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Handicrafts and Indian Economy

Handicrafts play an important role in the development of Indian economy in general and rural economy in particular. It is a labour intensive and eco friendly sector with huge potential of employment generation and foreign exchange earnings. But due to globalization it is facing tough competition with machine made low cost substitutes. Keeping in view the importance and challenges of this eco friendly, less demanding capital but immediate and good returns industry Government should provide maximum assistance at minimum cost. This will help in the sustainable growth in the long run and also will increase its contribution in the employment generation, foreign exchange and the over all socio economic development of Indian economy.

The Handicrafts Sector plays a significant & important role in the countrys economy. It provides employment to a vast segment of craftsperson's in rural & semi urban areas and generates substantial foreign exchange for the country, while preserving its cultural heritage. Handicrafts have great potential, as they hold the key for sustaining not only the existing set of millions of artisans spread over length and breadth of the country, but also for the increasingly large number of new entrants in the crafts activity. Presently, handicrafts contribute substantially to employment generation and exports. The Handicraft sector has, however, suffered due to its being unorganized, with the additional constraints of lack of education, low capital, and poor exposure to new technologies, absence of market intelligence, and a poor institutional framework. In spite of these constraints, sector has witnessed a significant growth of 3 % annually. Some of the promising areas in the crafts sector during the Xth Five Year Plan had been:

  • Exports continued to grow for high value-added crafts products.
  • Consumer tastes changed rapidly on account of economic liberalization.
  • Focus on quality and product diversification with increasing consumer awareness
  • Increasing challenge offered by availability of mass-produced competing product lines using different raw materials (often man-made) and mechanized production techniques.
  • Government policy envisaged a greater role for NGOs, and participation of private resources both human & financial.


    Indian handicrafts have been admired world over for its brilliant mix of colures oddity and exquisite craftsmanship. Both rural units and cottage industries are the main players who contribute about 78% of handicrafts produced in the country. About 76% of the artisans are self employed and the rest are wage earners. Both men and women are contributing as a main input in the production of handicrafts. No doubt there has been some decline in the demand of handicraft due to globalization as there is tough competition in handicraft production which has been more commercialized. In many cases artisans are out of touch with those end markets which presents a challenge to those seeking to export their products. But still it is one of the important contributors to the foreign exchange earnings and generation of employment after agriculture. The exports are continuously growing and are expected to touch USD 400 million marks in 2015. The demand for the handicraft products from the point of international trade theory is because of interesting oddity and many other reasons like the comparative advantage both in the demand and supply. Being labour intensive it helps in the reduction of unemployment and the wages farmed in this sector are more than what the wage earner earns in the agricultural and its allied sector. In case of Indian scenario handicrafts is playing an important role not only in the employment generation and foreign exchange earnings, but also helps in increasing the living standard of its rural people as it give employment both men and women, those who are doing well in the handicraft and handloom business are enterprising and are moving with the time.

    Indian handicraft has been influenced and encouraged by different empires. From the centuries, handicrafts have been embedded as a culture and tradition in the rural areas. Much rural population is depending on handicrafts. Handicraft in common language means the goods made by using labour intensive technique, these are skilled people who used to work on the wood, clay, shells, rocks, stone, metal etc. with the help of traditional or simple tools. India is known for its ethnicity. So far India is among the famous countries which have rich in handicraft and have highly skilled artisans, who increased the fame of our country around the world. Our country is manufacturer various kinds of handicrafts such as: • Bamboo Handicrafts • Cane Handicrafts • Bell Metal Handicrafts • Bone and Horn Handicrafts • Brass Handicrafts • Clay Handicrafts or Pottery • Dhokra Handicrafts • Jute Handicrafts • Paper Handicrafts • Rock Handicrafts • Shell Handicraft • Silver Filigree or Meenakari or Tarakashi Handicrafts • Weaving or Embroidery Handicrafts • Wood Handicrafts The Indian Handicraft industry is so widely scattered all over the country with a dominance of small and tiny units, apart from this Indian handicrafts showing the trend of growth in its export. The handicraft sector is important for the economy due to its employment generation, foreign exchange earnings and vast untapped export potential. Most famous handicraft manufacturing states include Saharanpur, Rajasthan, Karnataka, Tamilnadu and Kashmir. India's share in the world handicraft market is a dismal 2% as compared to China which claims 17% of the world market share. A recent study by the EXIM Bank recommends that the Handicraft sector needs to be given an industry status so that a mechanized, modern segment will emerge to face the global competition. This is the most fundamental step which boosts Indian handicrafts in international market. Once India recognizes the potential of handicrafts it leads the whole market


    India has a history of rich and diverse cultural tradition. And among its diversity, the legacy of India's craft culture always occupies a special place owing to its beauty, dignity, form, style and aesthetics. "To write about Indian Handicrafts is almost like writing about the country itself. So vast, complex and colourful, and yet with a simplicity and charm, difficult to attain under comparable conditions" . It is a fact that Indian handicrafts have very ancient origin and of high quality. They have customarily received royal and aristocratic patronage and handicrafts men were honoured by other communities. The versatility of the various materials used in Indian handicrafts items, such as wood, stone, metal, grass, glass, cane and bamboo, textiles, clay, terracotta and ceramics, makes these products truly unique. Emphasizing on the greater value of the arts and crafts, T.M. Abraham wrote: "the world of art and craft is as valuable as the world of science, philosophy or ethics. Like art, crafts reflect the state of human society through the individual. Craft treasures like art's, give us a glimpse into the core and kernel of the collective mind and societies through the mirror of individual mind that created them". As said above there are numerous varieties of art crafts in India which are made with attractive designs and meticulous craftsmanship. Referring to one of the India made craft jewellery, the anklets used by peasant women at Bundi in Rajasthan state of India, during a lecture in 1901, Sir T. Wardle wrote: "I bought for a few annas a bronze chain anklet, but all cast in one mould together, quite a common thing, but so wonderfully made that one of our best foundry owners told me he did not think anyone could do it in Europe

    With the passage of time, Indian society and economy has changed enormously. It opened up its economy and adapted to globalisation in the early nineties. Major changes initiated as a part of the liberalisation and globalisation strategy included scrapping of the industrial 'license raj' (referring to the regulated and controlled economic policy by the state for running business), reduction in the number of areas reserved for the public sector, amendment of the monopolies and the restrictive trade practices act, start of the privatisation programme, reduction in tariff rates etc. Many Indian companies have started becoming respectable players in the International scene.. Since the advent of globalization in 1991, India has experienced a lot and accordingly the society has undergone many changes in different spheres. Though the forces of globalization have ample positive effects in the long-run in many sectors of our economy and society, some of its biased ramifications against the poor in many cases have worried different thinkers and planners in our country. If we suspend the later for a moment, one of the growing sector benefited out of it, is the Handicraft industry. The case of the handicrafts sector can be discussed here from both macro and micro level; macro level – taking its contribution to the Indian economy through export and micro level – in terms of its employment potential


    Although India adapted to liberalization policies in early nineties, the handicrafts sector continued to get state intervention. Handicrafts being a state subject defined in our constitution, the development and promotion of crafts are the responsibility of the respective state governments. The Central government through various developmental schemes plays the role by supplementing their efforts. As the Annual Report suggests, for the holistic growth and development of the handicrafts, the government during n-th five-year plan has implemented few generic schemes. These can be discussed below.

    Baba Saheb Ambedkar Hastshilp Vikas Yojana

    The basic objective of this scheme is for a sustainable development of handicrafts through the participation of craftspersons. This scheme is implemented through: (i) social Intervention, i.e. mobilizing the artists, (ii) technological intervention; assisting for design and technological upgradation, reviving the languishing crafts etc., (iii) marketing interventions and (iv) financial interventions.

    Marketing Support and Service Scheme

    This scheme is developed to create awareness of Indian craft products among the people through: (i) organizing marketing events, (ii) providing services in the form of entrepreneurship and (iii) providing financial assistance to state handicrafts corporations and NGOs for opening new Emporia, etc.

    Design and Technology Upgradation Scheme

    The scheme aims to supply modern tools, upgrade artisans' skills, preserve traditional crafts and revive rare crafts through (i) departmental activities (by giving training in Regional Design & Technical Development Centres etc.) and (ii) outsourcing (to Shilp Gurus or Heritage Masters, of design and technology upgradation).

    Export Promotion Scheme

    It intends to promote export of handicrafts, including hand knotted carpets and floor covering from India. The main components of this scheme are (i) product Development, (ii) publicity and marketing and (iii) social and other welfare measures.

    Research and Development Scheme

    The basic objective of this scheme is to create a regular system of obtaining feedback on economic, social, aesthetic and promotional aspects of various craft goods. It also addresses issues related to WTO. Survey or study of specific crafts on which adequate information is not available, looking at the working conditions of the artisans etc are the major thrust areas under this scheme.

    Training and Extension Scheme

    The scheme aims at enhancing the capacity building of staff of DC-Handicrafts, artisans, NGOs etc.

    Bima Yojana for Handicrafts Artisans

    The Yojana provides life insurance protection to the artisans, either male or female in the age group of 18-60 years. It is being implemented in association with the Life Insurance Corporation of India ltd (LIC).

    Special Handicrafts Training Projects

    Under this programme, the office of the DC-Handicrafts takes initiatives to upgrade the skills of existing as well as new craftpersons, enhance employment opportunities in the handicrafts sector, transfer skills Master Artists to new trainees etc. Apart from the above schemes, the government is also taking special measures for promotion and development of crafts by popularizing the products and encouraging the artists. In terms of variety of handicrafts and celebrated craft products, India is one of the richest countries. The most important contribution to its craft heritage has been of the Shilp Gurus, the Heritage Masters, who have innovated, and contributed on their own to the traditional craft forms. They are in fact leading lights of handicraft sector and are sources of inspiration for the younger generations. Office of the Development Commissioner (DC) – Handicrafts, Ministry of Textiles, Govt of India has decided to honour ten Shilp Gurus, every year starting from the year 2002. Besides, the All India Handicrafts Board was established in 1952 to study the problems confronting the handicrafts, to improve and develop the production techniques and new designs to suit the changing tastes and to promote marketing in India and abroad .But unfortunately most of the governmental schemes have failed to produce visible results. Since Handicrafts come under the state list, each state has set up its own handicrafts policy.


    Handicrafts are the unique expression of our community and culture. A large group of population is directly or indirectly depends upon handicrafts for their livelihood. It generates employment and foreign exchange earnings which are vital for economic growth and upliftment of the rural economy. The dynamic factors which determine the growth and decline of craft need to be understood from a total livelihood perspective and not a narrow economic perspective alone. In order to optimal exploration of this handmade industry Government should provide both incentives and assistance. Both state and central Government must take step to increase the wages and improve the working conditions of the artisans and others who are involved in this handmade industry.

    (Biswa Mohan Jena /January/NAM Today/2016)

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