A HISTORICAL ACCOUNT OF INDUSTRIALIZATION IN INDIA AND IN KERALA

2.0 Introduction

By way of substantiating the thesis that the large scale

industries and their promotion have proved detrimental to

environment, a close look at the history and evolution of

industrialization is a must. But such a historical account of

industrialization is too vast a field for the researcher to look

into. It is therefore necessary to limit this enquiry

to the area of industrialization in India in general and to

industrialization in Kerala in particular.

What were the kinds of industries that were flourishing in

India before the advent of the British? What was the impact of

the industrial policy of the British on the traditional

industries and the extent of industrialization in the

independent India? How did this evolution of large scale

industries affect the existing small scale industries? What is

the history of industrialization in Kerala? What are the

industrial promotional agencies that are at work today? These

are some of the questions that await an answer in this chapter.

The answer that might emerge from the historical account of

industrialization in India and in Kerala will be briefly

enumerated at the end of this chapter.

2.1 Industrialization in India

Industrialization in India can well be marked under two

heads viz., Pre-British Period and the Evolution of Modern

Industry.

2.1.1 Pre-British period

India was famous for her handicrafts right from Pre-

British times. During the Mughal Period, India had a considerable

variety of arts and handicrafts. In several handicrafts,

specialization of jobs had advanced to such an extent that

particular classes of artisans undertook distinct processes in

the class of production; and the products commanded wide range of

foreign markets. At that time no other country produced products

that could be imported to India in exchange for cotton and silk

goods which were in world-wide demand. Europe had to pay in

bullions for the increasing volume of Indian exports.

"At that time when the west of Europe, a birth place of modern industrial system, was j-nhabitated by uncivilized tribes, India was famous for the wealth of her rulers and for the high artistic skill of her craftsmen. And, even at a much later period, when the merchant adventurers from the West made their first appearance in India, industrial advancement of this country was, at any rate, not inferior to those of the more advanced European nations. "

India was also famous for jewellery of exquisite quality

which were made out of gold and silver and also those which were

made out of copper, brass and bell-metal. Many urban centres

were famous in those days for carving work in ivory, wood, stone

and marble. In bigger towns each handicraft was organized into

a guild which safeguarded the professional interest of its

members.

Though the quality of Indian goods was high, in England

they were treated as 'plague' shortly. Prohibitory laws were

passed in 1701 and 1720 against the use of printed Indian calicos

in England in the interests of the woolen and silk industry of

that country. So the supremacy of Indian handicrafts could no

longer be maintained because of certain technological, economic

and political developments. 2

One of the important reasons for the decline of indigenous

industries was the industrial revolution of England. The cotton

industry was the first to be revolutionalised by the new process.

India was reduced to the status of a colonial dependency.

Imperialism set out to destroy the independent economy and a

substantial part of native handicrafts. Prohibitory duties were

imposed on Indian goods because, up to 1813 the silk and cotton

goods of India were sold in the British market at a price from

fifty to sixty percent lower than the price of those fabricated

in England. The 'Gumasthasr, the agents of the East India

Company were entrusted with powers which they frequently misused.

This high-handedness of the company agents contributed to the

decline of Indian goods. A number of other reasons contributed

to this but they are not immediately relevant to this thesis and

are therefore bypassed. By 1880, the decline of handicrafts were

nearly complete and the mass of Indian handicrafts men had no

alternative means of livelihood.

2.1.2 Evolution of Hodern Industry

The emergence of modern industrial enterprises can be

traced back to the end of the 18th century, though it developed

after 1850. The new industrial activity took two forms,

plantations and factory industries. Real and satisfactory

progress in the factory industries was began only after 1875.

During the next two decades, two textile units - cotton and jute- flourished. Mr. Justice Ranade, studying the position of

industries during this period observed,

"It was, however, only after late nineties that industrial progress all over the country began; and in the first decade of the twentieth century many mineral industries and some small miscellaneous industries came into prominence. It was also during these later years that there spread in India, the use of small machines and small engines, and also there was generally a tendency to make a great y increased use of mechanical appliances everywhere." 4

From the analysis of the factors contributed one may

realize that the gradual transformation of India into a single

national unit and the growth of great mercantile centres were

the impacts of British rule. The introduction of the English

language was another factor which helped the training of a large

number of young Indians. This was necessary for mastering modern

scientific subjects which were necessary for gaining the

technical knowledge required for industri.es and also in business

organizations and management on Western 1.ines. The abolition of

the monopoly of the East India Company in 1833 provided a big

opportunity for the English merchants to develop trade and

industry in India. Foreign capital and enterprise flowed into

plantations and monopolistic industries such as jute and

railways. The foundation for the development of large scale

industries was thus laid. The improvement of oceanic and inland

transport system contributed to this. Another major factor which

contributed to this was the political developments in India and

abroad. For instance, the American civil war gave a great

impetus t.o the cotton industry and the World War I to the iron

and steel industry. But it is observed that the development of

industries in India was slow. Dr. S.C. Kuchhal observes,

"...development of industries in India was not only slow but also lop-sided in its character. The results of industries up to world war I were disappointing. With abundant supplies of raw materials, with a redundant population ... with an excellent market within her own boarder, India after a century was supportin only about 2 % of her population by factory industry." 9

The Uorld War I (1914-t18) (which was fought on a global

basisland the years immediately following the war experienced a

sort of industrial boom. The crisis of 1921, the widely

fluctuating exchange rates of 1921 to '27, the depression of

1929-'33, the recovery of 1934-'37, the adoption of constitution

in 1935 and the formation of Ministries in various provinces

during 1937-'39 were some of the main events that influenced

India's industrial development during the inter-war period.

It was during this period that ~pdian Industrial

Commission 1 9 1 6 - 1 8 the Fiscal Commission (1921-'22), the

External Capital Committee (1925), the Rota1 Whitley Commission

and Labour (1929-'31) and Central Bank:ing Enquiry Committee

(1940) were appointed to make a deep enquiry into their

respective fields. This directly or indirectly helped the

development of Indian industries.

India registered a substantial progress in various

industrial fields during 1922 and 1939. Considerable progress

was recorded in industrial production and the total number of

factories increased from 2936 in 1914 to 11,613 in 1939 and

the number of workers engaged in them increased from 9,50,000

lakhs to 17,50,000 lakhs. 5

During the Second World War period, though the actual war

was not fought on Indian soil as such, India stood as a major

supply base of war materials for the Middle Eastern and South

Eastern theatres of war. But the capacity for the production of

war materials in India was limited. Therefore, a few new

industrial enterprises were set up.

Thus, some new important industries started production

during the war period. These include manufacture of transport

equipment, chemicals, metals and mechanical industries like

diesel engine and pumps. There was considerable increase in the

number of new industries. The number of companies in 1945 rose

to 14,859 with total paid up capital of Ks. 290 crores in 1939.

This shows that the number of companies increased by 3475 and

paid up capital by nearly Rs. 100 crores. 6

Along with the increase in the number of industries, the

War also had some adverse impact on the Indian industrial

economy. There arose a continuous deterioration of plant and

machinery due to optimum and over work and there was no proper

repairs. The authorities were bothered only about the immediate

need of war time. So, long term factors such as location,

availability of raw materials, scale of operation, size of market

and sufficiency of technical and financial organizations did not

receive due attention. The war created inflationary pressure on

Indian economy. The high cost of production and improvised

methods left a legacy of inflation which lasted for long. The

war time diversion of the country's resources for defence

purposes led to an acute scarcity of various consumer goods and

articles essential for manufacturing purposes. This problem was

further strengthened by large scale currency expansion and thus

the prices went on increasing.

During the immediate post war years, the industrial

production was low and stagnant. Almost all industries

registered lower output and the situation was serious with

respect to cotton, textiles, cement, iron and steel, sugar and

paper.

1947 marked a serious threat to the nation as such, so

also to the industrial activities. The partition of India

brought about a complete disruption of the industrial and

economic system, which had for long, lived as a single united

economic unit. Partition, no doubt, influenced adversely the

pace and pattern of industrial development of India in subsequent

years. Industrial production continued to be hampered by the

lack of confidence among the industrialists. With the aim of

uplifting the disrupted Indian economy, several steps were taken.

In 1948, industrial production in almost all industries showed a

definite improvement over the previous year except two

industries i.e., coal and steel. This is said to be mainly due

to the shortage of raw materials, lack of incentives among

industrialists, and so on.

The Employees State Insurance Corporation was formed on

1948 by the Government to improve labour welfare. The Coal Mines

Provident Fund and Bonus Scheme Act 1948 c!ame into operation for

the payment of bonus. The Indian Factories Act of 1949 laid down

the minimum requirements regarding health safety and general

welfare of workers. It was on 7th April 1948 that the Resolution

on Industrial Policy was adopted by the Government, laying down

the broad objectives of Government's policy in this field, and

demarcating the respective spheres for private and public

sectors. In the years that followed also it~dustrial production

was quite good. 7

A new feature of the year was the starting of new

industries for the manufacture of autolnatic looms, aluminum

powder, etc. Among the consumer good industry, the production of

cotton cloth and yarn rose by about 11 percent over the previous

year. In september 1951, the State Financial Corporation Act

was passed to enable State Governments to set up their own

Industrial Financial Corporation to assist: medium and small scale

industries. In September 1951, Parliament also passed the

Tariff Commission Act to enquire into the claim for protection of

Indian industries by establishing a Statutory Tariff Commission

and in October 1952 the Industries (Development and Regulation)

Act was passed for regulating industries as a corollary to

planned development. For further improvement in July 1961, a

Joint Consultive Board on Industry and Labour was set up to deal

with the question relating to nationalisation and related

problems.

2.1.3 Industrial Policy Evolution

In 1609, when the East India Company came to India, they

were interested in the export of manufactured products of India.

So they encouraged Indian crafts industry; but with the

industrial revolution in England after 1750, the English were

antagonistic to the above trading policy as the Indian products

started dominating England. So the policy of England was to

export the raw materials to England instead of the finished

Indian industrial products. In 1858, when the responsibility of

Indian administration was transferred from the East India Company

to the British Crown and to the Parliament in England they

adopted the policy of '~aissez-Faire' (The policy of non-

interference by the State in the economic affairs of the people).

Therefore in India also the British rulers assumed

disinterestedness when the Indian handicrafts started rapidly

declining. Thus the policy of Laissez-Faire remained the running

philosophy, though it was more of a dogma than a complete fact.

Madras Government was the first to make some Serious

efforts (1890) in the direction of improving technical education,

surveying industrial potentialities, assisting private industrial

enterprise and even starting some pioneering industrial units in

the province of Madras on the basis of available industrial

resources there. This appears to be the beginning of the

reversal of the policy of Laissez-Faire :in the industrial sphere

of India by the British rulers. In 1905, Lord Curson established

a separate imperial department of commerce and industry.

In Bengal, a Superintendent of industries and an Inspector

of technical and industrial institutions were appointed. In the

Central Province, attempts were made to revive cottage industries

such as weaving and shoe making. In the Madras province, a

separate provincial department of industries was established in

1906. But the Secretary of State disapproved the above activity

of the State, directly helping industrial development in the

provinces and in the country.

It was during the period of the First World War that the

need for a new industrial policy was urgently felt and the result

was the appointment of Industrial Commission in 1916. The Indian

Munitions Board was appointed in 1917 to control and develop

India's resources, especially with a view to meet the needs of

the war. The Industrial Commission which submitted its report in

1918 states:

I ) in future, Government must play an active part in the industrial development of the country, with the aim of making India more self-contained in respect of men and material, and (11) that it is impossible for the Government of India to undertake that part unless provided with administrative equipment and f rearmed with reliable scientific and technical advice." 8

The Montagu-Chelmsford report on constitutional reform of

1919 also pleaded for the industrial development of the country.

It states that on all grounds a forward policy in industrial

development is urgently called for not merely to give India

economic stability but in order to satisfy the aspirations of the

people. lo Under the Montagu-Chelmsf ord ref o m s industries became

provincial transferred subject. M t e r the First World War, there

was an increasing pressure and demand for some concrete action on

the part of the Government of India to assist and protect

industries and as a consequence to this Indian Fiscal Commission

was appointed.'' The recommendations of the Fiscal Commission

were accepted and a Tariff Board was appointed in 1923. On the

recommendations of this, the Government of India granted

protection to a number of industries such as iron, steel, cotton,

textiles, sugar, matches, etc.

Meanwhile, in 1922 State Aid to Industries Act was passed

in Bombay and subsequently similar Acts were passed in Bihar,

West Bengal and Madhya Pradesh. The Provincial Governments took

several measures to assist industries, particularly small scale

and cottage industries in the form of financial assistance.

Under the 1935 Act also industry was a provincial subject unless

otherwise specified. It is also found that the Indian

Nationalist Movement had accepted industrialization as necessary

to the development of India. In 1937, the Congress Working

Committee passed a resolution which called upon the Congress

Ministers that had taken office in the province to appoint a

committee of experts to consider the urgent and vital problems,

the solution of which is necessary to any scheme of national

reconstruction and social planning.12 The Industries Ministers'

conference held in October 1938 was of the opinion that the

problem of poverty and unemployment, of national defence and

economic regeneration can not be solved without

industrialization.

A conference of Ministers was called and it was this

conference which was responsible for the creation of Congress

National Planning Committee. The conference gave importance to

the views of various Provincial Governments and it was decided

that large scale industries are necessary on all India basis and

that all Provinces and Indian States should make effort to

fulfill this aim. l3 A committee was constituted under the

Chairmanship of Jawaharlal Nehru and K.T. Shaw as the Secretary.

The conflicts between large scale and small scale industries were

very prominent in its meetings. A compromise was reached when

the Chairman argued that there can be no planning if such

planning does not include big industries. But the Secretary

argued that the basic Congress Policy of encouraging cottage

industries must be taken into account in formulating plans. 14

In 1948 Government announced its industrial policy which

envisaged mixed economy for India. The industrial policy

recommendation recognized the need for the expansion of

production as the pre-requisite for more equitable

distribution. l5 After the adoption of the constitution and the

socio-economic goals the industrial policy was comprehensively

revised.

It was in 1956 that the industrial policy was reviewed.

The after-effects of the Second World War and the communal

disharmony were the factors that had made the situation abnormal

and this called for the review of the industrial policy.16 The

major objective was to speed up the rate of economic development

of heavy and basic industries. Private sector was considered as

significant as the public sector. In this the role of the State

industrial sphere was broadened. Hence the 1956 industrial

policy resolution gave primacy to the role of the State to

assume a predominant and direct responsibility for industrial

development. 17. 17A

In 1977 when the Janata Government came into power they

announced a new industrial policy. Their main emphasis was on

the employment generation arid it was recognized that this was

possible only by the speedy development of small scale,Khadi and

village industries. l8 Special attention was given to laid upon

small scale sector. The policy also called for an agency called

district industry centre.

In 1980, the industrial policy was reviewed by the new

Government and this policy 1.ays emphasis on the relative growth

of different sectors, large, small and tiny. Modernization was

considered necessary for small and tiny sectors. The policy gave

all encouragements to export oriented industries and for

encouraging foreign investment in high technology areas. 19

The industrial policy of 1980 was revised by the

industrial policy of 1991. The major objectives of the new

industrial policy (now in existence) are to build on the

infrastructure already made; to correct the distortions that may

have crept in, maintain a sustainable growth in productivity and

to provide gainful employment and to attain international

competitiveness. The pursuit of these objectives will be

tampered by the need to preserve the environment and ensure the

efficient use of available resources. 20

2.1.4 Plan Wise Industrial Investment and Growth of the Public Enterprise

The industrial investment through successive Plans is

provided in the Table 2.1. What has been revealed in the table

Table 2.1: India: Industry and Hinerals - Public Sector Outlay

PlanlPeriod Plan Provision (PP) Actual Outlay (AO) % of to ta l Expenditure "a0 to PP

Industry & Villaqe & Industry & Villaqe & Industry & Village & Industry & Village & Minerals Small Ind. Hinerals Srnall Ind. Minerals Small Ind. Hinerals Small Ind.

I1P 1978-80 2,384 256 19.51

VII 1985-90 19,663 2,753 25,971 3,249 11.5 1.5 132 118

VIII 1992-97 40,588 6,334 .. -. .. ..

* Including other industries expenditure 212 cmres

Source: 1. Government of India, Planning Cmiss ion, Fourth Five Year plan 1964.74, New Delhi, 1910

2 , - -. . -. . -. -. . - - - .. . . - -. - -. - - - .. - . . - . . . . . - , Eighth Five Yea Plan 1992-97, New Delhi.

3. Ministry of Industry, Snall Scale Industries Development Cmiss ion 1989, New Delhi,l990.

4 , ..-.-....-.-..-.-. ........-..-.---... Dept, of Industrial Developnent Handbook of Industrjal S ta t i s t ics , New Delhi, 1989.

5. Govt. of India, Ministry of Information and Br~~dcas t inq , Publication Division, India a Reference Annual [Various Years].

6. CUE, Msic 3;;r;is;ics Relating t c Ii~dihn Z~wil'my, Ayust, 1954.

Table 2.2: INDIA: Plan Wise Growth of mrblic Enterprises & Investment

Statement Number of Total investment enterprises (Rs. in crores)

At the commencement of the :Lst five year Plan (1 April 1951) 5

At the commencement of the 2nd five year Plan (1 April 1956) 21

At the commencement of the 3rd five year Plan (1 April 1961) 47

At the end of the 3rd five year Plan (31 march 1966) 73

At the commencement of the 4th five year Plan (1 April 1969) 84

At the cammencement of the !5th five year Plan (1 April 1974) 122

At the end of 5th five year Plan (31 March 1979) 169

At the commencement of the 6th five year Plan (1 April 1980) 179

At the commencement of the '7th five year Plan (1 April 1985) 215

At the end of the 7th five year Plan (31 March 1990) 244

As on 31 March 1991 246 1,13,896

As on 31. March 1992 246 1,35,871

Source : Government of India, Ministry of Information and Broadcasting, Publication Division, India 1993: A Referecne Annual, New Delhi, 1994, p. 508.

is that the investment made for large industries and minerals was

increasing in every Five Year Plans and it is many times greater

than that of village and small scale industries. This also can

be claimed as one of the reasons for the deterioration of the

status of village and small scale industries. The thrust was

always on the development of large scale industries through the

Five Year Plans. Table 2.2 shows the Plan wise growth of public

enterprise in India and their investment. A steady increase in

the number of public enterprises can be noticed from 1951 to

1990. In between 1990 and 1991 only two enterprises were

established, and there was no new enterprise started in between

1991 and 1992 even though the investment was increased by about

200 crores. This may be utilized for maintenance or modification

of the existing area.

2.2 Industrialization in Kerala

It appears that several factors contribute to the

industrial growth of a country. The resources of the region and

the labour force are the basic factors which contribute to it.

The initial industrial base of that particular region plays a

crucial role in the further development of that country.

Therefore we pass on from the examination of industrialization in

India to industrialization in Kerala.

As far as Kerala is concerned, from centuries back

traditional industries like mat weaving, handlooms, bamboo

products, etc. were popular in different parts of the State. It

was only on 1st November 1956 that Kerala was formed by the

unification of Travancore, Cochin and Malabar, which were three

distinct political units. Travancore and Cochin were under

princely rule, while Malabar was part of adjoining presidency

and was under British rule.

It was very fortunate for Travancore and Cochin that they

were never under the domination of a foreign rule. The relation

between the two Governments and the British was very cordial and

that helped both the Governments to industrialize their States.

2.2.1 Industrial Development in Ravancore

Among the three political units, Travancore registered

considerable progress in the field of industrialization. This

may be due to the importance given by the rulers for

industrializing their State. In this context it is interesting

to recall that Travancore was the first State to nationalize

trade in commercial crops in 1750 AD, under the rule of Maharaja

Marthanda Varma. But after a hundred years, the trade was

denationalized.

The industries of Travancore can be classified into two

sub divisions: (i) Factory industries (ii) Cottage industries.

Factory industries were only gradually coming to prominence.

Their number was increasing every year as would be evidenced by

the speedy rise in the number of factories in the annual

statistics. Out of the 159 factories established then. 77 were

engaged in the manufacture of tea and one in curing cardamom.

The remaining 81 were engaged in the manufacture of tiles, coir

yarn, matting, rubber, paper, steel goods and sugar, matches,

etc. Among these, the extraction of coconut oil and manufacture

of coir yarn arrested greater attention. There were numerous

cottage industries spread throughout the State.

"Various cottage industries have for centuries obtained a firm foot hold in the country and cotton weaving and coir making, wood and ivory carving, screwpine work and carpentary are well known for their artistic excellence throughout the world. . . @12'

Handloom weaving was the most important cottage industry

in vogue. Cotton weaving was quite prevalent throughout the

State, particularly in South Travancore. Manufacture of silver

and gold threads, lace and embroidery, bell-metal industries,

iron industries, screw-pine, mat-weaving, wool-seasoning palm-

leaf umbrella making, preparing coconut jaggery, etc. were the

major cottage industries.

The first industry in the State of Travancore was a

textile mill at Quilon, established by an American in 1881. This

was followed by the establishment of the first coir factory at

Alleppey . 23 In 1883 an indigo factory was started by a Dutch

family at Kulachal, Northern part of Travancore. Salt

manufacturing industries were established in Trivandrum,

Karunagappally and Karthikappally. The match factory at Thenmala

was also an important business establishment. 24

It was in 1884 that the Quilon Spinning Mill started under

a European management. It worked for about 20 years and with the

outbreak of First World War it ceased working. The Punalur paper

mill in Quilon District was started in 1887. At that time

electricity was not available and water power was used to run the

paper plant.25 In the 19th century itself handweaving units vere

established at Kottar, Balaramapuram, Chirayinkil and Pandalam.

According to the 1931 census, there was about 15.18 of

the people engaged in different types of industries. The

proportion was only 10% as far as India as a whole was concerned

(See Table 2.3).

Table 2.3: Wavancore: People Depended on Industries

Year No. of employees depended Percentage of total on industries population

Source : T.K. Velu Pillai, havancore State Hanual, Vol. 111, p.41.

In the early years, private enterprises vere not

forthcoming in adequate measures to take up the challenging tasks

of industrialization. So the Government was obliged to take up

this task. The ruling houses both of T'ravancore and Cochin took

effective measures to create socio-economic overheads and to

promote the development of indigenous entrepreneurship.

The beginning of an attempt to oryanize industries in the

State dates back to the year 1918. In that year, a separate

department for industries was started by the Travancore State

Government. During 1920-21 an Economic Development Board was

constituted with the objective of developing the economic

resources of the State, establishing new industries and expanding

old ones. The industrial pattern in the State at that time was

mostly confined to the coir yarn spinning, handloom weaving, and

such other cottage industries. Though there were some registered

factories, most of the industries were in unorganised sector.

With the organization of Industries Department in

Travancore under Dr. S. Backer, the industrial climate changed.

Many new schemes were taken up and encouraged by Economic

Development Board. The result was that a good number of the

existing large scale industries came up in the subsequent years.

A sugar factory was started in Thuckala (now in Tamil Nadu) in

1931-32.27 It worked for about 12 to 13 years and later closed

down with the coming up of a bigger unit at Thiruvalla.

Industrialization and C.P. Ranamvary Iyer

Industrialization of the former Princely State of

Travancore began much earlier than in most other regions in

India. Efforts were made since the middle of 19th century. The

process of integration of Travancorean economy with the

international commodity market commenced from around the second

half of the 19th century. The basis for the enclave pattern of

economic development laid during this period was the

channelization of private foreign capital into plantations,

initially coffee and tea and later :rubber and into agro-

processing industry principally coir. 28

While we trace the industrial development of Travancore,

Sir C. P. Ramaswamy Iyer deserves a special mention.

Industrialization of Travancore in the recent past had been

chiefly due to the genius, farsight and the characteristic

leadership of the former Diwan Sir C.P. Ramaswamy Iyer. He

invited outsiders to start industries here with the view that

capital and skilled workers are not sufficiently available in the

State. Even foreign companies reacted favourably to the call

given by him. Sir C.P.'s interest in industrializing the State

is evident from his following statements,

"My idea from the beginning was to start an industrial revival in the state. Local attempts were tried, but they failed. I shall give details of the failure presently. This Government are definitely of the opinion that ultimately, and I underline the word *ultimatelyg, all the industrial enterprises that are coming into existence and are functioning or will function throughout the state, must belong essentially to the people of the state, both with referygce to the capital and personal direction and control."

"The question is whether... we should take the best possible means now of starting these industries with sufficient safeguards that those industries will come into the hands of Travancore personnel or will be worked in the interests, solely and exclusively of Travancore. When that alternative comes before the Government they would have no objection, nay would be anxious to avail themselves of the services of any agency, Indian or European, American or African, for the purpose of starting thq8e industries and give a push to them at the outset.l8

During the time of Sir C.P. Ramaswamy Iyer, the products

of industries of Travancore have dominated in most of the States

in India and to some extent abroad as well. Sir C.P. had made

clear that he was not prepared to sell the monopoly of any

concern to any foreigner however much expertise he had. On the

contrary, he tried his best for providing opportunities to

Travancoreans to acquire technical know-how and skill. Against

the various objections, he succeeded in obtaining the best

machinery in the world for the industries of the State. Sir C.P.

was very much aware of the importance of electricity in industry.

So he made several steps to boost the projects of electricity in

Travancore.

It is generally believed that the decade 1934 to 1944 was

the golden age of industrialization in the annals of Kerala

history. This is because, it is during this period that several

industries were established in Travancore and Cochin areas. The

preliminary work on the Travancore Rubber Works was completed in

1934-'37. The Sree Chitra Mills at Alwye established by M/s E.D.

Sasson and Co., Bombay, the Government Ceramics concern at

Kundara in Quilon District, the Indian Aluminium Company at

Alwaye, the Travancore Plywood Industries at Punalur and

Travancore Ogale Glass Manufacturing Company at Alwaye and

Travancore Rayons at Perumbavoor were started during this period.

1947-'48 also witnessed the establishment of several

industries in Travancore-Cochin. 31 It was during this period

that FACT was commissioned. Preliminary work on ALIND, Kundara,

Forest Industries at Alwaye and West Coast Industries in Cochin

were started. The construction work of Travancore Titanium

Products Ltd., at Trivandrum, Electro-Chemical Industries at

Chingavanam and the Electrical and Allied Industry at Kundara

were also started during this time. The completion of the Hydro

Electric Project at Pallivassal gave a boost and favourable

climate for the development of these industries.

2.2.2 Industrial Development in Cochin

Like Travancore, Cochin also enjoyed a good position in

the field of traditional industries. Since the beginning of 19th

century, coir, timber, coconut oil extraction, tile making,

handloom weaving were the predominant ones. In 1909 an

industrial survey was conducted in order to assess the

possibilities of industrialization. 3 2 Accordingly, some

Industrial Training Schools were started. They were both in

private and public sectors and were under the Department of

Education. In 1920, an economic survey was conducted and an

Industrial Advisory Board was established on the basis of its

recommendations. In 1925 when the Economic Development Committee

was formed, Industries Advisory Board was merged into it.

In Cochin where Sir Shanmugham Chetty had already set a

new phase of development, facilities were offered to investors to

come forward and organise industrial units. The resources of

the state being limited, the Cochin Government could not follow

the pattern of industrial development of Travancore. So

traditional industries were considerably expanded. New textiles

like the Alagappa Textiles, the Cochin Potteries, the Victory

Chemicals and Pharmaceutical works, the Tata Oil Mills, etc.

were established. 33

2.2.3 Industrialization in Halabar

Industrial development in Malabar owes much to the Base1

Missionaries (a Christian missionary group organized in

Switzerland) and their economic activities. Base1 Mission came

to India with many other Missionaries, with the policy change of

East India Company. Since 1834 the Missionary activities

flourished in Malabar-Konkan Coast. This process lasted till the

beginning of the First World War in 1914. 34

Three distinct phases35 can be observed in the industrial

activities of the Base1 Mission in Malabar and South Canara.

Base1 Evangelical Missionary Society or Base1 Mission activities

can be chronologically placed under the Early phase beginning

from 1834 to 1852, the Middle Phase beginning from 1852 to 1882

and the Final Phase beginning from 1882 to 1914. With the

outbreak of First World War, Base1 Mission activities in India

came to an end.

The Early Phase begins with the arrival of the

Missionaries in the Malabar coast in 1834. In 1846 the

Industrial Commission was established. In 1852 it was placed

under a separate treasury within the Mission. Jaiprakash

Raghaviah observes this event as an important turning point in

the organization of Missionary industrial activities. 36,36A

This marks the end of the First phase.

It was during the Middle phase that industrial activities

came increasingly under the Central Board of Industrial

Commission. Base1 mission gave new dimensions to the existing

traditional industries such as cloth weaving and tile making by

introducing machinery and thus providing a modern factory

outlook.37 This period is characterised by the establishment of

factory type of production organization. The Industrial

Commission which had existed in the Mission from 1846 was

reconstituted with a separate treasury, though it continued to be

a part of the Basel Missionary Society. The new Commission was

placed under professional management of the Christian merchants.

With these efforts, industrial activities of the Mission got a

boost. Weaving got much importance. Another important area was

the invention of dye of khadi from the bark of semicarpus tree.

The dye house at Quilandy was established by the Mission.

Later, mechanised knitting was introduced. Thus Base1

Mission factories were the first to manufacture banians and

stockinette materials. The other activities which evolved during

that period were mechanical repairing and fabrication, printing

and book binding and trading activities. Another type of

industry which flourished during this period was tile industry.

The manufacturing of tile was a century old profession,

traditionally undertaken by the potter cast in Southern India.

By the 19th century, public works like the construction of public

off ices, railway stations, etc. created a market for tiles. The

traditional tile maker was handicapped to meet the demand. The

problem with the use of traditional tiles was that it required a

heavy super-structure which was costly. 'Thus the stage was set

for the rapid expansion of Base1 Mission's machine made roofing

tiles.

With the outbreak of First World War, Enemy Trading Act of

1916 was issued by the Governor General in Council to prohibit

and control trading by hostile foreigners. The Madras Chamber of

Commerce immediately approached the Government of the Presidency

of Madras for winding up the operations of the company. They

feared that the fast growth of the company had challenged the

British commercial interest in India. On 22nd May 1919, six

months after armistice on the basis of an ordinance issued by the

Viceroy, the entire assets of the company in India were

sequestered by the custodian of enemy property. Under the

direction of the controlling officer, an inventory of possessions

was drawn up. Later the properties were transferred to Common

Wealth Trust Ltd. But due to the absence of further development

work, some of the units had to be sold off.

It appears that the pioneering efforts in modern

manufacturing owe to the Base1 Mission activities which started

industrial units in India even before the British showed interest

in this field.

By the time the world war was over, a fairly strong

industrial base was built up particularly in the Travancore

State. In the Travancore region a certain amount of planning

was done in the name of post war construction. A post war

reconstruction was set up under the Chairmanship of the Diwan.

Upto the First Five Year Plan this committee continued its

activities. The Government of Cochin rendered adequate financial

assistance to deserving concerns to tide over the post war

economic situation. It initiated schemes to bring the coir

industry within the co-operative fold. The Cochin Illdustrial

Board, a post war development functioned creditably well and it

made available industrial loan from newly constituted Industrial

Development Fund.38 Thus the two decades preceeding independence

were a period of many note-worthy achievements in industrial

field as far as Travancore was concerned. But the cochin and

Malabar region lagged behind.

2.2.4 Industrial D e v e l o m t during the Plan Periods

The industrial development of Kerala during the first 10

years after independence was not at all satisfactory. When

compared with that of 1936-47, the industrial advancement during

the period of Sir C.P. Ramaswamy Iyer was far better than that

of the period from 1947 to 56. Before the starting of Five Year

Plans, 39 industrial units were registered. But during the First

Plan only 7 factories were registered, one in Central sector,

two in the State sector and 4 in private sector. Plan-wise

outlay and expenditure for industry and minerals are discussed

below with the help of Tables and Figures.

F i r s t F i v e Y e a r Plan

The industrial schemes in the First Five Year Plan which

were implemented prior to the formation of the State of Kerala,

were confined to a few activities mainly in the area of

traditional small scale industries like coir, co-operative

schemes, survey of small scale industries, installations of an

electric tunner kiln in the Ceramic Factory at Kundara and

improvements to the Kerala Polytechnique at Kozhikode.

Comparatively very little importance was given to industries in

this Plan. The outlay for industries was 112 lakhs, 3.7% of the

total Plan outlay (See Table 2.4). The actual expenditure

incurred was less i .e. , Rs. 50.3 lakhs , and there was no Central

investment in the industrial sector. Dr. P.K. Gopalakrishnan

made the comment that in this plan indust:ries were relegated to

the status of a residual claimant.39 Though the First Five Year

Plan was a disorganized attempt at development, it gave the State

considerable experience of planning.

Second F i v e Y e a r Plan

Kerala was reorganized as a State only in November, 1956

and by that time the Second Five Year Plan was already

Table 2.4: KERAW: Outlay & Expenditure - Industry & Minerals

(Rs. in lakhs)

Periods Outlay % Expenditure Expenditure as % of outlay

First Plan 1951-56 112 3.7 5 0 44.6

Second Plan 1956-61 684 7.9 604 88.3

Third Plan 1961-66 1719 10.1 1437 83.6

Annual Plan 1966-69 1014 7.1 1334 131.6

Fourth Plan 1969-74 2208 8.6 *2604 113.3

Fifth Plan 1974-78 6154 10.8 *5478 87.8

Annual Plan 1978-80 4227 10.8 6707 158.7

Sixth Plan 1980-85 16459 11.1 *I6647 101.0

Seventh Plan 1985-90 21455 9.7 27260 127.1

Annual Plan 1990-92 15980 10 14970 93.7

Eighth Plan 1992-97 81000 14.84 --- --- --

* Including special assistance.

Source: 1. Government of Kerala, State Planning Board, Plan outlays and expenditure: Kerala 1951-52 to 1989-90, 1992.

2. ------- -------- , Eighth Five Year Plan 1992-97: Wid-Tern Review, 1994.

formulated. The Second Plan gave greater importance to industry,

when compared to the First Five Year Plan. The total outlay for

industries was 6.84 crores i .e. , 7 -9% of the total Plan outlay (See Table 2.4). More attention was given to the promotion of

small, cottage and traditional industries. They attracted 4.99

crores out of which 3.46 crores was utilized (See Table 2.4).

During this Plan also the State did not give any serious

thought to industrialization except taking steps towards the

expansion of production in Kundara Ceramic Factory and the Kerala

Cycles Private Ltd., in the establishment of a spinning mill in

Thiruvananthapuram and the organization of coir and handloom co-

operatives. In this Plan also Central investment was almost nil.

The Stearing Committee on Industry and Mining (1990) observes,

"Though there was substantial improvement in the development of the industrial sector during the Second Five Year Plan throughout the country, the investment in Kerala was only 0.1 p cent of the total central public sector investment." $6

The only industry established during this Plan by the

central government was the Insecticides Lt.d. at Alwaye.

Third F i v e Y e a r Plan

During this Plan, industry received slightly more

importance than the other two Plans. The outlay for industries

was 17.19 crores. This was about 10.1% of the total State

outlay. The actual expenditure was 14.37 crores, about 83.6% of

the total outlay for industries (See Table 2.4). Like the Second

Pive Year Plan, Third Plan also got a Gandhian touch. In this

Plan also small and cottage industries received a major portion

of the outlay - 8 crores. However, the case was quite different

in the field of large and medium industries. The outlay was only

4.54 crores but the expenditure was a huge 8.05 crores

(See Table 2.4).

The F o u r t h Pive Pear Plan

The allotment for industries and mining in this Plan

was Rs. 2208 lakhs, which was 8.6% of total outlay. When the

outlay of the Fourth Plan is compared with that of the Third

Plan, it is found that the outlay for industries as a whole was

less than that of the former (See Table 2.4). The actual

expenditure was 26.04 crores which is 113.31 of the total outlay.

After the Third Plan and before the Fourth Plan, there was a gap

which was filled by Annual Plans. It was during this time that

the industrial policy of 1967 was issued, which asserts that the

State will function within the limits of the policy laid by the

Government of 1ndi.a." In the industrial policy statement The

Government has indirectly concerned that the performance of the

public sector undertaking in the State has been unsatisfactory.

The Government's determination to do away with this unhealthy

condition is embodied in the policy state~mnt.'~

In the light of the above policy, a few industries were

started in the State. In order to provide financial and

auxiliary facilities for the development of Handloom industry,

Kerala Handloom Finance Corporation was formed in 1968. It

entered the field of export trade in 1971. It was during the

Fourth Plan that the coalition Government formed a number of

corporations to rehabilitate or expand industries relating to

coir, cashew, handloom, textiles, minerals and handicrafts. The

existing industries like FACT was expanded. From 92 crores

investment, when the Plan ended it went up to 120 crores. Along

with many other industries, it was during this period that the

first steel complex at Feroke and the expansion of Traco Cable

were completed. Cochin Refineries, Hindustan Latex, Hindustan

Machine Tools, Modern Bakeries, etc. were established in Kerala

which were in the Central sector. Thus the Fourth Plan period

witnessed a tremendous growth in industria.lization.

The F i f t h F i v e Y e a r Plan

The total outlay for industrial development in this Plan

was 6154 lakhs which is 10.8% of the total outlay. The aim was

to achieve more industrialization by establishing new units and

the modernization of traditional sector. The total expenditure

during this Plan was 5478 lakhs. The percentage of expenditure

as per the outlay was only 87.8% (See Table 2.4).

The S i x t h F i v e Y e a r Plan

Before the Sixth Plan there were .Annual Plans (1978-80)

and the total outlay for industries during this period was 4227

lakhs which is 10.8% of the total outlay. The expenditure during

Annual Plans was 6707 lakhs which is 158.7% of the total outlay

(See Table 2.4). The Sixth Plan which commenced from 1985 put a

total outlay of 16459 lakhs, which is 11.1% of the total. The

total expenditure was 16647 lakhs, which is 101% of the total

outlay (Table 2.4). That is, the percentage of total expenditure

was higher than that of the Fifth Plan, but lower than the

percentage of expenditure of the Annual Plans. The expenditure

of medium and large industrial sector in the Sixth Plan was

11,848.69 lakhs. The expenditure for vil-lage and small scale

industries was 4632.24 lakhs which included a special assistance

of 17.16 lakhs (See Table 2.5).

The S e v e n t h F i v e Y e a r Plan

The Seventh Plan which commenced from 1985, envisaged an

outlay of 21,455 lakhs which was 9.7 percentage of the total.

The total expenditure was 27,260 lakhs which was 127.1% of the

total (See Table 2.4) . There was a steep growth of small scale

industries in Kerala during this Plan.

The E i g h t h F i v e Y e a r Plan

The present Plan, started in 1992, envisages 810 crores

for industry and minerals. It is 14.84% of the total outlay (See

Table 2.4). One who goes through the budget outlays from the

First Plan to the present Eighth Plan, can see a substantial

increase of the investment in industries. In the First Plan the

outlay was only 1.12 crores against an outlay of 810 crores in

Table 2.5: KERAW: Plan-Wise Outlays and Expenditure on Village and Small Scale Industries 5 Medium and Large Scale Industries

(Rs. in lakhs)

Village & Small scale Medium & Large scale ~ndustries Industries

Plan/Period - Budget Accounts Budget Accounts Estimate Estimate

-.

First Five Year Plan 1951-56 * 50.43

Second Five Year Plan 1956-61 499.7 346.28 102.33 179.47

Third Five Year Plan 1961-66 800.00 629.52 **919.50 760.33

Annual Plan 1966-69

Fourth Five Year Plan 1969-74 1,007.00 1,011.25

Fifth Five Year Plan 1974-78 849.00 836.29

Annual Plan 1978-80

Sixth Five Year Plan 1980-85 4,450.07 4,615.0~***11,841.04 11,848.69

Seventh Five Year Plan 1985-90 7,040.50 7,392.81 14,135.00 19,684.64

Annual Plan 1990-.92

Eiqhth Five Year Plan 1.99%-.97 30,400.00 --- 50,000.00 --- - --- * Expenditure for both Village, Small Scale, Medium and Large Industries

** Including Industrial Estate and Plantation Industry *** Excluding Special Central Assistance of 17.16 lakhs

Source: 1. Govt. of Kerala, State Planning Board, Plan Outlays and Expenditure Kerala, (1951-52 to 1989-90), 1992.

2. ----- ------ , Draft: Eight Five Year Plan, 1992-97 and Annual Plan 1992-93, Vol. 11, 1991.

3. Krishna Iyer, S., Kerala Economy, Tvm.: State Institute of languages 1975 (in Malayalam).

the Eighth Plan. In the First Plan expenditure as percentage of

outlay was only 44.6 against 127.1 in the Seventh Plan. The

outlay for industries in the First Plan was a mere 3.7% when

compared to the huge 14.84% of the Eighth Plan (See Table 2.4).

These figures show how the Government gave continuously greater

importance to industrialization Plan after Plan. Fig 2.1 shows

the outlay and expenditure for industry and minerals through Plan

periods. The graph clearly shows, upto Sixth Plan outlay and

expenditure was somewhat the same. But in the Seventh Plan the

expenditure was much higher than the Plan outlay.

In the First Plan separate allocation was not made for

village and small industries (VhSSI) and medium and large scale

industries (M&LSI) (See Table 2.5). Separate allocation was made

during the Second Plan onwards. Much thrust was given to VhSSI

in the Second Plan and this was the only Plan which gave an

outlay for V&SSI higher then MhLSI. (Outlay for VLSSS was 5

crores against 1 crores for M&LSI (See Table 2.5). In the

following Plans, the outlay for VhSSI began to decrease when

compared to H&LSI. In the Eighth Plan the outlay for VLSSI was

304 crores aganist 500 crores for M&LSI (See Table 2.5). Fig.

2.2 shows clearly the disparity between expenditure for VLSSI and

M&LSI . The year-wise break up of expenditure on Khadi and

Village Industries, Small Scale Industries and Medium h Large

Industries are provided in Table 2.6.

2 .6 : KERALA: Year-Wise Break-up of Expenditure on Village Industries, Small Scale Iridustries and Medium and Large Industries 1900 to 1995

(Rs. in lakhs)

KHADI AND VILLAGE SMALL SCALE MEDIUM & W l G E INDUSTRIES INDUSTRIES INDUSTEIES

Period - Budget Budget Budget Estimate Accounts Estimate Accounts Estimate Accounts

* Special Central Assistance (Rs. 8.80 lakh) included ** Anticipated

Source : 1. Government of Kerala, State Planning Board, Plan Outlays and Expenditure Kerala (1951-52 to 1989-go), 1992.

2. -------- ------- , Eighth Five Year Plan 1992-97 Hid-Term Review 1994, p. 132, 144, 155.

Figure: 2.1 Kerala: Industry & Minerals - Outlay and Expenditure

0 OUTLAY + EXPENDITURE

Figure: 2.2 Kerala: Expenditure for Village and Small Scale b Medium and Large Scale Industries

0 '$illage a Smai i Ind + Medium & Lorge Ind.

21 -

20

19

18

1 7

16

15

1 4

13 12

11

10

9

8

7

6

5

4

3

2

- - - - - - -

-

- - - - - - - - - - - - 1;

0 . FIRST(1951-55) -y-cd/ THIRS(195:-66) F iF lH(1974-78) 7 I SEVF.NTI-I(I I 985-

SECCND(i956-6 i j touRTH(1969-74) S1XTI-r.C 1980-.35) <----- Plan eeriods ------>

Table 2.7: KERALA : Central Sector 1ndustri.al Investment

(Rs. In crores)

Year Investment as on 31St March % of column (3) ........................... All India Kerala to column(2)

Source: Economic Review (various issues)

2.2.5 Central Sector Investment in Kerala

Table 2.7 shows the Central sector industrial investment

in Kerala. At a glance one may feel that the investment in

Kerala is increasing year after year according to the increase in

the all India level. But when the percentage share to Kerala is

calculated, one can see a gradual decrease (Table 2.7: Fig.

2.3). Thus when the percentage share of Kerala in 1970 was

3.069 it was only 1.31% in 1993. This decrease will be further

deepened, if we calculate the investment on the per capita

basis, as Kerala is accommodating a population of 4% of the total

population of India.

2.2.6 Working Factories and Employrent in Kerala

At the end of December 1993 there were 14399 registered

working factories in Kerala. Between 1992 and 1993 the

increase in working factories was 453, an increase of 3.25 per

cent over the previous year. During this period the increase in

workers was 7133 i.e., an increase of 1.78 percent over the

previous year's. Growth of the working factories and employment

in Kerala since 1960 is given in Table 2.8.

2.2.7 Traditional and Small Scale Industries in Kerala

The major traditional industries in Kerala include coir,

handloom, cahsew, khadi and village industries, beedi, bricks,

tile and bamboo industries. Coir industry provides direct

employment to about 3.83 lakh workers and thus occupies the

Table 2.8: KERALA : Number of Registered Working Factories and Employment

-- Year No. of Factories Employment No.

* provisional

Source : Economic Review (various issues)

2. Govt. of Kerala. Directorate of Economics and statistics. Statistics for planning. 1990. p. 35.

Table 2.9: KERALA: Year-Wise Break-up of Outlay and Expenditure for Traditional Industries 1980-1995

Handicrafts Handloom industry Coir industry - Period -

Budget Budget Budget Estimate Accounts Estimate Accounts Estimate Accounts

1994-95 100.00 --- 740.00 --- 850 .OO --- * including special Central assistance Rs.8.36 lakh

Source: 1. Government of Kerala, State Planning Board, Plan Outlays and Expenditure Kerala (1951-52 to 1989-90). 1992

2. ------ ------ ,Eight Five Year Plan 1992-97 Uid Term Review, 1994.

formost place among traditional i n d u ~ t r i e s . ~ ~ According to the

Stearing Committee ~ e ~ o r t ~ ~ on Industry and Mining 1990, c0ir

industry accounts for 44% of the labour force in traditional

industries. Handloom industry accounts for 20%, Khadi and

Village industries 11% and Cashew industry 10%. Handicrafts and

other traditional industries represent the remaining 15%. Table

2.9 shows the year-wise break up of the outlay and expenditure

for Tradititonal Industries. The performance of khadi and

village industries in Kerala since 1977-78 is furnished in Table

2.10.

There is a phenomenal growth of small scale industries in

Kerala, especially during the Seventh Plan. The number of small

scale industrial units increased from 31,499 at the end of Sixth

Plan to 55,427 at the end of 1988-'89 registering an increase of

76% over a period of four years. 45 These units, at the end of

1988-89, with a total investment of Rs.660 crores and employment

of 3.67 lakhs persons produced goods worth Rs.1724 crores. Table

2.11 shows the annual growth of small-scale industrial units from

1980-'81 to 1993-'94. 1993-'94 witnessed a tremendous growth in

small scale units. 14,533 units were registered in the financial

year against a target of 10500 units and accomadated more than

ten thousand jobless when compared to the previous year. A

remarkable increase was also noticed in the value of goods and

services produced as high as 622 crores compaired to 263 crores

of 1992-'93.

Table 2.10: KERALA: Performance of W a d i and Village Ind~~tries

Year Production Sales ~m~loyment* Wages ( lakhs ) (lakhs) (Nos. ) ( lakhs)

1977-78 863.73 944.13 84,359 403.47

1978-79 1,035.56 1,122.17 1,11,495 500.80

1979-80 1,329.77 1,456.25 1,01,555 583.31

1980-81 1,694.81 1,808.00 1,23,328 882.89

1981-82 2,697.82 2,824.23 1,34,125 1,055.74

1982-83 2,656.31 2,801.46 1,43,585 1,248.87

1983-84 2,575.59 2,779.12 1,44,437 1,127.48

1984-85 3,323.24 3,448.55 1,52,462 1,201.05

1985-86 4,228.85 4,496.56 1,613,084 1,744.05

1986-87 4,794.96 5,116.68 1,621,098 1,469.86

1987-88 4,819.10 5,252.33 1,73,647 2,132.00

1988-89 5,526.49 5,896.59 1,79,257 1,949.70

1990-91 7,478.03 8,290.80 1,92,901 2,879.40

1992-93 9,400.52 10,494.17 1,7E1,103 2,759.71

1993-94 9,727.94 11,077.66 1,76,362 3,128.56

* ~ncludes-part-time and casual labours

Source: 1. Econcmic Review (various issues)

2. Government of Kerala, Direcorate of Economics & Statistics, Statistics for Planning 1983, 1983.

Table 2.11: KERALA: Growth of Small Scale Industrial Units.

No. of Value of goods Employment year small scale Investment & services provided

units (in lams) produced ( Number ) (Rs. lakhs)

1993-94* 14,533 16,627.75 62,206.10 60,945

* Provisional

Source : Economic Review - Various issues

The Government of India have launched a new scheme namely

'Prime Minsters Rozgar Yogana' (PMRY) on 2nd October 1993 for

providing self employment to the educated unemployed youth in

urban area.

2 . 2 . 8 Industrial Promotional Agencies

Government's effort to promote industrialization in the

State can be traced back to the introduction of various

industrial promotion agencies.

Kerala State Industrial Development Corporation

KSIDC was established in 1961. It is the nodal agency for

the promotion of large and medium scale industries in Kerala.

Kerala Financial Corporation

Its prime objective is to encourage and promote

industrialization in the State by providing loans to small and

medium scale industries. During the span of 40 years the

corporation has sanctioned Rs.641 crores to about 20,000 small

and medium scale units in the State.

Small Industries Development Corporation

The main activities of SIDCO are to aid, counsel, finance,

protect and promote the interests of small scale industries in

the State. The raw material division of SIDCO procures and

distributes scarce raw materials to the registered small scale

industrial (SSI) units in the State. It gives financial

assistance to boost the development of SSI.

Small Industries Service Institute

This stands unique in the field of providing technical and

managerial consultancy services to a number of industrial units.

Besides, it prepares several technical reports for the benefits

of existing as well as prospective entrepreneurs.

Kerala Industrial and Technical COnSUltan~y Organization

KITCO also stands as an organization providing consultancy

service to entrepreneurs and managements on project preparation,

civil works, engineering aspects, energy conservation, industrial

management and business promotion.

Handicrafts ObVelOpmOnt Corporation of KeraZa Ltd.

The main objective of this corporation is to protect and

develop handicrafts industry within the State by marketing the

products in India and abroad. Procurement and distribution of raw

materials to artisans at subsidised rates, collection of finished

handicrafts goods at fair prices, exhibition and sales of

handicrafts all over India, financial assistance to artisans,

etc. are the major activities of the corporation.

Ratio- Small Industries Corporation

NSIC stands prominently in the iield of industrial

promotional agencies. The organization is providing machinery

-62-

for small entrepreneurs on loan basis. The re-payment of the

loan should be made on instalment basis.

Khadi and Village Industires Board

The Board has been functioning in Kerala from 1957 as a

statutory board for implementing programmes for the development

of Khadi and Village Industries. KVIR has been providing

employment opportunities to the rural population through its own

production centres, registered institutions and co-operative

societies. One of the objectives of the Board is extending

financial and technical assistance to artisans engaged in khadi

and village industries through co-operative societies, charitable

institutions and individuals.

Besides these eight, there are several other agencies

such as Coir Co-operatives, Coir Marketing Corporation (Coirfed),

Handicrafts Development Corporation, Kerala State Bamboo

Corporation Ltd., Kerala State Handloom Weavers Co-operative

Society Ltd. and Cashew Development Corporation to promote the

concerned traditional industries.

2.3 Conclusion

Several important conclusions can be drawn from the above

survey of industrialization in India and in Kerala. Some of

these conclusions that are relevant to the thesis are listed

below.

(i) There was a time when small scale industries flourished in

India. But this healthy trend changed after the advent of the

British. -63-

(ii) During the British rule in India large scale industries

gained prominance. The British preferred goods of their own make

to the Indian goods. This led to the decline of traditional

industries in India.

(iii) With the growth of modern industries large scale

industries were encouraged by the Government with the result that

small scale industries received little attention.

(iv) The industrial policies, even those that were formulated

after independence, promoted large scale industries, though there

were arguments favouring the harmonization of both small and

large scale industries.

(v) The situation during the Five Year Plan periods was not very

different. For, the Five Year Plans too paid greater attention

to large scale industries without paying much attention to the

problems that they create for the environment.

(vi) In Kerala also the process of industrialization has been

very much in tune with the policies and plans of the Central

Government.

(vii) Today the Governments both Central. and State are realizing

more and more the need and the urgency of promoting small scale

industries. This is particularly noticable in the industrial

policy statement of 1991, which recognizes the importance of

protecting the environment.

In short, when one looks at the history of

industrialization in India and in Kerala, what is revealing is

that the small scale industries did not get the attention they

deserve. Another striking aspect of this industrialization is

that it did not take seriously the problems of pollution and

depletion of natural resources.

References

1. 'Report of the Indian Industrial Commission 1916-18', p.6. c i ted in S.C. Kuchhal, The Industrial Ecomry of India, 1975 ed., p.27.

2. S.C. Kuchhal, The Industrial Economy of India, 1975 ed., p.29.

5. D. H. Buchanan, 'The Developrent of Capitalist Enterprise in India', pp. 450-51, c i t e d in n.2, p.36.

7. S.S.M. Desai, Industrial Economy of India, 1988, p.54.

10. Government of India, Ministry of Education and Social Welfare, Department of Culture, The Gaxettear of India, vol. 3, Economic structure and activities, 1975, p.464-65.

12. Cited in Rajiv Bhushan Tiwari, Federalisn and Industrial Development in India: Politics of Industrial Locations, (Ph.D Thesis-unpublished), 1980, p . 8 .

13. R.P. Dutt, India Today, p.631, cited in n.12, 1982, p.8.

14. K.T. Shah, 'Report of the National Planning Conittee', pp. 36-37, c i t e d in n.12, p.8.

16. Loksabha debates Dec. 20, 1954, p. 3527, c i ted in 13-12, 1982, p.41.

Government of India, Ministry of industry, Statement of Industrial Policy, 1991, p.1.

V. Gangadharan Pillai, The Public: Sector in Kerala : Administrative Problers, 1980, p.1.

Broadcast talk given by Sir. C.P. Ramaswamy Iyer K.C.1.E on Travancore from Bombay Radio on Sept. 27, 1936 c i t e d in T.K. Velupillai, Travancore State Manuel, p.543.

Government of Kerala, Report of High Level Corrittee on Industry Trade and Power, Vol. 1, General Report on Industries, 1984, p.88.

K. R. Rajan, Keralathile Vyavasayangal (Malayalam), Vol. I, 1987, p.2.

Kerala State Large and Hediw Industries Directory, 1967, pp. 12-13.

Raman Mahadevan, 'Industrial Entrepreneurship in Princely Travancore: 1930-47', In The South Indian Economy: Agrarian Change, Industrial Structure and State-Policy, c 1914-1947, Ed. by Sabyasachi Bhattacharya, ... st. al., 1991, p.160.

Proceedings of the Srimoolam Assembly, 1945, p.43. cited in J. Ramesh Chandra D a s , 'Sir C.P. and Industrialization of Travancore', Journal of Kerala Studies, March-June 1979, p.222.

Mary Joseph, The Economics of C h d c a l Industry in Kerala, (Ph.D. thesis-unpublished), p. 60.

Government of Travancore-Cochin, Administrative R e p o r t 1948- 49, 1950, p.76-77, n.21, p.6.

Vilma John, 'Basel missanum sambathika Navodhanavum Malabari18 Vijanakairali (Malayalam), Vol. 24, No.5. May 1993, p.360.

Jaiprakash Raghaviah, Basel Hission Industries in i(al€abar and South Canara 1834-1914, 1990, p.28.

K. K. N. Kurup, 'Basel Missanum Malabarile Samohya Privarthanavum8, Vijnakairali, Vol. 25, No.5, May 1993, p.357 (Malayalam).

P.K. Gopakasrishnan, Notes Twards the Formation of Kerala8s Sixth Five Year Plan, 1978, p.161.

Government of Kerala, Report of the Stearing Committee on Industry and Hining, 1990, p.11.

'Industry Policy statement of Government of Rerala 1967*, 1 . cited in n.21, p.10.

Economic Review, 1994, p.109.