10. Industries and Minerals

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10.1. Large Industries

Industrialisation produces steel, it produces power.They are the base. Once you have got the base, it iseasy to build. The strategy governing planning inIndia is to industrialise and that means the basic

industries being given the first place.

- Jawaharlal Nehru

10.1.1. Introduction

The acceleration of economic development in the State can be achievedby maximizing investment through higher investment in the Industries andServices sectors. The pace of industrialisation is influenced by a combinationof critical factors including sound infrastructure and uninterrupted supply ofvital inputs such as power, credit, raw materials and proactive entrepreneurs.Industrial progress is positively correlated to well established financialintermediaries, favourable investment climate for domestic as well as ForeignDirect Investment (FDI), wider access to Information Technology andcompetitiveness of products in terms of quality and price in both domesticand international markets.

Tamil Nadu Industrial Profile

Tamil Nadu is one of the well developed states in terms of industrialdevelopment. It has enjoyed a significant position in India’s geopolitical spaceand economic progress. Logistical advantages due to presence of three majorseaports, an international airport and several domestic airports, quality ofhuman resources, a peaceful industrial climate and a positive work culturehave strengthened Tamil Nadu’s standing in the industrial world. The State’sbusiness-friendly policies and proactive initiatives have played a key role inthis resurgence.

The State has a well diversified manufacturing sector. Even before theliberalisation wave hit Indian shores, Tamil Nadu had established itself on theindustrial map of India as a hub for Automobile and Auto components, Textile,Leather, Cement, Sugar and Engineering industries. In the post-liberalisationera, the State has witnessed growth of new knowledge-based industries suchas Information Technology (IT), Information Technology Enabled Services (ITES)and Biotechnology. The State has emerged as one of the front-runners in

402

attracting a large amount of domestic and foreign investments in all theseareas.

10.1.2. Industrial Policy

While the State Government is keen on improving the State’scompetitiveness in these new growth sectors, the State Government is alsodetermined to ensure the revival of the traditional industrial sectors with adeclared vision to make Tamil Nadu a regional gateway to Asia and a majorexporter of manufactured goods. In order to achieve this objective, the stategovernment has resolved to rejuvenate the traditional industries. The focus ofthe State policy has been to facilitate and incentivise large industrial house tolocate these factories within Tamil Nadu. This has led to the operation of amultiplier effect in terms of larger employment generation and investmentsin ancillary units and the related services sector. Industrial Infrastructure,such as roads, water supply, railways, industrial parks, etc., has also receivedadequate attention of the State.

The State is now focused on stimulating further industrial development,attracting investment, facilitating new manufacturing capacity and enablingglobal manufacturing competence and competitiveness of the local industry.A Special Task Force on Industrial Development has been constituted byGovernment with the Chief Minister as Chairman and with senior industryrepresentatives as members to speed up the industrial development in theState. The Government have announced new Industrial Policy during November2007. “It is proposed to give an impetus to the factors leading to industrialgrowth such as methodology of financing, development of technical skills,identification of the needs of industry by encouraging university-industryinteraction and efficient government administration.”

10.1.3. Industrial Scenario: Tamil Nadu Vs All India: By selectCharacteristics

As per the latest available results of Annual Survey of Industries (ASI)2004-05, Tamil Nadu’s industrial performance compares favorably with India’sindustrial performance. In terms of number of factories, the State continuesto retain the first rank for the seventh successive year starting from 1997-98.During 2004-05, the State has 21053 registered factories, sharing 15.4 % ofthis category at the all-India level. Based on the total number of personsengaged in industrial activity, the State has retained the first position

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successively for two years, 2003-04 and 2004-05. In other principal industrialcharacteristics viz. fixed capital, productive capital, gross value of output andnet value added, the State retains the third position behind Maharashtra andGujarat. During 2004-05, the State’s share at the national level was 9.9 % infixed capital, 9.6% in productive capital, 9.5 % in gross value of output and

8.3 % in net value added as given below in the Table 10.1.1.

Table 10.1. 1

Trends in Industrial Characteristics – Tamil Nadu

The latest Annual Survey of Industries 2004-05 reveals that the State is

well ahead in all principal industrial characteristics. The number of factories

increased by 2141 units (from 18912 units in 2001-02 to 21053 in 2004-05),

registering a growth of 11.32 %. Fixed capital in industrial sector increased to

Rs.51016 crore in 2004-05 from Rs.35896 crore in 2001-02 recording a growth

of 42.12 %. All other factors like productive capital, gross value of output, new

value added have also recorded a higher order of growth of 41.01, 69.04 and

47.50 % respectively in comparison with the relative figures in 2001-02.

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Industrial Production

The Index of Industrial production, which is a mirror of industrial

development, had registered a growth of 8.5 % during 2005-06 in the State

over and above 8.2 % recorded in the preceding year. The “manufacturing”

group with highest weight in the index (92.01%) performed well during the

year with a robust growth of 9.3 %. The relatively low growth of the ‘electricity’

group and the negative growth of the ‘mining’ sub-sector slightly reduced the

overall growth of the sector.

Table 10.1. 2

At the national level, the index of industrial production registered 8.3 %

growth during 2005-06, marginally lower than that of Tamil Nadu.

Investment Scenario in the Industrial Sector

Industrial investment in the State has increased by 7.47 % from Rs.151902

crore in April 2005 to Rs.163245 crore in April 2006. The State has accounted

for 5.74 % of the total investment of Rs.2845899 crore made at the national

level.

405

Table 10.1. 3

Investment in Projects under Implementation

In Tamil Nadu, of the total outstanding projects valued at Rs.175177

crore, in July 2006, projects with an estimated investment of Rs.54153 crore

are under implementation. This accounts for 5.8 % in total projects under

implementation at the national level.

Out of the total outstanding projects, the manufacturing sector accounts

for 239 projects with the total investment of Rs.55507 crore (31.68%). Within

the manufacturing group, Chemical and Chemical Project industry shows a

significant amount of investment to the tune of Rs.39947 crore. Next to

manufacturing, the electricity group accounts for nearly the same level of

investment of Rs.51330 crore followed by the services sector with an investment

of Rs.48193 crore.

Table 10.1. 4

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Tamil Nadu is one of the leading States in terms of Industrial

Entrepreneurs Memorandum (IEMs) filed. Between April 2006 and July 2006,

268 Investment intentions were filed through IEMs for a total investment of

Rs.7681 crore in the State accounting for 10.84 % of the IEMs and 4.57 % of

the total investment respectively at the national level.

Plan Investment in Industrial Sector

Tamil Nadu has been one of the leading States in attracting both domestic

and foreign direct investment since 1991. Hence, the percentage of Plan

investment by the government sector to the total investment has been declining

over the Plan periods.

Foreign Direct Investment

Foreign Direct Investment has had a direct and positive impact on

industrial growth of the State. Projects for the strengthening, modernising

and reinforcing of infrastructure facilities such as highways connecting airports

and sea ports, railways, IT Expressways and communication facilities are the

preferred targets for attracting Foreign Direct Investment. The proactive

transparent policy, availability of world class infrastructure, conducive

industrial atmosphere and abundant supply of skilled and technical manpower

have enabled the State to be one of the fore- runners in attracting Foreign

Direct Investment into projects which plays a major role in overall industrial

growth.

The benefits of Foreign Direct Investment are obvious and undeniable. It

helps to tide over the financial crunch faced by the State, bridging the gap in

public investment with private investment; it accelerates the process of

economic development and it helps to disseminate technical knowledge and

results in expansion of employment opportunities.

Between August 1991 and March 2006, totally 2758 projects have been

approved for the State comprising of 631 technical and 2127 financial projects.

The total FDI approval for the state during the reference period was Rs.23094

crore which accounts for 8.86 % of the total amount of Rs.260596 crore approved

at the national level. In terms of amount of FDI approval, the State ranks

third, next only to Maharashtra and Delhi.

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Exports

Tamil Nadu continues to be the largest exporter from Southern Region.

During 2005-06, the value of the State exports was Rs. 66856 crore which

accounted for about 42% of the exports from the southern region and 12.5%

from India. The following table summarizes the export performance of the

State over the last three years. A break up of the contribution of various

sectors to exports of the State reveals that along with the conventional

strongholds of textiles (Rs.15,526 crore) and engineering goods (Rs.12,275

crore), software and electronics contributes to nearly 21.1% of the total exports

at Rs.14,115 crore.

Table 10.1. 5

Major Industries

Textile Industry

Tamil Nadu has traditional strengths in the textile sector. In the

post-quota abolition regime, the Textile Industry has tremendous opportunities

for growth as well as challenges to be met.

Availability of cotton at fair prices and at right quality, the backlog in

modernization, supply of inputs particularly credit and power at reasonable

rates etc. are all essential for the textile industry to be competitive in an

increasingly uncertain trading environment. The Handlooms, Powerlooms,

Hi-Tech Weaving Parks, Garments & Hosiery, Processing Apparel Park are

important components of the textile industry.

(Note: The Textile Industry is dealt with in detail in the chapter “Handlooms

and Textiles”).

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Sugar Industry

Sugar industry in Tamil Nadu is an important agro-based industry. It

plays a vital role in the economic development of the State and particularly in

rural areas. The Sugar industry provides direct employment to thousands of

workers and indirect employment to several lakhs of farmers and agricultural

labourers in the rural areas who are involved in cultivation of sugarcane and

associated activities.There are 35 sugar mills in Tamil Nadu, of which 16 are

in cooperative sector and 19 in the private sector. Apart from this, the Tamil

Nadu Sugar Corporation Limited, a Public Sector Company established in

1974 is running three Public Sector Sugar Mills namely, Arignar Anna Sugar

Mills, Perambalur Sugar Mills and Madura Sugars. The total crushing capacity

of the 35 operating sugar mills in Tamil Nadu is 107800 tonnes per day (TCD).

The sugar industry is characterized by cyclical swings in production with

consequent impact on price and profitability.

Even after the economic liberalization, the sugar industry continues to

face a controlled policy environment. The international market is also complex

due to restrictions in market access, high tariff and other barriers. Exports

are not remunerative as international competitors like the European Union

get heavy subsidy from their respective governments and are able to sell at

much lower prices.

In addition to production of sugar, the byproducts of the industry such

as molasses and alcohol are also crucial for ensuring not only the health of

the sugar industry but also the downstream industries that are dependent on

them. In recent years, cogeneration of power has been started in most of the

sugar mills, which improves their financial condition by reducing their

dependence on grid power and also contributes to environmental improvement

due to saving of fossil fuels.

Fertilizer Industry

There are 12 fertilizer Plants in the State, 4 nitrogenous and 8 phosphatic

with an installed capacity of 14.10 lakh tonnes. The State accounts for 7.88

% of installed capacity and 5.82 % of the fertilizer production at the national

level.

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The fertilizer industry functions under many constraints. From the supply

side, the health of the industry hinges upon the subsidy and pricing policy of

the Government of India. From the demand side, monsoons determine the

off-take of fertilizers. During 2005-06, due to a bountiful monsoon, the country

experienced a sudden spurt in the demand for fertilizer. There was an acute

shortage of DAP and urea which had to be imported and government appealed

to the industry to produce more even though it produced at near full capacity.

However, no new capacity has been added in this sector since 1999. This

shows it is not profitable to invest in this industry.

Cement Industry

Tamil Nadu is a leading producer of cement in India. It has 13 major

cement factories. It is a home for leading brands in the country such as

Chettinad Cements (Karur), Dalmia Cements (Ariyalur), Ramco Cements

(Madras Cement Ltd.), India Cements (Sankakari, Ariyalur), Grasim etc.

The production of cement in the State increased from 126 lakh tonnes in

2004-05 to 142.89 lakh tonnes in 2005-06 with a growth rate of 13.4%

accounting for 10.08 % of cement production at the national level, occupying

the 5th place. However, it may be noted that, the cement production in the

private sector has been showing an increasing trend whereas production in

the public sector has decreased to 7.85 lakh tonnes from 8.06 lakh tonnes in

the public sector for the corresponding period.

The cement industry in the country and the state has continued to show

sustained growth over the last one and a half decades. The infrastructure

driven demand for cement is mainly from housing and commercial development

in metros such as Mumbai, Chennai, Hyderabad, Bangalore and Delhi. Another

huge demand emerges from the highways sector especially the National

Highways Development Authority of India. The rising cost of cement, fuelled

by increase in the cost of inputs such as coal, diesel, power and transport

continue to be a cause for concern as need for cement increases linearly with

the pace of economic development.

Paper Industry

Tamil Nadu continues to be one of the forerunners in the production of

paper and paper products. There are 74 paper mills in operation in Tamil

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Nadu. The total paper production was 3.7 lakh tonnes in 2005 06 which

accounts for 17.30% share of the national production, next only to Andhra

Pradesh. As the country’s forest cover is much below the desired level, the

Government of Tamil Nadu established TNPL in 1979 to manufacture newsprint

and paper using bagasse (sugarcane waste) as the primary raw material. This

is the largest paper mill in India with an installed capacity of 230,000 TPA

(tonnes per annum). In 2005-2006, the company produced 230079 MTs of

newsprint and printing and writing paper.

Automobile Industries

Tamil Nadu is being popularly hailed as “Detroit” of India as it has a large

Automobile and Ancillary sector. Automobile industry plays a crucial role in

the State economy and has been one of the key driving factors, contributing 8

% to State GDP and giving direct employment to 2,20,000 people. More than

100 companies in the Automotive and Auto Ancillary industry are located in

this state, maintaining highest production norms by implementing

internationally recognized quality standards. Tamil Nadu accounts for 21% of

passenger cars, 33% of the Commercial vehicles and 35% of Automobile

components produced in India. The size of the auto industry in Tamil Nadu is

estimated to grow to Rs.67500 -Rs.90000 crore ($15-20 billion) by 2015,

according to the Confederation of Indian Industry’s (CII) recent study on

‘Mapping of Human Resource skills in Tamil Nadu’. Chennai has two adjoining

automotive clusters, one at Maraimalai Nagar and the other at Sriperumpudur.

The success of this sector is basically due to the availability of skilled manpower

in automobile production, electrical engineering, Computer Aided Design and

Computer Aided Manufacturing.

Overview of State Public Sector Enterprises

The State Public Sector Undertakings (SPSU) have been engaged in

providing industrial infrastructure, financial services, manufacturing and

mining etc. apart from playing a significant role in providing the basic services

like water supply, transport and electricity. There are 47 SPSUs functioning

in the state. The major ones are Tamil Nadu Newsprint and Papers Limited

(TNPL), Tamil Nadu Minerals Ltd., (TAMIN), Tamil Nadu Tea Plantation

Corporation Ltd. (TANTEA), Tamil Nadu Industrial Investment Corporation Ltd.

(TIIC), Electronics Corporation of Tamil Nadu Ltd. (ELCOT), Tamil Nadu

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Industrial Guidance and Export Promotion Bureau (Guidance Bureau), etc.

Their total turnover was Rs.17574.72 crore in 2005-06 showing an

improvement from Rs.14808.90 crore in 2004-05 by posting a growth rate of

18.68%. These SPSUs altogether employed 138879 persons as on March 31,

2006. The total investment in all these undertakings in terms of share capital

and loan put together by Government and other sources was Rs.9477.40 crore

in 2005-06. The profit-making 31 Corporations had earned aggregate net profit

of Rs.199.28 crore and the aggregate profit of all the SPSUs put together was

in the order of Rs.135.02 crore during the year 2005-06.

Promotional Agencies for industrial activities

The industrial activities in the state are being catalysed by the following

promotional agencies with their unique objectives as given in the following

table.

Table 10.1. 6

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10.1.4. Tenth Plan Outlay and Expenditure

An outlay of Rs.200 crore was provided for Large and Medium Industries

during the Tenth Plan inclusive of State Capital Subsidy of Rs 120 crore,

Generator Subsidy of Rs 4 crore, Mega Project Subsidy of Rs 50 crore and

Share Capital Assistance to SIPCOT for Rs 26 crore. Against this outlay, the

expenditure for the Large and Medium Industries during the Tenth Plan was

Rs.309.26 crore.

10.1.5. Eleventh Five Year Plan - Vision

Tamil Nadu is experiencing rapid industrial and economic growth. The

State plays a supportive and proactive role in attracting industrial investments

both domestic and foreign. It ranks 3rd in terms of Foreign Direct Investment

in India. As a result of a very conducive investment environment prevailing in

the State, large-scale investments in industrial projects, infrastructure sector

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and service sector are flowing in. The Vision for the Plan includes the following

specific targets.

� To create additional 2 million jobs by 2011.

� To raise the contribution of manufacturing sector to GSDP

� To double the exports from the state

� To raise the state to a position of pre-eminence in innovation and

high technology

� To raise the competitiveness and efficiency of Small and Medium

Enterprises

Objectives

� To position Tamil Nadu as the most attractive investment destination.

� To achieve a sustained GSDP growth rate of over 10% which in turn

may call for an industrial sector growth of over 12%.

� To strengthen the manufacturing sector and widen its base especially

in value added, skill intensive and high technology sectors, such as

engineering, and electronics.

� To make the State’ “The Automotive Hub of Asia”

� To increase the share of Tamil Nadu’s exports in the national exports

to 20% in the ten years.

� To facilitate reduction in regional imbalances in industrial

development.

� To institutionalise Human Resources Skill Development for imparting

training to the unskilled and semi skilled work force in key sectors

so as to make them readily employable.

� To create additional employment opportunities for growing labour

force.

� To reform regulatory processes and remove procedural hurdles.

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� To build efficient and dependable industrial infrastructure.

� To develop human resources and intellectual capital to world

standards.

Strategies

The strategies for industrial development during the Eleventh Plan period

are outlined in the new Industrial Policy announced by the Government in

November 2007. The salient features of the new Industrial Policy is given as

follows:

Industrial Policy 2007

The Government of Tamil Nadu is well known for its commitment to develop

industrial sector through appropriate policy pronouncements from time to

time. The Industrial Policy 2007 was declared by the Honourable Chief Minister

on 5.11.2007.This policy statement is an outcome of the deliberations in the

Special Task Force on Industrial Development constituted with the Honourable

Chief Minister as the Chairman and industrialists and other stakeholders as

members.

The mission statement highlights ‘maximizing investment, output, growth,

employment and manufacturing competitiveness through infrastructure and

human resources development in industries and services sectors’ as the broad

objective of the industrial policy.

The state government is committed to providing high quality infrastructure

services and encouraging Public-Private Partnership for investments in

infrastructure and promotion of Industrial Parks (IP) and Special Economic

Zones (SEZ). The state government has categorically stated that the agricultural

lands should not be acquired for industrial use. Single window clearance

system is extended to setting up of IPs and SEZs.

Production of high quality labour force is essential for promoting

high-tech industrial and services sectors. The cluster-based approach to

institution-industry interaction is the hallmark of the new industrial policy.

The state facilitates promotion of educational institutions in industrial zones

for effective institution-industry interaction and thereby enabling institutions

to impart appropriate employable skills in students.

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The back-ended state capital subsidy and electricity tax exemption for

promoting employment, stamp duty exemption up to 50% on lease or purchase

of land for industrial use, subsidy for providing environment protection and

infrastructure facilities are some of the welcome features of the new industrial

policy. Subsidy for obtaining patent rights, investments in R and D and

establishment of environment protection systems are also announced.

Balanced development of both traditional and modern industries is

emphasized in the new industrial policy. In the traditional industrial sector,

promotion of SEZs for footwear and leather processing, agro-processing and

export of agro-products and establishment of co-generation Plants and ethanol

units in sugar mills are some of the initiatives stated in the new industrial

policy. Promotion of industries in high-tech areas like semiconductor, electronic

hardware and nanotechnology are given high priority in the policy statement.

Though a separate policy statement is to be issued for the growth of

Small and Medium Enterprises in the state, every new IP/SEZ is mandated to

allocate 20% of the land for SMEs. This is a positive step for balanced growth

of all segments of the industrial sector. Various subsidy schemes for SMEs in

agro-processing sector are also announced.

Eleventh Plan Schemes

1. Major investment projects of TIDCO

Tamil Nadu Industrial Development Corporation (TIDCO) promotes large

and medium scale industries in Tamil Nadu through new joint venture projects

in the manufacturing sector. With the liberalization of industrial licensing

and controls, TIDCO has shifted more towards infjyrastructure projects. It

promotes Special Economic Zones (SEZ) and Agricultural Export zones (AEZ)

through joint ventures.

The Government of India is planning to establish Petroleum, Chemicals

& Petroleum, Chemicals and Petrochemicals Investment Regions (PCPIR) in

the country. A detailed report on two sites in Tamil Nadu has been submitted

to Government of India. The PCPIR as and when it is established would attract

investments in the Petroleum and Petrochemicals sector upto about Rs. 15,000

crore.

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To augment the oil refining capacity of the State, Nagarjuna Oil Corporation

Ltd. (NOCL), a joint venture of TIDCO & Nagarjuna Group is constructing a 60

lakh tonnes per year capacity of petroleum refinery project in Cuddalore district

with a total investment of Rs. 4790 crore. This is the single largest joint venture

investment first in the State.

Tamil Nadu Iron Ore Mining Corporation Limited (TIMCO) is implementing

Iron Ore Mining, Beneficiation and Pelletisation projects at a cost of Rs.400crore at Kanjamalai in Salem District and Kauthimalai/Vediappanmalai inThiruvannamalai District.

TIDCO is going to implement various investment projects during theEleventh Plan period with the total outlay of Rs. 763.72 crore, out of which asum of Rs. 100 crore would be met using state funds.

2. Modernization of Co-operative Sugar Mills

Though Co-operative and Public Sector Sugar Mills expanded theircapacity, modernization could not been undertaken subsequently due to poorfinancial position. Further most of the mills are more than 25 years old andhave to be modernized in order to achieve better recovery and better sugarquality. This will enable the mills to get increased realization so that they canpay the cane price to the growers within the stipulated period.

A sum of Rs.54 crore is earmarked for the Co-operative and Public sectorSugar Mills during Eleventh Five YearPlan to undertake modernization worksin a phased manner.

A sum of Rs.2.10 crore for improvement of Directorate of Sugar andRs.1.28 crore towards Sugar cane Research and Development are alsoproposed during the Eleventh Plan period.

3. Capital Subsidy to Mega Industries

TIIC provides financial assistance by way of term loans for purchase of

land, Plant and machinery and construction of building for new industrial

units as well as for expansion / modernization / diversification of the existing

units including to the service sector. It also operates the National Equity Fund

(NEF) Scheme and the Technology Upgradation Fund (TUF) scheme as well as

various subsidy schemes for the benefit of entrepreneurs to reduce their

financial burden in setting up industries and undertaking expansion /

modernization of the existing units. TIIC is also implementing the Back Ended

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Interest Subsidy Assistance Scheme of the state in the following items: a)

term loans obtained for technology up gradation / modernization, b) term

loans obtained under National Equity Fund Scheme; c) term loans obtained

for ISO certification and Research & Development; and d) a maximum of 3%

reduction in interest rate is given as back ended interest subsidy against

benchmarked interest rates.

A sum of Rs.100 crore is proposed for Capital Subsidy to Mega Industries

during the Eleventh Plan period.

4. Capital Projects of Tamil Nadu News Print and Papers Limited (TNPL)

TNPL is producing newsprint and printing and writing paper using Bagasse

as the primary raw material. It has already undertaken a major expansion

scheme with the financial resources from issue of equity shares and loan from

financial institutions and World Bank.

TNPL is also taking major initiatives in the area of non-conventional

energy. It set up a 15 MW wind farm at Devarkulam and Perungudi in

Tirunelveli District at a cost of Rs. 47.69 crore.

TNPL is

implementing a Mill

Development Plan at

a capital outlay of

Rs. 565 crore to

achieve further

excellence in the

e n v i r o n m e n t a l

standards and to

improve the

C o m p a n y ’ s

competitive edge in quality and cost of production.

An amount of Rs. 5 crore is proposed from State Fund towards the Capital

projects of TNPL during Eleventh Plan.

5. Assistance to Guidance Bureau

The functions of the Guidance Bureau are to attract industrial projectsand promote investments in Tamil Nadu, to function as Single Window

Tamilnadu News Print and Papers Limited

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documentation enter for major investment proposals, provide comprehensiveinformation support to investors about federal and State Government policies,infrastructure support, taxation, investment opportunities, etc and monitorimplementation of Foreign Investment proposals approved by FIPB, Governmentof India.

Guidance Bureau also assists in investment promotion campaignsconducted in key locations in India and abroad. It also serves as a nodalagency for the ASIDE programme of the Government of India for fundinginfrastructure projects for export projects or zones. Currently, the SpecialEconomic Zones (SEZ) Scheme is also monitored and supported by GUIDANCE,which also assists the Government in assessing SEZ proposals before beingsent to the Government of India.

An amount of Rs.1 crore is earmarked for Assistance to Guidance Bureau

for investment promotion and facilitation during the Eleventh Plan.

Table 10.1. 7

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10.2. Information Technology

Transport of the mails, transport of the human voice,transport of flickering pictures-in this century as inothers our highest accomplishments still have thesingle aim of bringing men together.

- Antoine de Saint-Exupery

10.2.1. Introduction

Information and Communication Technology (ICT) has been one of the

major growth drivers for the Indian economy in the last few years. In 2005-06,

the industry grew to a size of USD 28 Billion. India has shown competitive

strength in offshore IT services with a 65% share of the global offshore market

and a 46% share of global business process off shoring (BPO) industry. Tamil

Nadu has been amongst the top 3 States in India in terms of ICT investments

and production in the past few years and is now poised to leverage the unique

advantages it possesses to enhance its presence in the ICT sector.

Tamil Nadu is emerging as a hub for software, hardware and R&D. The

number of Indian and Multinational Companies (MNCs) who have established

their presence in TN is a testimony to this. IT exports from the State are rising

exponentially and have crossed the USD 3 Billion mark in the year 2006. The

thrust of the State in the 11th Plan period is to sustain this momentum and

emerge as the most favoured destination for ICT investments.

10.2.2. Tenth Plan Review

During the Tenth Plan, out of an outlay of Rs.50 crore, an expenditure of

Rs.15.67 crore was incurred. The scheme wise, details of expenditure incurred

during the Tenth Plan are furnished below.

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Table 10.2. 1

10.2.3.Eleventh Five Year Plan

Objectives

� To establish Tamil Nadu as an Information and Communication

Technology (ICT) hub of South Asia.

� To develop a culture of entrepreneurship and create business-friendly

environment in the State by focusing on nurturing talent among the

students.

� To upgrade the ICT infrastructure in the State, so that the benefits of

development of ICT is enjoyed by everyone in the State.

� To improve the existing strength of the State like good human

resources, presence of R & D, manufacturing and software

development activities, better infrastructure and pro-active

Government, and focusing on building a sustainable eco system.

� To enhance the R & D activities in Tamil Nadu.

Vision

Tamil Nadu today has a 14% share, at USD 4 Billion, of the total Indian

ICT production of USD 27.6 Billion. Given its current performance and the

prevailing favourable climate, the state aspires to capture a 25% share of the

Indian ICT production by year 2011. The State’s vision for the ICT sector is

articulated as follows:

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Vision

“Tamil Nadu shall be the ICT Hub for Information & Communication

Technology of South Asia by creating knowledge driven ecosystem, leveraging

entrepreneurship and promoting socially inclusive growth to achieve a 25%

production share of the Indian ICT Industry by 2011.”

The direct employment in the ICT sector is estimated at 0.8 million jobs,

both in ICT services and manufacturing, while the indirect employment is

much anticipated to be much higher at 1.8 million jobs by 2011.

Key Components

Based on the above objectives and vision, the following have been

identified as key components of the knowledge driven eco-system:

1. Nurturing Talent

Though there has been rapid growth of the professional services, there is

a constant concern about the growing skill deficit. Many graduates, not only

from the humanities but even from the engineering and science streams have

to be trained further to acquire relevant skills. The Government of Tamil

Nadu has proposed to address this issue by focusing on nurturing talent as a

key component of its policy. The following are proposed in this regard:

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a) Centres of Excellence

The Government of Tamil Nadu proposes to set up a task force to assess

the need for developing technical institutes in the state into centres of

excellence. The task force will also assess the technical educational institutes

in the state and identify institutes that can be developed into Centres of

Excellence and their respective areas of specialisation and focus. Each centre

of excellence would adopt neighbouring ITIs and Polytechnics.

b) Tamil Nadu IT Academy

The Government of Tamil Nadu is in the process of setting up the Tamil

Nadu IT Academy in order to fulfill needs of curriculum development, content

development and faculty training in the area of IT education.

This institution will be set up on a Public-Private Partnership mode with

active participation of the Industry and the Academia. The state government

contribution is expected to be Rs.1 crore.

c) Industry Participation in ICT Education Delivery

The government and academia shall encourage active participation by

industry in education delivery by getting industry to offer elective courses in

all colleges in Tamil Nadu, identifying and adopting new pedagogies for better

learning by students and evolving new teaching methodologies leveraging ICT.

d) Syllabus Committee

Industry representatives would also be included in the university syllabus

committees to align the curriculum with the needs of the industry.

e) IT Clusters within University Campus

Educational institutions will be encouraged to set up Information

technology parks within or near their campus. This will help to strengthen

the industry-institute interaction, thus accelerating the pace of development.

f) Incubation Centre

The Government will also encourage educational institutions to establish

incubation centres and commit resources specifically for this purpose. The

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incubation centres would assist young entrepreneurs by providing guidance

in terms of technical knowledge, providing managerial assistance and by

helping them in raising resources for their projects.

g) Entrepreneurship Development

The Government will introduce a course on entrepreneurship in all

engineering colleges. A part of this course shall provide for face to face meetings

with entrepreneurs giving students a first hand interaction with project

promoters, thus facilitating knowledge and experience transfer.

h) ICT Aptitude Test

The State Government will work closely with the industry to develop a

standardized ICT aptitude test. The tests will be conducted on line across the

State and the scores obtained in these tests made available to industry for

use during recruitment.

i) Computer Labs in all Government Schools

IT infrastructure in the form of a computer lab will be made available in

all Government schools and colleges in the State by the end of 2011. All these

labs will be provided with broadband internet connectivity. Funds for setting

up these laboratories will be provided in the respective departmental budgets.

j) School Curriculum

The Government will work towards the development of a new school

curriculum, which will focus on soft skills and personality development in

addition to regular subjects. This will facilitate employability of students in IT

and IT related industries.

k) Providing a secure climate in the State to enable 24/7 working

The Government will conduct a comprehensive safety review along with

industry in key cities and emerging industrial clusters in the state. Based on

this review it will identify prevention mechanisms for potential safety threats

(individual safety, safety to the industrial assets from attacks etc). The

Government will coordinate with the industry and security agencies to provide

appropriate security measures for employees who work late in the night.

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2. Boosting Research & Development activity in Tamil Nadu

The Government of Tamil Nadu has taken steps to establish the “Indian

Institute of Information Technology, Design and Manufacturing” with assistance

from the Human Resources Development Ministry of the Central Government.

This National Centre of Excellence, which would be set up around Chennai

will undertake applied and basic research in the ICT sector and would meet

international standards. Land has already been identified in Kancheepuram

district for the establishment of this Institute. The establishment of this

prestigious institution in Tamil Nadu will give a boost to the ICT Industry in

the State.

Due to the efforts of the State Government, the Society for Electronic

Transactions and Security (SETS), an organization conceived by Dr. A.P.J.

Abdul Kalam and headed by the Principal Scientific Advisor to the Government

of India, has been established at Chennai. The main objective of this institute

is to develop technologies that can protect the information wealth of the

country. These technologies can also be used in the Certification of Information

Security products and services. The Government of Tamil Nadu has also allotted

land at Taramani, Chennai for setting up a world class Advanced Facility for

Information Security and Cryptology (AFISC).

A state of the art, Bio IT Park is being set up at Sriperumbudur in

collaboration with the Government of India and a private entrepreneur

Ascendas. This IT Park spread over an extent of 100 acres will be the first of its

kind in the country. The Government of Tamil Nadu will continue to strive for

the establishment of more institutions of this nature in the State.

The State will facilitate partnership between educational institutes and

industry to identify specific areas of research and provide incentives for students

from Tamil Nadu to take up doctoral and post-doctoral research in the ICT

area.

Outstanding students and employees working in the ICT sector across

the state will be offered scholarships to take up research. The requirement of

funds has been worked out at Rs.3 crore which will be met in collaboration

with the industry.

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Government will encourage industry to set up labs in existing institutes

for specific research initiatives. Industry may also “adopt” existing labs &

upgrade facilities. The government will facilitate interaction between educational

institutes and industry

The Government proposes to set up a separate incubation agency to

help budding entrepreneurs and promote the spirit of entrepreneurship in

the State. The agency will provide support to the entrepreneurs by providing

relevant information, sharing resources and teaching them about best

practices. The key role performed by this agency would be to translate ideas

into workable business models

An allocation of Rs.1 crore per year has been proposed to provide subsidy

to the SMEs who take part in the inter-National events. This scheme will

encourage small and medium enterprises to constantly upgrade their quality

and be competitive in the international arena. The outlay for this scheme

during the Plan period will be Rs. 5 crore.

3. e-Governance for a Smart Society

I. Infrastructure for e-Governance

a) Tamil Nadu State Wide Area Network (TNSWAN)

Tamil Nadu state-wide Area Network (TNSWAN) is a project jointly

implemented by the Government of Tamil Nadu and the Government of India

aimed at providing broadband connectivity of minimum 2 Mbps linking State

Headquarters at Chennai with all the 31 District Headquarters. The project

will also link Districts Headquarters to the Divisional Headquarters, Taluk

Headquarters and Block Headquarters. The Project’s infrastructure facilities

are in an advanced state of completion. This project has been implemented

from 2007 through TATA company for which the Government is funding every

year. Tamil Nadu is among the very few States in India that will have this

advanced facility. The outlay for this project in the Eleventh Plan is Rs.111.80

crore.

b) State Data Centre

A model State Data Centre is being set up in Chennai with assistance

from the Government of India. The establishment of this key infrastructure

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will give a big boost to the implementation of e-Governance projects in the

State. The cost of this unique project including infrastructure and operating

costs will be Rs.9 crore during the Plan period.

c) Disaster Recovery Centre

A Disaster Recovery and Business Continuity Centre is proposed at

Madurai. This is an essential infrastructure for maintaining a data back up for

computer based data in the event of a disaster or any other eventuality.

A total amount of Rs.14.55 crore has been earmarked for this purpose,

which includes construction of buildings, provision of hardware and

maintenance costs.

d) Citizen Service Centres

In order to empower the people in the rural areas and to bridge the

digital divide, a programme for rural service delivery through Common Services

Centres is being under taken with assistance from the Government of India.

5440 CSCs are proposed to be set up on a Public-Private Partnership mode.

These CSCs will enable the common man to access a large number of

Government as well as private services through the computer at his doorstep.

II. Strengthening the institutional mechanism for delivery of e-Governance

a) Tamil Nadu e-Governance Agency (TNeGA)

An autonomous Society called ‘Tamil Nadu e-Governance Agency’ has

been set up in the State to focus exclusively on e Governance. This will be

the nodal agency for e-Governance projects for the various departments. The

Government will consolidate the activities of this society and diversify its role.

b) State e Mission Team (SeMT)

The Government proposes to set up a Mission Team comprising of domain

experts at the State level that would formulate and drive e-governance projects.

This will function within the TNeGA.

c) Project e-Mission Teams (PeMT)

Similar to the SeMT, the Government proposes to set up Mission Teams

comprising of domain experts at Department level.

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d) National e-Governance Programme (NeGP)

Tamil Nadu Government is committed to implement e-Governance in all

sectors of the Government. 15 Mission Mode Projects have been selected under

the National e-Governance Plan (NeGP) in Tamil Nadu. They are as follows:

1 Land Records

2 Commercial Taxes

3 Registration

4 Agriculture

5 Food and Civil Supplies

6 Health

7 Panchayats

8 Education

9 Treasuries

10 Municipalities

11 Transport

12 Employment

13 Industries

14 Social Welfare

15 Secretariat Computerisation

Detailed Project Reports (DPR) have been formulated for all the above

Projects. The Government proposes to hasten implementation of the Mission

Mode Projects under the National e-Governance Plan (NeGP)

e) Non-NeGP Projects

The Government proposes to formulate comprehensive e-Governance

Plans for Departments not covered under the NeGP. This includes funds for

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writing the Detailed Project Reports as well as for collection of data at the field

level. Funding for these projects will be sought under State Plan, Central Plan

as well as through Externally Aided Projects.

f) Capacity building within the Government at all levels

A scheme to enhance the capacity of Government servants for the

implementation of the e-governance projects has been submitted to the

Government of India. The Government have approved formation of e-Governance

Training Centre at Chennai. The maintenance and conducting of training to

Government employees and officials requires funds, for which an allocation of

Rs.0.65 crore is sought for in the Plan. As a first step, the Government will

take steps to build skills and manage change in order to make e-Governance

sustainable.

g) Establish a monitoring mechanism with measurable targets and milestones

A State level monitoring Committee has been proposed under the

Chairmanship of the Chief Secretary to monitor the various initiatives and

evaluate its outcomes.

h) Create a policy environment for e-Governance

Comprehensive policies are being formulated covering areas such as

e-Governance Vision, Strategy, Architecture and Standards, Cyber Security

etc. These are aimed at providing the required policy environment for

e -Governance.

i) Tamil language computing

The Government is in the process of evolving new Standards for Tamil

Computing and Mobile Telephone usages. An effort is also being made to

make content available in the Tamil language on a wider scale.

j) Broadband Coverage

The Government is working closely with Service Providers to spread the

coverage of broadband in rural areas. This would ensure the faster delivery of

services to the citizens. The Government will also work towards the coverage

of rural areas with wireless and mobile technologies.

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4. Government IT Parks

a) Chennai

A world-class IT facility is

being promoted on a joint venture

basis at Taramani in Chennai. The

estimated cost of the project is Rs.

850 crore. It is expected that work

on this project will commence in

mid-2007 and will be completed

in early 2009. Another project to

develop an IT-ITES Park with an

Integrated International

Convention Centre is also being

planned in Taramani, Chennai.

The project is estimated to cost Rs.

800 crore. It is expected to go on

stream in January 2009. An IT-

ITES SEZ developed by ELCOT at Sholinganallur near Chennai is also fast

taking shape with large IT Companies commencing construction. Similarly,

the IT Park at Siruseri on the outskirts of Chennai, developed by SIPCOT is

developing at a fast pace. 62 large and medium sized IT-ITES companies are

putting up their facilities at this IT Park. In addition to these, an integrated IT

Township spread over 213 acres consisting of IT Buildings as well as Housing

and Social amenities will be established on a Public-Private Participation (PPP)

mode at Sholinganallur-Perumbakkam Villages in Kancheepuram district,

which is on the outskirts of Chennai.

b) IT Park in Coimbatore

An IT-ITES Special Economic Zone measuring 29.08 acres has been

established at Coimbatore. An extent of 10 acres in this SEZ has been allotted

to Ms. WIPRO Ltd. for establishment of an IT facility. Similarly, an extent of 5

acres has been allotted to Ms. TCS Ltd. In the remaining extent, ELCOT and

TIDCO (two Public Sector Undertakings of the Government of Tamil Nadu) are

jointly putting up an IT Building. The work on this project has commenced

and will be ready by early 2009. This Park has been expanded by an additional

Tidel Park, Chennai

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32.51 acres of land. An integrated IT campus consisting of IT Buildings as well

as Housing and Social amenities will be established on a Public- Private

Participation (PPP) mode in a part of the land at this site.

c) IT Parks in Madurai

Two IT-ITES Parks are being established at Madurai, one near Tiruchy,

one in Salem and the last one in Tirunelveli. A portion of the land in these

parks will be converted as an integrated IT complex consisting of IT buildings

as well as housing and social amenities, established on a Public-Private

Participation (PPP) mode. The remaining land will be allotted to IT-ITES

companies who would like to establish their own campuses.

5. Branding Tamil Nadu

The Government of Tamil Nadu proposes to constitute a task force

comprising representatives from industry, government and industry experts

to develop a comprehensive ICT branding and promotion strategy for Tamil

Nadu. This would also develop a regional growth strategy for all regions of

Tamil Nadu and identify ways and means of promoting Tier 2 and 3 towns.

The State will develop a time bound action Plan for implementing this strategy

and allocate appropriate resources for implementing this plan.

6. Leveraging the Tamil Diaspora

Citizens of Tamil Nadu are spread all over the world and many occupy

key positions in many leading organizations. Many of them would like to

contribute to the growth of their parent state. These citizens would be leveraged

to get in more investments into the State. Events, and award functions targeting

the citizens of the Tamil Nadu who have now migrated to other states will be

held and communication will be head with them to encourage them to actively

engage with Tamil Nadu.

7. Tamil Virtual University

The Tamil Virtual University (TVU) was established by the Government of

Tamil Nadu for providing internet based educational resources. It renders

services not only for Tamil speaking communities living in different parts of

the globe but also for others interested in learning Tamil and acquiring

knowledge of the history, art, literature and culture of the Tamils.

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The Tamil Virtual University offers web based academic programmes

leading to award of Certificates and Degrees in Tamil, through its various

study centers located in different countries. It offers Certificate Courses in

three levels - Basic, Intermediate and Advanced and B.A. Programme in Tamil.

The post-graduate Programme M.A. (Tamil) has been approved by the Tamil

University and the lesson writing is in progress. Tamil Virtual University has

also signed a Memorandum of Collaboration with Indira Gandhi National Open

University (IGNOU) for sharing their education resources for the students of

TVU. Their resources will be used for the optional Language (English, Part – II)

of B.A Degree Programme.

The Teaching/Learning methodology adopted for the Academic

Programme is E-learning through Internet based lessons with multimedia

support. A Virtual Class Room with video conferencing equipments along with

a streaming server and high speed internet connectivity have been established

in TVU for this purpose.

The TVU has a Digital Library comprising of a rich collection of Tamil

Literature and also provides a view window into the culture, history and heritage

of the Tamils. The literature content includes more than 300 Tamil books. It

has also got Video clippings on folk arts, architecture etc. Thirty Glossaries in

different disciplines are also available with more than 2,00,000 technical terms.

Scheme to provide free Colour Television Sets

A unique scheme of free distribution of Colour Television sets to the

households not having Colour Television Sets was commenced on 15th

September 2006. A Committee of Legislators comprising representatives of

political parties represented in the Legislative Assembly has been formed to

ensure transparency in procurement and proper distribution of Colour

Television sets. The procurement of 30,000 Colour Television Sets through

National Competitive Bidding in the first phase and 25 lakh Colour Television

Sets through International Competitive Bidding in the second phase was done

under the direct supervision and guidance of this Committee. In the first

phase, 30,000 Colour TV sets were procured and distributed. The second

Phase of free distribution of 25,00,000 Colour Television Sets was launched

by the Hon’ble Chief Minister on15.2.2007. The Government of Tamil Nadu

proposes to continue this scheme till all families not owning a Colour TV set

are covered.

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A sum of Rs.750 crore is proposed for this scheme.

Table 10.2. 2

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10.3. Micro, Small and Medium Enterprises

Industry is the soul of business and the keystone of

prosperity.

- Chales Dickens

10.3.1. Introduction

The Micro, Small and Medium Enterprises sector occupies a significantrole in the total manufacturing sector of the country and Tamil Nadu. TamilNadu has been in the forefront, with a proactive policy to stimulate the growthof this sector. It is imperative to initiate activities that help by the strong basefor the development of small and medium industries. Encouraging thedevelopment of a sound industrial base without losing focus on the small andmedium enterprise sector has been one of the unique features of Tamil Nadu’sbalanced industrial policy.

The importance of the small enterprise sector in our state stems from thecontribution it makes to the State Domestic Product and its major role inemployment generation, being next only to agriculture in this regard. Thesector also serves to facilitate equitable distribution of national wealth andreduce inter and intra-regional disparities by exploiting rural skills andpotential to the maximum, thus helping to reduce rural-urban migration. Itis also recognised for its contribution to industrial growth in serving as anursery for entrepreneurial talent in the country. Its importance can be seenby the fact that it accounts for 95% of industrial units, 40% of output inmanufacturing sector and 30% of exports at the national level.

The Government of India, sensing unequal competition between the largeand small scale sectors has consciously introduced various policy measuresover the last 50 years to strengthen the small industry sector. These policymeasures have laid emphasis on development of local entrepreneurship,women’s employment and technology up-gradation to reap better economiesto scale and also simultaneously started emphasising on quality consciousnessand building brand equity among the small scale entrepreneurs. The policy ofreserving items (introduced in 1967) for exclusive manufacture in the SmallScale Sector is being continued although at lower key now. Other prominentsteps taken by the government for the development of SSI Sector includeintroduction of various subsidies, purchase preference, raising of excise andcommercial tax limits as well as modification of the investment limit for

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inclusion under the SSI sector. Besides this, Government has also minimisedthe number of statutory licenses to make this sector more attractive to theinvestors.

10.3.2. SSI Sector during the Five Year Plans

The concept of SSI Sector has undergone drastic changes over the years.While different countries have adopted different criteria with regard to level ofemployment, turnover etc., the Government of India have adopted investmentlimit in the value of Plant and machinery items of an industrial unit, as thesole criterion for defining the SSI sector. In its pursuit to help the sector togrow further, the investment of the SSI sector has been raised from time totime, ranging from Rs.5 lakh in Plant and machinery value in the year 1960to Rs.500 lakh in Plant and machinery value in 2006, as shown in the tablebelow.

Table 10.3. 1

10.3.3. SME Sector

While the definition and the concept of the SSI sector differ in manycountries to suit the local requirements, the concept of SME sector has beenfound to be more flexible as more emphasis has now been laid on theenterprises / service sector. As a response to the long-standing demand ofthe SSI sector, and considering the emergent need to provide a legal frameworkto address the developmental concerns of what is globally known as “SmallAnd Medium Enterprises”, Government of India in its recent enactment of theMicro, Small and Medium Enterprises Development (MSMED) Act, 2006 haschanged the nomenclature of SSI sector into SME sector, giving due importance

435

to the enterprise segment and at the same time bringing the medium sectorinto its fold. The salient features of the Act are given in Box 10.3.1.

Box 10.3. 1

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10.3.4. Tamil Nadu Small Scale Industries – Profile

In Tamil Nadu, the SSI sector is one of the most vibrant and vital sectorsof the economy both in terms of employment generation and in share ofproduction and exports, besides serving as an incubator for entrepreneurialtalent. Nearly 40% of export earnings come from the SSI sector. As per theregistration data available with the Directorate of Industries and Commerce,there are 523,764 registered SSI units in the State with a total investment ofabout Rs.16,430 crore, providing employment to about 36.40 lakh persons ason 15.12.2006. The table below gives an idea of the growth of the SSI Sector

in the State over the various Plan periods.

Table 10.3. 2

It is seen from the above table that between 1996-97 (end year of VIII

Plan) and 2006-07, the SSI sector nearly doubled as the number of registered

units increased from 2.56 lakh units to 5.24 lakh units in 2006-2007.

10.3.5. Tenth Plan Performance

i. State Schemes

The Tenth Plan provided an outlay of Rs. 83.55 crore including an outlay

of Rs.60.35 crore for eight on-going schemes and five new schemes with an

outlay of Rs. 23.20 crore under the State Sector.

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The on-going schemes, covered schemes for maintenance of Industrial

Estates, imparting of Entrepreneur Development Training to women, provision

of subsidy for the promotion of Agro based / Food Processing Industries under

New Anna Marumalarchi Thittam etc. An expenditure of Rs. 37.17 crore was

incurred as against an outlay of Rs. 60.35 crore.

The proposed new schemes were aimed at Human Resource Development,

Technology Up-gradation, Establishment of Product Display Centres, Common

Facility Centres and Technology Malls as well as Technical and Financial

Consultancy Support to assist the Small Industry Sector to face the challenges

due to global competition emanating from WTO. However, the schemes did

not take off, except for the first two schemes, due to poor response from the

SSI Associations. These schemes were conceived under the Public-Private

Partnership concept where a part of the capital cost was expected to be shared

between the Associations, State/ Central Government and the balance capital

cost was to be obtained as loan from financial institutions. Therefore, an

expenditure of Rs. 2.73 crore has been achieved against an outlay of Rs. 23.2

crore.

Besides the above Plan schemes, schemes for infrastructure development,

capacity building and other development schemes were taken up to the tune

of Rs. 2.99 crore during the Tenth Plan period.

ii. Centrally Sponsored Schemes

In addition to the above schemes funded by the State Government, the

following schemes were taken up with assistance under various schemes

funded by the Government of India during the Tenth Plan period.

a. Schemes partly assisted by the Centre

Cluster development schemes are being funded by Government of India

under various schemes such as Industrial Infrastructure Upgradation Scheme

(IIUS), Small Industries Cluster Development Programme (SICDP), Scheme of

Fund for Regeneration of Traditional Industries (SFURTI) etc. During the Tenth

Plan, 5 clusters under IIUS, one cluster under SICDP and 6 Coir Clusters

under SFURTI Scheme have been taken up in the State. The actual expenditure

under the schemes was Rs. 6.55 crore as against the total outlay of Rs. 217.41

crore.

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b. Schemes fully assisted by the Centre

The Prime Minister’s Rozgar Yojana (PMRY) Scheme, a self-employment

programme for the Educated Unemployed Youth was being continued during

Tenth Plan also. About 1,05,514 persons (as on 31.5.07) have been disbursed

loan assistance under the scheme upto 2006-07, during Tenth Plan period.

The actual expenditure under the scheme was Rs. 6.40 crore as against the

total outlay of Rs. 10.80 crore.

A Nucleus Cell has also been created as a fully Centrally Sponsored

Scheme for collection and updation of statistics through periodic SSI census

and sample surveys. The 3rd All India Census of SSI Units was conducted in

October 2002. The actual expenditure under this scheme was Rs.4.38 crore

as against a proposed outlay of Rs.2.25 crore for the Tenth Plan period.

The Table 10.3.3 gives the expenditure on plan schemes. Broadly

speaking, the Tenth Plan was perhaps a period when market forces gripped

the SSI sub-sectors with greater force than ever before. Some units responded

and thrived while others, either due to inappropriate or inadequate response,

did not do so well. Yet the realisation grew in this period in the minds of those

in Government and Industry that the training, knowledge and infrastructure

support needed to manage these market forces acting strongly due to

globalisation, needed to be vastly improved. It was in essence, a learning plan.

Table 10.3.3

10.3.6. Eleventh Five Year Plan

Objectives

� To reduce regional imbalances in the industrial development within

the state and to facilitate setting up of Micro & Small Enterprises in

backward areas of the state.

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� To encourage modernisation and upgradation of technology in

traditional sectors for having competitive edge in the wake of

liberalisation and globalisation

� To create employment opportunities particularly to the vulnerable

sections of the society and rural people ensuring inclusive

development.

� To reduce procedural formalities to speed up industrialisation.

� To provide skill development and training for educated youth to

develop entrepreneurial skills and make them self-employed.

� To create infrastructure facilities, provide incentives and marketing

as well as technical support to the Micro & Small Enterprises.

� To revive the micro, small and medium enterprises in the state and

enable them to become competitive in the WTO compliant global

market and become world leaders in select segments.

� To cater to the Quality testing requirements of Small & Medium

Enterprises in general and Micro Enterprises in particular.

Strategies

� Creating and upgrading industrial estates and infrastructure facilities

by the public sector and also encouraging setting up of privately

developed industrial estates.

� Creation of common infrastructure facilities /services in Industrial

Clusters by supplementing the Cluster development schemes

available from Government of India.

� Providing back-ended interest subsidy assistance to Micro & Small

enterprises for Technology Upgradation and Modernisation.

� Organising Seminar and Exhibitions, setting up of Information

Centres at the Directorate of Industries and Commerce and the

District Industries Centres and networking of the Information

Centres.

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� Providing subsidy assistance to Micro & Small Enterprises set-up in

backward areas and also to specific sub-sectors like Sago, Tea and

Coir etc.

� Organising sector specific skill development training programmes to

match the emerging skill needs in coordination with industry.

� Taking up evaluation of the working of the various schemes and also

continuously reviewing procedures to ensure simplification and

procedural re-engineering with third party assistance.

� Ensuring faster and timely flow of credit, and extending the process

of Credit Guarantee Fund Trust Scheme to cover all loans to the

Micro sector.

Eleventh Plan Proposals

The support requirement of the Small and Medium Enterprises sector for

the Eleventh Plan, both on-going and new schemes, have been classified and

given below.

Infrastructure support

Upgradation of existing industrial Estates (Public Sector)

It is proposed to upgrade 3 Industrial Estates managed by Directorate of

Industries and Commerce, 3 Industrial Estates in the Cooperative Sector and

8 Industrial estates managed by SIDCO as per the pattern of assistance under

the Industrial Infrastructure Development (IID) Scheme of the Government of

India at an average unit cost of Rs. 2.50 crore, with a share of 40% each by the

State and the Centre and the balance 20% to be met by the occupants. An

outlay of Rs.14.00 crore is proposed for the on-going scheme towards the

share of the State during the Eleventh Plan.

Cluster Development

The Government of India under Industrial Infrastructure Up-gradation

Scheme (IIUS) and the Small Industries Cluster Development Programme

(SICDP) is funding cluster development schemes In addition, small clusters

are funded under the Scheme of Fund for Regeneration of Traditional Industries

441

(SFURTI). In these cases, Special Purpose Vehicles (SPVs) are set up by the

cluster associations to implement the scheme.

During the Tenth Plan, 5 clusters under IIUS, and one cluster under

SICDP, 6 Coir Clusters under SFURTI were approved and the work will continue

in the SICDP and SFURTI Clusters in the Eleventh Plan.

It is proposed to develop 4 clusters under IIUS at the rate of Rs. 50 crore

each during the Eleventh Plan, with the Central share being 75% and the

SPVs share being 25% of the total cost.

As regards to SICDP scheme for development of medium level clusters,

Government of India provides assistance ranging between 75% and 80% of

the project cost subject to a ceiling of Rs. 10 crore per project. Around 20% to

25% of the cost is to be borne by the SPV. Cost of components like land, road

and streetlight are not funded under the SICDP. It is therefore proposed to

provide 5% of the project cost as State assistance towards the cost of basic

infrastructure including land. It is proposed to develop 50 clusters at an

anticipated average cost of Rs.5 crore per cluster. An outlay of Rs.12.50 crore

as the state share for this ongoing scheme is proposed for the Plan period.

In respect of Village Industries and Coir Industries funded under SFURTI

Scheme, the Central assistance is 75% towards the cost of Common Facilities

Centre, Product Development and Design Interventions and 100% for other

components.

It is proposed to develop the six clusters viz., Tamarind processing rural

cluster at Erode, Wood Carving Cluster at Villupuram, Arecanut Leaf Cup

Cluster at Salem and Namakkal, Brass Utensils Making Cluster at Tirunelveli,

Bell Metal Cluster at Nachiarcoil and Thanjavur and Sea Food Preservation,

Processing, Packaging and Marketing Cluster at Nagapattinam under SFURTI

during the Eleventh Plan period with a Central share of Rs.6.15 crore and a

State share of Rs.0.88 crore under the on-going scheme.

Direct Catalytic Subsidy Support

Backward Area Subsidy in specific identified areas

A Committee has been set up for identifying the backward areas in the

State to extend Capital Subsidy for Industrial Units set up in these areas. An

442

outlay of Rs. 100 crore is proposed for the scheme, which seeks to encourage

setting up of industries in the identified backward areas.

Puthiya Anna Marumalarchi Thittam (PAMT)

Though Puthiya Anna Marumalarchi Thittam (PAMT), commenced in 2002,

would perhaps be subsumed in the Backward Area Subsidy Scheme in the

Eleventh Plan, a provision of Rs. 15 crore is proposed for meeting the ongoing

requirements of cases which are in pipeline under the PAMT at the onset of

the capital subsidy scheme for backward areas.

Technical Support

Assistance for Technology Upgradation and Modernization

Existing schemes for providing interest subsidy for technology upgradation

did not have a good response, because the 3% subsidy was linked to the

Prime Lending Rate (PLR) of banks. Further, the scheme was partitioned into

four parts affecting its flexibility and there was low awareness regarding the

benefits.

It is proposed to extend the interest subsidy at a flat rate of 3% for the

loan obtained from the banks / financial institutions without reference to

Prime Lending Rate (PLR). With the investment ceiling on Plant and machine

being increased from Rs.1 to Rs.5 crore, it is expected that the interest subsidy

scheme will be energized and reactivated. An outlay of Rs. 50 crore is proposed

during the Eleventh Plan.

Technology Up-gradation for specified sub sectors

Sago

The scheme of reimbursement of 50% of the subsidy paid by the

SAGOSERVE to the Sago units for modernization would be continued in the

Eleventh Plan also at a proposed State outlay of Rs. 2.50 crore.

In addition to this, it is proposed to access funds from (National Co-

operative Development Corporation (NCDC) under the Integrated Coir

Development Project (ICDP) Scheme to the tune of Rs. 3 crore to provide

assistance for modernization of Sago and Starch manufacturing small-scale

units. The scheme envisages a loan component of Rs.1.50 crore and an equity

443

share component of Rs.1.50 crore, to be equally shared by the Centre and

State. The State share for this scheme is proposed at Rs.1.50 crore.

Tea Sector

The Tea Industry in the state has been in crisis on account of price

instability. A scheme for improving the efficiency of the growers of cooperative

tea sector is being worked out in collaboration with Tea Board of India at a

cost of Rs.98.38 crore. The Tea Board would provide subsidy to the tune of Rs.

42.46 crore and the balance would be got from banks as loan. An outlay of

Rs. 2.65 crore is proposed for the scheme towards state share.

Certification, testing and IPR Support

It is proposed to upgrade the testing facilities at Central Electrical Testing

Laboratory (CETL), Kakkalur and Chemical Testing and Analytical Laboratory

(CTAL), Guindy as well as the Regional Testing Laboratories (RTLs) at Madurai,

Coimbatore, Salem and Tuticorin (which cater to the quality testing

requirements of micro enterprises in specific and small & medium enterprises

in general) to meet the revision in the standards prescribed by the Bureau of

Indian Standards. The cost will be shared equally by the State and the Centre.

A total outlay of Rs.1 crore is proposed in the Eleventh Plan towards state

share.

Information and Marketing Support

Market Development Support for sale of coir

Under this scheme, 10% of the annual turnover is granted as Market

Development Assistance to the tune of Rs. 5 crore, shared equally by the

State and the Central Government for the sale of coir products made by the

Coir Industrial Cooperative Societies in the State. An outlay of Rs. 2.50 crore

is proposed for this scheme.

Seminars & Exhibitions

In order to propagate and create awareness of various schemes

implemented by the State and Centre and to facilitate product display with

special focus for the promotion of micro enterprises, it is proposed to organize

Seminars and Exhibitions at the District level by the Entrepreneur

Development Institute with faculty support from the Technical Training

Institute, Guindy with an outlay of Rs. 0.50 crore.

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Networking Trade and Technology related information & Data Bank

It is proposed to network various industrial information centres like Tamil

Nadu Small and Tiny Industries Association-Friedrich Naumann Foundation

(TANSTIA-FNF), the Technology Development Centre of the Confederation of

Indian Industry (CII) and the SISI with the offices of the Directorate of Industries

and Commerce including District Industries Centres to facilitate free flow of

information to entrepreneurs / traders, with special emphasis on micro

enterprises for improving their competitiveness. This will help to compile the

initiatives taken in the State and abroad for helping Small and Medium

Enterprises Sector.

In order to evaluate the working of various schemes implemented by the

state at the field level and to continuously review procedures to ensure

simplification, it has been proposed to take up evaluation and procedural re-

engineering studies through an independent agency. An outlay of Rs. 1 crore

is proposed for Networking and Data Bank as well as Evaluation and

Simplification of Procedures during the Eleventh Plan.

The schemewise details of the outlays during the Eleventh Plan period

for the Micro, Small and Medium Industries sector are given in the following

table.

Table 10.3. 4

445

446

10.4. Village and Rural Industries

Now consider the household or cottage industries. They require

very little capital. A bout six or seven hundred rupees would get

an artisan family started. With any given investment, employment

possibilities would be ten or fifteen or even twenty times greater

in comparison with corresponding factory industries.

- P.C. Mahalanobis

10.4.1. Handicrafts

Introduction

Handicrafts are creative products made by hand, often with the use of

simple tools, and are generally artistic and traditional in nature. They are

objects of utility and decoration. The handicrafts sector is of special significance

in the country’s economy due to its contribution to employment generation

and foreign exchange earnings through exports.

Tamil Nadu has been endowed with a rich cultural heritage, which is

reflected in the various handicrafts of the state. The various kings who ruled

the state patronized the arts and crafts in a big way. The State Government in

collaboration with the Government of India have been implementing various

schemes to preserve and nurture the ancient crafts of the state while at the

same time ensuring the welfare of the artisans who make these beautiful

artefacts. While there are more than thirty types of handicrafts identified with

the state, bronzes from Swamimalai, stone sculptures from Mamallapuram

and Thirumuruganpoondi (Coimbatore District), artistic brass lamps from

Nachiarkoil (Thanjavur District), intricately carved art plates from Thanjavur,

woodcarvings from the craft pockets at Arumbavur, Thammampatti and Chinna

Salem, appliqué work from Madurai and Kumbakonam are the crafts that

have received maximum attention.

447

Current status of the sector

Though there are stated to be 1.60 lakh artisans engaged in the production

of various handicrafts in Tamil Nadu, this sector is still largely unorganized.

This leads to hurdles in the smooth implementation of schemes for the

sustainable development of the crafts and crafts persons.

The statistics in respect of units registered and employment generated

under the Cottage and Handicraft Industries during the Tenth Plan period

are as follows.

Table 10.4. 1

Tamil Nadu Handicrafts Development Corporation Limited

The Tamil Nadu Handicrafts Development Corporation Limited is the apex

body in charge of the Handicrafts sector in the state. The main objective of

the Corporation has been to provide marketing assistance to the artisans,

while at the same time implementing various schemes for the development of

the crafts and craftsmen in the state. The Corporation has a network of 17

showrooms through which it provides direct marketing assistance to the artisans

for the sale of their products. In addition, the Corporation also organizes

exhibitions throughout the country to explore more marketing avenues for

the handicrafts produced by the artisans. The Corporation has also been

implementing schemes for technology upgradation, design development and

training in order to develop the Handicrafts sector in the state.

The Tamil Nadu Handicrafts Development Corporation Limited has been

functioning mainly as a commercial organization rendering marketing

assistance to the artisans. Due to its commercial nature, the Corporation

has been unable to devote the required attention for the implementation of

exclusive schemes for the development of the Handicrafts sector in Tamil Nadu

448

. As a result, the schemes that were implemented earlier were only on an

adhoc basis without having any lasting impact.

With a view to get the sector organized and to implement livelihood and

welfare schemes for the artisans, the Government have set up a

Commissionerate of Handicrafts with the Chairman and Managing Director of

the Tamil Nadu Handicrafts Development Corporation being the Ex-officio

Commissioner. This Commissionerate will be responsible for drawing up and

implementing various schemes for the development of the Handicrafts sector

in the state. It will also coordinate and carry out various Centrally sponsored

schemes for the welfare of this sector. This arrangement would facilitate better

implementation of policy initiatives for the development of the sector and the

artisans in the state.

The production and sales performance of the Tamil Nadu Handicrafts

Development Corporation Limited during the Tenth Five Year Plan period are

given below.

Table 10.4. 2

Tenth Plan Performance

The performance of the Handicrafts Development Schemes during the

Tenth Plan period is shown in the table below.

449

Table 10.4. 3

Though an outlay of Rs.10 crore was provided for the Handicrafts sector

for the Tenth Plan, only a sum of Rs.1.84 crore was sanctioned during the

Plan period. In addition to the above Planned schemes, schemes for the

development of 10 Craft Clusters in the southern and eastern districts of the

state were taken up between 2004-05 and 2006-07 at an outlay of Rs.0.80

crore. Of the ongoing schemes, the schemes for development of Craft Clusters,

setting up of Craft Museum and the Urban Haat at Chennai are still in progress

and will be completed during the Eleventh Plan period.

Objectives for the Eleventh Five Year Plan

The main objective of the Eleventh Five Year Plan is the growth and

upgradation of the Handicrafts sector while ensuring a sustainable livelihood

for the artisans. The following schemes are proposed keeping in mind the

above objective.

(A) Sustainable Development of Handicrafts

Cluster Approach for Sustainable Growth

The scheme is meant for increasing the employment opportunities and

productivity of the various crafts in the state. It is proposed to encourage

450

more artisans to take up such crafts by conducting training programmes for

them and providing common facility centres for cluster development. A total

amount of Rs.0.50 crores is provided for training and provision of common

facility centres for Cluster development at Swamimalai & Coimbatore.

Design Development, Technology Upgradation and Marketing

To encourage the artisans to produce the contemporary craft products

based on market demand, it is necessary to provide new design inputs and

modernize the production process by upgrading the technology. The artisans

will be provided skill upgradation training. Marketing infrastructure will be

strengthened and publicity will be given for these craft products at home and

abroad.

In addition, there is a need for conducting a survey of artisans in the

state to assess their current situation so as to design schemes for their welfare

as well as for the development of the sector. An amount of Rs.2 crore is

provided in the Plan for these schemes.

Setting up of a Craft Museum at Chennai & Urban Haats atMahabalipuram and Kanyakumari.

Chennai, Mahabalipuram and Kanyakumari, the popular tourist centres

provide a sustained market for the handicrafts of Tamil Nadu throughout the

year. During the Tenth Plan period, proposals were initiated to set up a Craft

Museum at Chennai at a cost of Rs.0.50 crore and an Urban Haat at

Mahabalipuram at a cost of Rs.2 crore with Central and state participation.

Both these schemes are under progress.

It is proposed to set up an Urban Haat at Kanyakumari at a cost of Rs.2

crore with Central and State participation during the Eleventh Plan. The

state share of Rs.0.60 crore has already been released. Government of India

has agreed to this project in principle.

Renovation of Poompuhar showroom at New Delhi

Being the Country’s Capital and a tourist centre, New Delhi is a potentialmarket for Tamil Nadu handicrafts. The “Commonwealth Games” are proposedto be held at New Delhi during the year 2008. It is therefore Planned to

451

renovate the Poompuhar showroom in the National Capital at a cost of Rs.0.50crore.

B) Providing Sustainable Livelihood to Artisans

Health and Insurance Cover

At present, the handicraft artisans do not have any social security asthey are outside the organised sector. Hence it is proposed to implement ahealth and insurance cover scheme with the benefits on par with those givento handloom weavers. The individual premium of Rs.200/- per annum will beshared between Central and State Government with the state contributionbeing Rs.40/-. A provision of Rs.0.20 crore is made for this scheme.

Thus a total of Rs.3.80 crore is proposed in the Eleventh Five Year Plan

for the sector.

Table 10.4. 4

Table 10.4. 5

Outlay

(Rs. in crore)

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10.4.2. Khadi and Village Industries

Introduction

The Khadi and Village Industries sector provides economic activity for a

large section of the rural poor with minimum investment using local resources.

This activity, which is largely being carried out by Co-operative Societies and

other Charitable Societies such as Sarvodaya Sanghs since independence,

was given shape after the constitution of the All India Khadi and Village

Industries Board during the First Five Year Plan period. The Khadi and Village

Industries Commission (KVIC) was established in the year 1956 and the

Tamilnadu State Khadi and Village Industries Board (TNKVIB) was set up in

1957 to further augment the process of employment creation. The task of

implementing various programmes to enhance the employment potential and

productivity of the Khadi and Village Industries sector has been entrusted to

the Khadi and Village Industries Board in the State.

Khadi Sector

Khadi is a fabric made out of hand spun yarn (Cotton, Silk, Woollen yarn

or a mixture of any two or all such yarns ) and woven on handlooms. In other

words, Khadi is a hand-spun hand woven fabric. Khadi is not merely a piece

of cloth, it is a philosophy and way of life in pursuit of the objective of fulfilling

the dreams of the Father of our Nation. There is both unemployment and

underemployment in the rural areas especially for the older womenfolk, who

are not able to go for any other work like construction or fieldwork. The Khadi

Rural Spinning Centres provide employment to such categories of people to

help them to earn subsidiary wages so as to lift them above the poverty line.

The main products that are being produced under Khadi sector are Cotton,

Poly vastra and Silk varieties. TNKVIB has established its production centres

for Khadi cotton and Poly vastra fabrics in different parts of the State. There

are about 27195 Charkas and 4100 looms in the State, out of which only

about 570 looms and 10800 Charkas are in working condition. Currently,

13380 spinners and weavers are being provided employment by the Board

directly.

TNKVIB is also known for its exquisite Khadi Silk Sarees, made specially

from original Zari, using eco-friendly and natural dyes. Kumbakonam,

Kanchipuram and Arani are the major centres of production.

453

The Khadi Units working under the control of TNKVIB are given below.

Table 10.4. 6

Present Status of the Khadi and Village Industries Sector

During the past few years, the growth of Khadi, its employment potential,

its production and sales figures etc., have considerably dwindled throughout

India. In respect of the Khadi units under the control of Tamilnadu Khadi and

Village Industries Board and the Certified Institutions under the control of

Khadi and Village Industries Commission in our state, the Khadi production

and sales have shown a declining trend as seen from the table below.

(including units under the control of KVIB and Certified Institutions under the control of KVIC)

454

Table 10.4. 7

Village Industries Sector

‘Village Industries’ means any industry located in a rural area which

produces any goods or renders any service with or without the use of power in

which the fixed capital investment (in plant and machinery and land and

building) per head of an artisan or a worker does not exceed Rs.50,000/-.

Village Industries are employment-intensive and require little capital. However,

the earnings per worker are low and hence they require to be upgraded so as

to compete in the highly competitive and constrained market.

TNKVIB has been promoting Village Industries by establishing production

centres in different districts, organizing Co-operative Societies and granting

margin money to entrepreneurs for establishing Village Industrial Units. The

KVIB also provides support by providing raw materials required for production,

technical guidance and marketing the finished products through its retail

outlets, viz., “Khadi Krafts”, spread throughout the state. The items produced

by the Self-Help Groups are also being sold through the Khadi Kraft outlets.

The major Village industries supported under the Tamilnadu Khadi and

Village Industries Board are as follows:

� Leather Industry

� Bee-keeping Industry

� Non-Edible Oil & Soap Industry

� Pottery Industry

� Handmade Paper Industry

� Palmgur Industry

� Carpentry and Black smithy Industry

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The functions and varied features of some of the above industries

supported by the TNKVIB are detailed below.

Leather Industry

The activities of the Board under leather industry are the production of

shoes, chappals and other leather products. There are 19 foot-wear units

functioning all over Tamilnadu, with the major ones functioning at Ambattur,

Perambur and Pallavaram. The requirements of the Government Departments

like Prisons, Police and Fire services as well as Public Sector Undertakings

like Transport Corporations are being supplied by the units of the Board.

Bee-Keeping Industry

Bee-Keeping is one of the important activities supported by the Board.

Honey manufactured by the Board has good patronage among the public.

The Board’s Honey processing unit at Amsi in Kanyakumari district is

producing “A”, Grade Honey. Raw honey is procured mostly from

Jamunamaruthur in Thiruvannamalai district and Marthandam in

Kanyakumari district. Farmers are able to earn supplemental income through

bee-keeping activities.

Non-edible Oil and Soap Industry

The Board produces various kinds of soaps by using basic raw materials,

viz., Neem oil, Palm fatty acid, Sandalwood oil etc. along with other ingredients

required for the production of soap. The Board’s washing soap, toilet soap

and detergent powder are popular among the customers because they are

eco-friendly and reasonably priced.

Pottery Industry

Pottery Industry is one of the traditional industries in the State. Four

pottery units are functioning under the control of the Board. In these units,

glazed wares and pottery articles are being manufactured which are sold

through the Khadi Kraft outlets.

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Handmade Paper Industry

Handmade Paper and its allied products such as carry bags and file pads

are manufactured by the Board mainly by recycling the waste agro materials

such as cotton rags, waste paper and other agro-fibres. These units employ

workers from the rural areas and supply the requirements of various

government departments.

Other than the above, a few other activities like Agarbathi making, Candle

making, Camphor making, Cottage Match making, Cane & Bamboo processing

and Palmgur manufacture are also taken up by the institutions based on the

availability of infrastructure, raw materials and market trend.

The details of the units owned by the TNKVIB under Village Industries

sector are given below.

Table 10.4. 8

The Village Industries Sector in the State is also experiencing a declining

trend as seen from the table below.

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Table 10.4.9

Palm Products Industry under the fold of Tamil Nadu Palm Products

Development Board

The Palm Products Industry is also one of the major cottage industries

under the Village Industries Sector in the State. Tamil Nadu is a pioneer in

development of Palm Products Industry in India. Out of the estimated 8.59

crore of Palmyrah trees in India, about 5.20 crores of Palmyrah trees are in

Tamil Nadu. Palmyrah is declared as the “State Tree” of Tamil Nadu. Palmyrah

tree prevents soil erosion and protects natural wealth. Palm products are free

from pollution and are environment and eco-friendly. Tamil Nadu is a potential

centre for the growth and development of Palm Products Industry. The State

also earns foreign exchange by export of Palm Products.

The Tamil Nadu Palm Products Development Board which has been

functioning with effect from 6.1.1995, supervises the functioning of 996

Primary Jaggery Manufacturing Co-operative Societies, 8 District Palmgur

Marketing Co-operative Federation and one Tamil Nadu State Palmgur and

Fibre Marketing Co-operative Federation which are directly engaged in trading

activities. Edible products such as Neera, Palm Jaggery, Palm Candy, Palm

Sugar, Palm Fruit Jam, Preserved Nungu and other confectionary products as

well as non-edible items like Palm Fibre and Palm Leaf products, Brushes

and baskets are produced and marketed by these institutions.

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There is ample opportunity to offer employment to a larger number of

people in rural areas in the Palm Products industry which does not need high

investment or advanced technical know-how. Six lakh artisans, both men and

women, are currently engaged in the Palm Products Industry in the State

both directly and indirectly. This includes 30,000 Scheduled Caste artisans

who are directly engaged in activities related to the Palm Products Industry

such as tapping of Neera, manufacturing of Palm Jaggery, Palm Fibre and

Date Palm Baskets.

Review of Tenth Plan Performance

During the Tenth Plan, an outlay of Rs.55 crore have been provided for

the Khadi Schemes and Rs.15 crore have been provided for the Village

Industries Schemes (including Palm Product Industries Schemes).

During the last two to three years of the Tenth Plan period, TNKVIB has

been unable to get the required slivers from Khadi and Village Industries

Commission in time. Further, the sale of Khadi has also dwindled during the

past few years. Therefore, TNKVIB has had to slowdown the Khadi production

besides taking action to reduce the accumulation of stocks of Khadi Cotton

varieties to the tune of Rs.40 crore. Hence, the financial outlay of Rs. 55 crore

provided for the Tenth Plan could not be fully availed by TNKVIB.

Under Palm Products Development, an amount of Rs. 0.81 crore was

sanctioned during the Tenth Plan as against the outlay of Rs.1.65 crore. The

funds were utilised for modernisation of Neera Processing Units, establishment

of Palm Fibre Processing Centre, purchase of machinery and equipments and

distribution of tools and equipments to poor Palmgur Artisans to process palm

jaggery out of Neera.

Challenges faced by the Khadi and Village Industries Sector

Units of the Khadi and Village Industries Sector in the State have been

facing a number of hurdles, resulting in a declining trend in their activities.

The challenges faced by this sector are as follows.

� Obsolete machinery and equipments, lack of technology up-gradation

and absence of organised research and development and innovation

of new designs.

459

� Quality constraints in the production activities and absence of

standardization.

� Availability of alternative products at affordable cost.

� Lack of skill development, bottlenecks in inducting new workforce

and migration of existing artisans due to poor wage structure.

� Age-old marketing practices, inadequate publicity and promotional

activities

� No common brand name for competing in the market.

Eleventh Five Year Plan

Various schemes have been formulated to create improved infrastructure

and strengthen the Khadi, Village Industries and Palm Board sectors during

the Eleventh Five Year Plan

Objectives

Khadi & Village Industries sector

� The wider objective of creating self-reliance amongst the people to

build a strong rural community spirit;

� The social objective of providing more employment opportunities;

� The economic objective of producing saleable articles to meet the

present day demand and

� The technological objective of modernization of the industry to

increase production and promote sales.

Palm Board sector

� To organize the rural workers involved in the production of palm

products.

� To promote and introduce modern concepts in the industry

� To make the palm products competitive and attractive to increase

business

460

� To achieve the social objective of alleviating rural poverty by creating

marketing forums for palm products like Neera, palm jaggery, palm

sugar, palm candy, palm fruit jam, aerated drinks etc. with the help

of cooperative societies.

Strategies

Khadi & Village Industries sector

� Replacement and modernization of old Charkas and Looms and

addition of capacity wherever necessary

� Constructing work sheds for spinning and weaving

� Training of existing workforce to upgrade their skill and induction of

new workforce trained through Industrial Training Institutes

wherever necessary.

� Renovation and addition of marketing outlets

� Streamlining the procedures relating to eligibility and drawal of

rebate so as to improve overall production and sale of Khadi

� Modernising the handmade paper units to increase production

Palm Board sector

� Provision of tools and equipments to artisans in order to adopt new

technology

� Training rural artisans in Palm products manufacture

� Opening of additional Palm Kraft sales outlets

Eleventh Five Year Plan - Activities Proposed Khadi Sector

Replacement of old Charkas

The Rural Textile Centres of the Tamilnadu Khadi and Village and the

Spinning centres of the Certified institutions are working with old and obsolete

charkas with 6, 8 and 12 spindles. There are about 27195 Charkas in the

state out of which only 10800 Charkas are in working condition. These Charkas

461

also have not been replaced for over ten years due to the lack of surplus

resources with the Khadi spinners. Unless modern Charkas are supplied, it

will not be possible to increase the productivity and daily income of the Khadi

spinners and make it a viable activity. Hence, it is proposed to replace 2040

charkas of the TNKVIB and 8000 charkas of the Certified Institutions at a unit

cost of Rs.15000, for which a sum of Rs.15.06 crore has been allocated in the

Eleventh Five Year Plan.

Replacement of Looms

There are about 4100 looms all over the State out of which only about

570 looms are in good working condition. No new looms have been supplied

for the past 10 years. This has severely hampered the productivity and

profitability of the Khadi weavers. During the Eleventh Five Year Plan period,

it is proposed to replace 161 looms of the TNKVIB and 2000 looms of the

Certified Institutions at a unit cost of Rs.35000. For this purpose, a sum of

Rs.7.56 crore has been allocated during the Eleventh Five Year Plan.

Construction of spinning and weaving sheds

Spinning and weaving sheds, humming with busy mules and looms,

augment handloom production and also serve as subsistence for many

thousand rural households. To utilize the optimum craftsmanship of the

khadi weavers, they should also be provided with well equipped working-sheds.

Hence it is proposed to construct work sheds on the similar lines of those

provided for the handloom industry. A sum of Rs.1 crore has been allocated

during the Eleventh Five Year Plan for this purpose.

Provision of Heals and reeds to weavers

There is a reluctance on the part of many weavers to continue with khadi

weaving as it is not remunerative. One of the methods of making Khadi weaving

more attractive is to encourage Khadi weavers to take up production of

Polyester- Khadi and Khadi- Silk along with Cotton- Khadi. In order to motivate

weavers to take up Khadi weaving, it is proposed to provide Heals & Reeds to

Cotton-Khadi/ Polyester weavers.

A sum of Rs.0.25 crore has been allocated in the Eleventh Five Year Plan

for this scheme.

462

Induction of new workforce through ITI/ Vocational courses and training

for skill upgradation

To meet the challenge of globalisation and to compete with both the

domestic and international market, new trained workforce is proposed to be

introduced in this traditional sector. For this purpose, it is proposed to conduct

vocational courses and training for upgrading the skill of existing artisans

(spinning & weaving). A sum of Rs.1 crore has been allocated in the Eleventh

Five Year Plan for this programme.

Modernisation of the Khadi sector- strengthening, design development,

marketing, office automation etc.

Office automation and provision of infrastructure facilities will help in

optimizing existing office procedures which will go a long way in accomplishing

the basic goal of popularising Khadi. Further, innovative designs have to be

introduced. To enhance sales and attract more customers, it is essential to

modernise the sales outlets so as to have a catchy display of exclusive new

varieties. In addition to this, new outlets have to be opened. The strengthening

of the Khadi sector will have to be accompanied by a well orchestrated publicity

campaign regarding the benefits of Khadi at the district and sub-district level.

Promotional activities such as awards, prizes and motivation campaigns will

be taken up to improve Khadi sales. Export of high end Khadi products will

also be encouraged through better publicity and coordination with international

buyers. All these schemes will be taken up at an outlay of Rs 5 crore during

the Eleventh Five Year Plan.

Rebate

The State Government provides 20% rebate and the Khadi & Village

Industries Commission provides 10% rebate throughout the year. Thus, totally

30% rebate is allowed throughout the year. On festival days (108 days), the

State Government grants only 10% rebate and the Khadi & Village Industries

Commission grants 20% rebate.

The procedure for granting rebate will be streamlined which will help to

encourage the sale of khadi goods. Further, it is also proposed to release the

pending rebate claims of the Certified Institutions. For this, a sum of Rs.80

crore has been allocated in the Eleventh Five Year Plan.

463

SFURTI Scheme

The Khadi and Village Industries Commission (KVIC) has introduced the

SFURTI (Scheme of Fund for Regeneration of Traditional Industries) for meeting

the requirements of traditional industries including khadi on a cluster based

approach. The outlays under this scheme are shared by the KVIC and the

State government in the ratio of 75:25. It is proposed to meet the additional

requirement of Looms and Charkas in the viable well functioning Certified

Institutions under the SFURTI scheme. For this, a sum of Rs.13.37 crore is

provided towards the State’s share in the Eleventh Five Year Plan.

In addition to the above schemes, it has been recommended that the

Khadi weavers and spinners of both the KVIB and the Certified Institutions

should be covered by welfare schemes on par with those available for the

handloom weavers under the Labour Welfare Board.

Thus, a total sum of Rs.123.24 crore is proposed to be allocated in the

Eleventh Five Year Plan for the Khadi sector.

Village Industries sector

Development of Village Industries- SFURTI scheme

The SFURTI scheme will also be tapped for the development of the various

village industries such as Carpentry and Blacksmithy, Toy making, Wood

carving, Honey and Pottery. A sum of Rs. 7 crore proposed to be allocated in

the Eleventh Five Year Plan towards the State’s share for this scheme will be

operated in different clusters . Additional employment is anticipated during

the Eleventh Five Year Plan period due to the operation of this scheme.

Research and Development on Apiculture

464

Beekeeping is a subsidiary occupation providing supplementary income

to a large number of rural and tribal people because of the rich flora available

in the rural areas. If honey production is taken up, the vast agricultural and

forest areas can easily sustain at least one crore bee colonies. During the

Eleventh Five Year Plan, the activities proposed under this programme are:

bee nursery, distribution of beehives and other accessories, training, scientific

honey processing and establishing honey testing laboratory.

A provision of a sum of Rs. 1.28 crore is proposed to be allocated under

this scheme in the Eleventh Five Year Plan.

Research and Development in Hand Made Paper (HMP) industry

In order to be protect the environment, some of the urban local bodies

have started imposing a ban on the usage of polythene bags. Hence, the

Board has proposed to produce eco-friendly paper bags by using latest recycling

technologies. For this purpose, the existing Hand made Paper Unit has to be

modernised. A sum of Rs.2.05 crore is proposed for this purpose during the

Eleventh Five Year Plan.

Various Village Industries schemes under Western Ghat Development

Programme

Under this programme which covers 30 identified taluks in seven districts,

grants will be provided to artisans engaged in village industries such as cane

and bamboo, mat making, bee keeping and distillation of eucalyptus oil. 4800

beneficiaries will be assisted under the scheme with a total outlay of Rs.2.40

crore during the Eleventh Five Year Plan period.

465

Various Village Industries schemes under Hill Area Development

Programme (HADP)

The Board has been engaged in creating employment opportunities in

Nilgiris district under the HADP from 1975-76. Schemes such as distribution

of beehives, distribution of distillation plants for extraction of essential oils,

setting up of bee nursery, provision of machinery and equipments for jute bag

stitching and paper bag making units, construction of work shed etc. are

undertaken by the Board under this programme. It is proposed to continue

the assistance to the individual artisans under this scheme. A provision for a

sum of Rs.0.90 crore is proposed for this programme during the Eleventh Five

Year Plan.

Marketing and Development

In order to expand the sales of the products of village industries further,

the Board has proposed to conduct exhibitions throughout the year. A sum of

Rs.0.11 crore is proposed to be allocated for this purpose in the Eleventh Five

Year Plan.

Thus, a total sum of Rs.13.74 crore is proposed to be allocated in the

Eleventh Five Year Plan for the Village Industries sector.

Palm Board

Provision & distribution of tools & equipments for processing of Neera

to State, Non-district & District Palmgur Cooperative Federations (DPCF)

During the Eleventh Five Year Plan, it is proposed to start new Neera

chilling units and aerated drink manufacturing units by the State, Non-District

and District Palmgur Cooperative Federations. These units will be provided

with the necessary machinery and infrastructure, for which a sum of Rs.3.09

crore has been provided during the Eleventh Plan period.

Provision & distribution of tools & equipments to artisans (Primary

Jaggery Manufacturing cooperative societies (PRI-JMCS))

There are 996 Jaggery Manufacturing Co-operative Societies with 90000

members functioning in the Palmgur industry. At present, only a few members

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are benefited through this scheme resulting in less quantity of production

and marketing of Palm products. Therefore it is proposed to increase the

turnover of Palm products during the Eleventh Five Year Plan by providing

necessary tools and equipments for activities such as Neera tapping, Jaggery

manufacturing, Palm candy making and for Neera packing etc. to the Palmgur

artisans of State and District Federations. A sum of Rs 1.46 crore has been

provided for this programme in the Eleventh Five Year Plan.

Working capital for State Federation & DPCF

One of the major constraints in increasing the turnover of the State and

District Federations has been the shortage of funds to trade in palm products,

especially in Palmgur. In order to increase the trading activities of the

Federations, as well as maintain the price of Palmgur for the artisans, it is

proposed to supplement the limited funds of these federations by providing

working capital assistance for an initial period of one year with a strict condition

that the working capital be given only to viable societies and should be used

only for trading purpose i.e. purchase of Palmgur. Over time, it is expected

that these societies will be able to raise working capital from the banking

system. A sum of Rs.0.20 crore has been provided in the Eleventh Five Year

Plan for this purpose.

Provision of margin money and interest subsidy for State federation &

DPCF

As the working capital assistance to the State and District Federations

for trading purpose has been proposed for one year only, as discussed above,

it is proposed to extend financial assistance in the form of margin money

assistance and interest subsidy to the Federations to enable them to avail

loans from financial institutions for their working capital requirements. A

sum of Rs.1.44 crore is proposed to be allocated for this purpose during the

Eleventh Plan period.

Training for artisans

In order to reactivate the Palm Product Industry and to improve the quality

of the products, it is proposed to give training for the artisans both in palm

products and tree climbing. For this purpose, a sum of Rs.0.37 crore is proposed

to be allocated during the Eleventh Five Year Plan.

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Publicity, propaganda, research & development

Publicity, promotion and research and development are essential in order

to increase the sales and turnover of the Palmgur Industry and to increase

the quality of the palm products. For this purpose, a sum of Rs.0.50 crore has

been allocated in the Eleventh Five Year Plan.

Opening of sales outlets with infrastructure facilities

The shelf life of Neera and other allied products are limited. Hence sales

outlets with necessary infrastructure which are widely dispersed will reduce

spoilage and facilitate the timely sales of the products. It is therefore proposed

to install new Palm product outlets in the main bazaars, bus terminus, railway

stations and other places, for which a sum of Rs.0.96 crore has been provided

in the Eleventh Five Year Plan.

Thus, a total sum of Rs.8.02 crore is proposed to be allocated in the

Eleventh Five Year Plan for the Palm Board sector.

The total allocation for the Khadi, Village Industries and Palm Board

sectors in the Eleventh Five Year Plan is Rs. 145 crore.

Table 10.4.10

(Rs. in crore)

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10.4.3. Sericulture

Introduction

Sericulture is a unique combination of both agricultural and industrial

activities. On the agriculture side, it involves cultivation of mulberry to feed

the silkworms. The industrial activities involve reeling of the silk filament

from the cocoons and value addition such as processing and weaving.

Sericulture is a labour intensive industry in all its phases, viz., cultivation of

mulberry, silkworm rearing, silk reeling and other post-cocoon processes such

as twisting, dyeing, weaving, printing and finishing. It provides employment

469

to small and marginal farmers and workers in tiny and household industry

mainly in the hand-reeling and hand-weaving sections.

Women constitute over 60% of those employed in the sericulture and

allied activities in the country. This is possible because pre-cocoon activities

including mulberry garden management, leaf harvesting and silkworm rearing

are effectively taken up by the womenfolk. Activities in the post-cocoon sector

like silk reeling, weaving etc. are also largely supported by women.

India continues to be the second largest producer of silk in the world

next to China. Our country has the distinction of producing all the four

commercially known varieties of silk viz., Mulberry, Tasar, Eri and Muga.

Mulberry sericulture accounts for 32% and is being practised in traditional

states like Jammu & Kashmir, Karnataka, Andhra Pradesh, Tamil Nadu and

West Bengal. Tasar sericulture accounts for 1.7% and provides livelihood for

the tribal population of Andhra Pradesh, Bihar, Madhya Pradesh, Maharashtra

and Orissa. Eri (5.3%) and Muga sericulture (0.5%) are practised in all the

seven North-Eastern States. The cocoon and silk processing industry has

traditionally existed in clusters in areas not necessarily coinciding with the

mulberry cultivation areas in Karnataka, Andhra Pradesh, Tamil Nadu, West

Bengal and Bihar. Reeling of silk is more widespread, with different clusters,

traditionally producing distinctive designs and weaves, mainly in sarees.

The total area under mulberry cultivation in India is about 1,79,066

hectares in 2005-06. Tamil Nadu with an area of 6614 hectares under mulberry

cultivation ranks fourth (3.7%) among the silk producing states in the country.

Status of Sericulture in Tamil Nadu

Sericulture is predominantly practised in Krishnagiri (5,120 acres),

Dharmapuri (2,955 acres), Salem (1,295 acres), Erode (3,873 acres), Coimbatore

(2,776 acres), Vellore (1,546 acres), Namakkal (1,250 acres), Dindigul (1,828

acres) and Theni (1,250 acres) districts. Sericulture is also practised in

Thiruvannamalai, Villupuram, Cuddalore, Trichy, Thanjavur, Pudukottai, The

Nilgiris, Virudhunagar, Tirunelveli and Kanyakumari districts. As on

31.03.2007, totally 22,886 farmers are engaged in sericulture in the state

with 25,107 acres under mulberry cultivation. The sericulture sector employs

1,25,535 persons for mulberry cultivation, silk reeling and weaving throughout

the year.

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Agencies involved in promotion of Sericulture

The agencies that help in the growth of the sericulture sector by increasing

the production and marketing the products are.

� Anna Silk Exchange, Kancheepuram

� TANSILK

� Sericulture Development and Price Stabilisation Fund

Anna Silk Exchange, Kancheepuram

The development of silk reeling industry was sluggish in Tamil Nadu,

since raw silk production and trading was mainly concentrated in and around

Bangalore. Further analysis revealed that difficulty in marketing of raw silk

was the main reason for this slow growth of the silk reeling sector in Tamil

Nadu. The major silk consuming centres like Arani, Kancheepuram,

Kumbakonam and Salem were drawing their silk through traditional

customised trading channels from Bangalore. In order to facilitate marketing

of raw silk produced within the state, the Anna Silk Exchange was set up in

Kancheepuram and has been functioning since 1991. The reelers of Tamil

Nadu bring the silk produced by them for sale to the Anna Silk Exchange,

where they are quality tested and auctioned. TANSILK, Silk Weavers

Co-operative Societies, twisters and other consumers participate in the auction.

The exchange ensures spot payment and fair price to the reelers.

The operations of the Anna Silk Exchange has stabilised the silk reeling

industry and has encouraged more investment in this sector by private

entrepreneurs. This has resulted in increased transactions in the cocoon

markets. It has also eliminated middlemen and has been able to establish a

direct link between the producers and the consumers of silk in Tamil Nadu.

A market fee of 0.75 % of the value of silk transacted is collected from

both the sellers and buyers transacting in the exchange. This is remitted to

the “Sericulture Development and Price Stabilisation Fund” and utilised for

the development of the Sericulture sector. Currently, Anna Silk Exchange

transacts about 150 Metric Tons of raw silk every year. Till date, only the

organised sector of silk weaving industry has been participating in the

exchange. The private silk weavers and the master weavers have not transacted

471

in the exchange in a substantial manner so far. This is because they mostly

get the silk yarn supplied on credit while the exchange demands spot payment.

However with increasing awareness about quality, it is expected that the private

sector will also start participating in the auctions conducted by the exchange.

TANSILK

Tamil Nadu Co-operative Silk Producers Federation Ltd., (TANSILK)

Kancheepuram was registered in 1978 as a State level Co-operative Society.

The members of the Federation are the Silk Weavers Co-operative Societies,

the Silk Reelers Industrial Co-operative Societies and the Silk twisting societies.

The federation is unique in its setup, in which both producers and consumers

are members. The main objective of the federation is to procure raw silk yarn

and twisted silk and supply the same to its members and other bulk consumers

in the quasi-government sector such as Khadi and Village Industries Board

and Sarvodaya Sanghs. TANSILK purchases raw silk of the silk reelers through

the Anna Silk Exchange at Kancheepuram and supplies the same to its twister

members for further process of twisting. Such twisted silk (Ready silk) is

purchased from the twisters and supplied to the silk weavers’ co-operative

societies, Khadi and Sarvodaya Sanghs according to their requirements. The

Government has issued an order that all the silk weavers co-operative societies

in Tamil Nadu should purchase their silk requirement only from TANSILK.

TANSILK is also expected to buy all the silk coming to the Anna Silk Exchange

that is not bought by the regular buyers. Thus the exchange also provides

support to the reeling industry of the state.

Sericulture Development and Price Stabilisation Fund

As part of the World Bank aided National Sericulture Project, it was decided

to charge a fee on the value of cocoon and silk transacted in regulated markets

from both the producer and purchaser and use these funds for sericulture

development. Accordingly, the “Sericulture Development & Price Stabilisation

Fund” was constituted in 1990. At present, a levy of 0.75% on value of the

cocoons/silk sold in the cocoon markets/silk exchange, is being collected

from both the buyer & seller and remitted into the treasury. The amount

collected is being utilised for implementation of various schemes for developing

the sector and for provision of infrastructure facilities which are approved by

the Sericulture Development & Price Stabilisation Fund Committee functioning

at the Government level.

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Review of Tenth Plan Performance

Tenth Plan Objectives

During the Tenth Plan it was proposed to cover 4,000 hectares (10,000

acres) under mulberry over a period of 5 years, bringing the net acreage under

mulberry to 13,000 hectares (32,500 acres). It was also proposed to consume

258 lakhs of silkworm eggs and to produce 12,000 M.Tons of cocoons and

1,500 M.Tons of raw silk. (Cross breed: 1200 and Bivoltine: 300 M.Tons)

Strategy to increase productivity in the Tenth Plan

The following new approaches and strategies were adopted to increase

productivity in the Tenth Plan period.

In order to increase the yield to the desired level, the department promoted

cultivation of improved mulberry varieties, like “V-1”, “S” series & MR2. Farmers

were also educated to use the recommended dosage of manure, fertilizers and

quality disinfectants.

Improved cultivation practices such as paired row system for increased

yield and quality of leaves and drip irrigation system to conserve water were

popularised among the farmers. The technology of having separate rearing

sheds adopting the “chawkie rearing concept” was promoted and accepted by

the farmers.

Farmers were sensitised to switch over to the shoot harvest rearing method.

These technologies along with the usage of improved mountages, helped the

farmers to increase productivity at reduced labour cost.

The promotion of Bivoltine races also increased the yield. Nearly 26% of

the total silk production in Tamil Nadu is Bivoltine, which is perhaps the

highest percentage in India.

For the purpose of better performance, the Government Sericulture

Training School situated at Hosur was restructured as the “Tamil Nadu

Sericulture Training Institute.” Steps were also taken to upgrade the skills of

the extension staff as well as stakeholders through quality clubs, training

programmes, seminars and demonstration camps.

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Financial Performance

As against the outlay of Rs.6.45 crore proposed for the Tenth Plan for the

sericulture sector, a sum of Rs.8.72 crore have been sanctioned under various

programmes including area development programmes such as HADP, WGDP

and funds were also received for SERI-2000, an externally aided programme.

These developmental programmes were implemented with matching

financial assistance received from the Central Silk Board under the Catalytic

Development Programme. During the Tenth Plan, the Central Silk Board had

sanctioned a sum of Rs.10.55 crore for this sector in Tamil Nadu.

Table 10.4.11

Some of the schemes taken up under Catalytic Development Programme

during the Tenth Plan period are given below:-

i. Assistance was given to promote economic use of water through drip

irrigation system (50% subsidy shared on 90: 10 basis by Central

Silk Board and State).

ii. Assistance was given for the construction of separate rearing house

by sericulturists. Total cost upto Rs.1.00 lakh/unit. (50% subsidy

shared by State and Central Silk Board equally).

474

iii. Assistance was also given for the procurement of modern rearing

equipments required for Bivoltine Sericulture at a cost of Rs.30,000

per farmer to cover the cost of improved mountages like rotary

mountages, netrikas, shelf rearing equipments etc. (Cost is shared

on 25:25:50 basis by Central Silk Board, State and beneficiary).

iv. Chawkie rearing concept was promoted at a cost of Rs.3.00 lakhs -

Rs.1.00 lakh for rearing shed and Rs. 2.00 lakhs for equipments

(Cost shared by Central Silk Board, State and beneficiary on

25:25:50 basis).

The yearwise physical achievements under the Catalytic Development

Programme during the Tenth Plan period are given below.

Table 10.4.12

Physical Performance

The Benchmark set for Tenth plan and actual achievement are given

below.

475

Table 10.4.13

Due to the severe drought that

prevailed in the state during the

earlier years of the Tenth Plan, the

sector faced a setback in mulberry

acreage, resulting in a loss of

13,300 acres in first two years.

However from 2004-2005

onwards, the mulberry acreage has

increased reaching 25,107 acres in

2006-07. Improved races,

favourable climatic condition due

to better rainfall, improved

technologies and usage of quality

disinfectants in the course of silkworm rearing have improved the overall

productivity. Crop losses have also come down and the cocoon and silk prices

have stabilized at the end of the Tenth Plan period.

As shown above, the productivity of cocoons have increased 27% over the

past Five Years. Besides, the quality of cocoons has also improved and the

cocoon- silk ratio (rendita) has come down from 9.0: 1 to 7.1 :1 due to the

adoption of latest technologies.

Silk Worm

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Eleventh Five Year Plan

The main objectives for the Eleventh Five Year Plan are as follows:

� To increase the mulberry acreage in the state by 50,000 acres by

the end of the Eleventh Plan.

� To increase the productivity of cocoons per 100 Disease Free Layings

(DFLs) to 64.0 Kg by the end of Eleventh Five Year Plan.

� To improve the cocoon-silk ratio from 7:1 to 6.5:1.

� To increase bivoltine silk production from 26% to 50% of the total

silk production.

The major thrust areas during the Eleventh Plan will be.

� Promoting the chawkie rearing concept.

� Ensuring supply of quality disinfectants.

� Focusing on the post-cocoon (silk reeling) sector to increase both

the silk reeling capacity in the state and the consumption of cocoon

produced, in the state itself.

In order to give more impetus to the sericulture sector, the following strategies

have been devised to achieve the above objectives.

� Replacing existing poor yielding varieties with high yielding mulberry

varieties to enable farmers to increase income and productivity.

� Popularising Robust/disease tolerant silkworm races and ensuring

supply of disease free silkworm seeds.

� Providing assistance to establish drip irrigation system in mulberry

gardens to conserve water and increase acreage.

� Imparting training in mulberry cultivation, silkworm rearing and

silk reeling so as to facilitate stakeholders to adopt new technologies

developed.

� Continuing the cluster approach in programme management.

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� Educating the Sericulture farmers in soil nutrition, Vermi

composting and usage of disinfectants.

� Increasing production of government grainage and encouraging

private sector participation through Licensed Seed Producers

� Assisting in procurement of improved rearing equipment and

construction of separate rearing sheds.

� Providing assistance to silk reeling units in the private sector.

� Assisting sericulturists and reelers to dispose of their cocoon, silk

etc., in regulated cocoon markets/silk exchange

� Strengthening of silk reeling sector by establishing cocoon markets,

improving silk reeling capacity in the state by establishing, new

reeling units, expanding existing silk reeling units and revival of

closed units.

Activities proposed for the Eleventh Five Year Plan

In order to reduce the burden of the stakeholders, the Central Silk Board

has proposed to continue the catalytic development programme by providing

matching share along with State Government and the beneficiary shares during

the Eleventh Plan for the following ongoing schemes :-

Pre-Cocoon Sector

Mulberry Garden

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Reimbursement of cost of the saplings

During the Eleventh Five Year Plan it is proposed to provide assistance

for Planting high yielding mulberry varieties over an area of 25000 acres. The

cost of saplings has been worked out as Rs.5500/- per acre. Besides, the

beneficiary share of Rs.3.43 crore (25%), the total subsidy of Rs.10.31 crore

(75%) will be shared by the CSB & the State at the rate of 2:1. Hence, it is

proposed to allocate the state share of Rs.3.44 crore for the above scheme in

the Eleventh Five Year Plan.

Construction of Vermi - Compost shed

To enrich the soil fertility with required quantity of essential nutrients,

assistance will be given for the construction of 2500 vermi compost sheds at a

unit cost of Rs.14000. The total subsidy for the scheme is Rs.2.63 crore, with

the state share of Rs.0.88 crore being allocated for this purpose in the Eleventh

Five Year Plan.

Assistance for installation of Drip irrigation system

In order to conserve water and make optimum use of the available water

resources, it is proposed to provide assistance to the farmers to install drip

irrigation system in the mulberry gardens. The area proposed to be covered in

the Eleventh Plan will be 5000 acres at a unit cost of Rs.20,000 per acre. A

farmer will be eligible for a maximum subsidy of Rs.50,000 for 2.00 hectares.

A sum of Rs. 7.50 crore will be given as subsidy during the Eleventh Plan

period for this scheme which will be shared by the Central Silk Board and the

State Government at the rate of Rs.5 crore and Rs.2.50 crore respectively.

Bivoltine Thrust programme

In order to increase the production of bivoltine silk and improve its quality

in the State, it has been proposed to assist the stakeholders under the Catalytic

Development Programme during the Eleventh Plan. The schemes covered

under this programme include the construction of rearing sheds, procuring

of rearing appliances and farm equipments, establishment of chawkie rearing

centres and supply of quality disinfectants.

479

(a)Construction of rearing sheds

Rearing Shed

During the Eleventh Plan, it is proposed to construct 10000 rearing sheds

at a total cost of Rs.84 crore. The unit cost varies from Rs.50,000/- to

Rs.1,50,000/-. A sum of Rs.21 crore is proposed as outlay to meet the state

share of the cost.

(b) Procuring of rearing appliances and farm equipments.

It has also been proposed to provide assistance for procuring rearing

appliances and farm equipment sets of 10000 Nos. at an unit cost of Rs.40,000.

The total cost for the scheme works out to Rs.40 crore. A total sum of Rs.10

crore is provided as state share for the Eleventh Plan period.

(c) Establishment of chawkie rearing centres

Assistance is also proposed to be provided for the establishment of 40

chawkie rearing centres at a unit cost of Rs.5.00 lakh each. The total cost for

40 such centres works out to Rs.2 crore. An allocation of Rs.0.50 crore has

been made during the Eleventh Plan to meet the state share.

(d) Supply of quality disinfectants

In order to benefit 20,000 farmers during the Eleventh Plan, it is proposed

to provide assistance for the supply of quality disinfectants at a unit cost of

Rs.3000/-. The total cost for this purpose works out to Rs.6 crore, against

which a state share of Rs.1.50 crore has been allocated during the Eleventh

Plan.

480

Post-Cocoon Sector

Strengthening of silk reeling units under private sector

It has been proposed to produce 4000 M.Tonnes of raw silk in the State,

of which 2000 M.Tonnes (50%) should be produced as Bivoltine silk. Further,

in order to increase the consumption of cocoons in the state, it has been

decided to strengthen the silk reeling sector by providing support for the

establishment of automatic reeling units, assistance for multi-end reeling units,

cottage basin reeling units, hot air drying chambers, multi-end reeling units

with twisting units and construction of silk reeling sheds.

Support for establishment of Automatic reeling units

Automatic reeling is the advanced technology to produce better quality

gradable silk to meet the international standards. During the Eleventh Plan,

10 automatic reeling units are proposed to be established at a unit cost of

Rs.1.20 crore. The total cost for this scheme works out to Rs.12 crore. Unlike

the other schemes, the sharing pattern for this scheme will be CSB-50%,

State Government-12.5% and the beneficiary-37.5%. Hence, a sum of Rs.1.50

crore is proposed to be allocated as state share in the Eleventh Plan for this

purpose.

Assistance for multi-end reeling units

Multiend reeling machines are suitable reeling devices to produce gradable

raw silk economically under Indian conditions. Hence it is proposed to provide

assistance for 200 machines at a unit cost of Rs.10 lakh. The total cost for 200

machines works out to Rs.20 crore, out of which the state share of 25%, which

is Rs.5 crore is proposed to be provided during the Eleventh Plan.

Cottage Basin reeling

481

Assistance for cottage basin reeling units

Cottage basin reeling is an improved technology when compared to the

charka system, wherein cooking process is separated from reeling process.

Silk is reeled on small reels first and then re-reeled on bigger reels to improve

the winding quality. During the Eleventh Plan it is proposed to provide

assistance for 180 such units at a unit cost of Rs.2.50 lakh. The total cost for

180 units is Rs.4.50 crore, out of which 25% state share of Rs.1.13 crore has

been allocated in the Eleventh Plan.

Establishment of hot air drying chambers

During the Eleventh Plan it is proposed to establish 100 hot air drying

chambers at a unit cost of Rs.1.00 lakh. The total cost for these chambers

works out to Rs.1 crore. A sum of Rs.0.25 crore is proposed to be allocated

during the Eleventh Plan towards the state share of 25%.

Support for existing and new multi-end reeling units with twisting units

During the Eleventh Plan it is proposed to upgrade 50 existing and new

multi-end reeling units by providing twisting units at a unit cost of Rs.6.00

lakhs. The total cost for 50 units is Rs.3 crore. A sum of Rs.0.75 crore towards

state share of 25% is proposed to be allocated during the Eleventh Plan.

Construction of silk reeling sheds

Construction of silk reeling sheds improves the working environment of

the silk reeler. It is proposed to set up 400 silk reeling sheds at a unit cost of

Rs.2.00 lakh. The total cost for 400 silk reeling sheds is Rs.8 crore. For this

purpose, a sum of Rs.2 crore towards state share of 25% is proposed to be

allocated.

Combined Pre and Post-Cocoon Sector

Installation of Solar Power system in Private and Government units

(Reeling, rearing shed, CRCs etc.)

It has been proposed to provide assistance for installation of 200 solar

power systems in private and Government silk worm rearing and silk reeling

units at an unit cost of Rs.10000/- each. A sum of Rs.0.05 crore is proposed

482

to be allocated for this purpose as state share of the total subsidy of Rs.0.15

crore.

Support for establishment of new grainages under private sector

In order to meet the demand of Bivoltine laying, it is proposed to assist

10 private licensed seed producers at a unit cost of Rs.0.10 crore. Unlike the

other schemes, the total cost of Rs.1 crore will be shared by the CSB, State

Government and the beneficiary at the rate of 65%, 5% and 30% respectively.

A sum of Rs.0.05 crore is proposed to be allocated as state share in the Eleventh

Plan for this purpose.

Schemes shared between Centre and the State

Besides, the above schemes, it is proposed to implement the following

pre-cocoon and post-cocoon programmes as bipartite programmes funded both

by CSB and the state or exclusively by CSB or the state without involving the

beneficiary.

Schemes Shared between CSB and State Government

Strengthening of Seed sector

In order to compete with imports and meet out the domestic requirement

of raw silk, the quality of seed needs to be improved. For this, the silkworm

seed sector has to be strengthened. Therefore, it is proposed to upgrade the

existing Government seed farms and silkworm seed production centres

(Grainages) with required infrastructure. Further, new grainages and Bivoltine

seed markets are to be established. The total cost of Rs.10 crore proposed for

this scheme will be equally shared by the Central Silk Board and the State @

Rs.5 crore each.

Upgradation of existing Government Units

It is proposed to upgrade the equipments in 25 Government Silk farms at

a total cost of Rs. 0.50 crore. This cost will be shared equally by Central Silk

Board and State @ Rs.0.25 crore each.

Incentive for Production of Bivoltine Silk

To encourage the silk reelers, incentive for production of quality bivoltine

silk will be provided @ Rs.100/- per kg. The total expenditure of Rs.10 crore

483

will be equally shared by the Central Silk Board and the State @ Rs.5 crore

each.

Upgradation of existing Government cocoon markets

The seven Government cocoon markets are proposed to be upgraded with

required basic amenities and infrastructure facilities @ Rs.0.08 crore per unit.

The total cost of Rs.0.56 crore will be shared equally by CSB and State

Government at the rate of Rs.0.28 crore each.

Strengthening of Tamil Nadu Sericulture Training Institute at Hosur

To impart training to the stakeholders and to facilitate their active

participation, the Tamil Nadu Sericulture Training Institute at Hosur will be

strengthened with the required infrastructure at a cost of Rs.1.50 crore. This

expenditure will be shared equally by the Central Silk Board and State at the

rate of Rs.0.75 crore each. Hence, a sum of Rs.0.75 crore is proposed to be

allocated for this scheme during the Eleventh Plan period.

Conducting Publicity Meets etc.

In order to update the knowledge of the stakeholders, district level farmers

meets and seminars are proposed to be conducted. The cost of these publicity

programmes will be shared equally between the State Government and CSB.

During the Eleventh Plan it is proposed to conduct 100 such publicity meets

at 20 programmes per year with a unit cost of Rs.20000/- per programme. A

sum of Rs.0.10 crore is proposed to be allocated as state share.

IT initiatives - Computerisation Networking and IT interventions

During the Eleventh Five Year Plan, it is proposed to develop the

computerization and networking in the Sericulture Department at the cost of

Rs.1 crore. The cost will be equally shared by the CSB and the State @ Rs.0.50

crore each.

Schemes Implemented by State Government or CSB

Training to farmers and staff

The staff members will be trained in different disciplines of sericulture

technologies at a cost of Rs.0.05 crore which will be borne by the State

Government alone.

484

Besides this, the Central Silk Board provides 100% grant for training

programmes to educate the stakeholders with latest technology and to upgrade

their skill to take up sericulture. During the Eleventh Five Year Plan period,

15000 farmers and 2500 reelers will be given training at the cost of Rs.3 crore

and Rs.0.75 crore respectively which will be borne entirely by the Central

Silk Board.

Special SGSY Programme

A special SGSY programme for sericulture farmers is proposed to be

implemented in six districts in Tamil Nadu with financial assistance from the

Central Ministry of Rural Development and CSB for a span of five years. 1200

farmers who are below the poverty line will be assisted under this programme.

The total cost of this programme is Rs.14.59 crore, of which Rs.11.80 crore

will be met by the Ministry of Rural Development and the beneficiaries. The

remaining cost will be met by CSB and the State Government. The state share

of Rs.0.87 crore has been provided as outlay for the Plan period.

Establishment of Bivoltine Cocoon Markets (Rs.0.74 crore)

In order to market the Bivoltine cocoons and to facilitate the farmers and

reelers, three new Bivoltine Cocoon markets will be established at

Gobichettipalayam, Coimbatore and Salem at a unit cost of Rs 0.245 crore. A

sum of Rs.0.74 crore will be allocated in the Eleventh Plan and this expenditure

will be borne entirely by the state.

Thus, a sum of Rs.68.09 crore is proposed to be allocated for Sericulture

sector in the Eleventh Five Year Plan.

Table 10.4.14

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486

Table 10.4.15

487

10.5. Handlooms and Textiles

Thinner and Finer yarn beauifully woven

Artistically blossom Handloom craft

of South India celebrated always

- Poet Pattukkottai

Kalyanasudaram

10.5.1. Introduction

The Textile Industry of Tamil Nadu plays a significant role in the Nationaland State economy. It is the largest single manufacturing activity providingdirect and indirect employment. The various sectors of the textile Industry inthe state include handloom, powerloom, spinning, processing, and hosieryand garments sectors.

The Handloom Sector has a long tradition of excellent craftsmanship andis intricately connected with the country’s heritage and culture. Besidesgenerating employment, it contributes to the export earnings of the country.The powerloom sector in the state plays an important role in meeting theclothing needs of the people. Tamil Nadu is next only to Maharashtra interms of the number of powerlooms established.

The Textile Sector in Tamil Nadu has been decentralized by being orientedtowards spinning and functioning largely in the private sector. It is a labourintensive sector with a preponderance of decentralized units in clusters inmost of its segments. In the recent past, the processing, hosiery and garmentssectors have gained importance due to their significant growth and exportearnings.

Present Status of Various Sectors of the Textile Industry

Handloom Sector

Based on the Handloom Census of 1995-96, there are 34.86 lakhHandlooms in the country, out of which 4.13 lakh Handlooms are in TamilNadu, which provide employment to 6.08 lakh weavers. Out of the totalhandlooms in Tamil Nadu, 2.19 lakh handlooms are functioning with 1117Handloom Weavers’ Cooperative Societies and the remaining 1.94 lakh loomsare outside the cooperative fold. All the developmental and welfare schemes ofthe state Government intended for the handloom weavers are beingchannelised through these Weavers’ Cooperative Societies. Most of theHandloom Weavers’ Cooperative Societies exist in rural and semi-urban areas.

488

The average annual production of handloom cloth in Tamil Nadu is 2500lakh meters, of which the contribution made by Handloom Cooperatives isaround 1200 lakh meters. The annual sales of handloom cloth in Tamil Naduin 2005-06 is about Rs.1600 crore, of which, the sales made by HandloomCooperatives is Rs.700 crore. The average annual export of Handloom clothfrom Tamil Nadu is Rs. 875 crore, of which, export sales by HandloomCooperatives through Merchant Export is around Rs.260 crore.

The details of production of handloom cloth and sales made in TamilNadu for the past 5 years are as follows:

Table 10.5. 1

Powerloom Sector

There are 19.03 lakh registered powerlooms in India, of which, TamilNadu has nearly 3.66 lakh registered powerlooms. Of them, 33,504 powerloomsare functioning with 127 Powerloom Weavers Co-operative Societies in TamilNadu. These societies mainly produce cloth required under the scheme offree supply of uniforms to school children and free distribution of sarees anddhothies scheme. The powerloom industry in Tamil Nadu provides employmentto 9.14 lakh powerloom workers. The powerlooms in Tamil Nadu are mainlycotton oriented. Out of 3.66 lakh powerlooms, only about 5000 powerloomsare sophisticated.

Spinning Sector

The spinning mills are the backbone of Tamil Nadu’s industrialdevelopment. They are predominantly managed by private entrepreneurs andare also cotton oriented. Out of 3039 large, medium and small spinning millsin India, 1850 are located in Tamil Nadu which include 18 cooperative spinningmills, 8 National Textile Corporation mills and 20 composite mills. Thespinning capacity of the state is 17.92 million spindles with a labour force of

489

about 2.42 lakh. Tamil Nadu produces about 1261.98 million kgs. of spunyarn per annum which accounts for 38% of the National spun yarn production.

Co-operative Spinning Mills

In Tamil Nadu, 18 cooperative spinning mills have been set up from1958 to 1985 with a spindle capacity of 4.70 lakh with the object of supplyinggood quality yarn at reasonable rates to meet the requirement of hank yarn toHandloom Weavers’ Cooperative Societies and cone yarn to the PowerloomWeavers’ Cooperative Societies. Unfortunately, the cooperative spinning millscould not run viably over a long period of time due to high cost of labour, lackof modernization resulting in low productivity, hike in cotton price, inadequateworking capital, etc. All the 18 cooperative spinning mills are havingaccumulated losses and negative net worth. At present only 5 Co-operativeSpinning Mills at Aralvaimozhi, Andipatti, Aranthangi, Ettayapuram andUthangarai are functioning in order to fulfil the hank yarn requirement ofhandloom weavers.

Processing Sector

Processing is an important value-added segment in the textile sector.There are about 10397 hand processing units in India, of which, 2614 handprocessing units are located in Tamil Nadu. There are about 2510 powerprocessing units in India of which 985 power processing units are in TamilNadu. Out of 985 power processing units in the state, 713 units are located inTirupur. As the present availability of processing facilities is very insignificant,the Government is taking steps to establish a Textile Processing Park atCuddalore so as to undertake large scale processing activities.

Garment And Hosiery Sector

The garment industry occupies a predominant position in world tradeand it is the fastest growing sector in the textile industry. In Tamil Nadu, thegarment units are located substantially in and around Chennai. There areabout 600 garment units in the state providing employment to about 2 lakhpersons. This Sector in Tamil Nadu contributes Rs.2500 crore in foreignexchange.

There are about 6000 hosiery units in India of which 2900 units arelocated in Tirupur in Coimbatore District. The hosiery sector in Tamil Naduprovides large scale employment to around 3lakh persons. The hosieryindustry in Tirupur contributes 48% of the country’s exports and earns Rs.8000crore in foreign exchange per annum.

490

10.5.2. Tenth Plan Performance

An outlay of Rs.180 crore was provided for ‘Handlooms and Textiles’ inthe tenth plan. The actual financial performance during the tenth plan was

Rs.1336.40 crore.

The major reason for the increased expenditure was due to the

introduction of the ‘Free Saree and Dhoti Scheme’ in the year 2004 with a

dual objective of supplying free sarees and dhotis to the poor and providingthe weavers with livelihood. The expenditure under this scheme during theplan period was Rs.775 crore. The other major scheme implemented underthis sector in the Tenth Plan was Market Incentive to Weaver’s Cooperatives ata cost of Rs.405 crore.

Two more market assistance/ rebate schemes that were operated duringthe plan period which include the Deendayal Hath Kargha Protsahan Yojana(DHPY) scheme at a cost of Rs.29.21 crore and the Interest Subsidy Scheme

Table 10.5.2

491

at an outlay of Rs.33.80 crore. Schemes for Weaver’s Welfare were givenpriority during the tenth plan period, with the implementation of a GroupInsurance Scheme at a cost of Rs.7.35 crore, a savings and security schemefor weavers at a cost of Rs.8.68 crore and a new Health Insurance Scheme at acost of Rs.6.60 crore.

Besides this, a sum of Rs.13.22 crore was sanctioned towardsestablishment of Hi-Tech Weaving Parks at Palladam, Kumarapalayam andErode and a sum of Rs. 5 crore was sanctioned for the implementation ofTextile Centres Infrastructure Development Scheme (TCIDS) during the tenth

plan period. The financial and physical achievement against the outlay and

targets proposed for tenth plan period are given in the tables below:

Table 10.5. 3

New Scheme

492

Table 10.5. 4

Table 10.5. 5

493

Table 10.5. 6

494

10.5.3. Eleventh Five Year Plan

Objectives

The main objective of the Eleventh Five Year Plan is to provide for the

growth and development of the Textile Industry with specific focus on

handlooms and thereby ensure sustainable livelihood for the weavers and

other workers who form the backbone of the industry.

Thrust areas

� Making Handloom weaving a remunerative and economic avocation.

� To sustain the existing weaving population on hand weaving and to

overcome the challenges posed by the competitors through

development and welfare schemes.

� Upgradation or replacement of the existing technology in powerloom

industry to achieve fast modernisation.

� Improving infrastructure facilities in clusters associated with all sectors

of the textile industry so as to improve their productivity and

marketability.

� Imparting training in the latest technology to compete in the

International market.

� Addressing the environmental issues of the Textile industry.

495

Strategies

� Introduction of Handloom mark (logo) to popularise the handloom

products of Tamil Nadu among the public.

� Regular supply of quality raw materials through State and Central

Institutions at reasonable price.

� Establishment of a cluster based approach for development of

handlooms and powerlooms.

Ongoing Schemes

Free Distribution of Handloom Cloth to the people below poverty line

Every year during Pongal Festival, Sarees and Dhoties are distributed

free to the people living below poverty line in Rural and Urban areas. This

scheme provides continuous employment to about 50,000 weavers and also

fulfill the clothing needs of 3.28 crore poor people approximately.

During the eleventh plan it is proposed to produce sarees & dhoties of

820 lakh units each for this purpose.

For this scheme a sum of Rs.1344 crore is proposed in the eleventh plan.

Rebate on sale of Handloom Cloth

The state Government is providing subsidy towards rebate to promote

the sale of Handloom cloth. The state Government permitted the primary

weavers’ co-operative societies and Co-optex to allow rebate at the rate of 20%

for the sale of handloom cloth throughout the year for the retail and wholesale

business, subject to the limitation of 20% or Rs.100/- per unit for cotton

varieties and 20% or Rs.200/- per unit for silk varieties whichever is less. As

per the policy of the state Government, the excess expenditure over and above

the Government of India’s contribution under Marketing Incentive component

of the Deendayal Hath Kargha Protsahan Yojana will be borne by the state

Government.

A sum of Rs.400 crore is proposed in the eleventh plan for this scheme.

496

Deendayal Hath Kargha Protsahan Yojana (DHPY)Scheme

This is a comprehensive scheme formulated by Government of India and

is being implemented from 1.4.2000. Under this scheme, financial assistance

is provided for components like basic inputs, infrastructure support, design

inputs, publicity and strengthening of handloom organizations. The scheme

is shared between the State and Central Government on a 50:50 shared

basis.

A sum of Rs.30 crore is proposed in the eleventh plan as the state share.

New Health Insurance Scheme for Handloom Weavers

The Government of India has introduced a New Health Insurance Scheme

for Handloom Weavers from the year 2005-06 in place of earlier Health Package

Scheme for Handloom Weavers. Under the Scheme the total premium payable

to the insurance company would be Rs.1000/- per weaver per annum. Out of

this, Rs.800 will be Government of India’s contribution and Rs.200 will be

weavers’ contribution. In Tamil Nadu the weavers’ contribution of Rs.200 is

being paid by the state Government. Under this scheme the weaver’s family of

four can avail of the Medical treatment in any one of the empanelled hospitals/

nursing homes in various districts throughout the state without actually having

to pay for the medical treatment up to a maximum of Rs.15,000/- per annum.

In the eleventh plan outlay, a sum of Rs.21.80 crore as state share

towards premium payable for the existing beneficiaries in addition to enrolling

30,000 new members is proposed.

The Co-operative Handloom Weavers’ Savings & Security Scheme

To encourage the saving habit among handloom weavers, this scheme is

being implemented by the state Government since 1975. From the year

1985-86, the Government of India is also participating in the scheme and

contributing its share as part of the Central Thrift Fund Scheme.

Under this scheme while a weaver-member contributes 8 paise per rupee

of wages earned, the State Government contributes 4 paise per Rupee of

wages and Government of India contributes 4 paise as matching contribution

under Central Thrift Fund Scheme. Thus 16 paise per rupee is deposited in

the Government account for which the state Government allows 9.5% interest.

497

Out of the 9.5% interest, 6.5% is credited to Weaver-members’ account and

the remaining 3% is used for implementing the Old Age Pension Scheme and

Family Pension Scheme for handloom weavers.

During the plan period, it is proposed to enroll 30,000 weavers as members

in this scheme in addition to the existing beneficiaries of this scheme.

A sum of Rs.20 crore is proposed for this scheme in Eleventh plan covering

approximately 1 lakh weavers.

Payment of Premium for Tamil Nadu Co-Operative Handloom Weavers

under Bunkar Bima Yojana Scheme

A new Insurance Scheme called “Mahatma Gandhi Bunkar Bima Yojana”

is being implemented by the Government of Tamil Nadu from the year

2004-05. Under the Mahatma Gandhi Bunkar Bima Yojana, the total premium

to be paid to Life Insurance Corporation would be Rs.330 per weaver per

annum, of which Rs.150 will be contributed by Government of India, Rs.100

will be contributed by Life Insurance Corporation of India and Rs.80 being

the weaver’s contribution which will be paid by the state Government on the

behalf of the weavers.

The insurance amount payable to the beneficiaries of this scheme are as

follows:

For Natural Death Rs.50,000/-

For Accidental Death Rs.80,000/-

For Total Disability Rs.50,000/-

For Partial Disability Rs.25,000/-

This scheme which was hitherto covering Cooperative Handloom weavers

only has also been extended to the Handloom weavers outside the Co-operative

fold from the year 2006-07 onwards. During the eleventh plan period it is

proposed to enroll 30,000 new members under this scheme and the state

government outlay proposed is Rs. 8.45 crore.

498

Weavers’ Housing-cum-Workshed Scheme

The GOI has now proposed to modify the Weavers’ Housing Scheme to

the effect that weavers living in rural areas may avail assistance for construction

of houses under Indira Awaaz Yojana (IAY)of the Ministry of Rural Development

during the Eleventh five year plan period. Further, the weavers below poverty

line (BPL) will be fully funded while those other than BPL will be assisted by

the Central Government to the extent of 75%. The balance 25% will be borne

by the beneficiary/implementing agency.

Since the IAY scheme is applicable only to the people below poverty line

living in rural areas and as weavers are mostly residing in the semi-urban and

urban areas, the IAY scheme cannot be made applicable to most of the

handloom weavers. The matter has been taken up with GOI for extending a

similar scheme to urban weavers also.

For House-cum-Workshed Scheme, a sum of Rs.1.25 crore is proposed

as state share in the eleventh plan.

Conduct of Powerloom Census

The powerloom Industry is a major contributor towards foreign exchange

earnings, Gross Domestic Product, besides providing large scale employment.

Though, there is a considerable number of looms in our country, most of the

looms are not modernized and the quality of the products does not match the

international standard at large. In order to analyze the potential of the

powerloom sector and make it competitive in the world market a census of

powerlooms available in the state is essential.

An outlay of Rs.0.25 crore is proposed as a onetime expenditure in the

eleventh plan.

New Schemes

Infrastructure Development & Environmental Issues

To achieve 18% growth as envisaged in the National Textile Policy 2000,

it is necessary to improve the infrastructure facilities such as roads, water

supply and drainage, uninterrupted power etc. to the export units in the

textile centres.

499

Further, due to lack of modern processing facilities, yarn and cloth in

grey stage are mostly exported in large quantities without doing value addition.

The state Government is taking the initiative to set up an exclusive Processing

Park at Cuddalore under the scheme of Integrated Textile Park launched by

Government of India. At present, in addition to the 5% subsidy under TUF

scheme, 10% capital subsidy of Government of India is available for

modernization of processing sector.

Most of the processing units are situated in and around Coimbatore,

Tiruppur, Erode, Karur etc. The dyeing/bleaching effluents discharged from

these units are either treated in the effluent treatment plants situated in

these units or treated in the common effluent treatment plants. However, the

treated effluents contain total dissolved solids above the norms prescribed by

the Tamil Nadu Pollution Control Board (TNPCB). As a permanent solution for

the effluent discharge from bleaching/ dyeing/processing units, a Marine

Discharge Project has been announced at a project cost of Rs.750 crore

approximately with Central Share of 25%, state Share of 15% and balance by

private participation. This project aims at carrying the treated effluents

discharged from processing/dyeing units in Tiruppur, Erode, Karur etc.

through a pipeline upto the sea for marine disposal.

A Special Purpose Vehicle (SPV) for the said purpose has been formed

and registered in the name of “Textile Eco Solutions Tamil Nadu (TEST) Ltd”.

The project implementing agency is “Tamil Nadu Water Investment Company

Ltd. (TWIC)”. An advance amount of Rs.10 lakh has been paid to TWIC for

preparation of draft project report and the agency is in the process of

preparation of the report.

For this, a sum of Rs.112.50 crore being the state share of the total

project cost is proposed in the eleventh plan outlay.

Research and Development (R&D) Activities

Continuous innovation through research and development is necessary

for the exploitation of the opportunities available in the world market. This

can be achieved only when the research and development strategy of the

500

textiles industry is changed from passive to proactive by concentrating on

thrust areas like strengthening of R & D capabilities, implementing R & D

related projects, creating resource bank for new technologies, providing

accreditation/certification support etc.

Rs.1 crore is provided in the Eleventh Plan for this scheme.

Provision for Marketing / Design Development / Brand Imaging

Timely response to market needs is very critical for the success of any

product. To face the challenges posed by private and multinational Textile

manufacturers, the Weavers’ Cooperative Societies are being encouraged to

produce exportable varieties by infusing new designs based on fashion trends.

For this purpose, buyer-seller meets will be organized in important textile

centres within and outside the state of Tamil Nadu inviting the leading exporters

and domestic textile houses to showcase the products of the Weavers’

Cooperative societies without the involvement of middlemen. This will enable

direct interaction of the societies with the prospective buyers both in domestic

and international level. Further, to analyse market trends and consumer tastes

and arrive at the level of skill and technical development required to meet the

demand, a market survey is necessary.

Hence a comprehensive scheme comprising advertising and publicity,

design development, conduct of exhibitions, conduct of buyer-seller meets

and market survey is proposed with a total provision of Rs.1 crore in the

eleventh plan.

Creation of awareness among the Public on the usage of Handloom

Products

The modern day public, especially the youth, are not aware of the benefits

of handlooms and often cannot distinguish handloom textiles from powerloom

or mill made materials. In order to create awareness among the public of the

diversity and intrinsic benefits of using handloom materials both in cotton

and silk, it is planned to give wide publicity within and outside the state. This

will definitely increase awareness among the public and increase the demand

for handloom products.

A sum of Rs.1 crore is proposed in the eleventh plan outlay for this

scheme.

501

Identification of Virudhunagar & Nagercoil Weavers Clusters as Export

Zone

To increase the wage earning capacity of the weavers, Virudhunagar and

Nagercoil weaver clusters have been identified as export zone. Nearly thousand

weavers belonging to that area will be linked with exporters for continuous

production of export varieties. The financial assistance for this project will be

dovetailed from the schemes of Government of India and state Government at

a cost Rs.1.23 crore.

In the eleventh plan outlay Rs.0.79 crore is proposed as state share for

this scheme.

Establishment of a Handloom Weavers’ Training Centre at Erode

To enable the handloom weavers to meet the challenges of globalisation,

skill upgradation of the weavers is necessary. At present there is no separate

training centre for this sector and the training is imparted through the state

and Central Government agencies on a job basis.

Hence it is proposed to establish an exclusive training centre at Erode

District, the largest weavers belt.

An amount of Rs.0.51 crore is provided in the eleventh plan of which

Rs.0.10 crore will be non-recurring.

Separate Circle Assistant Director Office for Tiruvannamalai Dist.

At present, all the developmental and welfare schemes intended for the

handloom and powerloom weavers of Vellore and Tiruvannamalai district are

being channelised through the Circle office of the Assistant Director of

Handlooms & Textiles functioning at Vellore. To focus the attention exclusively

for the welfare of weavers of Tiruvannamalai district, a separate Circle Assistant

Director Office is proposed to be established at a cost of Rs. 0.20 crore in

Tiruvannamalai District for which necessary provision is made in the eleventh

plan.

Thus a total of Rs.1942.75 crore is proposed in the Eleventh Plan.

502

Table 10.5. 7

503

Table 10.5. 8

504

10.6. Mining and Metallurgical Industries

We mined gold unearthed iron; laid into the furnace,

made them int machines.

- Revolutionary Poet Barathidasan

10.6.1. Introduction

Minerals form the basic raw materials for several industries in the large,

medium and small scale sectors and contribute substantially to the GDP of

the country. Minerals are therefore considered the backbone of a nation’s

economy. As minerals are exhaustible and non-renewable resources, their

exploitation has to be done keeping in view not only the present but the long

term needs. Management of mineral resources has, therefore, to be closely

integrated with the overall strategy of development; and to be guided by long-

term national goals and perspectives. As the country is not endowed with all

the requisite mineral resources, it is imperative that we achieve the best use

of available mineral resources through scientific methods of mining,

beneficiation and economic utilisation.

Mineral Deposits in Tamil Nadu

Geomorphologically, the State can be divided into three distinct zones

viz., 1) the North Western and Western regions covered by hilly terrains, 2)

the Eastern zone covered by coastal plains and 3) the middle level plain area

in between these two zones spreading in the North - South direction.

Geologically, the hilly terrains and the middle level plains contain

crystalline hard rocks such as charnockites, granite gneiss, khondalites,

leptynites, metamorphic gneisses with detached occurrences of crystalline

limestone, iron ore, quartzo-feldspathic veins and basic intrusives such as

dolerites and anorthosites. Coastal zones contain sedimentary limestones,

clay, laterites, heavy mineral sands and silica sands. The hill ranges

are sporadically capped with late rites and bauxites of residual nature.

Gypsum and phosphatic nodules occur as sedimentary veins in rocks of

the cretaceous age. Gypsum of secondary replacement occurs in some of the

areas adjoining the foot hills of the Western Ghats. Lignite occurs as

sedimentary beds of tertiary age. The Black Granite and other hard rocks are

505

amenable for high polish. These granites occur in most of the districts except

the coastal area. Potential for gold deposits in Maharajakadai region of

Dharmapuri district, as the southern extension of Kolar Gold Fields and in

the Gudalur-Devala region in The Nilgiris district exists.

The important minerals of commercial value in Tamil Nadu are granite,

lignite, limestone and recently found natural gas and oil. Tamil Nadu accounts

for 90 percent of lignite potential in the country. Lignite constitutes a major

mineral base for the production of power and fertilizers in the State. Manganese

deposits in Salem are the largest in India and provide the raw material for

manufacture of refractory materials. Granite is one of the important export

earners from Tamil Nadu. Salt is found all along the coast and manufactured

in large scale in Tuticorin. Other minerals, which occur in Tamil Nadu, are

mica, chromite graphite and bauxite.

The systematic geological survey of the country carried out during the

last century and a half has brought to light the mineral potential of the State

and provided the base for the industrial development achieved to date. This

involved the setting up of cement, ceramic, stoneware, chemical, fertilizer,

refractory, abrasives, aluminum and sponge iron industries, lignite mining

and power development and mineral oil exploitation and refining units.

An overview of the mineral reserves in the State is given in the Table

below.

Mining

506

Table 10.6. 1

Role of the State in mineral development

The Department of Geology and Mining in Tamil Nadu which originally

started as a wing of the Directorate of Industries and Commerce in 1957, has

had achievements in assessment of iron ore and limestone for the then proposed

Salem Steel Plant, bauxite resources for Aluminium plant set up at Mettur,

limestone resources for a number of cement plants, major and minor, besides

expanding the capacity of the existing plants and meeting the requirements

of the increasing mineral based industrial units. The mineral resources located

and evaluated by the Department formed the base for the setting up of a

Mineral Development Corporation viz., the Tamil Nadu Minerals Limited

(TAMIN). It has also rendered valuable assistance to the mineral based public

sector units such as TANMAG, erstwhile TACEL and TANCEM.

Besides mineral exploration and evaluation, the Department also carries

out mineral administration under various Acts and Rules, thus augmenting

mineral revenue to the State exchequer. The revenue collections of the State

from Mineral sector have steadily increased from about Rs. 2 crore in 1983 to

Rs.254.26 crore at the end of the Ninth Plan period. During the Tenth Plan

507

this revenue has grown to Rs. 489.24 crore registering an increase of 92.4 %

in five years.

Tamil Nadu Minerals Ltd.

Tamil Nadu Minerals Ltd. (TAMIN) is a State Public Sector Undertaking

engaged in the exploitation, processing and marketing minerals such as

Limestone, Vermiculite, Quartz, Feldspar and Graphite. It exports polished

granite slabs, building slabs and attractive colours, wall panels and monuments

of various International Standards. TAMIN also uses its funds for the exploration

of the above minerals. During 2006-07, TAMIN achieved a turnover of Rs.102

crore and expects a growth rate of 25% during 2007-08.

10.6.2. Tenth Plan Performance

The Mining Sector has registered an annual average growth of 6.77 percent

when compared with an overall GSDP growth of 6.137 during the Tenth Plan

Period. The Sector had registered a positive growth in the first 2 years of

Tenth Plan as seen in the chart shown below, but has shown a declining

trend thereafter. During the year 2006-07 the sector has registered a negative

growth.

Graph 10.6.1

Performance of Mining

The Tenth Plan provided an outlay of Rs.3 crore including an outlay of

Rs.0.08 crore for one ongoing scheme and five new schemes with an outlay of

Rs. 2.20 crore under the State Sector.

508

I. On going schemes

Geo -Technical Cell at Coonoor

The Geo-technical Cell was established in 1985 at Coonoor in the Nilgiris

district under the Hill Area Development Programme to identify the areas

prone to landslides and to suggest remedial and preventive measure against

such natural calamities. The Cell has continued its Geo-technical studies for

identifying landslides prone areas In Nilgiris district every year during the

Tenth Plan and more than 500 sites were inspected and reports furnished.

An expenditure of Rs.54.10 lakh was incurred for this Scheme during Tenth

Plan against an outlay of Rs.69.36 lakh.

II. New schemes

1. Reappraisal Limestone investigation in southern and western districts

During Tenth Plan it was proposed to cover the unexplored areas in

southern and western districts in the State so that new areas of Limestone

occurrence could be identified and the possibility of setting up of few more

major or mini cement plants can be explored, considering the increase in

building activities and consequent consumption of cement for such building

activities.

Initially, investigation work has been carried out in Sathankulam Taluk

of Thoothukudi District where it was found that the Calcium Oxide (CaO)

content in these areas ranges from 32% to 45%. A reserve of 85,92,000 MT of

Kankary limestone is inferred to be available in the area. In the second stage

comprehensive investigation work has been taken up in Parapadi and

Illankulam villages of Nanguneri Taluk in the year 2006-2007. The chemical

reports reveal that the Calcium Oxide (CaO) content of Limestone is ranging

from 21.42% to 52.15% showing potential for limestone mining in this area.

The work is being continued. An expenditure of Rs.16.90 lakh was incurred

during Tenth Plan for this scheme against an outlay of Rs.34.27 lakh.

2. Establishment of Geographical Information System.

During Eighth Plan period, the development of a data base management

system concerning Mineral exploration and Mineral Administration was taken

up by the Department. In order to have a complete analysis of the field data

509

collected during the geological exploration, a Geological Information System

package has been set up in the Department during the year 2005 to create a

comprehensive data base. Compilation of the data base on Mineral receipts,

Mineral production, Lease particulars etc., has since been undertaken using

GIS techniques. Besides the above, digitization of maps is also contemplated.

An expenditure of Rs. 41.09 lakh was incurred during Tenth Plan for this

Scheme against an outlay of Rs. 45.23 lakh.

The following schemes originally proposed to be taken up during Tenth

Plan period could not be taken up due to want of sanction from the

Government.

� Resource assessment of Black and Multi coloured granites in

Tamilnadu.

� Investigation of Iron Ores in the Nainar Malai area of Namakkal

District.

� Investigation for Lignite in areas lying to the East of Vellar block

Cuddalore district and in the Jayamkondacholapuram area,

Perambalur District.

However, these schemes would be taken up during the Eleventh Plan

period by formation of a Separate Exploration Wing.

Besides the above mentioned plan schemes, schemes for Office

automation and computerisation of District Offices, up-gradation of

infrastructure, capacity building and other development schemes were taken

up during the Tenth Plan period. An expenditure of Rs. 70.08 lakh was incurred

during Tenth Plan against an outlay of Rs. 92.15 lakh for these schemes.

510

Table 10.6. 2

Eleventh Five Year Plan

Objectives

The rich and varied mineral resources of the state have contributed

handsomely towards the development and industrialisation of the state. The

main objective of the sector during the Eleventh Five Year Plan is to facilitate

scientific exploration, optimal exploitation without affecting ecology and

environment and judicious conservation of minerals and other resources as

well as maximisation of the revenue to the state.

511

Ongoing Schemes

Under ongoing scheme of Strengthening of Information System and

Laboratory Facilities, modernisation and computerisation of laboratories

catering to the analytical needs would be carried out with an outlay of Rs.0.36

crore during the Eleventh Plan Period.

An outlay of Rs.1.71 crore is proposed for expansion of the State Geological

Department Headquarters.

New Schemes

1) Formation of separate Exploration wing

It is proposed to create an Exploration Wing with adequate staff strength

at the state as well as district level to explore the mineral deposits such as

granites, laterite, gravel, savudu in mineral based districts. The details of

such exploration would be published since it is essential to identify such

mineral bearing areas to meet the ever-growing demand of minerals for the

industry. An outlay of Rs.0.71 crore is earmarked for this purpose during the

Eleventh Plan Period.

2) Administrative Improvement and provision for infrastructure

The order to streamline mineral administration and make it more effective,

it is proposed to computerise and strengthen the district offices of the

Department, with an outlay of Rs.0.37 crore for the Eleventh Plan Period.

Other proposals including provision of amenities required for investigation

work, strengthening of library facilities & purchase of digitised topo sheets

will also be taken up during the Plan Period, to improve the overall functioning

of the department.

512

Table 10.6. 3