CHAPTER -V

RURAL INDUSTRIES IN KANYAKUMARI DISTRICT -

A GENERAL PICTURE

INTRODUCTION

Kanyakumari is mainly an agricultural district, the prosperity of which is

mainly dependent on the development of agricultural resources. Intensive efforts

are made to raise the yield different crops by adopting modern methods of

cultivation. But agriculture alone can't contribute to increase the income of the

local people since the area of cultivation is limited in relation to its growing

population. Therefore it is imperative that secondary sectors, particularly rural

industries are also developed in order to provide employment opportunities to the

unemployed.

Rural Industries usually manufactured articles needed in the villages,

utilising tools and implements falling within the financial capacity of the villagers

carrying on the industries. Local raw materials and human or animal power are

used without causing unemployment among wage earners. These industries play

a vital role in the district, in view of their capacity to generate employment

opportunities in the rural sector at low capital cost, developing rural initiative,

cooperation and a spirit self reliance in the economy. They provide seasonal part

108

time employment to the rural people suffering from under employment owing to the

seasonal characters of agricultural operations.

Further, rural industries require lesser gestation period and produce goods

of common necessities required locally. They are eminently suited for initiating the

process of industrialisation in the backward areas of the district on a dispersed

basis and they have the capacity to rectify the regional imbalances. These

industries, therefore have been accorded an important place with a view to

achieve rapid industrialisation of rural areas.

5.1 DISTRIBUTION OF RURAL INDUSTRIES:

The Rural industries of Kanyakumari district fall within the seven categories

of industries that come under the purview of Khadi and Village Industries

Commission (KVIC). The block wise distribution of these seven categories of

rural industries is given in Table 5.1

TABLE 5.1

CATEGORY WISE DISTRIBUTION OF RURAL INDUSTRIES IN

KANYAKU MARt DISTRICT

E .L.

•i! •0 C C -

>1w0 02 E

Im

.cCI-.

Mineral 123123 110 65 20 13 10 6 11 10 350basedForest

160 150 82 82 90 60 72 65 82 975basedAgro basedand food 260 210 132 127 120 110 111 184 113 1726basedPolymer andchemical 132 110 65 52 57 61 68 72 63 805based Engineering

and non - 125 102 62 42 51 54 63 62 42 835conventionalTextileexcluding 222 190 102 136 120 85 97 142 120 1595Khadi Service

72 64 10 20 15 4 8 9 10 212IndustryTotal 1094 936 705 742 754 589 625 531 522 6498

ource: 1'cuon pian or u1L, ivagercoii.

From Table 5.1 it is clear that, out of the seven groups of rural industries,

agro and food based industries occupy the top place (1726), followed by textile

110

industry (1595 units). Forest based industries account for 975 units. Engineering

III

and non-conventional energy units in the district number 835 and polymer and

chemical based industries are 805 in number.

In each of these categories that manufacture rural products, the types of

prominent industries are

Hosiery and garments

Food products

Wood products

Metal products

Leather products

- 1484 units

- 954 units

- 578 units

- 544 units

- 472 units

There are many factors which need consideration for the efficient running

of an industry The prosperity of any industry, particularly a rural industry depends

much on rural entrepreneurs, as ninety percent of the rural industrial units has sole

proprietorship as the form of organisation. Out of the different factors that

determine efficiency of an entrepreneur, the socio-economic background is very

significant. So the researcher has made an attempt to study the socio-economic

profile of the rural entrepreneurs before analysing the role of promotional

agencies. The socio-economic background of four hundred and fifty rural

entrepreneurs is analysed.

5.2 AGE

The age wise composition of the rural entrepreneurs is shown in Table 5.2

TABLE 5.2

AGE COMPOSITION OF RURAL ENTREPRENEURS

Food Hosiery Wood Metal LeatherCategory Products and products products products Totalgarments

Below 25 228 5 4 2 3

years (4.89)

26-35 19239 61 30 33 29

years (42.67)

36-45 13932 43 25 18 21

years (30.89)

46-55 7123 25 11 7 5

years (15.78)

Above 55 263 8 4 7 4

years (5.78)

450Total- 105 142 74 67 62

(100)Source: Uomputecl trom pnmaiy data.

Figures within parenthesis denote percentage to total.

Table 5.2 reveals that 42.67 percent of the rural entrepreneurs was in the

age group of 26-35 years, followed by those in the age group of 36-45 years

(30.89 percent). The rural entrepreneurs who belonged to these two age

categories were young and energetic. They had chances to undergo training and

112

adopt innovations. This had an impact on production. But those entrepreneurs

113

below 25 years (4.89 percent) were inexperienced and 15.78 percent who were

in the age group of 46-55 years did not go for training and they produced goods

using traditional methods. Thus, the study revealed that age composition is one of

the factors which determines production of rural product.

5.3 COMMUNITY

Community is one of the social factors determining the social status.

Table 5.3 shows the community of the rural entrepreneurs taken for study.

TABLE 5.3

COMMUNITY OF THE RURAL ENTREPRENEURS

C)

-

2 o°- . I-.0 0

Q

Forward 21 32 7 4 - 64 14.22

Backward 72 92 58 55 42 319 70.89Most

Backward10 15 7 7 10 49 10.89

Scheduled 2 3 2 1 10 18 4

Total 105 142 74 t 67 62 450 100 1QUU1U * UII1UWU IIUtJI JTIffIfy aaia

114

It can be seen from table 5.3 that 70.89 percent of the rural entrepreneurs

taken for study belonged to backward community, because they occupy 82.73

percent of the total population of the district. Only ( 4 ) percent belong to the

scheduled caste because they occupy only 5.13 percent of the total population of

the district. Those owners of rural industries belonging to backward caste

possessed properties and other assets. They are in a advantageous position

compared to those owners belonging to the scheduled caste because they can get

loans from financial institutions keeping these assets as security.

5.4 Family size of the respondents:

This is one of the determinants of the socio-economic status of an

industrial. It has an impact on the progress of the family. A study has been

attempted on the family size and it is presented in Table 5.4

TABLE 5.4

FAMILY SIZE OF RESPONDENTS

Family Food HosIerj'and Wood Metal Leather

size products products products productsTotal PercentagegarmentsLessthan 4 11 13 9 7 6 46 10.22members4-6 85 104 54 48 38 329 78.11membersAbove 6 9 25 11 12 18 75 16.67members ________ ________ ________ Total 105 1 142 74 1 67 1 62 450 100source: Uomputecl from pnmary data

115

It is observed from the table 5.4 that 73.11 percent of the rural

entrepreneurs have a family size of 4-6 members and only 55 percent of these

members are adults. The rest are school going children. 10.22 percent of the rural

entrepreneurs who have a family size of less than four members have

comparatively less family expenditure and so they are able to invest more in

production. Twenty three percent of the families are joint families. Hence the

owners have an additional responsibility of taking care of the aged and the sick

and the money is diverted for unforeseen contingencies and personal purposes.

5.5 LITERACY

Literacy is the pre-requisite for the socio-economic development of any

society. Education and training are important factors influencing the progress of

rural entrepreneurs. The literacy level of the rural entrepreneurs is given in

the Table 5.5

Table 5.5 LITERACY LEVEL OF RURAL ENTREPRENEURS

Food Hosiery Wood Metal Leather

Category products and products products products Total PercentagegarmentsIlliterate 4 3 3 5 3 18 4Primary 23 20 42 20 20 144 32

Secondary 73 96 19 34 34 239 53.11Degree

and 5 23 10 5 5 49 10.89Technical

Total 105 142 74 62 62 450 100.uuwe: uUmpurea rwm t-nmary aara.

116

Table 5.5 highlights that 53.11 percent of the rural entrepreneurs have

completed their secondary level of education. The analysis shows that 96 percent

are literate. Thirty two percent of the respondents who had completed primary

education find the loan proceedings cumbersome, so they hesitate to approach

the government and cooperative institutions for financial assistance. But only

10.89 percent of the entrepreneurs have acquired upgraded technical skills.

Because of this, they are able to introduce innovations and increase production.

The illiterate rural entrepreneurs are cheated with poor quality of raw materials and

in the marketing their products because of their ignorance.

5.6 HOUSING CONDITIONS

Housing is one of the basic necessaries of life and the housing condition

has an impact on the socio-economic state of the rural entrepreneurs. The details

of the housing of the rural entrepreneurs is given in Table 5.6

TABLE 5.6

HOUSING CONDITIONS OF SAMPLE POPULATION

Food Hosiery Wood Metal LeatherCategory products and products products products Total PercentagegarmentsOwn

84 96 43 39 41 303 67.33house

House10 24 25 23 17 99 22

on rent

House11 22 6 5 4 48 10.67

on lease

Total 105 142 74 67 62 450 100

Source: Computed from Primary data.

Table 5.6 reveals that 67.33 percent of the rural entrepreneurs have houses

of their own. They have the advantage of keeping the house as security to get a

loan. But 22 percent of those who live in rented houses face problems in

production. The space is not sufficient. Some of the rented houses do not have a

hygenic surrounding. They are at the mercy of the owners who may ask them to

vacate at any time. In this way the state of housing affects production. Further

some of the entrepreneurs diverted their profits for construction of houses. It led to

shortage of working capital which forced them to borrow money at high rate of

interest for their business operations.

117

5.7 OCCUPATIONAL BACKGROUND

This is a significant factor determining the progress in production. So the

occupational background of the rural entrepreneurs has been studied and the

details are presented in Table 5.7

TABLE 5.7

OCCUPATIONAL BACKGROUND OF THE RURAL ENTREPRENEURS

Food Hosiery Wood Metal LeatherCategory products and products products products Total PercentagegarmentsAgriculture 40 24 6 10 5 85 18.89

Industry 30 62 53 43 50 238 52.89

Fishing 7 6 5 4 - 22 4.89

Pettytrade and 28 48 10 10 9 105 23.33business

Total 105 142 74 67 62 450 100ource: uompurea rwm i-'nmary oara.

Table 5.7 depicts that 52.89 of the rural entrepreneurs have an industrial

occupational background. This helps them in production as well as easy

marketing. They could adapt themselves to the production techniques faster than

those having an agricultural background 4.89 percent of the rural entrepreneurs

who had fishing as the prior occupation took more time to pick up the production

activity. Hence the study revealed the family occupational background had an

impact on production.

118

5.8 INCOME

Income is an important indicator of the financial status of a rural

entrepreneur and it also determines the standard of living. The income wise

distribution of the rural entrepreneurs under study is given in Table 5.8

• TABLE 5.8

INCOME STATUS OF THE RURAL ENTREPRENEURS

Level ofmonthly Food Hosier' Wood Metal Leatherincome products and products products products Total Percentagegarments(Rs.) Less

than 21 36 34 21 32 122 27.11

3,000

3000-67 84 24 33 20 250 55.56

4000

4000-11 13 9 8 6 47 10.44

5000

Above6 9 7 5 4 31 6.89

5000

Total 105 142 74 67 62 450 100

Source: Computed from Primary data.

Table 5.8 reveals that 55.56 percent of the respondents selected for study

are in the monthly income group of Rs. 3,000 to Rs. 4,000. The respondents who

have a monthly income range of less than Rs. 3000 is 27.11 percent.

120

The main source of income is the earnings from the sate of the products of

their own industries. Only 23 percent of the respondents have additional income

from rent, coconut yield and livestock. Thirty two percent (32%) of the rural

entrepreneurs whose monthly income is between Rs. 3000 and Rs. 4000 had

large families (more than 6 members). The monthly income is sufficient to meet

the consumption expenditure. This affects production. During off season, there is

not much demand for garments. Hence the owners of these industries cannot get

steady income throughout the year

5.9 ORIGIN OF THE RURAL ENTREPRENEURS

The place of origin of entrepreneurs had its impact on production. The

distribution of the selected rural entrepreneurs by their origin is given in

Table 5.9

TABLE 5.9

ORIGIN OF RURAL ENTREPRENEURS

Food Hosiery Wood Metal LeatherCategory products and products products products Total PercentagegarmentsLocal 87 106 54 50 41 338 75.11

Outside

the 18 36 17 17 21 112 24.89district

Total 105 142 67 67 62 450 100ource: uompurea rmm I-ilma!y aaw.

121

Table 5.9 points out that 75.11 percent of the rural entrepreneurs were of

local origin, whereas 24.89 percent of them were not of local origin. They had

settled these to earn their livelihood.

Rural entrepreneurs of local origin were familiar with the locality and the

people around. Non-local entrepreneurs took time to get orders and get

acquainted with the people. But another benefit which the non-local entrepreneurs

had, was that they could have contact with people from their native place and

thereby extend their market.

5.10 SOURCES OF IDEA OF ESTABLISHMENT

Different reasons were given by the owners of rural industries for starting

the industrial unit. The source of idea of establishment of the rural industry

influenced production and the varied sources of idea of establishment are given in

the Table 5.10

TABLE 5.10

SOURCES OF IDEA OF ESTABLISHMENT

122

Food HosieryCategory products

andgarment

Past67 96experience

and skillAvailability ofraw

materials 11 17and easymarketAdvice of

relatives 23 10and friendsOther

4 19reasons

Total 105 142

Source: Computed from Primary data.

Wood Metal I Leather Total I Percentage

products products products

50 42 44 1 299 66.44

14 I 10! 13165114.44

7 7 5

52 12.11

3 8 - 34 7.01

74 67 62

450

Table 5.10 depicts that 66.44 percent of the rural entrepreneurs were

motivated to establish the unit because of their past experience and acquired skill.

The prior work experience was achieved by learning from their parents. Having

worked as labourers in similar industries prior to the starting of their own unit was

a help to them. The percentage of rural entrepreneurs who got the idea to start

the unit, because of the availability of raw materials and scope for marketing was

14.44 percent.

5.11 PROMOTIONAL AGENCIES

In rural areas, individuals do not have adequate capital to start industries

Besides, in the rural economy of Kanyakumari district, where the production units

are numerous, but small and scattered, no meaningful programme of economic

assistance can be successfully operated if the government attempts to approach

the rural industrial units individually, By providing the institutional structure for

organising the dispersed units and through its emphasis on distributive justice the

government renders it possible to have economic development with the help of

rural entrepreneurs and labourers. Hence the need for promotional agencies.

The support given by the facilitating agencies towards the growth of rural

industries has been analysed in this chapter.

5.12. ROLE OF DISTRICT INDUSTRIES CENTRE IN PROMOTING RURAL

INDUSTRIES IN KANYAKUMARI DISTRICT

The 1977 Industrial policy resolution emphasised on providing all

assistance to the rural industries. The Government as a result introduced the

scheme of District Industries Centre (DIC) in May, 1978. The DIC program was a

significant step towards rural industrialisation.

123

124

Kanyakumari district has plenty of resources with regard to agriculture,

minerals, forests, sea and human skills. Speaking human resources it is a fact

that the district can be proud of a very high rate of literacy. There is a general

fascination for white collared and secure job. The high density of population and

the high cost of land have aggravated the situation further. So this district has a

slow pace of industrial development. Due to the strenuous efforts of the DIC, the

situation is now changed.

5.13 ORGANISATIONAL STRUCTURE

The District Industries Centre (DIC) is a centrally sponsored scheme of the

government of India, but its schemes are implemented by the State government

and the functionaries work under state.

General Manager(District Level)

Seven Functionaries

Research SmallScale

Extension Raw Credit Marketing andillage

Economic Machineryand and Material V

Investigation Equipment Training ______ Industries

125

District Industries centre consists of one general manager. There are three

functional managers in the fields economic investigation, credit and village

industries respectively. The other function as project managers in disciplines

considered relevant to the needs of the District.

5.14 ACTIVITIES OF THE DISTRICT INDUSTRIES CENTRE

The District Industries centre functions at Nagercoil, the District head

quarters. The main objective of the formation of this centre is to provide all kinds

of financial support required by the prospective entrepreneurs to start small scale

as well as rural industrial units particularly in the rural semi-urban areas of the

district. The main functions of the industries centre are

> Identification of project based on the natural resources available in this

district and preparation of action Plan.

> Identification of entrepreneur, by conducting motivation campaigns,

seminars and awareness camps.

> Issue of SSI registration certificate, both provisional/Permanent..

Identification of rural artisans and issue of cottage industries certificates and

handicraft certificates.

> Assisting the entrepreneurs in getting clearances from the statutory bodies

through single window concept committee meetings.

126

> Assisting the entrepreneurs to get the required financial assistance for their

projects.

) Rendering assistance to the entrepreneurs to get power connection quickly

through single window concept committee meetings.

> Assisting the SSI units to get state capital investment subsidy/special

capital subsidy, power tariff subsidy, generator subsidy, Interest free sales

tax waver/Deferral concession

Rendering assistance to the SSI units to get the raw materials/machineries

imported form abroad.

> Conduct of Entrepreneurs Development programme to women

entrepreneurs.

Assisting the Educated unemployed youth to get the required financial

assistance from banks under P.M.R.Y. scheme for starting new SSI

units/service oriented units/small Business

) Assisting the sick SSI units for revival under sick SSI units rehabilitation

programme

> Formation of Industrial cooperative societies.

5.15 Activities of District Industries Centre

District Industries centre makes available under one roof all the facilities to

entrepreneurs at pre-investment and post-investment stages. It provides services

and facilities like the identification of suitable scheme, the preparation of feasibility

127

report, arrangement for the supply of machinery and equipment, provision of raw

materials, credit facilities and input for marketing and expansion services, quality

control, research and entrepreneur's training.

DIC follows the entrepreneurs who received the provisional registration

certificate and renders required help in getting their industries registered under

permanent registration. A number of incentives are provided under DIC.

5.16 Incentives! Subsidies Provided by DIC

Subsidies are an incentive to the rural industrial units to indicate production

and they are helpful in the entire process of production.

1. State capital Investment subsidy

The Government of Tamil Nadu has declared the following areas of

Kanyakumari district industrially backward.

Agasteeswaram Block.

Rajakamangalam Block

Colachel Municipality

128

New rural industrial units started in these areas are eligible for state capital

investment subsidy at the rate of 15 percent of the value of total fixed investment

subject to a maximum of Rs 15 lakhs.

2. Power Tariff Subsidy

Industries which are located eight km. beyond urban areas are eligible to

avail subsidy on the power consumption charges at 40 percent, 30 percent and 20

percent for the 1st, 2nd and 3rd year respectively.

3. Generator subsidy

Rural industries units with permanent registration certificate are eligible to

avail 15 percent subsidy on the purchase of brand new generators to be used by

these units. The amount given as subsidies under these three categories are

shown in Table 5.11.

TABLE 5.11

SUBSIDIES DISBURSED BY THE DISTRICT INDUSTRIES CENTRE(1987-2002) (Amount In Lakhs)

Capita! Power Tariff GeneratorYears investment subsidy subsidy Totalsubsidy

'87-88 17.2 6.1 - 23.33

(73.72) (26.15)

'88-89 20.1 4.34 - 24.44

(82.24) (17.76)

'89-90 25.65 4.92 - 30.57

(83.91) (16.09)

1 90-91 30.14 5.67 0.13 35.94

(83.86) (2.78) (8.36)

'91-92 39.16 3.13 0.23 42.52

(92.1) (7.36) (8.36)

'92-93 40.67 4.86 0.41 45.94

(88.52) (10.58) (0.89)

'93-94 43.31 6.35 0.49 50.25

(86.89) (12.64) (0.98)

'94-95 51.3 5.12 0.51 56.93

(90.11) (8.99) (0.90)

'95-96 66.10 5.49 0.54 72.13

(21.64) (7.61) (0.75)

'96-97 13.19 27.15 0.42 40.76

(32.36) (66.61) (1.03)

'97-98 32.70 11.91 1.90 46.51

(85.03) (13.77) (2.20)

'98-99 41.65 10.40 0.56 52.61

(79.17) (19.77) (1.06)

'99-2000 11.25 14.84 1.35 27.44

(40.99) (54.08) (4.92)

'2000-2001 35.23 19.7 2.34 57.27

(61.52) (34.40) (4.09)

2001-2002 27.14 23.41 2.87 53.42

(50.80) (43.82) (5.37)

494.89 153.39 [11.75 1660.06

Source: Records of DIC, Nagercoii, 1987-2002. (Figures with in parenthesis denotepercentage).

129

130

Table 5.11 indicates that out of three kinds of subsidies, the amount of

capital investment subsidy is the hightest (Rs.494.89 Iakhs), followed by power

table subsidy (Rs. 153.39 lakhs). The rural entrepreneurs made little use the

generator subsidy (Rs.1 1.75 lakhs)

5.17 Entrepreneurial development programmes

The District industries centre organises this programme at the government

polytechnic, Institute Konam, adjacent to DIG. This is done to intensify the

activities for the development of new entrepreneurs and for providing gainful

employment opportunities among the people who are technically qualified or who

are familiar with management of inputs, but do not have adequate means for

setting up industries. The number of programmes organised annually for

entrepreneurial development is given in Table 5.12.

TABLE 5.12

ENTREPRENEUR DEVELOPMENT PROGRAMMES OF THE DIC

Years No. of programmes

'94-95 40

'95-96 41

'96-97 43

'97-98 40

'98-99 44

'99-2000 30

'2000-2001 29

2001-2002 36

Source: Records of DIC, Nagercoil

Table 5.12 reveals that on an average 38 entrepreneurs have benefited

annually through the EDP. This programme had been conducted every two

months and necessary assistance had been rendered for starting their own

ventures after successful completion of the training programme. Entrepreneurs

who have passed tenth standard and are above 18 years of age are eligible to

avail their opportunity. The training period consists of theoretical training for one

month in enterprise management and practical training in the trade selected by the

candidates for another month. Stipend at the rate of Rs. 300/-per candidate per

month is paid to candidates during the training period.

131

5.18 INDUSTRIAL COOPERATIVES

District Industries centre helps in the formation of industrial cooperatives.

There are 24 industrial cooperatives functioning in the district with an investment

of Rs.88 lakhs. These societies are engaged in the manufacturing of brick, coir

products, printing, auto hiring, automobile, umbrella making and tailoring.

5.19 ENTREPRENEUR'S GUIDANCE CELL

This cell which is functioning in the District Industries Centre provides

guidance to the prospective entrepreneurs who approach the centre for stating

new rural industry. Industrial enquiries are being received at this cell and useful

guidance is provided. To the prospective entrepreneurs, advice and guidance are

given to develop entrepreneurship, cultivate industrial culture, concentrate on the

theoretical and practical aspects of industries, select industries suitable for the

area, work out the cost of the projects, venture viable and profit earning industries

and stabilise the career so as to have a brought future. One of the assistance

offered by this cell is providing copies of project reports to prospective

132

entrepreneurs. It guides the entrepreneurs in the right direction.

5.20 PRIME MINISTER'S ROZGAR YOJANA

This scheme meant for educated unemployed youth is being implemented

in all the nine blocks and four municipal centres in this district. District industries

centre is the implementing agency for this scheme. It envisages financial

assistance to educated unemployed youth in the age group of 10 to 35 for starting

new ventures. The borrower under this scheme is eligible for sanction of

composite loan up to Rs.2.00 Iakhs for any venture covering industries and

services. In partnership, finance is extended to projects up Rs. 10.00 Iakhs.

Subsidy is limited to 15 percent of the project cost to a maximum of Rs. 7500 per

person. A district level task force has been set up to select the beneficiaries. The

District industries centre provides training to all the selected youth for a period of

two to four weeks and recommends the deserving candidates to the banks for

sanction of financial assistance. The number of beneficiaries of PMRY through

'33

DIC since the implementation of the scheme are given in Table.5.13.

TABLE 5.13

NUMBER OF BENEFICIARIES UNDER PMRY SCHEME

Year I Number of Beneficiaries1997-98 i 630

1998-99 1618

1999-2000 1550

2000-2001 1572

2001-2002 1672

Source: Records of DIC, Nagercoil

Table 5.13 shows that the number of beneficiaries under PMRY schemes

increased from 630 in 1997 - 1998 to 672 in 2002. In getting industrial clearance

and approval of plans, the government of TamilNadu introduced the single window

concept.

As a result of the activities of DIC, combined with the subsidies disbursed,

there was growth in rural industries.

5.21 Growth Trend

The facilities provided by the District Industries centre has fostered the

growth of rural industries and this is furnished in Table 5.14

134

TABLE 5.14

NUMBER OF RURAL INDUSTRIES REGISTERED With DIC (1987-2002)

Number of Rural PercentageAnnual increase increase over theYears industries

previous year

'87-88 1890 - -

'88-89 2005 115 6.08

1 89-90 2130 125 6.25

1 90-91 2280 150 7.04

'91-92 2455 175 7.68

'92-93 2680 225 9.16

'93-94 2970 290 10.82

'94-95 3276 306 10.30

'95-96 3626 350 10.68

'96-97 4001 375 10.34

'97-98 4403 402 10.05

'98-99 4839 436 9.90

'99-2000 5287 448 9.20

'2000-2001 5794 507 9.59

2001-2002 6498 704 12.5Source: Records of DIC, Nagercoil (1987-2002)

Table 5.14 focuses on the growth in the number 6 registered rural industries

in Kanyakumari district. During 1987288 there were only 1890 registered rural

industries and it increased to 6498 in 2002. The percentage increase over the

preceding year varied from 6.08 to 12.5.

35

5.22 PRODUCTION AND SALES

The growth of any industry is known by its production and sales value. The

details of the production and sales of rural industries in Kanyakumari district

shown in Table 5.15.

TABLE 5.15

PRODUCTION AND SALES OF RURAL INDUSTRIES IN KANYAKUMARI

DISTRICT 1987-2002

Production Percentage of Percentageincrease over Sales value increase overYears Value (Rs. the previous (Rs. in lakhs) the previous

year year'87-88 12.34 - 6.72 -

'88-89 15.67 26.99 13.13 95.39

1 89-90 17.25 10.11 15.25 16.15

1 90-91 19.98 15.83 16.34 7.15

'91-92 27.95 39.89 22.81 39.60

'92-93 30.12 7.76 24.68 8.20

'93-94 33.32 10.62 29.34 18.88'94-95 .32.13 3.57 26.25 10.53

'95-96 35.29 9.84 27.56 4.99

'96-97 23.22 34.20 18.42 33.16

'97-98 32.44 39.71 22.73 23.40

'98-99 33.66 3.76 26.23 15.40'99-2000 35.42 5.23 13.05 50.25

'2000-2001 33.74 4.74 24.78 89.89

2001-2002 36.82 9.13 27.42 10.65ourue: rcoftJs 01 UIL, ivagetcoii

136

137

Table 5.15 indicates that there was continuous rise in the production value

of the rural industries from Rs. 12.34 lakhs in 1987 - 88 to Rs. 36.82 lakhs in 2002.

Sales value during the same period increased from Rs. 6.72 Iakhs in to Rs. 27.42

lakhs.

5.23 EMPLOYMENT

The registered rural industries of the district has provided employment to

45395 people for a period of 15 years and details of block wise employment in

rural industries. (1987-2002) is given in Table 5.16.

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139

Table 5.16 indicates that out of the nine blocks of the district, Killiyoor had

more employment generation (78,981 workers) as there are cashew-nut industries

and other food product units which necessitates more workers for its different

stages of production - cleaning, peeling, drying, weighing and packing. Thuckalay

block had the second highest number of workers employed.

5.24 ROLE OF KVIB ( KHADI AND VILLAGE INDUSTRIES BOARD) IN

FOSTERING RURAL INDUSTRIES IN KANYAKUMARI DISTRICT

The KVIB promotes the growth of Rural industries in the district through the

establishment of Industrial cooperatives. Formation of Industrial cooperatives has

always been considered as one of the most suitable methods of re-organising

village industries. In Kanyakumari District. Industrial cooperatives were brought

under the control of Khadi and village Industries sector in 1960. The Assistant

Director of Khadi and village Industries is in charge of the Industrial cooperatives

under this sector. The office is situated in Nagercoil. The main purpose of these

societies is the improvement of village industries and of the economic condition of

the workers by providing employment to both men and women. In KanyaKumari

district, Khadi and village Industries sector deal with Industrial cooperatives. The

number of industrial cooperatives under Khadi and village industries sector is

given in the Table 5.17.

TABLE 5.17

TOTAL NUMBER OF INDUSTRIAL COOPERATIVES UNDER KVIB THAT

PROMOTES RURAL INDUSTRIES

Year I No of Societies

1987-88 21

1988-89 22

1989-90 22

1990-91 22

1991-92 22

1992-93 22

1993-94 22

1994-95 23

1995-96 23

1996-97 23

1997-98 23

1998-99 23

1999-2000 24

2000-2001 24

2001-2002 24urce: Records of Industrial cooperative societies, Nagercoll 2002.

Table 5.17 shows that within a period of 15 years, starting from 1987, the

number of industrial cooperatives has increased to twenty four. The annual

increase of cooperatives was very low.

The various industrial products manufactured through the industrial

cooperatives functioning under KVIB are presented in Table 5.18

140

TABLE 5.18

RURAL PRODUCTS PRODUCED THROUGH INDUSTRIAL COOPERATIVES.

Types of products Place Number ofooperatives

Honey Marthandam and Thiruvattar 5Bamboo and cane work Mullaipoongani IPrinting Karungal 1Pounding Suchindram IPottery Chunkankadai and 2

Thazhakudy

Fibre products KoIvel 2Edaicodu I

Lime Rajakamangalam 2Sethupatteyur 2Manakudy I

Mat Soorankudy 3Ayurveda Medicines Erachakulam 2Coconut leaf articles Puthalam 1Source : Records of Assistant Director of K y/B, Nagercoll.

Table 5.18 indicates that the 24 industrial cooperatives functioning in the

district are engaged in the production of mat, coconut leaf articles, ayurveda

medicines. Out of the 24 cooperatives, five industrial cooperative societies are

engaged in the production of honey.

5.25 PRODUCTION

The production value of the village industries under KVIB is presented in

141

Table 5.19.

TABLE 5.19

PRODUCTION OF RURAL PRODUCTS

Year Production Value (In !akhs of Rs.)

1987-88 74.00

1988-89 80.00

1989-90 88.96

1990-91 101.97

1991-92 119.68

1992-93 168.00

1993-94 174.24

1994-95 153.52

1995-96 91.12

1996-97 44.61

1997-98 86.25

1998-99 92.34

1999-2000 82.50

2000-2001 90.65

2001-2002 112.54

Source KV!B, Naqercoil

Table 5.19 reveals that there is a fluctuating trend in the production value of

the products of the village industries. From 1985 - '95 there was a rising trend. But

after 1995, there was decline in production due to fluctuation in demand caused by

the entry of Multi National Companies and other medium and small enterprises

which produced similar products at low cost.

142

5.26 SALES

The sales value of the products of rural industries sold through the sales

outlets of KVIB are given in Table 5.20.

TABLE 520

SALES VALUE OF PRODUCTS SOLD THROUGH KVIB CENTRES(1987 -2002)

143

Year1987-88

1988-89

1989-90

1990-91

1991 -92

1992-93

1993-94

1994-95

1995-96

1996-97

1997-98

1998-99

2000-2001

2001-2002Source: KVIB, Nagercoll.

Sales value (in Iakhs of24.67

29.47

30.44

19.98

27.95

30.12

33.32

32.13

35.29

23.22

32.44

40.45

42.65

50.26

Table 5.20 indicates the fluctuating trend in sales. In 1987, the sales value

amounted to Rs 24.67 lakhs. It increased to Rs 30.44 lakhs in 1990 and then it

showed a dealing trend in 1991. Then with the incentives provided, the sales

improved people became aware of the quality and durability of KVIB products

though the price was high.

.

. I

144

STATISTICAL ANALYSIS OF SECONDARYDATA

The growth rate estimates related to role of DIC in Rural industries is given

in table 5.21.

Particulars Model Value of Value of Value of CGR Value oft

a b

Number of Semilog -.029 0.988** 0.981 168.5 26.70

Rural (0.037)

industries

under.

DIC

Production Semilog 2.769 0.064** 0.682 6.6 5.33(0.012)

Sales Semilog 2.576 0.0503 0.311 5.15(0.21) 0.2395

Employment Semllog 9.641 0.0869** 0.988 9.07(.003) 28.98

"Significant at 1% level t-Igures in me pWFIIFieSIS

Significant at 5% level denote Standard error)

The estimates of Compound growth rate of number of rural industries in

DIC, production, sales and creation of employment by these rural industries

showed a growth rate of 168.5 percent, 6.6 percent 5.15 percent and 9.07 percent

respectively. All these estimates were statistically significant at cnmpinit one

percent level of probability except the growth rate of sales.

145

In Kanyakumari district, in spite of the incentives and activities of the

promotional agencies, the rural industries have not achieved their objectives

adequately. Each rural industry has its own problems. The significant problems of

the rural industries are production problems, marketing problems and financial

problems.

Multivariate analysis

A multivariate regression model was used to study the functional

relationship between the number of rural industries developed and sales made,

number of labourers employed capital invested and subsidies provided by the

government. The form of multiple linear regression model used was

Y= bo+bixi+b2x2+b3x3+b4X4.

Where b0, b1 , b2, b3, b4 are the parameters to be estimated.

The above model was estimated by the method of ordinary least square

method (OLS) and the results were given in Table.

Table 5.21.1 Estimates of parameters of number of industries developed.

S. VariableNo.

1. Number ofindustries

2. Constant3. Sales made4. Number of

labourers emplo5. Capital invested6. Subsidies provkR2 = 0.996* Significant at 5% levelNS - Not significant.

Symbol Coefficient Standard 't' Valueerror

Y - - -

b0306.81 113.28 2.7085

X1344933* .9146 3.771

X2 0.0985* .0047 20.7803

X3 0.1601* 0.0238 6.7050

X43.2962 4.6152 -0.7142F=749.128

145A

The value of 'F' shows that the model fitted for this problem in statistically

significant at five percent level of probability. The coefficient of multiple

determination R - square is 0.996. It means that 99.6 percent of variation in the

dependent Variable number of independent rural industries developed was

influenced jointly by the variables considered in the multivariate model.

Further, the estimates of the parameters inferred that only three

independent variables such as sales made, number of labourers employed and

capital invested had significant effect on the dependent variable number of rural

industries developed in the Kanyakumari district during the study period.

The regression coefficient for the factor sales made was positively related

to the number of industries developed. It means that a unit (one lakh Rupees)

increase of sales could lead to a increase of 3.45 unit of industries keeping other

factors as constant. The regression coefficient for the factors -labour employed

and capital invested were also positively related to the dependent variables. The

influence of factor subsidies provided was insignificant as per the regression

coefficient.

U