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of handloom production from 810 million yards in 1950-51 to 1700 million yards by 1955-56.
20. It will be seen, thus, that both for those small industries whose production has to be integrated with and form a part of the production of the large-scale industry as well as for those which have to be `protected' in relation to the large-scale industry, policy has to be based on the premises that there should be a common production programme for an industry as a whole, including both the large as well as the small-scale units. The nature of the common production programme would of course have to vary with each industry. In some cases, as explained in the chapter on village industries, the essential points are that the supply of the basic raw-materials should be assured, a sphere of production earmarked and perhaps a small cess enforced on the large-scale industry, either with a view to reducing the difference in the cost of production or merely with the object of providing funds for improving the efficiency and Organisation of small-scale units. In other cases, a common production programme takes the form of a closely integrated programme in which the large and the small units are essentially complementary. The principle of reservation of a sphere of work is implied in both cases.
STATE PURCHASE 21. Apart from the field of production for any small-scale industry which may be specified by a common production programme, there are two directions in which the demand for products of small industries could be deliberately developed. These are : (i) stores purchase and (d) replacement of imports. The question of stores purchase has been the subject of a recent decision by the Central Government. It has been agreed that where basic considerations like quality, delivery date etc. are comparable, the products of cottage and small-scale industry would receive preference for the requirements of the Governments over the products of other manufacturers. In those items in which cottage industry has advantages over large-scale industry or has established itself as a supplier to government on competitive terms, orders should be placed with cottage and small- scale industry to the fullest extent before orders are given to large- scale industry. In the case of other products, according to the circumstances and merits of each case, a price advantage and suitable relaxation as regards specifications would be allowed. It has also been provided that preference should normally be given only to offers made by cottage and small-scale industry through a co-operative society or through agencies approved by the Central Ministry of Commerce and Industry in consultation with State Governments. While, over a period, this stipulation will encourage the growth of co- operative organisations, in order to extend immediate support to small industry, it has been further agreed that price preferences would not be withheld from cottage industry products on the ground that purchases were made from a middle-man, provided that the middleman is a traditional employer, for instance a `master weaver' or a `master cobbler'. These decisions embody a considerable advance in policy and we suggest that they should be followed by those States which have not already adopted such a policy. It is important, however, that there should be machinery for the enforcement of these decisions and for reviewing their working from time to time If it is carefully employed, the stores purchase policy can be both a method of encouraging cottage industry and a means for raising its technical efficiency and improving its Organisation.
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REPLACING IMPORTS 22. A preliminary study of the possibilities of replacing by cottage and small-scale production articles which are now imported, has been made, but we suggest that the subject requires detailed examination by panels of technicians and businessmen in different trades. Such examination should be taken in hand and completed as a matter of priority. These panels could work out in detail the directions in which imported articles could be substituted and the stages in which the programme of production by cottage and small-scale industries could be organised.
NEW CENTRES OF SMALL-SCALE PRODUCTION 23. The scope for initiating the production of articles in replacement of those now imported is likely to be most considerable where the Government has the opportunity of organizing new centres of small-scale production. Thus, for instance, for the rehabilitation of displaced persons, especially those who had non-agricultural occupations or interests, it has been necessary to establish important townships such as Nilokheri, Faridabad, Phulia, Gandhi Dham etc. In the Punjab, new industrial areas have been added to a number of towns and, besides the. provision of sites and the necessary social amenities, power has been made available. Independent artisans and small-scale entrepreneurs are being assisted with finance and technical guidance to establish production in selected lines. Among the community projects recently initiated there are a few, especially in West Bengal, in which the establishment of towns of local industries constitute the principal programme. In community projects of the rural type also, some provision has been made for the promotion of arts and crafts.
24. From these examples it would be apparent that by far the most important method of developing small-scale industries is to establish either new townships or, what might frequently be even more advantageous, to extend existing towns and provide sites, services, power, etc. It is hoped that from the funds provided in the Plan for cottage and small-scale industries, community projects as well as under certain other heads, it would be possible to promote and assist a number of centres for small industries. In the river valley projects, particularly when power becomes available, development of this kind will have a great deal of importance. The creation of such centres of industrial production is a development of such importance for the economy that if the programmes require additional financial provision in the later stages of the Plan, we recommend that this should be considered. It should be added, however, that progress in establishing new centres for industries is likely to be impeded, not so much by lack of finance for establishing them, as by the lack of capital for those who have to establish the enterprises, failure in marketing arrangements and by inadequate training of workers. The problems of marketing are already proving a source of anxiety in some centres which were started in connection with the rehabilitation of displaced persons. Frequently, acute problems of marketing develop because (a) in laying down lines of production sufficient study is not made of the prospects of future demand and (b) there is no overall planning in terms of common production programmes between large-scale and small-scale units. There are, therefore, dangers which have to be considered carefully in advance by the Government concerned before new industrial centres are established.
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TRAINING 25. The question of training has received considerable emphasis in the Five Year Plan. The training centres maintained by the Central Government under the Directorate General of Resettlement and Re- employment have trained during the past few years 144,000 persons. The Ministry of Rehabilitation has so far arranged for the technical training of 52,000 persons from West Pakistan and at present 12,000 persons are under training, in addition to 8,000 trainees from East Pakistan. The plans of the State Governments provide for the following training programmes :
State Programmes of Training
1950-51 1955-56
Number of industrial schools 365 456
Number of pupils trained 14,750 21,797
Number of technical and vocational 260 407
Number of Person trained 26,702 42,997
The Central Ministry of Education has also provided for substantial assistance to technical institutions engaged in imparting more advanced training. Technical training programmes should be so designed that they fit in with the overall plan for the development of village and small-scale industries in the country. The training should be directed towards those trades in which the prospects of stable employment are reasonably clear. There is need also for considerable emphasis on the training of artisans in the existing small-scale industries. Exhibitions of village and small-scale industries which are valuable in stimulating demand should also be utilised for providing instruction concerning new techniques and designs to artisans.
26. Research.-The importance of research for the development of village industries and of handicrafts has already been stressed. Small industries of the modern type have their own problems of research which can only be solved in close collaboration with the larger industries to which they are related. We suggest that the Central Government should arrange, in consultation with the State Governments, for the opening of special research sections for small industries in research institutes associated with individual large- scale industries. Where necessary, a measure of assistance could be afforded to enable an institution to expand its facilities. In view of the variety of problems which small industries of the modern type are likely to raise, it is doubtful if a single research institute wilt be sufficient.
27. Finance.-We have referred already to the need for finance. One suggestion may be made. Some States are likely to find it difficult to establish industrial finance corporations of an economic size because of their small resources or the undeveloped state of their industry. We suggest that the Central Government should consider the possibility of making regional arrangements for the establishment of industrial finance corporations for those States which may not be able, with advantage, to support independent financial institutions.
28. In conclusion, we may refer to a number of small industries which call for skill and training and, invariably, for the use of power. The growth of these industries is related closely to the development of heavy industry, including the manufacture of machinery in the country. The advance of technological education is of course a material factor in the progress of such small industries.