Swarojgar Yojna). Other than SHG activities, those activities have also been identified where participation of women is higher than their men counterpart. For these purposes, the products which have been identified as having potential for further women involvement are: Diversified Jute items, Nylon Rope, Zari Chikan, Hand Embroidery, Readymade Garments, Elastic tape, Spices, Pickles and Papad and Agarbatti etc. A total training package including functional literacy as well as skill development has been visualized for women, which would help in their self-development as successful entrepreneurs in the society.
Capacity building of artisans in general, to be able to produce better and enter larger markets would be a strategic intervention point. Skill trainings, trainings on design and on top of all Entrepreneurship Development Programmes are the major capacity building exercises for the rural people of Hooghly. Nearly all the IDOs (Industrial Development Officers) have pointed out the needs for rigorous and regular EDP (Executive Development Programme) to be conducted at the Block level. Various training agencies can be brought under the folds of the rural industrialization drive. Apart from the involvement of Small Industries Service Institute (SISI), other departmental agencies like NCJD and IJIRA for Jute, Haldia Petro-chemcal for HP down stream industries can be included. The SHGs need capacity building trainings not only in the particular trade or vocation, they need management trainings too. NGOs who conduct capacity building trainings should be tapped. The DRDC (District Rural Development Cell) and NABARD already have a record of such NGO-s.
Based on all the observations and inferences as noted above, an Action Plan has been prepared. The Action Plan has been designed with a focus on four types of groupings with respect to the small-scale and cottage sector in Hooghly district. The basic features of the Action Plan are as follow:

Promoting special-focus clusters with industries that have backward and forward linkages.
Existing industries that need improvement in terms of market linkages and distribution channels. The focus will be on developing clusters.
Existing industries that need to adopt product diversification and technology upgradation measures to stay competitive and profitable. The focus will be on imparting new design and technology skills to workmen in existing units.
New units that have the potential for high growth in Hooghly district. The action for this category will therefore be focused on ushering in new entrepreneurs

A bird’s eye view of the action plan for new units is provided bellow:
TOTAL UNITS, INVESTMENT, BANK LOAN & EMPLOYMENT GENERATION OVER FIVE YEARS (2005-06 TO 2009-10)
(Amount in Rs. Lakhs)


2005_06

2006_07

2007_08

2008_09

2009_10

Total
(Cumulative)
Total number of units
25
18
19
24
21
107
Total investment
255
487
672
721
781
2916.27
Total bank loan
217
414
571
613
664
2478.83
Total employment generation
219
316
335
375
434
1679


The industrial development plan, which includes emergence of new units and revitalization of the existing ones through technological, marketing and organizational support, would, however, involve a total financial outlay of Rs 3109.57 lakhs where investments in new units and for revitalization would be of the order of Rs 2916.27 lakhs and Rs 193.3 Lakhs respectively.

The industrial units expected to come up in the following five years in the small-scale sector would mainly be technologically advanced and would not be labour intensive. But these are expected to create a multiplier effect and draw in more units with backward and forward linkages and create the necessary base for attracting investors in the infrastructure and service sectors promoting further industrial development.

However, the parallel SHG programme would aim at high employment generation. It is expected that over the span of five years SHGs would create a platform for self-employment for more than 3, 00,000 rural potential employment seekers.

Since the 1950s, the government has supported SSI to generate employment and to promote regional dispersal and equal income distribution. The government has carried out various preferential policies for this sector, consisting of financial assistance from commercial banks and Development Financial Institutions (DFIs), tax exemption, reserved items for SSI, purchase preference by the government agencies, preferential access to materials, and provision of infrastructural facilities. The central and state governments in India have together set up an elaborate 3-tier structure at national, state and district levels, for promoting the small-scale sector. The environment for industrialization, through suitable financial linkages for SSI and SHG-s in the Non Farm Sector, has been made conducive through mandatory provisions over the last few years. Role of NGO-s has been institutionalized to mobilize the community for entering the RNFS through SHG-s.

With the external factor conditions in favour of the RNFS movement, a concerted effort backed by an efficiently drawn plan would lead to a big push in terms of industrialization. However the bottom line lies in educating and motivating potential entrepreneurs to participate in this industrialization drive.
*Saumitra Mohan is an IAS officer presently working as an Additional District Magistrate, Hooghly in West Bengal.
Address for correspondence:
Saumitra Mohan, IAS, Additional District Magistrate, Office of the District Magistrate, Hooghly-712101.
E-mail: saumitra_mohan@hotmail.com.
Phone: 033-26806456/26802043(O)/26802041(R).
Fax: 033-26802043.
Mobile: 91-9831388803/9434242