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credit, marketing, etc. The plan also suggested the policy of providing satisfactory
arrangements for marketing research, rural electrification, improvement of the
housing conditions of artisans, and of credit and finance, etc.
The Fourth Five Year plan (1969-74) document states that, it would be necessary to
improve skills and provide a combination of incentives and disincentives for securing
decentralization and dispersal of small industries.
The fifth plan document of different small industries are to facilitate the attainment of
some of the major tasks for the removal of poverty and inequality in consumption
standards of these persons (artisans dependent of traditional industries) through the
creation of large scale opportunities for fuller and additional productive employment
and improvement of their skills so as to improve their level of earnings.
The Sixth Five Year Plan (1980-85) states: The dispersal of small scale units far away
from metropolitan areas and large cities had not taken place to an appreciable
extent. Further, it states that, in spite of credit expansion, the share of tiny units
with investment up to Rs.1 lakh has been very little. The entrepreneurial
development programme has not made significant progress.
The Seventh Five Year Plan (1985-90) the plan aimed at the rationalization of the
fiscal regime to ensure rapid growth; strengthening of infrastructural facilities at
various levels.
The Eighth Five Year Plan (1992-97) also visualized this sector as a major part of the
manufacturing growth since, it yielded employment elasticity of 0.6 as against 0.15
in the organized sector during the period 1977-83. Therefore, the government has
proposed various policy measures for the smooth development of this sector. As for
example, the investment limit in plant and machinery has been raised to Rs.60 lakh
and Rs.5 lakh for small scale industries and tiny industries respectively.
Further, to facilitate location of industries in rural backward areas and to integrate
agriculture and industry, a new scheme of Integrated Infrastructural Development
for Small Industries is being implemented with the active participation of State
Governments and financial institutions. Besides, certain measures to strengthen the
KVI and State Khadi and Village Industries Boards and improving the quality and
marketability of their products with consumer preferences instead of merely
depending on rebates and subsidies through the area development approach (that is
the progreammes which have been tied up with DRDA, TRYSEM, and others related to
weaker sections like Scheduled Castes/Scheduled Tribes and women) has been
extended throughout the country.
Problems of Administration
The administrative set-up for executing the rural industrial development programme
has been manifested with certain problems, such as the multiplicity of agencies
(which result in the overlapping of the organizational structure, function, programme
and schemes, etc., particularly at the field level of defying of the principle of
integration of efforts), absence of adequate coordination, inconsistent personnel
system (such as lack of adequate staff, particularly at the field level, maladjusted
officials, lack of motivation among personnel), bureaucratization, red-tapism,
corruption, favouritism and nepotism, the prevailing inefficiency, rigidly and delay in
decision-making.
The prospects of rural industrialization though the KVIC although optimistic, can
become the only when the programmes and policies are formulated in broader
perspective and implementation is successfully carried on through proper coordination. To provide marketing support it is suggested to set up a marketing
development corporation for this sector. In order to able the financial problem, it is
recommended that the financial institutions should have a greater role to play in the
expansion of rural industrialization and steps should be taken to promote smoother
credit flow. In order to make the rural industrialization programme an effective
instrument for removal of poverty and ameliorating the conditions of the rural weaker
sections the need it to adopt appropriate strategy to meet the set objective and well
harmonise the output, employment and technological suitability of the khadi and
village industrial sector.