CENTRE FOR SUSTAINABLE PRODUCTION AND CONSUMPTION (C-SPAC) 

GLOBALISATION AND THE INFORMAL SECTOR  

THE EVENTS

Background and Objective: 

Consumer Unity & Trust Society (CUTS) has taken up a project supported by Oxfam GB’s India Office to organise advocacy dialogue and generate awareness among the target group on impact of globalisation and economic liberalisation on Indian informal sector. Oxfam has taken up this project as a part of their “Make Trade Fair” campaign. The key objectives of holding these dialogues are:

• Bringing different stakeholders active in informal sectors, home-based production and cottage industries into dialogues platforms for exchanging information and views on opportunities and challenges facing the sector in the era of globalisation and economic liberalisation.

• Disseminating balanced views on globalisation and economic liberalisation to the representatives of these sectors.

• Creating an enabling environment for policy advocacy so that these sectors are able to take challenges and avail opportunities arising out of globalisation and economic liberalisation.

• Developing a long-term work programme with these sector as the target group and for facilitating the process of getting benefits out of globalisation and economic liberalisation and understanding safety nets for taking risks in order to avail opportunities as well as insulate from threats.

• Ensuring fair trade environment through advocating effective implementation of existing trade rules to percolate the benefits of free trade to the marginalised informal sector producers in developing countries.

Regional Workshop: 

The project was started a virtuous beginning with Launch Meeting in New Delhi on 9^th June, 2003. Subsequently a series of four regional workshops are being organised by CUTS with support from Oxfam GB’s India office and in collaboration with regional partners at Bhubaneswar (Orissa), Hyderabad (Andhra Pradesh), Lucknow (Uttar Pradesh) and Ahmedabad (Gujrat). Partner organisations of these workshops are respectively Regional Centre for Development Cooperation (RCDC), Bhubaneswar; Centre for Resource Education (CRE), Hyderabad; Network of Entrepreneurship & Human Development (NEED), Lucknow and International Centre for Entrepreneurship & Career Development (ICECD), Ahmedabad.  

For better concentration and meticulous working one particular item under the broad aegis of informal sector has been identified for each workshop. The specific sector for Hyderabad and Ahmedabad workshops is handloom. Sectors identified for Bhubaneswar and Lucknow are respectively Non-timber Forest product (NTFP) and Handicraft. 

Participants:

Each workshop witnessed a wide range of participation consisting of producer groups, their associations, community-based organisations and NGOs working among these groups, government officials, academicians, elected representatives of local self-government institutions, media persons, developmental agencies etc. The encouraging participation and interaction from the producer group, specially women entrepreneurs helped to frame up very purposeful and fruitful policy recommendations in all the workshops.
 

The Competitiveness of Indian Informal Sector and Cottage Industries in the Era of Globalisation and Economic Liberalisation

Report of New Delhi Seminar held on 9^thJune 2003 

Anand K. Das, Programme Coordinator, Market Access Programme, Oxfam GB’s India Office
Ms. Mita Dutta, Coordinator, CUTS, Calcutta 

The Seminar began with Ms Mita Dutta welcoming all participants present. She briefed the audience on CUTS’ history, its present activities and its centres. She emphasised that for the Indian economy to achieve economic equality and social justice, development of the informal sector is crucial. Institutional and infrastructure support for technological upgradation and market penetration of informal sector goods, is important in this era of globalisation and economic liberalisation. There is an urgent need to look into the policies that impact this sector, with the view of improving its competitiveness and long-term prospects for high growth. It is found that efforts towards this end lack cogent actions. From this rationale, stems the key objectives of the GELIS project, which are: 

• Bringing different stakeholders in the informal sector into dialogues for exchanging information and views of the opportunities and challenges faced by this sector in this era of globalisation.
• Disseminate balanced views on globalisation and economic liberalisation to the representatives of this sector.
• Create an enabling environment for policy advocacy.
• Develop a long-term work programme with the informal sector as the target group.

Anand K Das gave a brief introduction of OXFAM GB in India and its activities. He said that one of the objectives of the sustainable livelihood programme and the OXFAM Make Trade Fair campaign is to work for the benefit of small producers. The informal sector, he said, has huge potential to bring benefits to the poor. Only too often, issues concerning small producers are not taken into account by policymakers.

Discussions, he said, are mostly centred on large industries. The voice of the small producers, home based production and cottage industries are often missed. The objective of this seminar is to get the crucial issues on board and to obtain inputs from all present to make the project a success. 

One of the key objectives of the launch seminar, said Ms. Dutta, was to develop a proper regional agenda. On this note she welcomed and requested all the regional partners and other participants attending the seminar to give brief introduction of them. The following are the regional partners to the project:
 

·         Mr. Binu Zachariah,

International Centre for Entrepreneurship & Career Development (ICECD), Gujrat

·         Mr. Nirmalendu Jyotishi,

Regional Centre for Development Cooperation (RCDC), Orissa

·         Mr. D. Narasimha Reddy,

Centre for Resource Education (CRE), Andhra Pradesh

·         Mr. Anil K Singh,

Network of Entrepreneurship & Human Development (NEED), Uttar Pradesh

Prof. B.B. Bhattacharya, Director, Institute of Economic Growth, New Delhi
Prof. T.P. Bhat, Institute for Studies in Industrial Development, New Delhi 

Prof. Bhatttacharya started by raising the issue of massive job losses in Southeast Asian countries as a result of the East Asian Financial Crisis. The economies of Southeast Asia, he said, faced traumatic changes due to severe adjustments in their macroeconomic policies. It was the drastic exchange rate changes in Malaysia, for example, that affected jobs. Further, it was the poor and not the industrialists that were affected by these policy changes and who were victim to increasing unemployment. 

This, he said, and other such examples, bring to light the fact that it is the poor and the vulnerable that bear the cost of liberalisation most, while the benefits are mostly reaped by the rich. This imbalance, he said, is reflected clearly in the existent multilateral trading system.  

Bringing in the dimension of multilateral trade rules, he said that the World Trade Organisation (WTO) was flawed in making two assumptions: firstly, that as soon as you open trade, trade will boom, increase incomes and further production. Secondly, that globalisation is needed for improving efficiency. The WTO espouses the globalisation of capital, when production is an interaction of both capital and labour. In reality, developing countries are characterised by low capital bases and a host of other institutional constraints that make it difficult for them to derive equal benefits from the multilateral trading system, as compared to developed countries. All this has given rise to a worldwide backlash and call for a rethinking of the way multilateral trade rules are formulated and implemented. The need for ‘globalisation with a human face’ is being increasingly recognised by industry associations and policymakers. A new thinking is evolving which addresses a pertinent question: What needs to be done in order to ensure that the benefits of globalisation percolate down to the poor?   

Bhattacharya brought to fore the pertinent issue that developing countries that depend on foreign capital to cover their trade deficit, cannot be choosers at the multilateral trading front. Efforts need to be made at the domestic level to improve the institutional infrastructure in developing countries, including developing an effective regulatory structure, modernisation of production, improving social and human development etc. in order to derive maximum benefits from international trade. In India, the labour laws between the formal and informal sector need to be more even. Further, production is not the only necessary component for industrial growth. It is equally important to take policy measures to increase the purchasing power of consumers (buyers). 

“The bulk of foreign exchange in India is earned from the informal sector,” said Bhattacharya. India, he said, should exploit its grossly under utilised skilled scientific manpower, which is largely unorganised. Further, he pointed out that the Government should adopt a selective approach, by investing resources in those sectors that have a competitive advantage in the international market. 

He ended by saying that it is crucial for non-governmental sectors to bring about grassroot level awareness, educating the citizens about what is the right issue and the right leader to vote for, in order to promote the right kind of policymaking. 

Prof. Bhat made an interesting presentation on the impact of economic liberalisation on the Indian informal sector, in the context of ongoing changes in the world economy. He started by defining the globalisation as the increasing integration of local and national economies with the world economy. The process of globalisation, he said, involves gradual removal of trade and investment barriers between nations, with the aim to achieve economic efficiency through competitiveness, while seeking broader objectives of socio-economic development. 

Liberalisation, according to him, means simplifying business procedures, namely trade and investment and doing away with licenses, permits and regulations. “Government acts as a facilitator and not an interventionist in conducting business”, he emphasised.  

He defined the informal sector as highly heterogeneous, encompassing production units of different features and in a wide range of economic activities as well people (workers, producers and employers), working or producing under many different types’ employment relations and production arrangements. According to him, due to its multiple dimensions, it is difficult to describe the informal sector. 

Some interesting facts of the India informal sector emerged from Bhat’s presentation. These are: 

• Informal sector is growing rapidly in India due to close down of state enterprises or privatisation.  As a result, there is a rise in unemployment in the organised sector. The proportion of the active population in the informal sector (excluding agriculture) increased from 75% in 1990 to 94% in 2000. 92% total employment in India is from the informal sector. 75% of agriculture, 60% of construction and 75% of trade is in this sector. 60-65% of the output comes from the informal sector.

• There are two important reasons at the global level for enlargement of the informal sector:
  • Global economic crisis of 1997-99
  • Method of organising production by transnational enterprises
     
• In the foreseeable future, one can expect more deregulation and further growth of the informal sector.

• As far as production process goes, there are two segments in the informal sector
  • One segment which directly produces and meets consumers requirements and
  • Another one depends on the large sector, mainly downstream industries
     
• The dependent informal sector buys inputs from the organised sector and sells its output back. This is about 27% of the output of the units in the informal sector
• Rests of the informal sector units directly sell their output in the market. These units do not get any promotional incentives like subsidies etc
• Even in the informal sectors branded goods may gain and nonbranded goods may suffer due to consumers preferences for branded products in the recent times.
• Removal of regulatory restrictions will reduce transactional costs from the informal sector. This is a positive gain. At the same time, denial of promotional benefits will negatively affect them.
• On the other hand, removal of restrictions and denial of promotional benefits will not affect units in the informal sector. Therefore, their efficiency would remain intact.
• In this situation, informal sector efficiency will be critical for the survival of the formal sector due to their dependence
• Citing the example of the 1997-99 East Asian crises, he said that it destroyed 24 million jobs in East Asia alone, mostly in the industrial sector. For these jobless, in the absence of the social safety nets, the informal sector was the only option. The issue for India is the need to put in place a mechanism to protect the unprotected in the informal sector.
• Social safety net should be developed to give support to informal sector. The formal sector should be partners in their own interest.

Bhat concluded by saying that globalisation of industry is irreversible. It is driven by trade and investment liberalisation, rapid technological progress, new management systems, new global rules and regulations. India needs to be part of it and there is no option. However, the negative impact of globalisation maybe the exclusion of local producers from the benefits and the exclusion of disadvantaged workers, social groups and women.

Competitive efficiency is forcing greater flexibility in the use of labour. This means loss of secure jobs and employment in the informal sector. The corrective measures needed are:

• Enhancement of inter linkage between formal and informal sectors
• Increasing technological efficiency of production in the informal sector
• Organise informal sector labour and provide social safety nets
• Evolve economic policies to give preferential treatment and access to health and education to the socially disadvantaged
  groups.

D.S.Negi, General Manager, Small Industries Development Bank of India, New Delhi 

D.S.Negi through his discourse on the role of Small Industries Development Bank of India (SIDBI) in providing finance to the informal sector, brought to light the role informal lending can play in meeting the credit needs of this growing informal sector in India.  

SIDBI, he said, which is an offshoot of Industrial Development Bank of India, was created in 1990 with the mandate of financing, developing and promoting the small-scale industries sector in India.  SIDBI, is more of an ‘enabler’ than a promoter of small industries, which includes the informal sector. Income generation in the informal sector is through diverse activities, which largely involve home-based production. Given this and the proportion of the population that engages in informal sector activity in India, their credit needs, if estimated, can be incredibly high. 

According to Negi, the small industries growth relative to large-scale industries growth has always been higher. However, the poverty figures in India are staggering. There are some 400 million rural poor, most of whom are women. It is the women, in these diverse societies, who predominantly undertake economic activity. Despite this, their existence is not ‘visualised’. For rural poor there are poverty alleviation programmes like the Integrated Rural Development Programme and for the urban poor there are several employment generation schemes. However the impact of these measures on poverty in India has hardly visible. The credit channels, particularly, to the informal sector activities is still largely inadequate. 

Negi raised a crucial point that in spite of a network of 50,000 commercial bank branches and 14,000 rural bank branches all over India and small branches in the remotest of areas in the country, the informal sector is still starved of finances. In this context, he said, that the problem is that bankers want to lend but the small borrowers often do not comply with the various terms and conditions of commercial bank lending, like proof of creditworthiness to their name etc. A way out has to be found. 

SIDBI, he said has experimented lending ‘informally’ to the informal sector. SIDBI’s experience shows that the credit needs of the rural poor are large, and mostly composite in nature. For example, finances are required for part direct consumption, partly to build a house and partly for raw materials to be used in production. Credit demands of this nature make lending complicated for bankers.  

The trend adopted by SIDBI for informal bank lending involves, as a first step, the identification of well-accredited non-governmental organisations that understand the ethos of the informal sector environment best. SIDBI then prepares these selected NGOs with the capacity to provide micro-finance to the informal sector. Micro-credit financing involves little paperwork and SIDBI has a well-developed scheme for rating NGOs. Today, 150 NGOs are accredited to SIDBI and the micro-credit approvals obtained by SIDBI since 1994 is more than Rs. 112cr. 

SIDBI engages in two types of funding activities: preparing NGOs with the capacity to provide credit as micro-financing institutions, or providing them with grants, which are apportioned from their profits every year, for lending to the informal sector.  

The micro-credit approvals obtained by SIDBI since 1994 has been more than 112 crore rupees, though the disbursements have been little less. In SIDBI’s experience, the credit is returned with a default rate of less than one per cent, most of which have been minor delays in repayment rather than there being a chronic default.  

According to Negi, as of 2003, approximately 7,20,000 beneficiaries are assisted by SIDBI.  Through formal channels for lending, this reach would have been difficult. The Government of India, he said, has appreciated SIDBI’s efforts and achievement.  

Negi ended by reiterating the central message of his discussion, “ Formal lending has given way to informal lending”. 

Discussion Points from All Participants:

Negi’s presentation generated active discussion from the audience. The key points raised were:

• When asked if SIDBI’s lending activities, as described by him, are an ‘informal’ way of financing or an ‘indirect’ way, Negi answered that it was both.
• When asked the crucial question of how clients are chosen, or how their credibility is obtained, Negi said that it was a question of trust. A large part of the informal sector borrowing is in the form of community borrowing, which automatically is more credible.
• Another crucial point was raised from the participants that NGOs can be subject to a lot of political influence. In this regard, how does SIDBI establish the credibility of NGOs?
• When asked why local moneylenders still dominate, Negi responded by saying that moneylenders have been operating for ages. They however engage in a lot of arm-twisting which needs to be addressed.

Shyam S Sharma, President, Fair Trade Foundation
Samar Varma, OXFAM GB’s India Office 

Shyam Sharma depicted the bleak scenario of wage employment wherein the informal small-scale sector, based mostly on home-based jobs, acts as a viable alternative to absorb rapidly increasing workforce. The sector provides an essential and automatic training ground for developing the entrepreneurial skills that are essential to further employment and production.  

Defining the informal sector he mentioned that the sector is not supported or regulated by the government and is compelled by circumstances to operate outside the framework of law. He explained that the term home-based, has generally been used, in reference to piece-rate workers who complete specific steps in the production process, for an employer or sub-contractor from their homes.  They work at home and look independent, but in reality they are mostly dependent on employers and intermediaries for work.  He highlighted the meagre earning of home-based producers, which are lower than other workers and often less than the minimum wages.  

The constraints faced by the sector ranges from no or little access to organised markets, formal credit institutions to non-availability of formal education and training facilities. He then turned the spotlight of his discussion on the plight of informal sector workers having no social protection, labour legislation and protective measures at the work place. They are generally working in appalling and unhealthy conditions. Children are employed in hazardous labour and women are condemned to inequality. 

The presentation of Shyam Sharma penetrated into the lacking in periodic review process of the policies and schemes as also ineffective functioning of the existing provisions by the government. He also referred to the adverse impact on informal sector due to withdrawal of some benefits in the last budget as a result of difficult taxation policies. He emphasised the need to consider the ground realities so that the artisans and other players in the sector can take real advantage. The government and government sponsored organisations like Apex Bodies, State Emporia etc. can play a major role in accessing larger domestic markets for the crafts sector. 

Enunciating the role of government he pointed out that government policies should facilitate the availability of raw material at reasonable costs, encourage technical innovation to facilitate efficient and quality production and evolve mechanisms for less cumbersome inter-state movement of handicrafts and textiles.  He stressed the need for more government schemes to take advantage of the design input provided by the trained designers and government sponsored design institutes. Against the backdrop of changing socio-economic scenario, he proposed government consultation with various NGOs, private businesses, designers, management persons, to assess the requirements of the market and the limitations and needs of the artisans. This would help to formulate policies and execute plans to strengthen the informal home-based sector.  

The kingpin of his presentation was fair trade factor in market access and producers' development. He put special emphasis to develop the production process professionally and also to make it marketable and attractive in the world market.  He mentioned a number of producers' organisations in organising the grassroots to make them capable practically and professionally.  A large number of home-based producers, although comparatively still a small section, were trained to compete successfully in the fair trade market. At this point, he appreciated the commendable role of Oxfam GB in India and Oxfam worldwide, to enable the producers to compete in the market on one side and to make the fair trade market accessible to them on the other side.  He also narrated the role of the Fair Trade Forum of India, which is part of Oxfam’s BIG NOISE campaign and other such useful activities to make the world fairer. 

He eloquently explained the issue of human dignity and its linkage with fair trade practices. The fair trade in the world has supported millions of grassroots, engaged in the home-based informal sector of production, mainly in fields of handicrafts and commodities. He stated that the concept and practice of buying only ethically produced products, with a motive of human development, is catching fast in the west. For that the fair trade is in need of a better visibility and advocacy & lobbying of its ethically clean products made in dignity for the development of grassroots. 

Referring to the problem of market access, he mentioned that the home-based products are mainly being sold through the world shops now spread all over the world.  But still the number of world shops is very limited and the access of fair trade products to the mainstream global, regional and local markets is of utmost importance. His presentation ended with the clarion call to make a better liveable world for all with producers' development, human achievement and national advancement.  

Samar Verma thanked CUTS for inviting him to the conference and also acknowledged that he was in the presence of a number of experienced people. 

• Began his session with a brief background on ‘Fair trade’ or ‘alternate trade’. He specifically addressed issues related to market access with the fair trade perspective.
• Discussed the issues related to the Informal sectors/cottage industries and home-based industries. He reiterated the importance of these sectors and mentioned that because of these sectors, employment for a large no of people has been created. These are people who have not been absorbed by the organised sector. Today these sectors are faced with great challenges.
• Fair Trade today is faced with several dilemmas, such as:
  1. Increased poverty,
  2. Growing marginalisation of different margins of society.

This is largely due to the trade rules that exist today which are skewed more towards the Rich countries.

·         Cited examples of the IT sector and the handlooms and handicrafts industry

·         The IT sector began as an informal sector and today is one of the largest sectors of India. The reason for its development is largely due to absence of regulation. On several cases the failure of the informal sector has been assumed to be due to lack of regulation. But the mentioned example makes it quite clear that an informal sector can do better without regulations also. On a lighter note he said that by asking for regulation people are giving the chance to the government to increase work of agencies and NGO’s like those present in the conference, who have to struggle for people’s causes.

• Globalisation and Economic Liberalisation: Globalisation, these topics were unheard of ten years ago. Then why is there such a huge hue and cry about them for the last few years? It is because the ratio of globalisation has increased dramatically in the 90’s. The increase is due to the global commodity chain and also due to the improvements in technology. The driver of the global commodity chain is none other than the buyer himself. Hence more emphasis needs to be given to address problems faced by buyers.

• It is important for people in the informal sector to explore the international markets. They should not restrict themselves to the domestic markets alone. This will largely depend on the quality of products produced and thus it has to be ensured that they are produced in line with export quality.
• The barrier between the domestic and international trade is fast crumbling, it is the ideal time for this sector to use this to their advantage. With the advent of new technologies such as Internet it is easier, cheaper and faster for one to carry on business internationally. But one has to realise that the products should be of high quality as competition at the international market as well as  in domestic market is increasing.
• Market Access: We all know that all international trade rules are rigged and that everyone present for the session were well aware of the plethora of the problems with international trade. The quotas that have been sanctioned will go away soon but the tariffs that have been decided will remain. The tariff barriers on the imports from India will crumble soon and this will greatly affect trade. Some of the issues that will be used for this are as follows:

1. Environment standards
2. Child labour etc.

These problems will contribute to this phenomenon and this will greatly affect people working for the informal sector.

• On a concluding note he said that the industry should provide an enabling platform to achieve competitiveness, especially for sectors such as handlooms and handicrafts. These sectors can be popularised by devising proper marketing strategies to market these product and make consumers aware of their utility.

He gave the example of the handloom and the handicrafts sector: the products manufactured by these sectors are usually considered cheap because poor people make it.

• With the help of the right marketing strategy one can market these products very well. It is a well-known fact that such handmade products are well appreciated in the overseas market. Hence such knowledge should be used to market the products. He said that it is the responsibility of the NGO’s and the people present here to bring about change in these sectors, and that they should not wait for the government and the authorities to do so.

• Oxfam GB and partner agencies intend to take up the cause of fair trade, which legitimately belongs to every individual. The rules that prevail today will be changed with the help of Advocacy and Capacity Building programmes.

Discussion from Participants:
 

Greater part of this session involved vibrant interaction and various queries from the participants. Some of the comments of the participants were: 

• The informal sector is badly in need of a marketing strategy, which will help them grow and develop faster.

• The quality of goods produced by these sectors has to be regularised. The quality of goods for export is much more superior to those produced for the domestic market. This difference in quality should not prevail and that all products should be produced of the best quality, this will help easy entry into international markets.

• Competitiveness is a myth. Addressing this issue the speakers opined that globalisation has increased competitiveness. Due to the presence of global commodity chain and the improvements in technology it is possible today to generate products in large and international scale by coordinating from different places using technologies such as networking etc.

• The issue of fair price for the informal sector products needs to be addressed with respect to market access in domestic economy as well. The small craftsmen of the informal sector are hardly getting actual return of their products, which stands as an institutional problem of the sector. Such problems urgently need proper redressal measures.

• Fair trade also implies ensuring dignity in the production process of the home-based informal sector.  There is need to generate awareness among the workers of this sector regarding the rules of fair trade and to sensitise them about the minimum standard of working conditions.

• Question rose on why the agricultural sector was not getting due importance. While turmeric production exhibited growth for the last 20 years trade of the same did not show any upward trend.

Finally Mita Dutta, CUTS delivered the vote of thanks.

  Regional Workshop on Non Timber Forest Product

17th and 18th July 2003 at Bhubaneswar

Sri Naveen Patnaik, Hon’ble Chief Minister of Orissa
Sanjoy Patnaik, Secretary, RCDC
Prof. Nabinananda Sen
Dasarathi Das, Acting Programme Manager, Bhubaneswar Oxfam GB’s India Office
Ms. Dalia Dey, CUTS 

In the beginning the Guest of Honour, Hon’ble Chief Minister of Orissa, Sri Naveen Patnaik lit the light for the two- day workshop. The welcome address by Sanjay Patnaik reflected his serious concern over the distress of primary NTFP collectors, mainly comprising the tribal women. He expressed good wishes for conducting a successful workshop and coming out with dynamic recommendations. 

Earlier Sanjoy Patnaik welcomed all participants and honourable resource persons. All participants were invited to introduce themselves. Apart from the representatives of CUTS, Oxfam and RCDC, this self-introductory part revealed a wide range of participation consisting of target beneficiaries of the NTFP sector, their associations, community-based organisations working among these groups, government officials, elected representatives of local self-government institutions, media persons, developmental agencies, etc. 

In his inaugural address, Hon’ble Chief Minister mentioned about the importance of NTFP in the livelihood of the tribals and other forest dwellers. He stressed that NTFP is a part of the socio-cultural life of tribal people who mainly maintain a symbiotic relationship with the forest and forest-based products. Considering the strength of the issue, his government took necessary steps after resuming power to decentralise the management of NTFP in Orissa and open up avenues for economic upliftment of tribal. 

Prof. Nabinananda Sen, representing CUTS, delivered the Keynote Address. He analysed the impact and implication of globalisation on NTFP trade, particularly in the context of multistakeholders encompassing producers, consumers, policy makers and indigenous groups. Explaining the terms globalisation and economic liberalisation, he emphasised that implication of globalisation is not clear to many of the stakeholders for which rigorous campaigning is of urgent need. His speech also enunciated Trade Related Intellectual Property Rights (TRIPs), Convention on Biological Diversity (CBD). He drew special attention to market access provisions of WTO and how developed countries are restricting free trade movement from developing nations using various non-trade barriers. Oxfam Make Trade Fair campaign had also been highlighted in the speech. 

Dasarathi Das in a short speech highlighted the rationale of the project and current activities of his organisation on poverty and livelihood issues initiatives that Oxfam is taking in Orissa. He mentioned that Oxfam is initiating the Fair Trade movement to benefit the marginalised communities. Communication gap between major stakeholders, he believed, had been solely responsible for the growing economic imbalances in the society. 

Ms. Dalia Dey from CUTS presented a brief overview depicting the objectives of the project and delineated the role and activities of CUTS in promoting Consumer Sovereignty based on social justice and economic equality within and across borders. 

The Inaugural Session ended with a Vote of Thanks by Ms. Anindita Tripathi from RCDC. 

Ardhendu Chatterjee, Service Centre, Calcutta
Rohini K Sahu, Srusti, Bhubaneswar
Ms. Sumita Sindhi, Freelance Researcher, Sunabeda
Chairperson: Sri Saroj Kumar Patnaik, Retired Additional PCCF 

Ardhendu Chatterjee focused on the wide diversity and rich traditional knowledge of medicinal plants by the indigenous people in the country. He identified the following direct links between globalisation and medicinal plants: 

·        Demand for use of medicinal species in the preparation of drugs is declining and its use in cosmetics is increasing.

·        Indian value system seems to be against the traditional medicinal system but now demand is increasing for traditional medicines.

·        Degradation of forest is on the rise and important medicinal species would become extinct, as the current development model itself is the reason for deforestation.

·        The major threat is from the patent laws – earlier only the process was being patented but now efforts are on to patent the products for about 20 years so that no one can do any further research and development on the product.

·        The Indian scientists in US are the critical players in patenting the products as well as process as they understand the availability and use of the products in India. 

He strongly recommended a vigorous campaign against proposed conversion of patenting provision from process patent to product patent. He suggested that NGOs and other civil society actors should initiate wider debate on patenting of living organisms and building up public opinion to register local traditional health practices. 

R K Sahu brought to the fore the transition from community knowledge system to property based regime through the introduction of Intellectual Property Rights (IPRs). The focus areas of his speech were types of protections, micro patents and their relevance, new patent Rule 2003, drainage of local knowledge due to promotion of capitalist and corporate interests and relevance of community knowledge and scope for protection. 

Sumita Sindhi delved deep into the issues of NTFP certification. She proposed the requirement of thorough certification process for the complete cycle from harvesting to marketing of NTFP through ‘chain of custody’ approach. This approach would be promoted through vertical linkages between the stakeholders. She advocated for the need of certification of NTFP in order to get more premium from the international markets. Referring to the positive impact of certification of defined forest area she stated that it has improved forest management systems, environmental provisions and skills She suggested that the criteria for such certification could be fair trade, organic production and sustainable management. She mentioned that 60 percent of the forest revenues and 70 percent of employment from forestry sector come from NTFP. NTFP provide 4-6 month of livelihood source to the poor forest dwellers. Elucidating the various issues and challenges in NTFP certification she focused on legal bottlenecks, low consumer consciousness and lack of experience on NTFP certification procedure in India. She emphasised the need to conduct research on NTFP silviculture, genetics and biochemistry and building institutional capacity i.e. co-operatives, Joint Forest Management committee.  

A K Mohapatra, Managing Director, Tribal Development Cooperative Corporation, Bhubaneswar
G Raju, Gram Mooligai, Bangalore
A K Patnaik, Special Secretary, Forest Department, Government of Orissa
R K Agarwal, Natural Remedies, Bangalore
Chairperson: Ram Vir Singh, IFS, Convener, Poverty Task Force 

The participation of government officials from the Department of forest added a remarkable flair to the proceedings of this session.        

A K Mohapatra mentioned that among developing countries, India is in a better position to avail of the opportunities of globalisation in NTFP trading. He urged the need to promote the national market first and then think of global market. Till now it is a trader driven market. He anticipated that the policies would become people/ trade friendly if globalisation happens but the support prices and subsidy will be removed. According to him high competition will boost up quality consciousness among the producers. 

G Raju made slide presentation on Globalisation and Changing Scenario in Medicinal Plants. He mentioned that there are about 8000 medicinal plants in India. The business of herbal products is about Rs. 4000cr, which is growing at the rate of 30 per cent. The export of medicinal species is to the tune of Rs. 400cr annually, which is next to IT and Biotechnology. He projected an in depth analysis of positive and negative impact of globalisation on herbal NTFP. He made a mention about the Bio-diversity act, which has imposed a lot of restriction of the harvesting and trading of medicinal species. He proposed to build up collective effort by NGOs working in NTFP sector and formulate very precise actions to promote NTFP trading within a stipulated cost limit. He anticipated that along with globalisation fair trade would be flourished, cultivation of some medicinal plants would be stepped up and buy back arrangements would become possible. However, he was sceptical about the effect of commercialisation, role of small cultivators and forest dwellers, rights of the forest dwellers in the changing situation. 

A K Patnaik described the link between biodiversity and sustainability of forest management. His presentation touched upon the issues of medicinal plant strategies and priorities, objectives and opportunities of national policy on Indian system of medicines, perceived threats of exploitation by intermediaries and extinction of rare species in herbal NTFP trading. He also said that scope and opportunities exist for medicinal plant linked tourism. He put special emphasis on the strategy for development of medicinal plant sector in Orissa through SMPB 2002. 

The kingpin of the discussion by R K Agarwal was impact of globalisation on medicinal plants with special emphasis on the problems faced by the primary collectors, traders and industry. He made a detailed presentation on how to ensure the quality parameters in NTFP harvesting and processing. He emphasized that what needs to be done is to promote and establish competitive markets in NTFP. His company has developed quality standard for 120 products and he expressed his intention of building up the capacity of the primary collectors on how to have quality production of NTFP. He stressed the need to provide proper training of sustainable forest management to primary collectors. He posed the problem faced by industry in getting desired quality of raw material for which more emphasis need to be given to quality control of NTFP products. He proposed that to avoid bio piracy by any other country, it will be wise to develop a database of the wealth of traditional knowledge and put it in electronic media so that the patent offices of other countries will be careful while granting any patent. 

R.V. Singh concluded the session by expressing appreciation to R.K. Agarwal and desired that the participants should carry the indication and exposure of him with a promising spirit. New opportunities are coming up. If the producers start learning how to process the NTFP products and be quality conscious, then definitely the future will be bright.

Ms. Vidya Das, Agragamee and Ama Sangathan
Nihar Ranjan Misra, Bana Banijya Samiti  
Biswajit Pande, Srusti  

Vidya Das gave a picture of tribal women’s initiative in Kashipur to procure, process and sell NTFP. She raised the legal and administrative bottlenecks in processing and marketing of NTFP in Orissa. She alleged that middlemen are benefited much in the process of NTFP marketing. She suggested that the government agencies like TDCC should provide better marketing linkages to the primary collectors. With proper processing techniques the products by illiterate tribal women can hold a better market-standard. She raised a crucial point of considering NTFP not only from the angle of commercialisation but also from symbiosis. 

Biswajit Padhi made a presentation on their work for creating alternatives at the local level to deal with NTFP. He explained the initiatives of SHGs to make Pachan Amla, Amla facial and also Triphala, which clearly brought to the fore the aspect of cost benefit. He explained that if the market can be established then there would be a substantial margin from the local value addition and enterprise development. He emphasised on the local use of NTFP and creation of alternatives for local consumption. He called for a synergic approach from all sectors for a successful outcome. 

The deliberation of Nihar Ranjan Mishra focused more on the adverse impact of globalisation. He mentioned that because of globalisation the country is losing economic sovereignty and now more emphasis is given on promotion of corporate/capitalist interests. On this backdrop cooperatives are being promoted to collect, process and market NTFP emphasising economic democratisation. The cooperatives have taken up the challenge of structuring the local market and trade. 

The daylong session ended with the vote of thanks by Sanjay Patnaik.

The second day of the workshop started with a vibrant video presentation by Rohini Sahu. The presentation traversed through a number of grassroot level examples drawn from different rural areas of the country. He explained how simple and cost-effective technological innovations and improvisations dovetailed to the existing rich traditional knowledge of the farmers and their farming techniques have been user-friendlier and have significantly enhanced productivity. Many such experiments by the scientists and technologists of the IITs and other institutions with the cooperation of the farmers have already been patented. 

There was presentation from women representatives of target group and Self Help Groups working in the NTFP sector. This was a vibrant session with the grassroots experiences narrated by the practitioners themselves. The tribal and the NGO representatives who work in the field were in the fore to express their reactions. The emerging crisis faced by the sector as came out of their deliberation comprised tedious job of collecting raw material and processing, not getting fair prices because of the exploitation by middlemen, hurdles in marketing, non availability of timely and adequate finance. Most of them mentioned that after they have been united, they are able to earn significantly higher amounts and this also enabled them to enrich the supply base to the marketing channel. Demand for more facilities and support from government for marketing the tribal products also have been stressed. 

All the participants were then divided into four groups for Group Discussion on selected thematic areas. Post-lunch sessions covered the group presentations.

Prof. Nabinananda Sen
Mr. Bijayshree Routray, Hon’ble Minister, Forests Orissa  
Vinod Kumar, Director Commercial, OFDC 

Recommendations:

The key issues and recommendations that came out of the two-day workshop were presented by Prof. Nabinananda Sen. The focal points were: 

1.      Rules and regulations are to be developed for sustainable forest management and potential assessment of NTFP.

2.      Protection, management and usufruct rights of NTFP are to be handed over to the village communities to provide livelihood security.

3.      NTFP trading in larger market to be encouraged only after meeting the local need.

4.      Infrastructure base to be developed for sharing of technical knowledge and support to the primary collectors’ organisation.

5.      Appropriate legal and operative framework to be created by the government for primary collectors’ organisations to procure, process and market the NTFP.

6.      State has to play an important role in promoting marketing opportunities of NTFP products and exploring market for non-traditional products.

7.      Proper recognition of federation model by the government in marketing of NTFP.

8.      Long term policy on NTFP need to be developed by the government, which will take care of quality parameters and sustainable management of forest and NTFP.

9.      Both the government agencies and cooperatives should announce the requirement of different produces well before the NTFP season.

10.  OFDC, TDCC, ORMAS/DSMS will not only function as trading organisation, but they would also work as facilitating organisation and they should become accountable to the cooperatives and primary collectors’ organisations.

11.  Government to create facilitating environment for Panchyat Raj Institutions (PRIs) to exercise their ownership control over NTFP.

12.  NGOs should play vital role in ensuring proper fixation of prices by the government and building up capacities of Panchyat Raj Institutions (PRIs).

13.  Government should not promote plantation/ monoculture and should not concentrate only on timber based forest management.

14.  Civil societies to pressurise the government to tune the policies and practices concerning NTFP to reality.

15.  Civil societies need to build up public opinion in favour of Community initiative in Forest Management (CFM).

16.  Financial institutions to support enterprise development based on NTFP trading.

17.  Role of media to disseminate information, to promote publicity and advocacy for the promotion and growth of NTFP trading activities.

18.  Civil societies should play an important role for generating consumer awareness on use and/or utility of NTFP and its superiority over substitutes.

Vinod Kumar advocated the issues of greater consumer demand for agro produce, greater productivity level, increasing demand for certification, popularisation of success stories and environmental audit and media coverage.  

Honb’le Forest Minister of Orissa, Sri Bijayshri Routray chaired the Valedictory Session. He put forward a comprehensive analysis of current status and emerging trends of NTFP trading in Orissa against the backdrop of globalisation and economic liberalisation. He raised the issues of increasing importance of the forest, encouraging women participation, operation of JFM with dynamic objectives and need for ecological awareness campaigns. 

Vote of thanks by Nirmalendu Jyotishi, RCDC marked formal conclusion of the two-day workshop.

 Regional Workshop on Handloom

28th and 29th July 2003 at Hyderabad

D. Narasimha Reddy, Project Coordinator, CHIP
Bipul Chatterjee, Director, CUTS, Jaipur
G. Venkata Swamy, Former Union Minister for Textiles
B. V. Subba Rao, President, CRE, Hyderabad 

D. Narasimha Reddy welcomed the participants of the workshop and explained the objectives of the workshop. He further explained the schedule for the two days.  

Bipul Chatterjee referred to the Tenth Five Year Plan which had recognised the importance of the Indian informal sector. However, there is no budget allocation to match to this recognition. He stated that though WTO is aiming to make trade free, the rules framed for this to happen are being interpreted to suit the interests of a few developed countries. To obviate this, a number of initiatives have been taken up. Oxfam has initiated Make Trade Fair campaign with a belief that international trade can help in poverty alleviation and sustainable development. He projected the contribution of handloom sector in providing large employment to people in India. He mentioned when the textile quota regime ends on 31^st December, 2004, India needs to take advantage by linking up organic cotton production with handloom sector to enable value addition to handloom production. He expressed hope that the year 2005 holds the promise of a better future for India, but also stressed the need for better policies and programmes. 

G. Venkataswamy lamented that despite enormous hard work put in by handloom weavers, their income has not risen, and is in fact shrinking. He felt anguished that in the process of liberalisation and modernisation the specific handloom skills are being lost. Due to problems in this sector, many weaver families have diversified into other areas and power looms. He wanted the governments to focus on policies which improve the living and working conditions of the handloom weavers. He pointed out that there exists a large market for handloom products. He proposed independent institutions to do research and help the weavers in improving their marketing skills. 

B. V. Subba Rao mentioned that despite the supposed policy focus, government has not been able to reduce rural poverty and unemployment. Government has the role and responsibility of providing social security. He brought it into sharp focus that the question before the country today is how to restore the self-esteem, self-confidence and self-respect of handloom weavers. Further, he said, handloom sector requires support from a broad spectrum of the society, and not just from within.

Session I: Changes in Handloom Sector

Macherla Mohan Rao, Founder President, Rastra Chenetha Karmika Samakhya (RCKS)
Karnati Venkatesham, Member, State-level Handlooms Programme Coordination Committee
Ande Narasimha Rao, President, Andhra Pradesh Chenetha Karmika Sangham
Tadka Yadagiri, Lecturer, Nizam College, Hyderabad
Chair Person: D. Narasimha Reddy 

Macherla Mohan Rao said handloom sector is being squeezed by the globalisation and economic liberalisation policies. Major change in handloom sector can be seen after the 1985 textile policy. This policy allowed import of new textile machinery, cotton and yarn. The number of looms decreased by nearly two lakhs within the one year span of 1985 to 1986. According to him, technology upgradation has always been associated with increased exploitation of handloom weavers. He highlighted the positive impact of reservation policy. He expressed his anguish over the fact that modern looms to a large extent have copied the traditional knowledge and have been demonstrating those varieties as created by them.  

Karnati Venkatesham mentioned that handloom sector is in severe problems. He emphasised the need to bring government’s attention to the problems being raised in the workshop. It is imperative to take suggestions from intellectuals basically to protect the handloom sector. 

Ande Narasimha Rao stated that some of the policies are being introduced ignoring the protests from handloom weavers. Powerlooms are being pitted against skill-based cloth production. WTO agreement is leading to problems in handloom sector. Due to improper access to yarn, and lack of proper support to market their products, handloom weavers have been committing suicides. Handloom sector with the support of other sectors has to fight these policies. 

Tadka Yadagiri focused on the changes in handloom sector after 1985 textile policy and economic liberalisation policies brought in 1991. Presently, there is an argument that one needs to look into opportunities under the WTO regime. However, the need of the hour is to understand the present conditions. Competition, quality and price are the three criteria on which handloom sector is supposed act upon once the textile quota regime is phased out.  He mentioned that powerloom production in the total textile production is increasing because of globalisation and economic liberalisation. 

Ms. Manjila, Handloom Weaver, Kerala
Sridhar, Thanal, Kerala
Prof. Jamal Kunju, Kudumbasree (Poverty Alleviation Mission), Kerala
P. B. Muhammed, Kerala
Chairperson: Prof. K. Sudhakar Reddy, Dept. of Fine Arts, Andhra University 

Ms. Manjila spoke on the problems being faced by them in Kerala which are much similar the problems in Andhra Pradesh. She pointed out that because of severe competition from powerlooms, handloom sector is suffering. As a result, unemployment is increasing and wages are also very low. The burden on women is more since they have to work on the looms and also complete the family chores. Highlighting the exploitation by the intermediaries, she said that handloom weavers should be able to market their own products, avoiding intermediaries.  

Sridhar spoke on his assessment of the situation in Kerala. The state has very strong cottage industry, of which the biggest are agriculture, fishing, coir and handloom sectors. Lakhs of people are dependent on these sectors. But employment in handloom is decreasing. He cited the example of Kannur district in Kerala where no. of workers in handloom sector  has drastically come down from 80,000 to 18,000. He mentioned that Kerala has two different patterns. Northern Kerala is mostly export-oriented, and the southern Kerala produces for domestic market only.  

Prof. Jamal Kunju stressed the need to tackle the intermediaries so that the handloom weavers get proper return. According to him non-availability of yarn is big problem.  He explained that handloom implies producing commodities with hands and not with sophisticated machinery or technology.  He raised the issue to advocate people to wear the handloom cloths. Here he mentioned that the cost of handloom cloth is much higher than that of power loom cloths which the poor people are unable to afford. The value addition to handloom products aboard is much higher than what the weaver gets for his production. He put special emphasis to provide proper education to the handloom weavers.  

P. B. Muhammed spoke of two distinct groups in Kerala: traditional and non-traditional weavers. They belong to different classes and castes. Families who are still sticking to traditional varieties are below poverty line. He proposed that handloom weavers need to explore new ways to survive. Reiterating the problem of middlemen he called for the initiative to find way out to avoid the middlemen. He narrated the collaborative initiatives from their organisation with Andhra Pradesh and other states to initiate programmes helping the families to face poverty with skills, confidence and knowledge. 

Prof. T. Sudhakar Reddy is his remarks said that although most of the issues raised in the discussion merits serious pondering, some positive impact of globalisation on handloom weavers also needs to be taken care of.  

Tadka Yadagiri, Lecturer, Nizam College, Hyderabad
Yeshala Ashok, General Secretary, AP Karmika Chenetha Sangham
Ele Bhikshapati, Rastra Chenetha Karmika Samakhya
Dusa Munender, Weavers Cooperative Society, Karimnagar
Madaka Rammohan, Chittoor district
Shankar, Emmiganur, Kurnool district
Chair Person: Kodanda Ram Reddy, Dept. of Political Science, Nizam College, Hyderabad 

Tadka Yadagiri said in Andhra Pradesh, the government has a favourable thinking towards globalisation and economic liberalisation policies. He stressed the importance of implementation of previous projects in terms of their efficacy and access to the intended beneficiaries. Budgetary allocations have been decreasing for the handloom sector. He mentioned that patenting of handloom varieties needs to be taken into serious consideration. 

Yeshala Ashok appreciated the initiative to organise such workshops on handloom sector. Many societies of handloom weavers are closing down because of lack of work. There is an opinion among the government circles that handloom would not be able to withstand the WTO-related trade. Agitations by labour unions against privatisation have been going on in Andhra Pradesh. He emphasised the need for united movement by handloom weavers to pressurise the government for making policies in favour of the sector. He also criticised the policy of imposing high taxes on raw materials for handloom weavers. 

Ele Bhikshapati said handloom sector is in crisis, and is decreasing in size. Many weaver families are encouraging their children to find alternative employment. Today, organisations working for the welfare of handloom sector are divided in terms of thinking, and are not able to come together. Many popular handloom varieties are on the decline. Opportunities available earlier for handloom weavers earlier are not seen today. There is a need for struggle for revival of the handloom sector through mobilisation of handloom weavers. 

Dusa Munender articulated that handloom is a globally recognised, oldest profession. There is still lot of scope for this profession to prosper. He expressed his grief over the present neglect in government policies for handloom sector. He reiterated the need to unite and mobilise handloom weavers to rejuvenate the sector. 

Madaka Rammohan portrayed their activities for the welfare of the handloom weavers. With their successful endeavour, government has issued identity cards and houses for the handloom weavers. They also worked to identify forged weaver cooperative societies, which had been gnawing into funds allotted for handloom weavers. 

Kodandram in his remarks emphasised the need to understand and analyse the age old problems faced by the sector as also the emerging challenges of liberalised trade regime. In the context of WTO-motivated trade regime, impelling need is to work upon a programme to clear myths and misunderstanding among the people, which probably would help develop proper policies. 

Shankar pinpointed the issue of helpless conditions of the poor handloom weavers. He stated that many looms are lying idle, despite enormous handloom market for sarees and in other niche areas. However, a few weavers who turned traders are earning enormously. He mentioned that apart from the government, weavers also need to change their attitude through knowledge and information.  

Kodandram in summing up emphasised the need for united struggle to overcome the problems like marketing and availability of raw material, critical conditions of weavers, suicide, hunger deaths, etc. The policies would come about only when the weavers would understand their responsibilities, rights and requirements more thoroughly. There is a need to understand the changing dynamics within the sector for proper perspective and approach, individually and socially.  

29^th July, 2003  

Ms. Kalpana, Sangamitra Society, Pochampally
Ms. Shashikala, Weaver
Chair Person: Macherla Mohan Rao, Founder President, Rastra Chenetha Karmika Samakhya (RCKS) 

In his opening remarks, Mohan Rao illustrated the vital role of women in handloom sector. Pre-loom processing is entirely done by women. Also, on the loom, women do assistance and even weaving. In addition, they take care of family needs, children and their needs, etc. Thus, they have multiple responsibilities.  

Ms. Kalpana said sixty percent of the work in tie and dye variety of weaving is done by women. She brought to fore the distress of women who are working for more than sixteen to eighteen hours everyday. Women participation in debates related to their profession is limited because of illiteracy and language problems and lack of information on. globalisation and economic liberalisation as also on different government welfare activities and women schemes. She emphasised the need to organise more such meetings which enable women to learn and participate fully and effectively. The debate organised in Pochampalli on 27th July, 2003 (done as part of this workshop) helped larger participation of women. She said media has to take the responsibility to bring about awareness among them. She went on explaining that because of marketing problems, the self-help movement among women weavers has not been a great success. While the raw material prices have increased, there has not been commensurate increase in prices of their products. She proposed that through a linkage with women groups in other sectors, the market for handlooms can be expanded. She also threw light on the issue of modern consumerism adversely affecting traditional, cottage industries.  

Ms. Shashikala referred to a number of problems faced by them. She says women do not get any social or family recognition of the work done by them. Economic benefits for such work are entirely ruled out. In their family, they tried out alternative professions since handloom weaving was not fetching sufficient earning.  

Mohan Rao projected the link between export-orientation, increased physical burden and accumulation of problems for women. Operation of Jacquard loom which is used for production of export varieties is very strenuous. He opined that such export-oriented production, basically necessitated by globalisation, increased the stress on the health of women.

Participants were divided into five groups. Issues were divided into five groups. These Groups were asked to come up with recommendations related to each of the issues identified above. Each of the Group selected their own Coordinator who presented the summary of the discussions.

Chair Person: Tadka Yadagiri, Lecturer, Nizam College, Hyderabad  

All the five groups presented the summary of their respective group discussions.

Chair Person: Dr. Naresh Sharma, Dept. of Economics, University of Hyderabad  

The spotlight of discussion in the session mainly focused on possibilities and requirements of patenting of handloom products.  The major points emerged out of the discussion were need for patenting traditional varieties of handloom products and benefit of community patenting.  

At this point Nishant Pandey from Oxfam GB, Hyderabad, talked about the need to present the recommendations in two broad categories. One part highlighting the handloom sector as a whole, and the other part dealing with the relationships between handloom and powerloom and dynamics within the handloom sector. This differentiation would help understanding the recommendations more clearly. He also proposed to think of some sort of community patenting which is being done in other areas already. He also raised the point of varying performance between handloom centres of different areas. Sridhar responded to Nishant’s query by explaining that in Kerala, there is a place where two communities have been producing for two different consumers – expensive and cheap. This also indicates that there is huge diversity in handloom.  

Bipul Chatterjee said community patenting is a good idea. He also put special emphasis to look into the mechanisms for the intended beneficiaries. There should be a definite mechanism for community sharing of the benefits coming out of community patenting.  

Naresh Sharma in his remarks said there are problems with the patenting. He pointed out that unlike textile sector, there are no research institutions for the handloom sector. Reservation has to be done at the level of the production to protect the handloom sector.  

Prof. Jamal Kunji put forward the suggestion to form a Handloom Welfare Board to cater to the social needs of the handloom sector. Mohan Rao said when law is not being implemented and the welfare of the people is being compromised, it would not be wrong to ask the government to implement the same. He emphasised that the relationship between the employer and employee should not be based on exploitation but sharing of labour and the value of the production.  

Harikrishna from Textile Committee, Government of India, gave his personal opinion. He said one should not expect government to market the handloom products. Weavers should develop their own markets. In response, Mohan Rao made it clear that the demand is not that government is to market the products. But, considering its contribution to the GDP and employment government can help the sector by asking departments like Defence, Railways, SC, ST hostels, and others to buy handloom clothes. This would help the sector to sustain.

Chair Person: Konda Laxman Bapuji  

Recommendations:  

1.       Raw Material: Yarn prices have to be reasonable, decentralised spinning mills have to be established, tax on hank yarn should be removed, colours should be provided at affordable prices, training should be provided on designs and colours, protection of designs and varieties.  

2.       Production: Supreme court order on handloom reservation should be implemented, patenting of all handloom varieties, research on loom improvement, implementation of minimum wages act, implementation of second national labour commission, provision of working capital and credit facilities, subsidies for handloom equipment.  

3.       Mechanisms: Autonomy for handloom cooperatives, higher budget allocation, direct marketing process, publicity and advertisement for handloom products.  

Bapuji appreciated the recommendations and considered most of those as purposeful. He stated that cooperative sector was considered as an answer to many of the problems faced by handloom sector long back in 1940s. Now cooperatives are very weak and it has no leadership. In this regard, the recommendations of this workshop are appropriate. He said handloom reservations should be implemented by the Central Government.  He mentioned that Shivraman Committee and Abid Hussain committee had brought out some good recommendations. However, he criticised Satyam Committee recommendations which in his words proved detrimental to the sector. He called for strong public pressure which would force the government to rethink on the recommendations of Satyam Committee and other such policies. To promote the interests of handloom sector he recommended the establishment of an independent weavers representative body - elected, non-official, non-commercial body, supported by the government. Everyone in the sector including the Master Weavers should be member of the body. This body should coordinate the development of handloom sector. Only the members will be entitled to get the raw material and other benefits.  

Nishant Pandey mentioned about the programmes organised by Oxfam GB for the handloom sector. He declared that soon Oxfam would organise an exposure trip of handloom weavers to Rajasthan. Oxfam GB has a long term programme for the handloom sector.  

At the end, D. Narasimha Reddy thanked everybody for participating in the workshop.

Regional Workshop on Handloom

7th and 8th August 2003 at Ahmedabad 

D.D. Bhuptani, Chairman, ICECD
Rajeev Mathur, Director, CUTS
Ms. Hina Shah, Director, ICECD 

D.D. Bhuptani inaugurated the one and half day's workshop. In his welcome address he welcomed representatives from CUTS and all the participants of the workshop and gave a brief introduction of ICECD. He also talked about effects of globalisation. He said that globalisation is inevitable, the policies should be framed such a way the maximum benefit can be reaped. 

Rajeev Mathur in his keynote address, gave the overview of the GELIIS project and set the tone for the conference by precisely identifying the issues at hand. He explained how the forces of globalisation and economic liberalisation were affecting the Indian informal sector and what were the issues that needed serious deliberation. He also stressed on make Trade Fair Campaign launched by Oxfam, GB whose aim is to ensure effective implementation of extant trade rules and to endow the grassroots procedures in developing countries with gains of free trade. 

Ms. Hina Shah said that globalisation should be taken positively.  She cited example of tea, which was originated in China and with time has become one of the most popular drinks worldwide. This is nothing but a glaring instance of globalisation of commodity. She pointed out the inability of Indian policy maker in taking advantage of globalisation Referring to the South Korean case she mentioned that both the countries got independence in 1947 with same per capita income and same growth strategies. But in 1970s South Korea opted for export substitutions and now its GDP is $13,417 compared to India’s GDP of $ 277.  She emphasised the need to eradicate poverty through globalisation by strategising proper policies.

Zaverbhai Chavda, Member of Handloom Board
Ms. Manda Parikh, RUDMI (NGO)
Prabhash Ranjan, Legal Researcher, CUTS
C.D. Kalker, Bank of Baroda
Ms. Usha Jumani, Jumani Foundation 

Zaverbhai Chavda spoke on technical aspects relating to Handloom sector. He discussed the problems that the weavers are facing because of increased competition from power loom and the economic liberalisation process. To remedy this situation, he argued for more government intervention in the form of subsidies. He then went on to deliberate that though machine made items are cheap and homogeneous, they can hardly emulate indigenous and creativity of the handloom weaver. He enunciated that preference for cotton fabrics has increased worldwide and therefore the demand for handloom products has also got a boost. Hence handloom sector has a great future. He also discussed the present unemployment in the handloom sector and called for a review of the labour laws. 

Ms. Manda Parikh highlighted the marketing and market related aspects of handloom sector. She started her presentation by stating that globalisation is a reality and is here to stay.  She emphasised the need of  different sub-systems:

i)   Input - Output sub-system

ii)  Processing sub-system

iii) Technology sub-system

iv) Marketing sub-system 

Projecting the contribution of handloom sector in total GDP and its employment potential, she emphasised the need for a decentralised marketing system, which would take care of problems of small producers. To develop markets and foster marketability of Indian handloom products, she advocated a cluster-based approach that can deal with the Global Marketing System. The role of credit for Micro Enterprises was also emphasised for easier availability of credit. She also advocated the need of developing the process of quality standardisation, quality equalisation and brand equity in the handloom sector to enhance markets and marketability. 

Prabhash Ranjan expressed his views on the legal dimension of the handloom sector. He endeavoured to put the legalities of the handloom sector in proper perspective by identifying the context in which the handloom sector is presently placed. He first identified the relevant International Trade Agreements under the WTO that could have a possible impact on the handloom sector. After providing the broader picture of international trade law in terms of challenges and opportunities, he went on to scrutinise the efficacy of domestic legislation on handlooms to meet these challenges and opportunities. The Handloom Act of 1985 was analysed and the need to re visit this Act in light of the changed economic scenario was emphasised. The need to have a comprehensive law on standards in handlooms was also advocated. 

Mr. C.D. Kelkar shared different bank policies in the workshop.  He categorically explained the availability of abundant credit with the Nationalised Banks and that too at lower cost.  Govt. has launched Technology Upgradation Fund (TUF) Scheme, which offers interest subsidy. He emphasised the need to develop better entrepreneurial capabilities, which in turn would help in developing better credit utilisation propensities. Government will have to play a proactive role in providing support services to industry to help it compete in international market. He said that the future prospect of handloom sector is immense and in next five years period the demand for ready made garments is going to increase worldwide and also in India.  

Ms. Usha Jumani spoke in the context of gender issues related to this sector.  She argued that the handloom sector employed a lot of women and thus the growth of the sector had a direct linkage with women empowerment. Mentioning that the status and contribution of women in handloom activities remain undermined, she put special emphasis to take up gender issues effectively.  She suggested serious pondering on the issues of recognition of women's contribution as a worker, ownership of tools and production space, technical skills and designs inputs, ownership of income earned and support services to improve productivity. 

The presentations were followed by questions and comments by the participants. The participants included weavers, artisans and entrepreneurs and thus some of them narrated the first hand experience of the problems that they are facing. These experiences ranged from difficulties in obtaining credit to the competition from the power loom sector. Concerns were also raised about productivity of Indian worker, cumbersome and dilatory procedure of getting bank loan, lack of marketing support, infrastructure problems and lack of institutional support. The suggestions of the resource persons throwing light on these issues were capacity building, skill upgradation and change of attitude will help improve the productivity of handloom workers, making necessary adjustments based on proper information about the market trend and demands, approaching senior bank personnel of the concerned branch if the lending rules are manipulated with unnecessary long formalities against micro enterprises.

Nainesh Pandya, Consultant
Y. Jacob, NABARD 

Nainesh Pandya spoke extensively on various issues that are of significant importance for the textile sector as a whole. He started his presentation by giving an overview of the WTO and explaining the opportunities that the multilateral trading regime has to offer for the textile sector as a whole. He argued that the textile sector in India is an over regulated sector with too many public bodies in picture. He suggested using eco-friendly dye and refocusing on technical capacity building with special focus on computer literacy. He said that in future just two categories of people would exist: illiterate and e-literate. He further went on to show the lacunae of the existing policy measures and also suggested possible remedies like acting in terms of integrating external inputs with national priorities, sustaining processes and systems etc.  

NABARD has supported development of handloom sector by providing various facilities such as refinance to banks.  State Co-operative banks provide finance for production/ procurement and marketing requirements of Primary Weavers Co-operative Society (PWCS) and Apex/ Regional Weavers Co-operative Society. Various studies on handloom sector brought out that 70 percent of weavers continue to be outside the co-operative fold.  To spread benefits to this sector, there is a special scheme in NABARD called SUDHA. (Skill Upgradation and Design Development for Handloom Weavers).  He said under SUDHA grants upto Rs.5 lac are given to NGOs for skill upgradation of weavers, design development, market survey, quality control programmes, hiring of consultants etc. to help weavers.

All the participants of the workshop were divided into 3 groups, with one facilitator in each group. At the end of the day, presentations were made by the groups, which brought out various aspects/ recommendations for the handloom sector. Each of the Groups came out with possible answers to the questions. Each presentation was followed by comments and questions by the participants. 

The second day of the workshop commenced with the recap of day one by Rajeev Mathur. In this recap the essence of the presentations and discussions were shared with the participants.  

This session was followed by the concluding session in which a synthesis of the group presentations was presented. This synthesis was an attempt to bring out the key recommendations on the basis of the issues that had dominated the proceedings during the entire workshop. 

Recommendations: 

The recommendations that emerged from the conference were many and covered a whole range of problems with which the handloom sector is confronted with. The principal recommendations are: 

1. Organising the handloom sector through Cluster approach
2. Development of Linkages in terms of

                                                               i.      Supply of raw material at workplace

                                                               ii.     Training for designs, skill and value addition

                                                               iii.     Financial Institutions

                                                               iv.     Market Development Agencies

                                                               v.      Institutes for designs and research

3. Focus from illiteracy to e-literacy
4. Increased role of export development agencies
5. Better marketing facilitation domestically e.g. through participation in fairs
6. Dissemination of information
7. Media support: Creativity, capacity building and customer outreach
8. Involvement of Panchayati Raj Institutions
9. Change of attitude towards work
10. Developing culture of Brand equity and brand ambassadors
11. Promotion of handloom as a life-style fabric/ products
12. Introduction of quality standards like ISO
13. Call for more liberalised tax and reservation policies from govt.
14. Growth of cotton fibres for raw materials.

There was a complete unanimity amongst the participants on the issues and recommendations identified and this was the most striking feature of the conference.   

After this representative from CHIP, Hyderabad where a similar workshop had been held on July 28^th & 29^th was asked to present on comments generated in that workshop. Mr.P.Ch. Subramaiam said that most points are similar except for three other points.  They are:

1.       Putting special emphasis to continue the reservations on the handloom items

2.       Provision for 20 percent royalty to the weavers

3.       Pension scheme for the weaver aged 50 years and above 

D.G. Vaghela form DIC presented different schemes by the government such as Prime Minister's Rojagar Yojana, Bankable scheme, Schemes for people who come under BPL (below poverty line) etc, which are existing to develop entrepreneurs.  

At the end of the day, Rajeev Mathur, Ashok Shah and Binu Zacharia (ICECD) finally extended their thanks to all the participants for their active participation in the one and half day workshop and also OXFAM for their support in organising this workshop. Rajeev Mathur specifically thanked ICECD for successfully conducting the workshop. The programme ended with the hope that whatever points that have emerged from this workshop would help in developing the advocacy paper for the success and development of handlooms in the informal sector in times to come.

Regional Workshop on Handicraft
 

7^th and 8^th August 2003 at Lucknow

Anil K. Singh, Chief Executive, NEED

Bipul Chatterjee, Director, CUTS

Anand K. Das, Programme Coordinator, Market Access, OXFAM GB in India

Prof. Sukumar Nandi, Department of Economics, IIM Lucknow

S.N. Jha, IAS, Principal Secretary cum Agriculture Production Commissioner, Govt. of UP

Anil Singh welcomed audience and expressed his heartiest thanks to the participants, for joining this movement of awareness generation and also extended thanks to OXFAM GB’s India office and CUTS for providing help and assistance in organising the workshop.

S.N. Jha formally inaugurated the workshop by lightening the lamp.

Bipul Chatterjee threw light on effects of globalisation and economic liberalisation on the Indian informal sector. He mentioned that Indian economy to grow with equality and economic justice, the informal sector need to achieve high growth with policy and institutional support. Referring to the point that the ground reality of the multilateral trading regime under World Trade Organisation (WTO) paints a dismal picture regarding the levelling of the playing field, he emphasised the need for strengthening Make Trade Fair campaign launched by Oxfam GB.  Highlighting traditional knowledge and expertise of Indian handicrafts, he put special emphasis to disseminate information on technology upgradation, current international price, changing demand pattern and export competitiveness for achieving higher growth in this sector. According to him, to protect women from exploitation it is essential to develop proper policy measures through providing fair working environment, ensuring fair prices for their product and enhanced market access.

Anand K Das narrated the evolution of Oxfam GB, established in UK in 1942. The organisation initiated its journey with the objective of charity, relief and rehabilitation. It started its operation in India since 1951. He mentioned the priorities are ensuring poor people’s rights to livelihoods and promotion of gender equity. The issue of grassroot level informal sector producers needs special attention here. He categorically pointed out that there should be some forum or platform to discuss the policy issues for informal sector. The main problems faced by the informal sector are documentation; sub contracting and more often than not wages are much below the minimum level.  He also emphasised the need for Make Trade Fair campaign initiated by Oxfam. He stressed that the policy recommendations coming out of each workshop will be fed into the GELIS Final Advocacy Meeting, to be held at New Delhi on 23^rd and 24^th September 2003. He expressed hope that policy level people will consider the cases with due weightage and way outs will be evolved out of threadbare discussion.

Sukumar Nandi quoted handicraft as a part of Indian cultural, tradition and also as an example of unity in diversity. Globalisation creates demands for some categories of crafts that induce large volume of production. The artisan crafts used for regular purposes like bags, backpacks, wall hanging or cheap jewellery are for mass consumption. While expressing his concern, he said that the numbers of artisans in India have declined by at least 30 percent over the last three decades. He cited the rising costs of raw materials and their scarcity as the reason for such a trend. He also threw light upon the role of government in creating transparent policies to take care of marketing and finance of handicraft sector.

S.N. Jha observed that women are lagging behind in this race for progress and identified unawareness and illiteracy as the main reasons for such backwardness. There is a great potential of tapping foreign market constituting around 2 crore 30 lakh Indian customers and the need of the hour is to reach such market. He is of the opinion that the development should be human centric. He stressed that NGOs need to play a vital role to empower rural women. He opined that the main constraint is not scarcity of fund. But NGOs need to extend unflinching support to the women entrepreneurs and unite them for making successful ventures with proper utilisation of fund.

Representative of producer group from a village called Kharagpur, Chinhat, Lucknow Ms. Sabnam proposed the vote of her warm thanks on her behalf as well as the entire majority of producer groups of the state engaged in various Handicraft ventures.   

Dr. T.N. Dhar, IAS (Secretary, IIPA, Lucknow)

Prof. Roop Rekha Verma, Ex. vice chancellor, Lucknow University

T.N. Dhar mentioned that adverse effects of globalisation should be mitigated and instead the opportunities need to be availed of. Standardisation of the handicraft sector is essential for the process of globalisation. According to him it is essential to provide basic life facilities to the child labours. Standard for environment protections like green labelling are not followed which is very essential. There is no scarcity of manpower in India but the skill enhancement of informal sector labourers is required. He proposed to organise national level programme to empower women to face challenges of changing socio economic scenario. He also mentioned that the role of NGOs should be social mobilisation and rejuvenating informal sector producers to build up an ownership feeling.

Roop Rekha Verma expressed the view that due to globalisation, informal sector as a whole, are facing some difficulties, while some problems remain with the women workers of the sector. The former one comprises difficulties in market access, competition in non-level playing field. Women mainly face the problems of gender discrimination and exploitation. Globalisation not only exposes the economy to increased competitiveness but also brings in its trail high cost technology and expensive advertisement which the small home based producers can hardly afford. In the present scenario it is essential to know the priorities of a nation, globalisation is not at all essential and a nation can progress without it. She put special emphasis to control the pace of the process of globalisation and liberalisation.  She mentioned that there is no forum for producers of informal sector; no charter of demand has been framed up from the informal sector, which can convey their problem to the policy makers. She expressed hope that this workshop will come out with such positive output.

Biswajeet Sen, Director, Grameen Development Service, Lucknow

Ashish Dwivedi, Director, Academy of Management Studies, Lucknow

Adarsh Kumar, Director, All India Artisan and Craftsmen Association (AIACA), New Delhi

Biswajeet Sen emphasised that globalisation is a reality and it has already arrived.  To protect and sustain Indian handicraft sector in the days of globalisation, attention must be paid to some of its basic standards like packaging, presentation and proper finishing and timely delivery of the product. He mentioned that unlike earlier days when handicraft items with rich aesthetic values like wall hanging and beautiful paintings enjoyed high market demand, nowadays consumers are putting more emphasis to the utility in a handmade item. Hence it is important to do utility research before making any product.

Dwivedi made a very lucid presentation involving spontaneous interaction with participants. He explained that market is not the problem per se but marketing or access to the market becomes the real constraint for informal sector producers. He explained that for marketing a product the producer should have considerable knowledge about demand pattern of consumers. To sell any item, it is essential that the product satisfy its functionality, proper cost value and timely availability. Relationship and behaviour with the customer is equally important. Identifying finance as another major bottleneck for informal sector producers, he mentioned that before sanctioning any funds it is the duty of the government to assess the sufficiency of the fund to execute the project.

Adarsh Kumar depicted comprehensive overview of globalisation and its impact on handicraft sector. He briefly enunciated how market, government and culture are the areas affected by impact of globalisation. He mentioned that increase in markets has not led to any significant increase in the standard of living of craft workers. According to him, craft worker is marginalised due to the problem of minimal bargaining power in the production chain. He pointed out the major threats to handicraft sector as risk of losing sustainable livelihoods, increased competition from imported and domestic “substitute” products, public tastes shifting away to non-handicraft products, decreased help from government to these sectors and adverse government policy making due to more organised industrial lobbying. He ended the presentation by describing the Craftmark initiative, which is an effort by AIACA. The objective is to help promote genuine Indian handicrafts, develop sector-wide minimum standards and norms for the production and sale of such handicrafts and increase consumer awareness of distinct handicraft traditions.

Chairperson: Ms. N. Parveen, Self Employed Women’s Association (SEWA) 

Besides the exchange of intellectual views, the workshop witnessed exchange of grassroots level experiences of the female members of production groups. Women like Leelavati, Shabnam, Latifa, Rajkumari,. Munni Devi, Madhuri etc. expressed their views. The main points of their discussion were: 

• All women face financial crises to begin the production process.

• After starting the enterprise their condition improved but they still face problems of market access and are being exploited by the intermediaries.

• After obtaining action training with concurrent follow-up and escort services from NEED they are able to run their houses or have added on to the existing income. Thus their financial condition has improved.

• These women are associated with crafts of chikan, zardozi, zari work, jute but they still feel that they are not getting due & fair wages for their handwork.

N. Parveen emphasised the need for awareness generation among the producer group. She also proposed to build up a centre with the initiative of the producer group that can take due care of the problems of non-availability of adequate market information and market access.
 

The participants were divided into five groups with one facilitator in each group and threadbare discussion took place on four thematic areas. Each group comprised target women producer who expressed their real problems and difficulties in producing and marketing hand made and home based crafts. All these were taken into due consideration in the next day presentation by each group.
 

The proceedings of the second day started with the recapitulation by Anand K Das.
 

Mr. Soumendra Sahu, Senior Correspondent, Hindustan Times, Lucknow

Mr. George Cheriyan, Development Manager, NEED

Dr. Lenin, Director, PVCHR, Varanasi

Defining the role of media in the promotion of handicraft, Soumendra Sahu said that media could not do anything unless people associated with this field do something about it. He cited the example that in 1960 European artisans were going through a tough phase but they overcome such situation by forming small groups and selling their products directly at market. This news made big headline at that time which encouraged other artisans to do likewise. He categorically emphasised that as the reach of media in rural areas (where about 70 percent of total artisans live) is not so good, the artisans should take up the responsibility to promote their work in such areas. He called for proper cohesion between artisan, the networking organisations and media.

George started his discussion by explaining certain ideological and material parameters of globalisation. He stated that the positive aspect of the globalisation is that it helped to shape a new era of interaction among nations, economics and people. Analysing the adverse impact on Indian informal sector he mentioned that due to increased inclination towards homogenisation and standardisation of products, the move is from small and many to big and few. Many lost their jobs and livelihood in this process. He drew special attention to the remarkable home made crafts, particularly owned by women artisans and the artisans with the traditional wisdom. All these are just withering away for want of new ideas, sources and information, new approaches and systems. So there is a need to strengthen existing initiatives and networks, introduce new partnership and race voice and advocacy for Fair Trade and policy change related trade. 

According to Dr. Lenin globalisation has led to marginalisation of some sections and centralisation of profit, which in turn could give rise to civil unrest. He highlighted the fact that earlier the farmers and small artisans even entrapped with indebtedness and facing economic exploitation had the conviction to continue their activities. Then committing suicide was not the alternative as it is today with the emerging problems of globalisation. He emphasised the need to ponder upon such issues by NGOs. He urged the producer groups to organise themselves into one powerful unit and display the problems of Uttar Pradesh (UP) at the national and international levels. His strong accent was that only formation of self help groups (SHG) will not be able to resist the trend of mechanisation and counter the adverse impacts of globalisation. He mentioned that strong voice should be raised by the producers themselves for promoting fair trade environment. He also called for strengthening the network between NGOs and other stakeholders.

C.S. Pasricha, Chief Manager, PNB

Ms. Shashi Singh, Joint Commissioner Export-Import Bureau, Government of  UP, Lucknow

Dr. V.P. Singh, The Project Director, Mahila Kalyan Nigam, Government of U.P., Lucknow

The session started with documentary presentation showing case histories of some successful entrepreneurs under different government programmes.

V.P. Singh made participants acquainted with various government policies, plans and programmes relating to handicraft sector. He presented a true picture of corruption among some of government officials. He put special emphasis on the problems related to adverse working environment for women. He proposed to exert sincere effort in forming strong association by the informal sector producers to bring forward their problems and views. He appreciated the endeavour of forming SHG. In this respect he opined that NGOs could also move on the same line and stand beside the producers.

C.S.Pasricha elaborated on the potential of handicraft sector. In his view the major share of profit is not reaching the artisans in the handicraft sector and market access is the main problem faced by the sector. He reiterated the need for forming SHG to address such problems. He mentioned about the  commitment by banks for helping SHGs and asked women entrepreneurs to come forward. He stated that for taking loan upto Rs 5lakh no collateral security is required from the entrepreneurs and such loan is provided at very nominal interest rate to assist the marginal producers.

Ms. Singh mentioned that Government of UP has set up the Export Promotion Bureau for the first time in India in 1999. She then provided brief ideas about existing schemes and gave an overview of registration as an exporter with the government. She also explained the ways in which a registered exporter could be benefited through these schemes.

Recommendations:
 

1.     Consumers awareness campaign for promoting sale of only those products, which satisfy basic working conditions and advocating against use of products, manufactured by child labour.

2.   Fair wages fixation for artisans.

3.   Participation of target producer group in the process of taking decisions.

4.   Different groups must come together to sell their products collectively so that the artisans are able to get a fair share in profits.

5.   There should be a protected contract between the producers groups and the traders for future security of the artisans.

6.   Skill development and time-to-time training of handicraft workers should be provided in order to keep them informed about the changing fashion, demand and design.

7.   A code of conduct must be formulated and followed to ensure fair trade.

8.   Extensive promotion of handicrafts must be through media. Advertising both by government and the private organisation.

9.   Provision of government procurement from the producer group of hand made items like, jute bags, files, folders etc for different government meetings, conference, workshops etc. under various government schemes.

10.  Handicraft items must have their own craft mark to ensure quality and originality.

11.  There should be a direct dialogue communication between consumers and producers / artisans.

12.  Better working conditions for the workers and a social security system like health / life insurance and provident fund etc.

13.  No discrimination should be encouraged in respect of gender, caste or religion.

14.  Evolving better marketing strategy to reduce the risk of market uncertainty.

15.  Organising exhibitions or trade fairs for the displaying and selling such items.

16.  Removal of the intermediaries who take a large part of the products belonging to the artisans / workers.

17.  Better government policy for promoting export of handicraft.

18.  NGOs should play catalysing role.

19.  Development of branded products.

20.  Strong network of NGOs for information sharing, information dissemination with special emphasis on current economic     
 policy issues, outreach programme involving as many stakeholders as possible. 

 
Mr. Vishnu Kant Shastri, Honourable Governor of UP

Brij Mohan, Executive Director, SIDBI, Lucknow

V.K. Mehrotra, Retd. Chief Justice of Himanchal Pradesh

The workshop came to a formal end with the address from honourable governor of UP. He expressed happiness that rural women have participated in a debate on economic issue. He believes that growth and progress of rural area should be top priority. He advised that the present government policies are focused on the development of marginal producers and not led by some vested interest of powerful producers’ lobby. India can face the challenges of export competitiveness because of the basic quality and standard of products, but the country needs to pay attention to keep her economic and cultural sovereignty protected. He denounced the claim that the world is a global village by stating that developed countries with economic superpower rein over the economically backward underdeveloped countries by manipulating international trade rules. He expressed serious concern to pay attention as to how the unhindered drift of poor from becoming poorer and rich becoming richer can be resisted. The stupendous task ahead is to improve the economic situation of the country by mitigating negative aspects of globalisation.

Brij Mohan congratulated the effort put in by NEED, CUTS and OXFAM GB’s India office to organise the workshop and come out with valuable recommendations. He suggested keeping market at the centre of upcoming challenges. It is always worth to start up the journey from market to production instead of production to market.

V.K. Mehrotra also congratulated the endeavours and suggested to incorporate application of auditing with social dimensions for the future prospect and prosperity of handicraft sector.  

Lastly but most importantly one representative of producer group Ms. Shivlata expressed her warm and sincere words of thanks to the entire august gathering of the workshop.

Advocacy Meeting
GLOBALISATION AND THE INFORMAL SECTOR 

Report of New Delhi Seminar held on 23^rd and 24^th September 2003 

Day 1: September 23, 2003 

Background 

The final outreach meeting of the project on Globalisation, Economic Liberalisation and Indian Informal Sector (GELIS) was organised by Consumer Unity & Trust Society (CUTS) with support of Oxfam GB in India. In an effort to make the multilateral trading regime fair and accountable, Oxfam has launched the “Make Trade Fair” campaign. An integral part of the campaign is to advocate for changing those trade rules that ignore the concerns of developing countries and allow developed nations to grow at the cost of their counterparts. The multilateral trading regime under WTO and its rigged rules are having a serious impact on Indian informal sector as well. It is against this backdrop that CUTS has taken up the GELIS project with support of Oxfam GB in India to organise dialogues among different stakeholders of the informal sector  about the impact of globalisation and economic liberalisation on the sector. 

The launch meeting of the project was held on 9^th June, 2003 at new Delhi. Subsequently, four regional workshops were organised at Bhubaneswar, Hyderabad, Ahmedabad and Lucknow.  For better focus, three sectors, viz. non-timber forest products, handloom and handicraft under the broad aegis of informal sector were chosen for discussion and debate. Based on the recommendations evolved out of each workshop, a draft advocacy document had been prepared which was placed for consideration in the final meeting during 23-24 September 2003. The long-term objective would be to create an enabling environment for policy advocacy on issues impacting these sectors, particularly facilitating the role that civil society organisations could play within, between and among constituencies. 

Participants 

The participants of the meeting comprised eminent economists, high rank government officials, academicians, producer groups, their associations, community-based organisations and NGOs working among these groups, elected representatives of local self-government institutions, media persons, developmental agencies etc.  

Rajan R Gandhi, Director, CUTS, Delhi
Samar Verma, Policy Advisor, Oxfam GB in India
Kirit S Parikh, Professor Emeritus, Indira Gandhi Institute of Development Research (IGIDR), Mumbai 

Rajan Gandhi initiated the proceedings by extending warm welcome to the august gathering.  He enunciated how CUTS and Oxfam have taken keen interest in the issues of international trade. He put special emphasis on Oxfam’s activities related to Make Trade Fair Campaign. Here he raised the issues of potential gains of liberalisation, but mentioned the need for some safety measures as well. This is mainly because un-hindered globalisation can lead to lopsided growth where some sectors may prosper leaving the vulnerable ones lagging behind.  

It is against this backdrop that CUTS with support from Oxfam GB in India have been executing the project on Globalisation, Liberalisation and Indian Informal Sector to study the impact of globalisation on this relatively un-organised and un-aware sector and to come out with policy recommendations for nurturing the sector in the first few years exposure to international economy. For focused attention and meticulous working three sectors from the broad aegis of informal sector have been identified. Those are viz. handloom, handicraft and non timber forest product. He expressed hope that the proceedings of the two day long seminar will go a long way to address the livelihood issues of people working in the informal sector. 

Samar Verma narrated the basic rationale of Make Trade Fair campaign by Oxfam. He stated that although trade has immense potential to improve living condition and enhance earning of large majority of marginal people, but current provisions in WTO are lopsided. Here arises the need for changing institutional framework for greater benefit of large section of marginalised population. He brought it to the fore that in most of the developing countries and in India, informal sector remains outside the institutional support. He projected two forms of globalisation – one led by MNCs where they act as principal drivers of trade and investment.  

The other one is increasing trend of intra-industry trade. Here he referred to the existence of global commodity chain where supply chain of MNCs have penetrated into the large number of population of developing countries. The snowballing impact is felt by the domestic home-based informal sector. Increased competition and continued pressure to reduce cost is posing the very survival of many small informal sector units at stake. He urged the need to form collective voice of informal sector producers to reach the emerging crisis faced by them to the policy makers. 

Kirit S Parikh set the stage by projecting a broad overview of globalisation and its impact on informal sector. He expressed that globalisation is a fact and no longer an option. He depicted the picture how globalisation is creating impact on industrial and service sector in India. He emphasised that in a globalised world the technical change is taking place where economies of scale and information technology enjoy the pride of position.  His presentation highlighted that deeper integration of the production process is significantly affecting the informal, unorganised sector. The agricultural subsidies in the developed countries impart negative impact on the farmers in developing countries.  

He proposed for a win-win solution in the liberalised trade regime with an additional aid of 0.5 percent of OECD GDP, which will reduce world poverty by more than 25 percent.  He opined that since liberalisation can wipe out many small informal sector units, measured pace and proper policies are needed to counteract the threats. He made clairvoyance analysis on global economic environment growth of services where increased trade led to increased service sector trading and higher output. Among service sector goods, he referred to entertainment as the ultimate superior good the demand for which is positively correlated with income growth. His deliberation also threw light on poverty and global warming and environmental impact of globalisation.  

He highlighted that poor are always more vulnerable in comparison to the rich. According to him the world food system is resilient for the rich and stubborn for the starving. He illustrated it as the faulty execution of market mechanism. Citing the examples of Netherlands and Bangladesh he explained how the former can easily control the flood even staying below the sea level while most of the marginalised section of fishermen and agricultural farmers in Bangladesh lose their livelihood every year due to submergence of island states. He put forward the concept of an equitable agreement with equal per capita tradable emission quota for all countries for sustainable environment. He delineated the opportunities of globalised world as IT, telecom, comparative advantage of free trade, knowledge economy culminated into a fast growth of an economy.   

He also raised the issue of indirect impact of globalisation on millions of poor and illiterate. He stated that free trade will enhance the rate of growth which will create more opportunities for conventional jobs and will therefore beneficial to the poor. On the other hand, globalisation will also rejuvenate entrepreneurial zeal, self-confidence and innovative spirit imbibed in highly educated careerist. The kingpin of his discussion was ICT and cost of information. He mentioned that although Internet greatly reduces marginal cost of information collection, there remains an entry cost barrier to access internet service. He called for a facilitating and supportive role of government with transparency and decentralised system with sensible policies to endow the marginalized section of the informal sector with the benefits of internet.   

Floor Discussion 

The presentations were followed by floor discussion. Some of the issues raised are following: 

·        Replying to the question whether unfair trade regime, exploitation and policy discrimination are to be accepted to follow
globalisation, Dr. Parikh stated that all such adverse impact might have been accentuated with globalisation. But all these things were there even in the protected environment and not an outcome of globalisation per se. 

·        If free trade can accrue benefits to marginalised sector without intervention of government, what specific role is government 
expected to play in this liberalised regime.  

Dr. Parikh responded that some level of intervention and guidance are required from the government to frame up self liquidating policies which will take care of the domestic industries from the onslaught of surging import and dumping from the developed countries.

·        Bangladesh workers, specially the marginalised section of women in many cases are working below the subsistence wage. Question was also raised about the provision of aid without conditionality.  

Dr. Parikh replied that in spite of bearing the social costs, women in Bangladesh are working gladly and to prohibit them to go to their workplace would require assurance of alternative opportunities. Regarding conditional aid he stated that certain measure of efficiency and governance need to be there for proper utilisation of aid. 

·        Referring to the issue of efficacy and requirement of IPR, Dr. Parikh pointed out that the provisions under IPR cannot be negated. He emphasised the need to provide protection to the producers so that piracy does not take place and there should be more constructive ways to preserve the traditional knowledge.  

The session ended with vote of thanks by Rajan Gandhi. 

Bipul Chatterjee, Director, CUTS, Jaipur 

Bipul Chatterjee narrated the background of the project and called for the need to discuss and to ponder upon the negative impact of globalisation. He highlighted the issues of Oxfam Make Trade Fair campaign. He explained that globalisation has been happening for centuries and since 1991 there has been a shift of paradigm to liberalisation and free trade regime. He evoked that the civil society has the responsibility to discuss and debate over the effect of globalisation on the marginalised section of the population so that policies can be implemented more effectively.  

At this point he touched upon the issues of implementation lag in policy execution and overburdening of policies irrespective of considering the necessity and efficacy of the same. He also put special stress on consumer movement, which he referred to as synonymous with vitalising national economic interest. He underlined the importance to understand the role of market. He raised the issue as to what extent the poor get right information of market and prices and emphasised that here the civil society has a catalytic role to play. He urged for information-based policy advocacy at various levels, involving different stakeholders for the Indian Informal Sector. His presentation provided an overview of the project encompassing various areas like aim of the project, the procedure of execution, a brief outline of informal sector in India and the process of economic liberalisation, emerging problems of the informal sector and its possible remedies.  

Ranjan Panda, MASS, Bhubaneswar 

Ranjan Panda presented the background of the Non-timber Forest Product (NTFP) sector and pointed out the challenges faced by the sector. He shared the key issues raised in the Bhubaneswar workshop which dealt with NTFP sector. The crucial points included patenting, certification, sustainable forest management, role of NGOs and other stakeholders like research organisations, academician, banks and financial institutions, local bodies, consumers etc. He emphasised that NTFPs are not just another informal sector activity but are also concerned with the ecology of a particular plant and the livelihood support of a very vulnerable section of population, the tribals.

Replying to the question on patent issue, he mentioned that NGOs need to play a vital role here to safeguard the rights of the primary gatherers and the fight against competition can be taken by policy advocacy. In the floor discussion concerns were also raised about lacunae that exist in the Biodiversity Act.

 Narasimha Reddy, Centre for Resource Education (CRE), Hyderabad
Anil Singh, Network of Entrepreneurship & Economic Development(NEED),Lucknow 

Narasimha Reddy discussed the salient features of the handloom sector with particular reference to the Andhra Pradesh situation, particularly emphasising its contribution to employment generation, rural base and family labour involvement. He also identified crisis factors like  poor income levels, indebtedness, unemployment, competition from towns and mills, illiteracy, poverty and exploitation, health problems of women, unfavourable government attitude and policies etc. As a result of globalisation and liberalisation, the competition with powerloom has increased significantly. On the other hand, subsidies and welfare schemes have been withdrawn, government allocations have been reduced and yarn supply and prices have become erratic.  

The commencement of quota free regime from 2005 will multiply the problems of handloom sector. Handloom sector is also adversely affected due to changing lifestyles of consumers. Lack of support from civil societies and inadequacy of database of the sector is another hurdle in the growth and development of the sector.  But in view of its environment friendliness, great market potential, high traditional skill content, vast employment potential and strong horizontal sector linkages in the handloom sector he felt the need for proper capacity building and provision of adequate financial and institutional support.  

Anil Singh presented the picture of Lucknow handicrafts with excerpts from some of the women artisans working with NEED. He also exhibited various facets and activities of women artisans including video presentation of their skilled work. He mentioned that in Uttar Pradesh, there exists 28 types of handicraft trade employing 28 lakh people. The main problem faced by this sector is severe competition from machine made products as also cheap imported items. Other constraints are lack of education and capital and inability to deliver the products in time. Economies of scale are not mostly accessible to them. The present development model has marginalised the role of women.  

The absence of data, use of obsolete techniques, non-availability of infrastructure facility have worsen the situation. He called for urgent need to initiate consumer awareness campaign, fair wage fixation, training to artisans, fair trade education, use of “craftmark” as proposed by AIACA, networking of organisations working in the sector, prohibition on child labour, no gender bias, better market strategy, trade fair and exhibitions etc.  

Floor Discussion 

Responding to some of the queries, Reddy said: 

·        The state is not neutral and has its own sectoral bias in favour of powerloom sector
·        The market crisis of the handloom sector not only led to the suicides of the weavers, but also of the cotton growers because of a
      resultant slump in cotton demand.
·        “Brand Equity’ is extremely important and need to be developed in case of handloom products. 

Anil Singh, in response to the questions, said: 

·        Awareness among the producer group is crucial for defending their crafts and handloom products against spurious products.
·        The concept of “craftmark” is extremely important for certification and needed to be taken up with the IPR question.
·        Tools and implements needed in handicraft production have to be invented and utilised as a continuous process. 

Chair:       Rajan R Gandhi, Director, CUTS, Delhi
Speakers: Ratna M Sudarshan, Director, Institute of Social Studies Trust (ISST),
                New Delhi
                Alakh Narayan Sharma, Director, Institute of Human Development (IHD),
                New Delhi
               T.A. Bhavani, Institute of Economic Growth (IEG), New Delhi 

The deliberation of Ratna Sudarshan rested on two main points – nature of informal economy and nature of trade liberalisation. She brought to the fore the distinction between informal sector and informal employment and discussed the possibility of expanding informal employment within the formal sector. Highlighting the appreciable employment contribution of the informal sector, she mentioned that there also remains large unpaid labour force, which is not part of this measurement. She emphasised that economic analysis need to be based on nature of employment. In her view, more focused attention need to be given to lower spectrum of informal sector where there is no provision of social security, formal contract of employment or any employment benefit. Informal sector in India has some distinctive features such as increasing vulnerability of market, unconventional work places like public places, home and streets, caste and gender inequity and illiteracy. 

She added that the workforce employed in the informal sector is hardly aware of the fact that they are linked to a long chain of production. She proposed to design policy to reach out all these workers and enhance the opportunities of market economy. Globalisation and trade liberalisation help to move away from vertically integrated workplace where formal and informal get highly interlinked. She referred to the increasing trend of informalities and outsourcing with globalisation, but for the overall economy it is very difficult to say what is the actual trend. She put special emphasis on maintenance of labour standard which will help to generate more congenial work environment. Increasing emphasis on quality aspect in the era of globalisation demands that the workplace even in the informal sector needs to be supervised. 

The speech of A.N. Sharma traversed through the pages of economic reform all over the world and how India embarked upon the reform process since 1991. India is a late starter in the process. He described three visible impact of globalisation end economic liberalisation on labour market, viz., increasing unemployment, increasing inequality between various sections and regions of work and increasing informality in workforce. He dwelt upon the changes taking place in the labour market with considerable decline in elasticity of employment, increasing casualisation in labour market specifically among rural women. Government and some other secondary data corroborate that there is steady growth of informal sector employment, which supersedes the formal sector one. He also illustrated the striking point that steady growth of informal sector employment in India is specifically related to those sectors, characterised by poor people. 

He mentioned that there is no increasing trend of enterprise development in informal sector. Reiterating the view of the earlier speaker he stated that informal sector employment increases with no security benefit and with declining amount of earning. He suggested to frame up such strategies which may revitalise the large segment of informal sector employment and make the workforce viable.

Citing the spectacular growth of small firms in China with skill development and rising productivity, marketing facilities etc. he drew attention to learn lessons and advocated to frame up policies for speedy growth and promotion of the informal sector. 

T.A. Bhavani started her presentation by explaining the link between small scale sector and informal sector. Small-scale sector connects formal sector to the informal sector. Based on some urban surveys, she observed three basic propositions for small scale units, viz., generation of wide spread employment opportunity which is important in a labour surplus economy like India, lack of competitive strength and need for protection. She opined that protection is not a viable alternative to invigorate inherent strength of the sector. Prior to liberalisation small units in general did not face direct competition from the larger ones, as there was no overlapping of markets. 

She went on explaining that markets constituted mainly two types – price sensitive and quality insensitive buyers comprising the poor segment and the rural population and the richer section of buyers who are price insensitive and quality sensitive. The former used to create demand for small-scale products while the large units were to cater the demand for the latter. There had always been competition among the small units but the market was overcrowded as well. With the advent of liberalisation competition became more intensified.  Government also aimed to touch the policy protections directly related to SSIs. Withdrawal of excise duty exemption, lowering of tariff barrier removed the protection shelter to a large extent. She pointed out that earlier segmentation of the market between small and large units through product market segmentation and geographical market segmentation has now become redundant. Surging import and foreign direct investment in different sectors like automobiles, electronics are creating pressure on domestic large industries, which in turn are trying to reach lower segment of population where earlier they did not wish to make a niche. 

Apart from diluting this product market segmentation, large units are also transcending the barrier of geographical market segmentation and start penetrating into suburban and rural areas. They are trying to get raw materials directly from the farmers or producers in the rural areas to reduce cost of production. Here she mentioned that small units do not have any protected area per se and the sector has to deal with it. Although 800 items are in the reservation list, 586 of them are under Open General Licence (OGL), which implies MNCs can come through this route. She argued very specifically that government should not have local content requirement under TRIMs. Remarkable traits of small-scale units are self-started business and switching to some other business when demand for the initial one has declined. She viewed that immediate displacements would be there but this should be taken as part of the transit phase. 

Floor Discussion 

The floor was then opened to the participants for discussion. The panel of speakers responded to the questions and some important queries raised thereof are the following: 

·        2.5 lakh SSI units were being closed during the last seven years. Will such inequality be acceptable to the country?
The response from the speaker was that most of the entrepreneurs must be taking down other business and they have the capacity to face the challenges. It had also been stated that globalisation increases inequality which is a growing concern and should not be justified in any sense.

·       Since the last twelve years Indian economy is moving from agriculture to industry to service sector. The trend is the same for many developed countries. In all such economies services in formal sector enjoys dominating share. But in India, where informal sector employment constitutes the largest share what kind of institutional mechanism is required to make the sector more competitive. 

The replies from the speakers were widespread. It was mentioned that although there is a shift from agriculture to industry to services, agriculture till now provides a large part of informal sector employment. To alleviate poverty broad based employment is required. However, productive and quality employment must be the index of development in India.
 

Day 2: September 24, 2003 

Chair   : Nabinananda Sen, Dept. of Business Management, University of Calcutta
Speakers: Roopa Mehta, SASHA, Calcutta
               Usha Jumani, Jumani Foundation, Ahmedabad 

Prof. Nabin Sen initiated the proceedings by introducing the speakers. He pointed out as to how gender issues especially right of women in informal sector deserves special attention, discussion and threadbare analysis to arrive at concrete conclusions. 

Roopa Mehta spoke about the changes, which are taking place in the market and shift of market from rural areas to urban areas. She emphasised the need to develop more capacity of craftsmen and if there is no change of attitude among the craftsmen, their survival will be at stake.  The degree of competitiveness has increased both at global and at domestic level. Even in China, machine made products resemble handicraft items. She further added that proper balance need to be maintained between the item produced, market place and even distribution of revenue. 

Referring to the statistical figure of 31 percent to 32 percent of the informal sector workforce, constituted by women, she pointed out that in reality the numbers are even more whose labour are not get accounted for. She raised the crucial issue as to how important is income to women and how far it goes to impact their lifestyle. She stressed the need to empower women entrepreneurs in the informal sector by creating more avenues and opportunities for skill and knowledge upgradation to run their business effectively. However, the pre requisites to all these is immediate change in mindset among women to recognise their spirited role.  

Usha Jumani presented a broad analysis of informal, semi formal and formal system of work, production relationship of the poor in informal system of work with focal point being work relationships for women. She stressed the fact that the economy is governed by free play of market forces of demand and supply where rich-poor and man-woman divide are not the determining factors. She very lucidly projected a matrix representation of different sectors of an economy with production relationships. Sectors of the economy consist of production including land-based, livestock-based, manufacturing-based, trade and services. Production relationships embrace small entrepreneur, own account work, unpaid family work, piece rate work and wage work.  

Among all such work relationships unpaid family work is a reality of mainly women and children. This work is neither recognised nor considered adequately in socio-economic policy making. With supportive statistical figures she highlighted the fact that although gender equality index at the national level increased from 62 percent in the early eighties to 67.6 percent in early nineties, on an average, the attainments of women on human development indicators were only two third of those for men.  

She emphasised the need to improve gender development index and gender empowerment index. She stated that women in general face discrimination in all aspects of social, economic and political spheres of lives. Such discrimination leads to determination of different social roles, control over resources and power in the hands of men and women. She proposed that to overcome the handicap of subordination and of being underprivileged some social and economic change need to be come about.

She enunciated five roles both for men and women in a socio-economic set-up respectively as wife, mother, homemaker, worker, citizen and husband, father, homemaker, worker, citizen. However, in Indian social system first three role of women gets more importance while men enjoy the last two roles of being worker and citizen. She categorically pointed out that both should have a balanced role to play in family life and work place. She further revealed that there exists a yawning gap between men and women in terms of skills and competencies to understand changing demand and supply conditions in the market and capitalise on emerging opportunities. Here she emphasised the need for concerted effort to strengthen the hands of poor women through individual and group entrepreneurship development.  

Coming to the end of the discussion she viewed that gender segregation is an intermediate step, which will culminate into gender equality. There is a need for three kinds of forums in all facets of life – a forum where women can come together, a forum where men can come together and a forum where representatives of men and women forum can come together to incorporate issues and concerns of men and women in their functioning.  

Her presentation delved deep into gender issues and evoked various thought provoking queries as to whether globalisation accentuate or reduce the existing gender gap, how to counter forces which expand the gap and how does the process of gender integration progress in these circumstances. She ended her presentation depicting the importance of evolution from survival economy to micro enterprises through enterprise transformation approach and from micro enterprises to small-scale enterprises with enterprise promotion approach. 

Floor discussion 

·        Ministry of Food Processing, Government of India, has introduced many schemes during Ninth and Tenth Five Year Plans for empowerment of women and rural development and for this women themselves need to come forward.  

The response was that certain discrimination needs to be made between men and women regarding skill development as in many areas women need to get more exposure. 

·      Globalisation enhances the trend of commercialisation and standardisation. But women are not always well informed about these changes and so there is need to redesign the training programme. The loan repayment record of women is also quite high at around 90 percent. In spite of that women find it very difficult to access loan due to cumbersome paper works.  

Replies from the panel of speakers were that standardisation is to be there to increase our competitive strength, but at the same time a balance need to be maintained between hand made and machine made goods. The need of the hour is to move from survival to livelihood. Also it is required to find out how small units can be combined to avail of the economies of scale. The example of Gujrat dairy cooperative has been illustrated as one of the ways of achieving skills. Regarding disbursement of loan, it has been stated that Small Industries Development Bank of India (SIDBI) is exerting sincere efforts on these issues and SIDBI is executing many schemes and running various programmes for promoting women entrepreneurship. 

·        Cultural impact of globalisation and its relation with gender issues.  

Responses touched various issues. To maintain indigenous cultural heritage, it is important to make proper designing approach and the items should bear some special trademarks. Here the initiative of Craftmark by All India Artisan and Craftsmen Association (AIACA) has been appreciated as a fruitful effort. Need for creating niche market in the tribal areas was also mentioned so that women in those areas can get opportunity to exhibit product of pure tribal culture.  

·       Women in the informal sector are facing severe problems related to workspace and health. There is absence of proper planning and execution of schemes to take care of the problems and constraints faced by women. The attitude remains that women do not need more workspace and their health issues also do not get any priority.
The point raised had been highly appreciated by the speakers and they fully agreed that proper and adequate space of work are very important to women for both health purposes as also providing quality output. Women in informal sector need more aspiration and conducive working environment to attain higher level of excellence. 

·      Effects of globalisation are not same on men and women. It is of utmost importance to create awareness among women and encourage them to take up more income generation activities, especially when their husbands do not want that once the latter reach a financial stability. 

The speakers addressed the point directly. It had been stated that women need to make clear distinction between society-determined role and their own profile. Women need to develop their space and they should work on their own choice and not by merely following the society determined and dictated roles. They need to be more professionally work oriented and need to be organised in groups to highlight the problems faced by them. 

Chair: Uday K Verma, Director, V.V. Giri National Labour Institute, Noida, UP
Speakers: N.P. Samy, Secretary-Coordination, National Centre for Labour, Bangalore
                Indrani Mazumdar, Centre for Women and Development Studies, New Delhi 

Uday Verma introduced the speakers and outlined the five key issues that need focus in the context of globalisation and its impacts on informal labour: 

·        Impacts on employment and unemployment – since these are livelihood issues

·        Appropriate social security measures

·        Appropriate labour reforms

·        Poor skill and productivity  of the sector and

·        Changing dimensions of industrial relations. 

He suggested that some lessons could be learnt from the experiences with the regulatory reform process in the telecom (considered ‘successful’) and electricity (considered ‘not so successful’) sectors. 

Indrani Mazumdar said that India is one of the few countries with sufficient data on the unorganised sector. Outlining the history of this sector, she said it primarily emerged in the urban areas and since existing industrial relations did not cover this sector. The focus here too was on the ‘enterprise’ and much time was spent on defining what exactly formal and informal sectors mean and include. In India, she said that land reforms were introduced to assist the unorganised sector. However, redistribution of land did not take place. The government then introduced large scale industrialisation, but even this was not very accessible for the poor unemployed peasants.  

Therefore they began working at unregistered manufacturing units, and in petty trade and services. Globalisation interestingly views the informal sector more positively. The ideology that was promoted was to replace State regulation with market based methods. At the ILO, the informal sector was being seen as “a reaffirmation of market forces against State which had made legitimate activities illegal”. The same philosophy has subsequently been promoted by agencies like the World Bank. 

There were serious casualties due to this. These include: 

·        Traditional issues like land and agrarian reforms were not being argued;

·        State stopped playing its role as a large employer.

·        Most importantly, any vision of a labour policy of State against exploitation of labour by capital ceased to exist. 

This third casualty is evidenced by the ‘quiet’ reversal of several significant labour-protection measures. She used the example of the policy measures taken to protect home-based workers in the pre-globalisation era and their subsequent removal to make this point. She also criticised the ‘umbrella’ approach of globalisation in its efforts to deal with labour issues on the ground that several key descriptive details are left out. In the globalisation era, she pointed out that several labour-exploitation measures that were earlier seen as being employer-friendly are now argued as being good for the economy. 

N. P. Samy argued that globalisation has reduced the political space for questioning or fighting important decisions and issues. He said that globalisation has not yet shown benefits to the marginalised workers and on the contrary, seems to push employers towards more ‘casualisation, contractualisation and informalisation’, and as such has worsened the situation for working classes. What made things even worse was the ‘nod’ given by the government to these exploitative policies. The unorganised sector works in different sectors, but together form a huge proportion of the population. However, they are not covered by any social security system and as such are vulnerable to the imbalances in the existing system. He used the examples of the agricultural and construction sectors to explain how globalisation has adversely affected the workers in these sectors.  

On agriculture, he argued that the ‘new agricultural policy’ that was brought in by globalisation has focused on the corporatisation of the sector – with little care being paid to the millions of farm workers who are dependent on the sector. On the construction industry, he argued that global players who came in through the window provided by globalisation offer capital-intensive and automation technologies that have adversely affected the employment potential for construction workers. He reiterated the point that existing labour legislations were being watered down or removed by the ‘dictates of global capital’. In this regard, he drew attention to the recommendations of the Task Force on Trade and Industry for Administrative and Legal Simplifications on (a) the removal of protection offered under the Contract Labour Act to certain kinds of workers and  (b) the application of Chapter VB of the Industrial Disputes Act to only establishments of more than 1000 workers. He argued that the government was only focused on pushing reforms irrespective of considering its impact on workers. 

The discussion that followed the presentations focused on possible interventions that could be made to protect labour rights in the sectors identified. The viability or otherwise of insurance schemes and minimum standards were discussed. 

The role of Trade Unions (TU) and their failure to address these issues earlier were also discussed. The need to refocus TU’s in this context was suggested. The plight of the unorganised sector workers was also highlighted and it was re-emphasised that there is an urgent need to develop an institutionalised mechanism to protect the interests of these workers.   

Wrapping up, the Chair said that one must view the entire ambit of labour issues in the context of a globalisation that is here to stay. He cautioned the inappropriateness of an ‘umbrella’ method of resolving these issues. He said that the complexities are many, problems are many and the solutions to these problems are many. Finally, he reiterated the need for NGO’s and other groups to address the issue of poor skills and productivity of the informal sector.

Chair:       Sanjeev Ahluwalia, Joint Secretary, Ministry of Disinvestments
Speakers:  P.M. Mathew, Director, Institute of Small Enterprises and Development
                  (ISED), Cochin
                  Samar Verma, Policy Advisor (Trade and Labour), Oxfam GB in India 

Sanjeev Ahluwalia introduced the theme and mentioned that the questions of labour standards as well as environmental standard deserve maximum attention as do the equity consideration in the context of globalisation.  

P.M. Mathew highlighted the inadequacies of government policies with respect to the small-scale sector and noted that two major studies of 1955 and 1984 have largely influenced policy making in this area. Globalisation, he observed, has created a ‘poverty of ideas’ and a vacuum though it has also opened up some opportunities as well. The gap between the policy formulation and implementation in the real situations needs to be seriously addressed by the academicians and the NGOs. Since 1970 till date, the focus of development was simply on employment. But now the sustainability of employment has become a more important consideration. The “cluster approach” towards informal sector has been criticised by him. He suggested an integrated cluster approach focused on infrastructure development, research, documentation and craftsmen welfare. He emphasised that informal sector development initiative has so long been ‘supply side’ focused and what is needed today is market-focused approach. 

Samar Verma made a brief presentation on the implications of globalisation for Indian informal sector, stuffed with some useful and relevant data. Starting with the common features of the various definitions of the informal sector he focused on the employment aspect of different subsectors within the sector. He stated that the share of casual labour in total employment of the sector has increased during the decade of 1990s while the employment elasticity of output has declined during 1993-2000 vis-a-is 1983-1994 in most of the subsectors excepting transport, financial services and real estate. The main employment generating subsectors are identified as agriculture, trade, restaurants and hotels, education and health, transport and construction etc.  

He also indicated the highly personalised character of the informal sector in respect of market entry, marketing network, financing etc. all of which contribute towards substantially low transaction cost of the informal sector vis-à-vis the formal sector. He also mentioned non-traditional issues like increasing obligations for adhering to labour standards, environmental concerns, code of conduct, certification etc. confronting the informal sector under globalisation. He noted the increasing quality consciousness of the buyers and the non-price factors of competitiveness as the important emerging trend. He observed that the big challenges for the Indian informal sector in the days to come would be continual capacity building and skill upgradation as well as creation of adequate and effective safety net. 

Replying to question regarding the increasing handloom imports from countries like China and no provision to invoke the safeguard clause against these handloom imports in the Agreement on Textiles and Clothing, Samar Verma said that this is the reason why even a non-exporter also gets affected by international trade and thus, there is an urgent need to improve the quality of our products. Value addition to our products is very important as it would help our products to compete in the international market.      

Valedictory Address: Veena Jha, Coordinator, United Nations Conference on
                                   Trade and Development (UNCTAD)
                                   Anand K Das, Programme Coordinator (Market Access),   
                                   Oxfam GB in India
                                   Sharad Joshi, Founder, Shetkari Sanghatana, All India Kisan Coordination Committee, Pune
                                   Mita Dutta, Coordinator, CUTS, Calcutta       

Mita Dutta commenced the proceedings of the session by introducing the speakers of the session.  

Anand K Das narrated how Oxfam GB in India and CUTS conceived the project after different brainstorming discussions and participation in various fora on WTO.  He stated that main discussions in different seminars are, in general, rested on industrial sector and the informal sector remains at the backburner. However, a large number of producers and suppliers are working in this production chain in the informal sector. CUTS and Oxfam decided to work together to bring multiple stakeholders into dialogue platform to discuss and debate issues that Indian informal sector is facing during this era of globalisation. The project launched at New Delhi, was succeeded by four regional workshops at Bhubaneswar, Hyderabad, Lucknow and Ahmedabad. The areas identified for these workshops are non-timber forest products, handloom and handicraft. Series of recommendations evolved out of these workshops based on which the advocacy document has already been prepared.  

He also spoke about the new unorganised sector labour bill, which has been introduced in the parliament and emphasised, that there should be sections on working conditions, terms of employment and code of conduct for the informal sector. He mentioned that Oxfam and CUTS would like to go deep into the issue in analysing the labour bill.  He appreciated unrelenting efforts of CUTS, the other network partners and the Oxfam GB colleagues and extended thanks to all of them. He expressed hope to move the project forward to attain the coveted objectives. 

Sharad Joshi picked up the thread linked to the concept of globalisation as a century old phenomenon. He explained that now it is more of WTO-isation with special emphasis on free, open multilateral and transparent trade regime. WTO rules are too complicated, technical and legalistic which remain beyond the understanding of the poor and illiterate farmers. He brought it to sharp focus that developed nations in most of the cases have not reduced the trade barriers to the extent they pressurise the developing nations to do so. He illustrated how India bestowed with the acclaim of being enterprising and courageous during the era of liberalisation and globalisation by an Eastern European delegation.  

He also touched the issues of women workers in informal sector whose works mostly remain unaccounted for. According to him distress of women in agricultural sector is rising with globalisation and its impact on informal sector. He ended his speech by stating that it was not an advocacy meeting but more an initiation dialogue.  

The presentation of Veena Jha was exemplified with UNCTAD study analysing the impact of globalisation on the informal sector in South Asia. The study shows that in Bangladesh, Sri Lanka and Pakistan there is significant positive impact on employment generation in export-oriented sector. She strongly argued against the views that globalisation increases poverty and feminisation. Until and unless the women workers do not get any alternative job, resisting them to work in the informal sector will merely increase poverty. Referring to the study, she highlighted that most of the respondents did not prefer to go back to their rural areas or agricultural works leaving the informal sector jobs.  

She also articulated the informal sector is capable of maintaining lower wages and it is not the right hour to go for raising wages without looking at the other factors. This is mainly because lower wages will keep the price of informal sector products within limit, which in turn will increase the competitive strength and enhance the opportunities to enter and face the challenges in the international market.      

Analysing casualisation of labour with globalisation, she mentioned that when casual labour has increased, counterfactual is that wages has risen two to three times in informal sector in comparison to agriculture. The trend of informal sector asset building also exceeds the formal sector one. In her words, in the decade of 1990s informal sector has contributed significantly towards asset building, which is an important impetus for the Indian economy. She also proposed to framing up of informal schemes for the informal sector so that the sector can avail of the opportunities of globalisation. 

Mita Dutta formally concluded the session and the meeting with the vote of thanks.      

CENTRE FOR SUSTAINABLE PRODUCTION AND CONSUMPTION (C-SPAC) 

3 Suren Tagore Road, 2nd Floor 
Calcutta 700 019, India 
Ph:  91.33.2460 1424 
Fax: 91.33.2440 7669 
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